Marketing Strategy for Startups

An Effective Startup Marketing Strategy for Accelerated Growth

Startups, like any other firm, can’t flourish without a solid startup marketing strategy. A well-documented plan for startups explains a company’s strategy for achieving its objectives. In other words, a good marketing plan serves as a road map for a startup’s success.

Startup Marketing Plans Are 100% Necessary

A marketing plan consists of strategies for the promotion of a startup’s products and/or services. It’s important to know, while there is no standard template, it usually includes details, information, timelines, and checklists that serve as the starting point for guiding the marketing process.

Standard marketing plans assist startups in identifying the right customers, media channels, and ways to target them. For most brands, the success of the business is highly dependent on a solid startup marketing strategy that is implemented on time. Marketing plans for startups can help by:

  • Determining the efficacy of a startup’s marketing strategy
  • Clarifying the market position of services and products
  • Understanding your market, competitors, and customers
  • Defining a company’s products and services
  • Recognizing and implementing various marketing strategies

The Elements of a Startup Marketing Plan

After reviewing hundreds of case studies from different digital marketing agencies for startups, we developed a marketing plan outline that can help you get your business off the ground quickly and easily.

First, customers must be identified.

First and foremost, you need to determine who exactly are your customers in as much in-depth detail as possible. Simon Sinek suggests beginning with “WHY” before moving on to HOW. Determine who your customers are and then develop a startup marketing strategy for them. You should be aware that numerous other startups are selling nearly identical products to yours. So, what is your competitive advantage? First, you must determine which type of consumer you are attempting to reach. Your efforts would be rewarded if you provided a comprehensive description of these categories. Describe the target audience in great detail so that everyone understands the goals you’re trying to accomplish.

For instance, here’s a buyer persona sketch for an e-commerce store selling yoga leggings.

Demographics: Primarily females between the ages of 18 to 28, University and College education, with median income of $40K per year.

Psychographics: Interests include athletics, gymnastics, fitness, yoga, and exercise.

Objectives: To become more attractive and slim.

Purchasing Power: $50-$100

Problems:

  • Lacks time to go out and purchase fitness gear from a local store.
  • Desires to lose weight quickly
  • Wants compression pants that will help lose weight and gain muscle

Follow the Buyer’s Journey

After there is a good understanding of the customer and buyer’s persona, you can begin tracking them to gain additional information about their purchasing habits and preferences. This will uncover the future marketing focus of your startup. It’s important to develop clear and actionable information into how to expand your business further. As a result, it is critical to track the buyer’s journey using various tools and software.

For example, you can use analytics tools to translate website traffic into the buyer’s journey. Google Analytics is a free tool that provides a wide range of tracking options, including purchases, phone calls, and contact form submissions.

Differentiate Yourself From the Competition

The only way to stand out from the crowd is to leverage your unique position. A key component of a startup marketing strategy is by implementing features and benefits that competitors do not offer. Search forums, social media, and other online communities are great places to learn what your customers like and dislike. Then, simply incorporate those features into your offer.

Then promote the features in the same places so that potential customers are aware that you offer these features. A simple yet comprehensive positioning statement of how you will meet the needs of your customers while outperforming the competition can work wonders for you. A positioning statement with a goal-oriented approach to problem-solving is preferable to a skewed vision.

Include Marketing Concepts for Specific Niche Markets

Anyone who is starting a business from the ground up should find a way to give their company an advantage. One of the most important ways for a company to gain a competitive advantage is to identify a market niche where it can best implement promotions to outperform other players in that market segment.

Finding a niche can be challenging. However, owning a specific niche should be one of the primary goals for the business. By researching the details about the niche segment, you can really gain an understanding of the market in which you’re operating, where gaps in the market are, and how to capitalize on the niche segments.

To summarize:

  • Look for new trends.
  • Experiment with new technology.
  • Discover and pursue market opportunities.
  • Create novel solutions to a problem.
  • Ensure startup marketing strategy is documented before starting.

Selecting Profitable Marketing Channels

When you first start, you will focus on multiple channels, but after a few months of trial and error, you should have identified a few channels that work.

Forbes reports that:

Among the hundreds of marketing channels available (PR, influencers, events, digital, podcasts, print, newsletters, partnerships, and so on), it’s critical to choose the ones that will work the hardest for you for the least amount of money. A good marketing strategy begins with strategically placing bets on a few channels where your customer is most likely to see your message AND take action (like, share, buy, comment, sign up, review).

Forbes

It’s also important to ensure that you’re engaging with customers at every step of the purchasing journey, from brand awareness to customer purchase. Also, be sure to stay in touch with customers after they’ve purchased to nurture brand loyalty and consumer advocacy.

Now, repeat the process.

Stay with your plan once you’ve devised one. Implement the plan for six months and then measure results to understand what worked and what didn’t. There will be times when the strategy does not go as planned; keep track of these instances and monitor your progress. You’ll have gained enough experience after six months to make better-informed decisions in the future.

Marketing Channels for Startups

Now let’s look at tactics for promoting your startup to gain new customers. Aside from the traditional approaches such as radio, print, or broadcast media, we have compiled a shortlist of various communications channels that can help grow your business.

Let’s look at how to use them effectively to make an impact.

Social Media

Social media has especially grown in popularity over the last 15 years, and serves as a good starting point for modern-marketing methods. It has transformed into an essential component of any marketing strategy because it allows you to reach a larger audience without a big investment. By taking a strategic approach, you can concentrate on smaller goals. Use it in conjunction with your other content, such as newsletters, blog articles, influencer collaboration, ebooks, and so on.

Points to remember:

  • Test content across all social media channels, but focus on a select few that are successful.
  • Post engaging and helpful content that raises brand awareness.
  • Assist potential customers by answering their questions in communities and groups.

Search Engine Marketing (SEO)

The majority of digital startups continue to rely heavily on search engines for increasing site traffic and growing revenue over a long-term timeline. They generate traffic organically from search engines like Google through blogging, earned media via public relations, and building backlinks through guest posting. That is why startups should prioritize improving their rankings on search engines, but not rely solely on it. A solid SEO strategy significantly reduces spending while increasing potential ROI.

When you first start with search engine marketing, make sure to:

Email Marketing

Whoever said email marketing is dead, is dead wrong! Email marketing continues to be an effective medium of promotion and marketing for most companies. It is also an essential component of a marketing strategy and can be effectively used for retargeting. Email marketing tactics can help businesses expand their reach, and to convert visitors into customers, email marketing necessitates the automation of drip marketing campaigns.

Email marketing is implemented as a way to move visitors from the awareness stage to the conversion and loyalty stages by sending relevant marketing material to customers at different steps of the buying journey.

Startups that want to grow their business through email marketing should:

  • A/B test email subject lines, headlines, and content.
  • Subscribers can be segmented based on their interests and preferences.

Simply put, paid advertising is absolutely crucial to the grow of any business. As a startup, you must first become acquainted with your brand before advertising it to the appropriate audience and target market. You can impress your audience and extend the reach of your business by targeting customer preferences and advertising relevant messages to them. It’s important to ensure that you identify the most effective paid marketing channels for gaining new clients. For example, Facebook marketing strategies like paid ads work great for consumer products but are less effective at driving growth for business-to-business brands.

There exists a degree of uncertainty when it comes to paid marketing and digital advertising. That’s why experts advise that your strategy should not rely solely on paid advertisements as the primary source of inbound traffic. Please keep in mind that paid ads rely on either purchasing intent or impulse purchases. People who use search engines have higher purchasing intent, whereas people who browse social media feeds in their spare time are more likely to make impulse purchases. 

Referrals and Affiliates

People frequently affiliate and referral programs confused.

  • Affiliates are other businesses that are attempting to make money by promoting your products.
  • Referrals are repeat customers who recommend your business to their friends and family.

Obtaining affiliate partnerships for your startup is one of the most effective ways to gain new customers quickly. Affiliate recommendations typically come with more authority, which positively influences people to sign up for your program. From an ROI perspective, you only have to pay your affiliates a commission when someone signs up through their referral link, rather than spending on tactics that drive traffic to your website.

In comparison to paid marketing, affiliate partnerships are a more effective way to acquire customers.

Another effective way to grow sales is through referral marketing. Generally speaking, referrals don’t perform as well as affiliate marketing, but it’s still a good marketing strategy for startups. For instance, companies like Lyft and Uber make excellent use of referral marketing. When someone downloads their app, they receive a message informing them that if someone else uses their coupon to get a ride, they will receive a credit to be used in their app.

Because of the direct impact on increasing profitability, affiliate programs deserve special attention in your startup marketing plan.

Startups can use this marketing strategy to grow their exposure and gain more customers. However, to pull this tactic off successfully, it’s important that customer support is superior. If not, you’ll risk losing your affiliate programs if errors occur with customers sourced from affiliates.

Blogs and Public Relations

Startups should also concentrate on developing content as part of their strategy. This entails developing six-month keyword research, blog marketing, and outreach strategy focused on organic rankings. According to the Content Marketing Institute, blog articles alone are an effective way to raise brand awareness about your product than any other medium. Another benefit of content marketing is you own the content. You don’t know when the social media algorithm will change, or when the paid marketing channel you use to promote your products will increase in price. But you do know your blog will always be working for you, 24/7/365.

Marketing Through Influencers

Influencer marketing is another approach to generate buzz for startups. As a result, it is a critical component of the startup marketing strategy. It entails identifying, collaborating (and most times, paying) a social media influencer to spread your message within their network. Influencer marketing does not guarantee sales, but it is an excellent way to raise brand awareness.

It’s important to remember:

  • Influencers can be used to test new products in the market more quickly.
  • More ROI can be obtained by utilizing micro-influencers.
  • Focus on a variety of micro-influencers to expand your reach.

Offline marketing should not be underestimated.

Digital marketing is absolutely sufficient to spark growth on its own. However, some startups require traditional marketing mediums to succeed. Print media and television marketing, billboard and transit advertisements, event marketing and sponsorship, and guerilla marketing are all examples of offline marketing channels. Because of their impact on effectively growing a brand, these marketing options should be considered when developing a startup marketing plan.

Other examples also include sales brochures, business cards, flyers, and vouchers. Before deciding on the type of offline channel to use, it is critical to first have a deep understanding of your customers.

Marketing Performance Metrics

Now that you’ve determined all aspects of your marketing strategy, it’s time to put your plan into action. Begin by marketing through various social media channels, start broad then narrow your campaigns to a few that work.

Prepare to Make Changes

Lastly, don’t be afraid to change the direction of your campaign to find a successful marketing strategy for your startup. Things have a habit of changing. To meet market demands, all businesses must be ready to change the course to maintain a competitive advantage.

Were you able to use this guide to create a startup marketing plan? What else should we say about it? Let us know by sharing this article on social media and tag us in the post!

Customers+Wants+And+Needs

Understanding Your Customer’s Wants And Needs

Successful Marketing Requires Understanding Your Customer’s Wants and Needs

At the end of the day, the basic customer’s wants and needs are the primary driving force for taking action to engage with your brand and buy your products or services. Whenever a need goes unsatisfied, there exists a gap between what a customer desires and what they currently have – whether on a physical or psychological level. This is important to remember for global mass-market organizations, mid-market companies, and small-to-medium-sized businesses because the impact is the same. If a need in a market is unmet, the competition will have an opportunity to gain an advantage when contending for the same customers.

Consumer Needs

This is where human psychology and behavior come into play, which focuses on the premise that every human has a need. Needs can be a basic physical need critical to our survival, such as food, drink, shelter, and sleep. People also have social and emotional needs that are critical to one’s happiness and mental health, such as belonging, security, esteem, love, and self-fulfillment. Needs are what motivates the behavior of people to make a decision to find a solution, which in many cases is “consumption behavior”. Having needs fulfilled do not come from marketers or social forces; they come from the basic biological and psychological aspects of human existence.

Similar to customers, businesses also have needs that must be satisfied to assure survival and well-being. The driving force behind the needs of an organization is determined by the strategic objectives and the resources required to achieve the objectives, such as capital, equipment, inventory, supplies, or services.

Consumer Wants

A consumer’s wants usually reflect the desired preferences for specific ways of satisfying a need. Thus, people usually want particular products, brands, or services that satisfy their needs in a specific way. A person is thirsty but wants something sweet, so perhaps they choose a Coke. Someone may need a new car, but they want a pickup truck because they live on a farm (a truck will best fit their needs) but they want Ford because “they’re tough” or perceived a dependable. When considering a B2B organization, a company may need office space, but they want an office with a prestigious address in midtown Manhattan.

Usually, needs are relatively few, but wants are shaped by social influences (celebrity or influencer endorsements), past history (recalls or awesome charitable work), and consumption behavior (the product or service is practical, functional, and effectively solves a problem). It’s important to remember that different people have different wants to satisfy the same need. Everyone needs to keep warm on a cold winter night, but some people want to use a down comforter while some people want to crank up the heat, and others may even want to use an electric blanket.

These differences between the customer’s wants and needs help to shed light on whether or not marketing campaigns and advertising can actually meet people’s wants and needs. Neither a marketing agency nor any other social force can create the physical and emotional aspects of being human. However, marketing and social forces can influence and customer’s wants and needs. A major role of a marketing agency is to help develop and promote products or services by simulating a customer’s specific want for a specific brand that helps them better satisfy one or more of their needs.

Photo by Demian Smit from Pexels

Do Customers Always Know What They Want?

Some business owners question whether or not a strong focus on customer needs and wants is always a good thing. It’s been argued that a customer may not always be able to articulate what they need or want. For instance, the smartphone is a good example of how consumers may not know that a product or service is technically possible, however, the need for more convenience always exists.

Akio Morita (late CEO of Sony) once said:

Our plan is to lead the public with new products rather than ask them what kind of products they want. The public does not know what is possible, but we do. So instead of doing a lot of marketing research, we refine our thinking on a product and its use and try to create a market for it by educating and communicating with the public. (1)

In fact, the Chrysler Minivan was developed with little or no market research. (You’re welcome, Karen.) In comparison, the Ford Edsel, New Coke, and McDonald’s Mclean low-fat burger, were all flops that were developed with a lot of customer feedback. (2)

When you think about it, the laws of probability dictate that some new products will succeed and even more will fail, regardless of how much money is invested into market research. Although, we should point out that without fault, critics of customer market research argue that paying too much attention to needs and wants can suppress innovation, leading companies to produce only marginal improvements, or even settling for producing line extensions of products and services that already exist, wrapped up with brand messaging as something different. How then, should business owners and marketers find a balance in this dilemma?

Conduct Market Research

While end-consumers may not always be able to accurately describe what they want, the same usually is not the same for business-to-business customers. In fact, the customer’s wants and needs of a B2B business are generally very clear and easy to understand. Oftentimes, B2B products are developed by the urging of customers and are designed in partnership between vendor and customer.

In contrast, gaining an understanding of consumer markets through research and opportunity analysis should be approached from an R&D perspective. This can be achieved by a conversation (conducted via focus groups, surveys, etc.) about technical concepts that can then be turned into salable products or services. The following is a great example of how we utilized social media to conduct market research for our client, Well Played Board Game Cafe.

A customer focus is critical for business development. It’s important to utilize analytical insights, market experience, and customer inputs to decide what products or services to make, what benefits they will offer to customers, and whether customers will value the benefits – at least enough to make it commercially viable.

The success factor of focusing on the customer often becomes clear when businesses attempt to develop a variety of new product offerings from an already well-established and successful product or technology. (i.e. Crystal Pepsi). In the case of new innovative technology like Augmented Reality, the tech must first be developed into a prototype or product concept before consumers can react and the commercial potential can be determined. In other cases, customers are able to describe the specific benefits they need or want without knowing what is technically feasible.

Customers usually find it easier to express what they don’t like or want about a product or service and what additional benefits they would like from something new. For example, before Apple introduced the iPod (yes, even before the iPhone), very view people knew about the convenience the product provided or were unaware of the possibilities of digital technology. At the time, if you asked a customer if they would buy a product smaller than a Sony Walkman that could store 10,000 songs they could import from their computer without messing with changing CDs and the songs won’t skip we all would say “YES PLEASE!”

THE TAKEAWAY

Although a strong focus on customers is necessary for developing new innovative products, it also shouldn’t hinder business owners from focusing on satisfying the wants and needs customers are able to articulate by improving current products or services. More importantly, even though organizations can succeed in the short run by ignoring customer desires, incorporating a strong customer focus pays off over time in terms of market share and profit. (3)

1. Quoted in Gary Hamel and C.K. Prahalad, Competing for the Future (Cambridge, MA: Harvard Business School Press. 1994)

2. Justin Martin, “Ignore Your Customer”, Fortune, 5/1/1995/ P121-126

3. “The Effect of Market Orientation on Business Profitability,” Journal of Marketing 54 (4/90) p1-18

Samsungs+Marketing+Strategy

How Samsung’s Marketing Strategy Transformed Them Into A Global Brand

Marketing Strategy That Transformed a Business

Despite being one of the world’s largest producers of electronics devices, you may be surprised to find out that Samsung electronics started out primarily as a low-tier manufacturing brand with cheap consumer perception. In this analysis, find out how Samsung’s marketing strategy literally transformed them into the global electronics powerhouse seen today.

A Brief History About Samsung

Back in 1970, Samsung’s electronics unit started out making cheap TV sets for the Sanyo label, but over time, it transformed into an innovative company and has turned out to be a pioneer in developing large flat-screen displays, plasma TVs, and cutting-edge smartphones. But until the mid-1990s, they competed mainly by developing technical components and low-cost manufactured products for bigger brands, such as Dell, Hewlett Packard, and GE. They were also selling other low-cost consumer products – like TVs and microwave ovens under the Samsung brand through discount chains like Walmart.

Until the 1997 Asian market crash, the low-cost-driven competitive strategy worked well for them. At the time, the market for memory chips and other components Samsung supplied to electronics producers saw increased competition, leading to excess capacity, while sales of the Samsung branded products were falling as well. Despite these facts, the company’s CEO Yun Jong-yong voiced that Samsung could produce products that were as good as Sony’s, but because of the brand’s downmarket image, their TV’s would sit at the back of the stores. 

What Is Samsung’s Marketing Strategy?

What Is Samsung’s Marketing Strategy?

Samsung’s marketing strategy focuses on developing new innovative products that are supported by strong branding and promotional campaigns. Mr. Yun initiated a new competitive strategy with the goal of developing and marketing superior products while also building an image of Samsung as a stylish, high-quality brand worthy of a premium price. The objective was to establish a unique position using technical innovation while designing more appeal to a younger generation, as well as upscale customers around the world. Yun argued that to continue to compete on price would eventually be their downfall.

R&D Into Innovative Tech

Samsung chose to invest heavily in technical innovation and R&D. In order to have a competitive advantage driven by innovation, Samsung had to become a pioneer in developing new technology. During the 90’s, Sony had an advantage in consumer-electronics, but it was rooted in analog technology. The digital world required new products and consequently, the firm shifted substantial resources into developing large-area LCDs, chipsets, and cellphones. Fast forward to the economic crisis of 2008-2009, Samsung spent over 7 Billion dollars for nearly 6% of the unit’s revenue into research and development, and at the time more than 25% of the company’s workforce engaged in R&D.

Product Development & Design

Understanding that cutting-edge technology does not always guarantee market success, Samsung also focused on product development and design. Their goal was to create products that deliver benefits that at least some segment of consumers will consider to be worth the price. Since many product benefits may be subjective – attractive styling, say, or a cool image, or maybe the quality of camera – new product development at Samsung usually involves a team of designers who collaborate closely with the firm’s engineers, manufacturing teams, and marketers. 

Brand Building Campaigns

Last and certainly not least, Samsung’s marketing strategy focused on creating a promotional campaign to build Samsung’s brand image. Revamping their marketing efforts was just as critical to the success of a new competitive strategy because even the most technically sophisticated and well design products are likely to fail unless customers know they exist, can acquire them easily, and think they’re worth the money.

Eric Kim was brought in to head a global marketing effort. One of his first moves was to re-organize the firm’s distribution channels to be consistent with the strategic objective of establishing Samsung as a high-quality brand. To start, many of the company’s products were pulled out of the low price discount chains and shifted distribution through big-box electronics stores like Best Buy and online shopping through Amazon.

To ensure consistent marketing communications across all markets, they also consolidated their roster of advertising agencies from 55 down to one global advertising group (WPP), who launched the organization’s first brand-building campaign. Using fashion-forward TV commercials, they created a contemporary sense of style while also promoting the technical sophistication of their products. WPP also made use of promotional tools such as product placements, social media ads, sponsorships, earned media, and online advertising to strengthen the brand.

What Were the Results of Samsung’s Strategic Marketing Decisions?

The revamped competitive strategy and marketing programs that Samsung designed and implemented have been a huge success. The global value of Samsung’s brand increased by more than 200% from 2003 to 2008, and it took over Sony as the most valuable consumer-electronics brand. 

As a result, the unit sales grew to $119 billion by 2009, and with the advent of the Samsung Galaxy, revenue has grown into a staggering $218 billion as of 2018. According to the vision statement on its website, Samsung seeks to achieve $400 billion in sales while placing Samsung Electronics’ overall brand value among the global top 5 by the end of 2020. Additionally, it seems they continue to lean into their strengths, as Samsung continues its commitment to furthering innovations in technology and products. For instance, the release of the Galaxy Z Flip and the Galaxy Fold are two of the latest examples of leading innovation coming out of Samsung.

IBMs+Marketing+Strategy

The Evolution Of IBM’s Marketing Strategy

The Corporate And Business Implications of IBM’s Marketing Strategy Over The Years

For many years, IBM put the majority of its efforts into the hardware side of the computer industry. Founded in 1911, IBM initially developed electric tabulating machines. Later on, they focused on developing large mainframe computers in the 1950s and eventually PCs, servers, and related equipment by the mid-1990s as the internet began to take off. Although their product mix has evolved their competitive strategy has remained mostly consistent. Rather than being positioned as the lowest-cost provider in the market, IBM’s marketing strategy has continuously pursued a high-quality differentiation strategy by offering advanced products and excellent technical service at a premium price.

To execute this strategy, the company has committed to a steady pipeline of cutting-edge technology by allocating huge amounts of resources into R&D and product development.

What Is IBM’s Marketing Strategy?

IBM’s marketing strategy involves substantial investments into both traditional and online advertising, as well as promotional budgets to inform potential customers about the always evolving product lines and to reinforce brand awareness. Equally as important, is their history of spending millions on recruiting, developing, and compensating one of the largest and technically competent salesforces. 

A Shift in Strategy: Technology Changes and Competitor Actions

Beginning in the mid-1990s, IBM’s traditional lines of business started to face trouble, with the company’s worldwide PC market share declining to 8% by 1999. Similarly, while IBM’s sales of UNIX-based computer servers grew rapidly in the mid-to-late nineties, they were only able to capture a small share of the market. Even its esteemed mainframe business (which had been a high-profit/low-growth market throughout the ’80s and early ’90s) suffered losses due to falling prices and declining demand. 

Many of these performance problems can be linked to a number of factors that softened the impact of the company’s proven corporate, competitive, and marketing strategies. For instance, vast changes in technology – such as the rapid increase in PCs & Desktops, the emergence of the internet, and the adoption of computer networks – greatly contributed to the reduced demand for large mainframe computers and centralized data processing systems. 

IBM’s differentiation strategy became less effective as some of its product’s life cycles began to mature and customer’s purchasing criteria began to change. As the PC industry matured the performance differences between competing brands became less pronounced, leading customers to be more price-conscious, less technically sophisticated, and more interested in buying easy-to-use devices. As a result, IBM’s premium price position was put at a disadvantage in attracting such customers.

Additionally, IBM’s focus on B2B customers contributed to the organization’s problem of competing in newly emerging markets for server equipment and software. Because of the firm’s hesitation to pursue small start-ups during the dot-com boom, IBM left an open playing field for Sun, Cisco, and other competitors in the market.  

Implementation of a New Corporate Strategy

In the wake of lackluster performance and a changing environment, IBM’s executive team began to adjust the corporate mission by de-emphasizing the development and manufacture of high-tech hardware while focusing on providing customers with business consulting, advanced software, and outsourcing services. In 2005, IBM sold its personal computer and x86 based server divisions to China-based Lenovo Group Ltd.

To gain leverage on the firm’s existing capabilities and its long-term relationships with traditional customers, new services were concentrated on helping large enterprise organizations hook old corporate databases (often on mainframes) into new online phone systems (such as DSL) and eventually cloud-based platforms. 

This new extensive strategy involved the development of “enterprise solutions on demand,” which were packages of networked and modularized technology, software, and consulting services that were aimed at helping companies in numerous sectors rethink, redesign, and manage large portions of their operations. This included everything from accounting and customer services to human resources and procurement. For example, the Bank of Russia was able to reduce its transaction processing costs by 95% using an IBM-based system and software.

Creating New Business and Marketing Strategies for the Information Age

The new emphasis on business services and software as the primary path toward future growth also forced some changes in IBM’s marketing strategy. Although the firm continues to differentiate itself from competitors by producing superior quality products at premium prices, IBM’s new service business relied on several different factors such as the knowledge, experience, and expertise of its consultants. This required IBM to reorganize and allocate internal resources toward developing a superior salesforce that could provide executive-level business consulting in addition to traditional technology consulting. 

Over the past decade, IBM has pivoted primarily toward the development and acquisition of software services (such as The Weather Company and Red Hat, for instance), artificial intelligence, and cloud-computing technology. In 2009, more than 70% of the 4,900 U.S. patents granted to IBM were for software and services and in 2011, IBM gained new attention worldwide for its AI program “Watson”, which was exhibited on Jeopardy!

In late 2020, IBM announced that it is splitting itself into two separate public companies, with the IBM brand pursuing high-margin cloud computing and artificial intelligence, built on the foundation of the 2019 Red Hat acquisition, while the new company (dubbed “NewCo”) will continue to focus on the organization’s existing global technology services.

Customers Buy Benefits not Products

Customers Buy Benefits, Not Products

Customers Buy Benefits, Not Products

It’s true that products and services will satisfy a customer’s need when they’re acquired, used, or consumed, but we argue that customers buy benefits, not products. Indeed, when a customer purchases a product or service to meet their needs, they’re really buying the benefits that are provided rather than the actual product.

When a customer has a headache, they are in-market to purchase pain relief, not Tylenol. This fact is critical when it comes to understanding your customer’s wants and needs.

Benefits are different between customers, depending on the specific needs each customer is looking to satisfy and the situation where the product or service will be used. Being that different customers want different types of benefits, they make different purchasing choices by associating importance to different product features when choosing brands within a certain category.

Think about someone you know who wanted to buy a car and they made their decision based on a subconscious need for social acceptance or self-esteem. In this case, the benefit is the feeling they receive from the product. They might feel this way when buying a Mercedes because it comes with a prestigious brand image. They might associate importance with engineering sophistication, European styling, or state-of-the-art features. Or maybe you know a friend who has to haul around 4 kids and needs a vehicle that is practical for a parental lifestyle. They’d likely go with a Minivan or full-size SUV because of the need for passenger capacity, safety ratings, and reliability.

Services also create benefits by reducing costs, offering simplification or convenience, and creating the ability to accomplish tasks faster and more effectively. This can be seen in business-to-business (B2B) service providers like a marketing agency or a payroll-processing company, as well as with consumer services such as mobile apps for banking, shopping, or even refilling your prescriptions.

The line between products and services blur together with technology companies pushing the boundaries of their marketing mix. Although they do sell products, Amazon.com thrives because they’re an industry-leading service provider that offers customers convenience through 2-day shipping, video and audio streaming, and more via Amazon Prime. This is a perfect example of why customers buy benefits, not products.

Benefits and Price Determine Value

A customer’s estimation of the benefits and the capacity to satisfy specific wants or needs ultimately determines the value that is attached to a given product or service. When a customer compares different products/services and brands, they will select what they think will provide the most need-satisfying benefits. Therefore, value is the conscious and subconscious determination of the capabilities, features, and price of a product or service, and this means different things to different people.

It’s important to note, though, that a customer’s value estimation of a product or service is not always accurate. This could be as simple as getting a bad haircut. Or for instance, a warehouse manager in Texas decides to install an air-conditioning system on the premise that it’ll provide more comfort for employees during the summer, leading to happier employees (emotional benefit) and increased productivity (financial benefit). After the installation is complete, the manager may learn that the cost of operation is higher than expected, has a slow response time to changes in outdoor temperatures, and the blower isn’t strong enough to cool distant locations in the building.

This is why the perceived value and satisfaction the customer gains also depends on whether the product or service actually lives up to the expectations and delivers on the promised benefits. This is why the activities that occur after the purchase (i.e. delivery, installation, operating instruction, repair, follow-up, etc.) are critical for ensuring that customers stay satisfied. This also makes it essential for businesses to manage customer complaints effectively. On average, businesses don’t hear from 96% of customers who are dissatisfied with their product or service. Of those who do complain, 50% will do business again if their complaints were handled compared to 95% if the issue is resolved quickly. (1)

Photo by Andrea Piacquadio from Pexels

The Value of Long-Term Customer Relationships

In the past, organizations considered the individual transaction with a customer as the actualization of their marketing strategy. Over time, however, markets have become increasingly competitive, forcing businesses to shift their strategy toward building long-term relationships between the customer and business. Over the last 15 years, we’ve seen this become increasingly prevalent with the use of social media marketing as an effective tactic in any marketer’s toolbox.

Focusing on long-term customer relationships can be quantified using a customer’s lifetime value (LTV), which is the expected value of revenue that a customer will produce over time. For an auto manufacturer, the LTV of a first-time car buyer that stays satisfied and loyal to a specific brand, purchasing multiple vehicles over their lifetime could reach well over $1M.

It’s important to remember that although activities focusing on improving LTV may increase marketing expenses, the initiatives overtime pay off with improved market share and profitability. This is for one simple reason – the cost of obtaining a new customer is far bigger than the cost to keep an existing one. (2) Persuading a customer to leave a competitor can be costly, because it often requires a financial incentive (lower price or special promotional offer) or an extensive and compelling communications strategy (using advertising or sales force effort). In comparison, the increased loyalty that comes from focusing on long-term customer relationships has a lower upfront cost impact and generally yields higher profits.

(1) Patricia Sellers, “How to Handle Customers’ Gripes,” Fortune, October 24, 1988 p. 88

(2) Patricia Sellers, “Keeping the Customer You Already Have,” Fortune, Special Issue, Autumn-Winter, 1993 p. 57

How+To+Do+A+Market+Opportunity+Analysis

How To Do A Small Business Market Opportunity Analysis

How To Do A Market Opportunity Analysis For A Small Business

A critical aspect of the success or failure of any marketing strategy is whether or not the elements of the marketing program are consistent with the reality of the market environment. This generates the need for a market opportunity analysis to be completed as a means to monitor and evaluate the favorable circumstances and challenges presented by factors outside of the organization’s control. Therefore, this responsibility falls on the individual or team responsible for managing an organization’s marketing initiatives. In this article, we identify the four primary actions that are required to conduct a market opportunity analysis. 

GAIN AN UNDERSTANDING OF THE MARKET OPPORTUNITIES

Having an awareness of the nature and attractiveness of any opportunity requires a look at the market as a whole. For instance, asking questions like:

  • What environmental trends are driving or constraining market demand, as well as the fundamental characteristics of the industry as a whole?
  • What are the characteristics that are unique, only the organization in question? 
  • Does the company have the necessary resources (talent, knowledge, time, etc.) to get the job done?

COMPLETE A CUSTOMER ANALYSIS

At the end of the day, the main goal of marketing is to facilitate and support a final transaction with customers. This requires, amongst many other things, the evaluation of the motivations and behavior of current and potential customers. This means conducting market research to analyze the consumer behavior of current and potential customers to understand their wants and needs.

This leads to the importance of knowing how customers’ wants and needs impact the benefits gained from the product or service, and what is the criteria used to select a brand. Having an understanding of where the customer shops is critical, in addition to how they respond to specific prices, promotions, or service policies. This is the point in which an understanding of the mental path customers take when making a purchasing decision, including the psychological, social, and emotional factors that influence the process. 

CONDUCT MARKET RESEARCH AND FORECASTING

It falls into marketing’s wheelhouse to collect objective information about potential customers, the satisfaction of existing customers, feedback from wholesale or retail partners, as well as the strengths and weaknesses of competitors.

When conducting market research, our team likes to utilize Porter’s 5 Forces Framework to analyze the different elements that impact markets. These include:

  • The Threat Of New Competitors
  • The Bargaining Power Of Buyers
  • The Threat Of Substitute Products, Services, or Technology
  • The Bargaining Power of Suppliers
  • The Competitive Environment Among Existing Competitors

It’s important to remember that for marketers to make informed and educated decisions, research data must also be converted into estimates of sales volume or expected profit. Otherwise, it’s almost impossible to determine the expectations and return on investment that a specific marketing program can generate within particular segments and timeframes. This creates the need for marketing agencies to prove their techniques and methods for collecting and analyzing market data, as well as forecasting potential sales volumes. 

EVALUATE MARKET SEGMENTATION, TARGETING, AND POSITIONING

Not all customers are created equal – meaning each prospective customer with a similar need requires the same products or services to satisfy such needs. Oftentimes, purchasing decisions are influenced by personal preferences, personal characteristics, social circumstances, etc. Although, it’s important to remember that customers who purchase the same product may be driven by different needs or benefits, and rely on different sources of information about a product, and may even purchase a product from a different distribution channel. 

Thus, a critical step of developing a marketing program is to divide customers into market segments – which are distinct groups of people with similar needs, interests, circumstances, or characteristics that influence them to respond to marketing messaging in a similar way to a product or service. After the market segments have been defined, a company must decide how to position the brand, product, or service to the selected target segment. In some cases, this means designing a product or service, and its marketing program to emphasize the attributes and benefits that appeal to customers within the segment, while also distinguishing the company’s brand from competitors. 

HOW+TO+BUILD+AN+EFFECTIVE+MARKETING+PROGRAM+TO+GROW+YOUR+BUSINESS

How To Build An Effective Marketing Program To Grow Your Business

What does an effective marketing program look like?

Building long-term customer relationships does not happen overnight. Really, it comes down to the result of collaboration and many different actions and decisions that need to be planned and implemented by, well, somebody. In this article, we break down our internal process that we go through for developing marketing strategies for each of our clients.

THE STRATEGIC MARKETING PROCESS

In some cases, organizations have the necessary resources – the talent, technology, time, and budget – to develop and execute an entire marketing strategy on their own. Often times though, it’s more common to find most marketing programs involve internal components interfaced with cooperative efforts from specialized vendors: suppliers, wholesalers, retailers, and even local advertising agencies. It’s also possible that customers are involved in determining or influencing certain parts of a marketing program, such as new product development and testing. 

Regardless of the team or individuals who lead the project, we define the entire progression of analysis, decisions, and activities involved in planning, carrying out, and evaluating a strategic marketing project as the marketing management process.

The following is a diagram of the strategic marketing management process we follow:

By following this technique to develop all of our strategic marketing campaigns for our clients, we’ve been able to lead a track record of successful performance. In this article, we take a detailed look at our marketing management process used to plan and execute strategic marketing programs.

A DATA-DRIVEN DECISION MAKING FOCUS 

The framework of our marketing management process relies on a structured approach involving a data-driven decision-making focus. Developing and implementing an effective marketing program requires various interrelated details for what to do, when to do it, and how. These decisions are the major focus of developing creative and compelling marketing campaigns and can be applied to single products, across an entire product line, as well as to services. 

I. MARKETING STRATEGY DEVELOPMENT

We begin by first identifying the business objectives and strategies that need to be taken into account by conducting a discovery call with prospective customers. The criteria determined at this step of the project is often the most important, as it serves as the organizational framework for marketing campaigns that are developed. 

II. OPPORTUNITY ANALYSIS

The objective of conducting an opportunity analysis focuses on identifying the existing details about the prospective business, industry, and trends- this is defined as the 4 Cs of marketing: Company, Customers, Competitors and Context.

At this step, we focus on conducting a substantial amount of analysis of prospective client’s customers, competitors, and the company itself before making suggestions concerning specific components of a marketing program. This reflects our perspective that successful marketing decisions depend on objectives, supported by a detailed and evidence-based understanding of the market and context of the industry environment.

It is important to acknowledge that an opportunity analysis is based on the time in which the evaluation occurred. It is also necessary to conduct ongoing analysis of market opportunities, simply because things change and the unexpected has a habit of occurring. If anything, the COVID-19 crisis has taught us a hard lesson that this is the case. Therefore, room for adjustments must always be considered to allow for new activities as a response to changes in consumer demand, the actions of a competitor, or shifting economic conditions. However, a comprehensive and ongoing analysis of the market environment allows businesses to make changes in an informed and logical way rather than relying on guess-work. 

The analysis that is necessary to formulate the structure for a good strategic marketing plan focused on four elements, or the 4Cs, that encompass the overall market environment that impacts the success of a strategy:

  1. The Company’s internal goals, resources, capabilities, constraints, culture, internal processes, and strategies.
  2. The Context of the business environment like social, economic, and technology trends.
  3. The Customer’s wants, needs, and characteristics that influence purchasing decisions.
  4. The Competitor’s relative strengths and weaknesses within the business environment.

This evaluation also includes an examination of an organization’s:

  • corporate strategy – the reflection of the mission and provides direction for decisions about what businesses it should pursue, how to allocate resources, and its growth goals.
  • competitive strategy – how a business plans to compete in the market

It’s important to remember that one important role of a marketing agency is to monitor and analyze the customer’s wants and needs, as well as the emerging opportunities and threats posed by competitors and trends in the market. Thus, many of the interconnected decisions about market segmentation, advertising channels, pricing, partnerships with suppliers, retailers, and other vendors reflect the corporate and competitive strategies and inform the development of an effective marketing strategy. By conducting thorough opportunity analysis, marketers are able to ensure that marketing strategies are realistic given a company’s resources and capabilities, while also being consistent with the organization’s corporate and competitive strategies. 

III. DEVELOPING STRATEGIC MARKETING PROGRAMS

While designing a new marketing program, there are two different operational paths that an organization can take:

PATH A: NEW PRODUCT-ENTRY

When formulating a strategic marketing program for a new product entering a market, there are three interrelated sets of criteria to consider:

  1. There must be specific objectives to be accomplished within the target market, such as sales volume, market share, return-on-investment, or profitability goals. The objectives must also be consistent with corporate and competitive strategies, while also being specific enough to allow management to monitor and evaluate performance over time.
  2. The overall strategy must appeal to the consumer while also being consistent with the company’s capabilities and resources.
  3. The tactical use of communications and distribution channels must be aligned and integrated with all other elements of the marketing program.

PATH B: SITUATIONAL POSITIONING

A marketing program for a product or service should not only reflect the demand and competitive environment within the target market but also take into consideration the specific objectives of the organization. It’s important to remember that the product life cycle, market demand, and competitive conditions may change over time. Thus, marketing strategies must be developed to be appropriate and successful for different market conditions at different stages of the life cycle. 

IV. ESTABLISHING A MARKETING PROGRAM

The initial stage of developing a strategic marketing plan always begins with determining the objectives and overall goals of the campaign, ideally broken down for each target market segment. The objectives should be partially determined by corporate and business-level goals, strategies, and available resources. For example, Samsung’s marketing strategy involves its product line, pricing, supply chain policies, advertising, and promotion efforts, but their marketing decisions are influenced by the company’s competitive strategy of producing innovative lifestyle products sold at a premium price. 

COMPONENTS OF A MARKETING STRATEGY

All of the tactical decisions that are made while designing a marketing strategy fall under four main categories that a business has the ability to control over time. Traditionally, these categories are defined as the 4 Ps:

  • Product – product lines, quality, features, style, options, packaging, guarantees, warranties, and customer services
  • Price – list price, discounts, allowances, credit terms, payment periods, and rental/leasing options
  • Promotion – advertising, salesforce, point-of-purchase materials, and publicity
  • Place – product or service development, distribution channels, supply chain, locations, availability, and inventory levels

Being that each element relies on each other, the decisions within this framework must be consistent and integrated with each other. When decisions are made surrounding these four components come together, it’s generally referred to as the marketing mix. 

V. IMPLEMENTATION AND CONTROL OF THE MARKETING STRATEGY

One critical element that determines the success of a marketing strategy is the organization’s ability to effectively execute the plan. This ultimately depends on whether or not the strategy is aligned with the company’s resources, organizational structure, operational capabilities, and the skills and expertise of its employees. Thus the importance of developing a plan that is tailored to the existing resources, competencies, and procedures of an organization, or that can aid in creating new structures and systems fit for the chosen strategy. 

In addition, an ongoing analysis should be made to determine if the marketing strategy is meeting the objectives and if not, determining if the plan should be adjusted. Implementing a measurement and control process allows for quantitative and qualitative feedback that can be used for ongoing opportunity analysis.

How then do we measure the success of a marketing strategy? Depending on the goals and objectives, performance could be measured by impressions, reach, engagement, clicks, new followers, leads, or conversions. Share