Marketing is the act of promoting a product, service or business to attract customers and buyers with the goal of increasing profits and sales. A marketing department can use various strategies to reach the target audience, who will be willing to invest in the products and support the business. However, effective marketing must include strategic planning and effective management.
One of the most vital factors in running a successful business is the strength of your strategic marketing plan. Conducting market research, distilling the findings and acting on recommendations in the marketing plan helps a business to define what it will sell, to whom it will sell, how it will communicate to them and when to do it.
Developing a Strategic Marketing Plan
A strategic marketing plan is often written as a report so the marketing manager can approve it with their CEO and board of executives. The strategic marketing plan must include a summary of the strategic plan and provide a situational analysis that includes the benefits and market opportunities for the business, a list of marketing strategies or approaches to get the message across and a marketing budget for the plan. The plan may need to be revised several times before it is approved.
Marketing management refers to the group of professionals who are responsible for planning and directing the marketing strategies that will benefit the business. This includes managing the strategic marketing plan. The marketing strategies must follow certain policies and company objectives. Managing marketing work includes delegating tasks, doing research about different strategies and analyzing the techniques that other companies are currently using. Part of the marketing management is ensuring that a business does not copy existing strategies used by competitors.
Marketing is one of the greatest sales tools available for start-up and existing businesses today. It is, in its simplest form, all methods utilized by an organization in an effort to get their products or services into the homes of customers. Stemming from a marketing plan, marketing strategies include product development, pricing, distribution, promotion and relationship management. Marketing strategies are centered around the central concept of customer satisfaction and vary depending on the needs of the company.
Market Dominance Strategy
The market dominance strategy, as the name implies, strives to put an organization’s product or service at the top. Within this strategy, organizations are categorized according to their market share. Market share refers to the percentage of sales achieved by an organization within a specific industry. Market dominance is categorized into four specific areas of interest including Leader, Follower, Challenger, and Nicher. Market Leader objectives include expanding the overall market, protecting the current market, and increasing market share. Market Follower strategies attempt to imitate products that have the greatest market share (e.g. Panasonic imitates Sony). Market Challenger strategies attack the market leader, same-size companies, and small companies alike. Lastly, Market Nicher strategies target market niches that are of no interest to big companies (e.g. Logitech computer mouse).
Innovative marketing strategies are utilized to keep organizations on the cutting edge of technology and new business practices. More specifically, they dictate an organization’s rate of business model innovation and new product development. Innovative marketing strategies are placed into three categories: pioneers, early followers, and late followers. These terms are associated with what is called the first-mover advantage. For example, Amazon was the first established online bookseller. Shortly thereafter, companies like Barnes and Noble started selling books online as well. When Amazon later paired up with Borders to increase sales, Barnes and Noble counteracted by offering even more items online. In this example, Amazon is the pioneer and Barnes and Noble is the early follower. Other bookstores across the country that followed the lead of these book selling giants are considered late followers. Today, innovative marketing strategies include direct mail campaigns, editorial write-ups in newspapers, third-party newsletters, and out-of-home advertising.
Growth marketing strategies are centered around company growth. They focus on increasing sales in existing markets by targeting loyal customers. Information gathered from loyal customer buying history helps to determine ways in which growth can occur. Four categories of growth strategies aid in understanding the specifics. The first category, horizontal integration, strives to increase market power, reduce cost of trade, share product resources, and sell more of the same product. The second category, vertical integration, helps to reduce transportation costs, grasp upstream profit margins and downstream profit margins, and access downstream distribution channels. Following suit, the third category, diversification, consists of internal development of new products, firm acquisition, partnership with similar companies, and new product licensing. Lastly, the intensification growth strategy penetrates the market to increase share, increase customer loyalty, and create promising incentives that target the current customer base. An example of a growth strategy could be a frequent buyer rewards program.
The importance of strategic marketing management is based on setting clear outcomes for the organization. Without concrete goals, the marketing plan and the business are aimless. As a result, the first step in creating a strong strategic marketing plan is to outline the goals of the business and how the marketing strategy will help the business to achieve them.
Goals may include increasing revenue, improving profitability, building brand awareness, creating a loyal customer base or building industry alliances. The strategic marketing plan should clearly outline the top goals for each fiscal year so the marketing team knows for what they are aiming. In addition to goals, it is important to identify success metrics that help the organization understand how it is progressing and when it has reached its goals.
Identifying Target Audience Segments
The strategic marketing plan helps a business to establish its target market. Not all markets are right for every product or every organization. As a result, it is critical to conduct thorough market research to understand which audience segment you can most help with your product.
The marketing plan should also outline any barriers to reaching the selected target market and how the business can overcome them. For example, if your business is new and lacks name recognition, the main barrier you face may be that your prospects are not aware you exist.
Establishing Clear Brand Messaging
The importance of strategic marketing planning is that it helps the business to identify clear brand messaging. This includes outlining the vision and mission of the company in addition to the core values. These can be both internal and external. It is important for employees to know for what the company stands, but customers also want to know what kind of values are important to an organization.
Creating a unique value proposition is also part of the strategic marketing plan. This is a succinct statement that outlines what makes your organization unique. What do you have to offer that no other business in your industry offers? For example, if your business sells homemade jam, there is likely a lot of competition both locally and globally. In order to stand out, you can look into unique flavors and fruit combinations that other businesses do not make.
Working With the Marketing Mix
The marketing mix is an integral part of any strategic marketing plan. It includes product, price, place and promotion. The strategic marketing plan should outline each element of the marketing mix and ensure they are aligned to present a cohesive brand image to the target audience.
The product refers to what the company will sell in addition to how it will be packaged. The pricing strategy can be a critical factor in the buying decision, so it is important to research how to best price your product.
Place is where the sale will happen. This can be a retail store, farmer’s market, website and other locations where customers are found. Promotion is how the business will communicate with customers. This can be done through advertising, direct marketing, personal selling, sales promotions and public relations.
A marketing strategy is a written plan that includes marketing topics like product development, promotion, distribution and pricing approach; identifies you company’s marketing goals; and explains how you will achieve those goals. Marketing strategies can help you identify strengths and weaknesses of your company and your competitors so you know where to focus your marketing tactics. There are several important components of a marketing strategy that you should include when writing the document.
Goals and Objectives
Because marketing strategy means finding ways to reach your marketing goals, one of the most important parts of your strategy is the goals and objectives section. Write your marketing goals so they are S.M.A.R.T. This means they should be “specific” because concise goals have a greater chance of being accomplished than general goals; “measurable,” which means you establish criteria for measuring your progress; “attainable,” so you focus on the goals most important to you; “realistic,” which means they’re not too lofty and out of reach; and “tangible,” which means you can experience your goals with your senses.
The “marketing mix” is also called the “four Ps” of marketing: price, place, product and promotion. This means your marketing strategy should describe in detail your product or service offering, communicate the pricing strategy for how much you will charge, describe the place you manufacture and distribute your products or services and outline the promotional strategies for your company.
A marketing strategy also means comparing your product to your competitors’ products to find competitive advantages. Examine the market opportunities for your business by conducting a competitive analysis. Make a list of each competitor and include addresses, total number of employees, sales figures, target market, market share, advantages and disadvantages. Then communicate how your company will position itself to develop and sustain a competitive advantage over each of these competitors.
Marketing Strategies and Tactics
Marketing strategy also means identifying the specific marketing mediums you will use to position your product in the marketplace. Your marketing strategy will depend on your target market. For example, if you target young adults who spend a significant amount of time online, use an Internet-based marketing strategy. Then pick several tactics that coincide with that strategy, such as email marketing, social network marketing and search engine advertising.
Tactical Plans That Incorporate Features of the Marketing Strategy
The strategic marketing plan needs to outline how the business will implement the marketing plans. This helps the organization to assign budgets, timelines and resources to ensure the plans can be successfully executed. Outline specific campaigns, promotions and other details that your business will use to reach the goals of your marketing plan.