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What Is Your Marketing Plan Missing?

Posted by Patrick Murphy on Aug 5, 2015 7:00:00 AM
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ING_17215_10332-947934-editedYour marketing plan should be about people and your products

Marketing is about people. A good marketer will find out what the company’s customers want, target the right audience, and discover or formulate the benefits that make a product or service unique. If your business, large or small, does not offer something exceptional, you are just selling something that customers can get elsewhere easily. If you want your business to succeed, you must offer something your competition doesn’t.

Make your marketing effort an integral part of your company’s overall business plan. Most textbooks offer a limited definition of marketing – a combination of product, price, promotion and place – but product is most important. Base your strategy on how your customers view your product and how much they are willing to pay for it. The goal of your marketing campaign is to increase your product’s “perceived value.”

Every business, large or small, needs a plan to allocate its marketing resources. Focus on your target customer, and provide clear direction to your marketing team members. Your strategy should address your target market, product “positioning” and goals. “Targeting” and positioning influence how you “coordinate, concentrate and communicate” your objectives. If you do not take the time to develop these strategies, your marketing efforts will not achieve your goals. Failing to plan and strategize can be a costly mistake, especially in a competitive market.

Focus your marketing planning on your overall organization. Use a “product-market strategy” to direct your goods or services to a specific segment of the market – the basic building block in any marketing campaign. Target marketing influences how much money your business will make.

Devising the Marketing Plan

Analyze your situation and identify your competition, then build your product strategy. Learn about your customers, their organizations, and the market conditions that affect their industries or companies. Apply this information to establish “key planning assumptions” you can use as the foundation of your plan; then revisit it periodically if conditions or assumptions change.

Your product-market strategy should consist of:

  • Analyzing your situation; study until you fully understand your customers, competitors and overall business environment.
  • Segmenting your customers.
  • Formulating your objectives, positioning and individual tactics.
  • Predicting the outcomes of your strategy.

Focus on the customers and what they want. Never assume that you already know what your customers seek.

Once you discover what your clients want, apply this information to your product’s “features” and “benefits.” A benefit is the solution to a customer’s problem, what he or she gains by using your product or service. A feature is a specific aspect of what you are selling that can deliver the benefit. For instance, a comfortable bed is a feature that attracts consumers and the benefit is a good night’s sleep. “Managers control features, but customers buy benefits.”

How much a customer will pay for your product depends on its perceived value. The product’s benefits affect its value, including how well the product delivers its claims, how your customer perceives you, and how he or she regards the benefits you deliver.

Your product’s perceived value dictates your profit margin, so you must be able to quantify it. You can use one of these four methods:

  • Value-in-use – Balance the current costs of using a product with the price and benefits of a new product. Meaningful benefits may make price comparison inconsequential to the customer.
  • The direct approach – Query customers if they would pay a higher fee or price for your services or products.
  • The indirect approach – Conduct market research or survey your customers. This approach works best for more complex questions involving pricing, product features and product design.
  • The subjective approach – Ask customers about the value your product offers them.

Treasure the Competition in you marketing plan

To be an effective competitor, analyze your competition, including new firms entering the market. Depending on what you sell, your competition can come from suppliers, resellers and manufacturers. But rivalries are not the only source of business uncertainty, which also can arise from larger trends – economic, demographic, technological, social or regulatory. Once you identify these competitive threats, factor them into a short list of your key planning assumptions, which you can use to build your marketing strategy.

Your marketing strategy must include the definition of your target customer and market. Establish your definition through market segmentation, which requires knowing your customers, including their demographic characteristics (such as age and income), job category, industry and location. Use this information to position your product. However, segmentation does not always provide clear, clean answers. As a marketer, you must scrutinize the data to find the most effective way to reach a wide audience. Positioning is the most important element in any marketing strategy; it dictates why a customer should select your product. Customers must clearly understand why your product is superior and how it will make their lives easier. This is the “benefit advantage.”

The “competitive advantage,” in contrast, is your firm’s ability to deliver on its promises (that is, its benefit advantage) and perform at a superior level for sustained periods. Apply this information to develop your competitive positions.

What about Brand Development and your marketing plan?

Your company’s brand is its most valuable asset. In a consumer business, a brand comprises 50% to 80% of the company’s value. (However, brand is often only 10% to 30% of an industrial company’s value.) Protect and promote the use and development of your brand, and build its value with dependable quality and consistent messages. Your brand should be readily recognized, create an emotional attachment and offer a distinct benefit.

Maintain the position of your brand by consistently delivering on its promise. Management and employees must understand and demonstrate the key ideas behind the brand. Then, the company will speak in a single voice, guaranteeing that customers hear consistent messages about the company’s brand promises.

Once you have established your brand, expand it by catering to new and existing clients. Current customers will buy more through programs that stress new ways to use existing products. Use the technique of “up-selling” to persuade customers to upgrade to a higher level of service or to use a product with more features. Everything you do can affect your brand and your product’s value, from reducing the package size to eliminating benefits the customer pays for but does not use.

Advertising, personal selling, public relations and other forms of marketing build brands and make your customers want to buy your product. To make your advertising campaign successful, plan ahead. Consider its objective, message, media choices and budget. An ad campaign should support your business goals. Make it distinctive with your identifier or brand symbol, such as a logo, name, design or typeface. Reinforce your brand and your company values by using positive images, such as family gatherings or athletic events.

Sales promotions such as contests, discounts and coupons are also effective strategic tools. Bring these activities into your program to support your other marketing communication efforts, drive sales and increase visibility. Promotions often deliver results, but only for a short time. Any promotion should have an objective and a message, and should use an appropriate medium.

And then there is The Pricing Challenge

Pricing, which drives sales, can be a marketer’s most challenging activity. If you set a price too high, your company will lose business, while underpricing translates into lost revenues. Competitors’ prices also affect what you charge. If you use a “competitive parity pricing” strategy, you equal their prices. This may lead potential clients to assume that your products or services are equal in quality. Having “a strong position” for your product compels customers to evaluate and compare before they buy.

Pricing involves both perceived value and base cost. Your most effective price lies in the gap between these two key variables. When the perceived value is greater than your price, you can offer a bargain, which encourages your customer to buy!

Next Steps

Do you want to know how you stack up against best practices in your field? Request a complimentary Marketing Assessment to see how your marketing plan and strategy stack up!

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Topics: Strategic marketing, Marketing Optimization