Most businesses, whether small to medium-sized and unfortunately even large companies struggle with marketing. The marketing function is often treated as a cost centre at best and at worst an in-house advertising agency conducting ad hoc activities that don’t produce measurable results that are tracked to the top and bottom line.
Lets’ start with a definition of marketing. Marketing can mean many different things to many people. To some its brochures and slogans and print ads in magazines, to others its websites and email campaigns, still others say its communicating with customers and to the intellectually inclined, it may be a Master’s program crunching numbers on brand equity and market share.
Yet marketing is much more than brochures and websites and numbers; it’s an investment that generates revenue, profit and opportunity for growth.
Marketing is the process of developing and communicating value to your prospects and customers.
Where Do we Start?
Good marketing is essential for every company. It can make a company with a mediocre product successful, but poor marketing can send a good company out of business. Interesting , isn’t it?
Lets’ start with where you are at: Your Market Position
What sets your product, service and company apart from your competitors?
What value do you provide and how is it different from the alternatives?
If you are selling tomatoes at the market, current accounts in the bank, ladies’ shoes, travel luggage, or car insurance, how do you differentiate yourself?
Competitive positioning is about defining how you’ll “differentiate” your product or service and create value for your market. It’s about carving out a SPOT in the competitive landscape and focusing your company to deliver on that strategy.
A good strategy includes:
- Market profile: size, competitors, stage of growth
- Customer segments: groups of prospects with similar wants & needs
- Competitive analysis: strengths, weaknesses, opportunities and threats in the landscape
- Positioning strategy: how you’ll position your offering to focus on opportunities in the market
- Value proposition: the type of value you’ll deliver to the market
When your market clearly sees how your offering is different than that of your competition it’s easier to generate new customers and guide them to buy. Without differentiation, it takes more time and money to show clients why they should choose you. As a result, you often end up competing on price – a tough position to sustain over the long term.
One of the key elements of your positioning strategy is your value proposition.
There are three essential types of value: operational excellence, product leadership and customer intimacy.
This strategy aims to accomplish cost leadership. Here the main focus centres on automating manufacturing processes and work procedures in order to streamline operations and reduce cost.
Example of Operational Excellence
Carrot Technology’s customers don’t want bells and whistles, just a good product at the lowest possible price. Carrot focuses on operational excellence so they can continually offer the lowest price in the market. For example, they just patented a new machine that dramatically lowers their costs. They’re not trying to come up with new or better products; they just want to produce more volume at a lower cost. Carrot’s value proposition is operational excellence; they convey it in their messages and in everything they do.
Companies focusing on Operational Excellence
Dell, South West airlines, Amazon, Wal-Mart, IKEA
This competitive strategy aims to build a culture that continuously brings superior products to market. Here product leaders achieve premium market prices thanks to the experience they create for their customers. The corporate disciplines they cultivate include research portfolio management, teamwork, product management, marketing, and talent management
Example of Product Leadership
Alpha Co.’s customers care most about quality – they want the best product. Alpha is completely dedicated to innovation and quality. They’re constantly working on product improvements and new ideas that they can bring to market. They know what their competitors are doing and are completely focused on staying one step ahead in order to capture a greater share of their market. Alpha’s culture is all about product leadership, and their prospects see it even before they become customers.
Companies focusing on product leadership
Sony, Apple Inc, BMW, Pfizer, Johnson and Johnson, Nike footwear
The customer intimacy strategy focuses on offering a unique range of customer services that allows for the personalization of service and the customization of products to meet differing customer needs. Often companies which pursue this strategy bundle services and products into a “solution” designed specifically for the individual customer. The successful design of solutions requires companies to possess deep customer knowledge as well as insights into their customers’ business processes.
Example of Customer Intimacy
Starboard’s market is flooded with products at all ends of the price spectrum. Yet Starboard’s customers want more than a product off the shelf; they want customized solutions. So Starboard’s mission is to know as much as possible about their customers’ businesses so they can deliver the correct solutions over time. Starboard knows they can’t just say “We offer great service.” Starboard’s team knows they have to deliver on that value proposition in every interaction they have with prospects and customers.
Companies focusing on customer intimacy
IBM, Lexus, Virgin Atlantic, Nordstrom, Goldman Sachs
Rather than leaving your positioning and value proposition to chance, establish a strategy. Think impartially about the wants and needs of your customers and what your competition offers. You may find an unmet need in the market, or you may realize that you need to find a way to differentiate from your competitors. As a result, you may decide to promote a different attribute of your product, or you may find entirely new opportunities to create new products and services. Either way, you’ll strengthen your business in both the short and long term.
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