Developing a Marketing Strategy

Marketing Strategy Sign Developing a Marketing Strategy

The process of developing a marketing strategy involves three primary phases: identifying target audience, establishing a successful marketing mix, and building a sustainable competitive advantage. Each of these stages builds from the previous ones.

Identifying the target audience is necessary to establish a successful marketing mix, while excelling in the four areas of the marketing mix is used to build a sustainable competitive advantage.

Marketing Strategy: Identifying Target Audience

Identifying and researching the target audience is essential to establishing a foundation for a successful marketing strategy. The company needs to know information about the audiences' demographic, geographic, psychographic, and behavioristic characteristics.

  • Demographic: Age, Gender, Education, Income, etc.
  • Geographic: Country, City, etc.
  • Psychographic: Interests, Values, Lifestyle, Social Class, etc.
  • Behavioristic: Habits, Buying Pattern, etc.

This information will give insight into developing a successful, and targeted, marketing mix. For details on the benefits of knowing your target audience, read Researching Your Target Audience.

Marketing Strategy: Marketing Mix

The marketing mix consists of the four P's: product, price, place, and promotion. The aim of the product category is selling, or developing, a product that is valuable to your target audience. The goal is to satisfy their needs and wants, or to solve their problems.

The price category focuses on matching the value of money to your audience's perceived value of the product. Generally, companies will need to match competitor pricing unless they can effectively communicate why their product is better than competitors (for a higher price). If a company chooses to price lower than competitors, then they must communicate why their product is equal to competitors, or risk the lower price reducing the perceived value. Cheap often communicates lower quality.

The place category focuses on everything from location of the product in stores to supply chain management. In terms of location in a store, the question to be answered is: Where do customers expect to find the product? Supply chain management focuses on how the product moves down the supply chain in order to be available for consumer purchases. Just In Time (JIT) is an example of inventory management to reduce storage costs.

The promotion category is all about communicating value to potential consumers. All four of these categories work together to create an effective marketing mix. Read more about the Marketing Mix or read about Selling Online with the Marketing Mix.

Marketing Strategy: Sustainable Competitive Advantage

The goal of creating a sustainable competitive advantage is to establish an edge over the competition that cannot be easily mimicked or copied. Understanding the competition will be essential to this phase, and will likely involve a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).

While there are different strategies to developing a competitive advantage, one of the best ways is to excel in the four areas of the marketing mix. A business can focus on providing products with high value, reducing costs by more efficiently managing the supply chain and human resources, reducing inventory costs by using the Just In Time (JIT) inventory method, or providing excellent customer service by building positive relationships with customers for long-term business.

As an example, if a company can produce a product for less than competitors, then pricing below competition while communicating equal value to consumers will give the company a sustainable competitive advantage over the competition that cannot be easily copied. Another example may be a company who matches the competition in product, price, and place, but excels in customer service in order to create consumer loyalty and repeat business.

The idea behind a sustainable competitive advantage is that it cannot be easily mimicked by the competition. No one can be the best at everything, and even if a competitor excels at product, price, and place, any small business can still compete with great customer service.

Article: Customer Relationship Management (CRM)

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