Elements of a Marketing Strategy – Part 1

marketing strategy

The diagram above demonstrates elements of a marketing strategy. Below, I will explain it in more detail.

Product or service

Although it may sound strange, the first obstacle in creating a marketing strategy is to define what product or service you are going to sell. Sometimes companies are too quick to change or switch their product because they try to please the end customer. This can cause contradicting marketing messages and result in marketing campaigns being ineffective.

USP (Unique Selling Proposition)

USP is the unique benefit resulting from the product or service that makes it stand along against competition. What is that that you can do better than others? For example, the USP of Ryanair is low-cost flights.

Features

Features are what your product or service is comprised of. In order to sell a product, it is not necessary and sometimes even counterproductive to include a large number of features. Rather, the features should match the requirements of the target customer (see below).

Use cases

Writing use cases for your product or service is an excellent exercise that helps you to get ideas for promotion. Here are some examples of use cases for an app for sending appreciation badges within a company:

  • New colleagues can introduce themselves by sending short messages to the team members.
  • Colleagues can congratulate each other on a completed project or on other occasions by sending a badge.
  • The app can be used after meetings or training for sending feedback and thanking the organizer.

Target group

Achieving product-to-market fit is one of the cornerstones of successful marketing. However, not only the product part is important but also defining and selecting your target group.

Segmentation

You can segment both outside and inside your target group. Segmenting the market in general (see market segmentation) orientates you what segments you will target and what not. Once you selected your target group, you will unlikely be homogeneous, so you need to segment further. Typical target group segmentation for a B2B product can include such criteria as:

  • Users vs decision makers
  • Company size
  • State-owned vs privately-owned companies
  • Geographical segmentation (country, location)
  • Field of business

Personas

Personas help you to define in detail who your customers are, to understand what language they speak, what motivates them and drives their decisions. Customer personas are more detailed and granular than segments and may look like this: “Male customers, located in the US, aged 20-30, working as software developers, interested in hacking, having “geek” mentality. Their main focus is not on the career but on improving their skills. They visit hacker blogs and websites, spend a lot of time online and participate in forums and closed communities. Their challenge at work is time pressure, the necessity to learn new skills fast and requirements changes in the course of projects.”

Market

While the target group defines who your customers are, market defines how many there are of them and also how many you can realistically reach.

Size

No matter how good your product fits customer needs or how elaborate your marketing strategy is, without a proper market size your product is not going to scale. Market size can be defined in several ways, e.g. total potential market size (the total number of potential users for your product), total existing market (what share of market is already being covered by the competition), the size of the market you can serve (for example, if your product does not scale very well or because there are strong competitors in the market). Estimating market size will be based both on research and assumption, however, this is an important step in creating marketing concept.

Market segmentation

Here you can look at the existing market (competition, customers) or make assumptions about a market you can create. Creating a new market means that you have to generate the demand by educating potential users about your product or service instead of fighting the competition. Bear in mind that this approach has both advantages and disadvantages: you will not have direct competitors, but at the same time, you may face indirect competition by substitute products (see Part 2 of this post).  It also takes a lot of time and effort to explain to potential customers why they need your product or service, so your sales materials and pitches have to be carefully crafted.

In the second part of this post, I will explain how company image influences your marketing concept, what you can learn from your competitors and why marketing tools are the final step in crafting your marketing strategy.

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Branding in E-Commerce: What to Consider

In one of my older posts I have already touched upon branding. This post will be based on the discussions in the e-commerce forum I recently attended and will cover examples of building up a brand in e-commerce.

Why is brand-building so important, especially in e-commerce?

  • For the company, a brand helps to differentiate its products from competitors and achieve a higher profit margin;
  • Branding is also orientation help for marketing and other departments, as it defines how the company wants to communicate itself internally and externally;
  • For the customer, branding makes choosing among a number of products easier and serves as a warranty of the quality associated with the brand.

As I had discussed before, a brand includes both “tangible” qualities such as logo, colors, design, etc. and “intangibles”, such as emotions and motives associated with the brand. Those motives play an extremely important role, as the majority of buying decisions are made on a subconscious level.

Two companies were invited to speak about how they built up their brand:  Haix (functional footwear) and Chrono24 (an online marketplace for watches).

In case of Haix, the following steps were taken to build up their brand:

  • Extensive market research to define the present (professionals) and the target (leisure) segments for their shoes;
  • Creating the main theme around the brand (thrill & adventure) and centering all communication around it;
  • Reaching out to consumers directly using branded shops;
  • Engaging in event marketing and social media marketing to establish a closer contact to the target customer.

Chrono24 uses a slightly different strategy:

  • Defining their brand archetype as “magician”- innovative and fulfilling wishes;
  • Developing the brand inside the company by educating employees about the brand;
  • Improving customer experience in line with the chosen brand-building strategy.
Archetypes-chart-poissy
Brand archetypes (Source: http://brandstradigi.com/)

 

However, as both speakers concluded, some of the most important things to consider in brand-building are: orientation towards the target segment, open dialog with the customer and consistency in the branding strategy.

 

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Love Thy Brand

Creating, developing, and maintaining one’s brand is important not only in the sector of luxury goods but also for virtually any company, whether in B2C or B2B area.

Creating, developing, and maintaining one’s brand is important not only in the sector of luxury goods but also for virtually any company, whether in B2C or B2B area.

According to Paul Feldwick (2002), a brand is “a recognizable and trustworthy badge of origin, but also a promise of performance”. On the one hand, a brand helps a product (or a service) stand apart from the competitors, allows the producer (or provider) to charge a price premium, and results in repeat purchases and cross-selling/up-selling. But on the other hand, it also serves as a guarantee of a certain level of quality and contributes to a constructive relationship between a company and its customers.

Therefore, owning a strong brand equals to owning brand equity. In marketing, brand equity has the following elements: perceived quality of a branded product and customer loyalty, as well as share of mind (recognition of a brand) and share of heart (trust and positive view of the brand).

Two well known brand-building models are the brand equity model by Aaker (1996) or brand identity prism by Kapferer (2004).

What these models have in common, is the notion that brand identity is a complex entity, incorporating not only the product or service in question or the brand as a symbol but also less tangible aspects, such as brand personalization and brand culture/values.

It is important to remember that brand building should occur not only externally (through advertising or brand endorsement by a famous person), but also internally (literally through living the values one’s brand dictates).

In other words, a customer’s contact with the brand occurs the moment an employee answers his/her phone call or the moment he/she steps through the doorway of an outlet, or the moment a product or service is being consumed. Thus, employee training and constant quality management are just as important as investing in fancy ads or creating a nice logo.

Companies with valuable brands are also known for having strict quality control procedures (mystery shopping at McDonald’s), careful managing of end-customer sales channels (Apple Stores), timely responding to the market trends (Google’s innovations) and implementing CSR (Starbucks’ Fair Trade products).

Loving your brand means sustaining a positive and balanced relationship between the brand, the product, the company and the external and internal stakeholders (including your employees, your customers, your investors and so on).

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