The Value of Marketing Strategy
06.18.2012 / Posted in Articles, Strategy
Does your company have a strategic marketing plan?
Seems like a silly question, but we ask it often at FrogDog. And we find that most companies don’t. (So, if this is your company, you’re not alone.)
We get a lot of calls asking us to help put an ad campaign together, for example. Or for a series of direct marketing materials. When we do, we ask about the overarching marketing strategy into which these efforts fall. And this is where, quite often, the conversation goes quiet.
These people are asking for help with marketing tactics. A marketing strategy, put simply, is a statement of how a company will achieve its marketing objectives. A tactic is a specific marketing initiative that implements the strategy. A marketing plan outlines the strategy and then describes what tactics marketing and sales will undertake to achieve targeted goals.
Without a strategy, you can’t develop a tactical plan—and you shouldn’t bother executing even a single tactic. Otherwise, you are likely spending money on activities that won’t work with your audiences and markets. Ouch.
Let’s look at the benefits of a fully developed strategy marketing plan:
Don’t confuse this with a differentiation strategy. When we use the word “differentiation” here, we are referring to what makes a company different from its competitors. This helps drive a company’s positioning in the market and the messaging to its audience. If a company understands its competitive landscape, it can better communicate its value.
Chipotle is a fast food chain that has seized this idea and done a fantastic job of rising above the massive array of fast food options. Through messaging and brand imagery and product differentiation, the chain communicates that it is more responsible to the environment. Their menu offers “food with integrity:” the best ingredients, animals raised without antibiotics, and local farm sourcing.
The decision to focus on natural, fresh ingredients at a fair price creates a significantly differentiated product from the heavily processed world of McDonald’s and Yum Brands. Today, Chipotle has a market cap of over $13 billion by promising its target demographic a high quality product at an affordable cost. Over time, staying true to the quality messaging will help strengthen the market’s understanding of Chipotle’s brand promise: quality incgredients and sustained activities at fair prices. (For more on what we mean by “brand promise,” read our series of articles on the topic.)
A key piece in any marketing strategy is determining who the company needs to engage. Once the company knows which market segment or segments it plans to target, it can determine what types of companies and people are the audiences for their marketing messages.
Two companies with similar products may target distinctly different groups. For example, Target and Walmart have very similar product offerings, but market to entirely different groups. Their brand promises are entirely different and the expectations of their targets are different. This does not stand for just business-to-consumer companies. Business to business companies will also go through the same process.
In addition to segmenting and targeting, a company will have multiple audiences within each target. For example, a business selling enterprise software has multiple constituencies within a particular type of target company, each of which will have different reasons to need the product. A purchasing agent, CEO, and IT director will have different needs, and a marketing strategy and plan will tailor messaging to each group while maintaining the overall positioning and global marketing messages.
Businesses live and die by controlling budgets. Every company wants a great return on any investment. Having a strong, well-considered strategy will help every company better understand what it needs to spend to market effectively. In other words, a marketing strategy leads to a better control of budget. It takes the guesswork out of spending. (For more information on setting budgets, read our article on how much to spend on marketing.)
Mix of Marketing Tactics
Once there is an established budget a company can better create a tactical mix that will achieve its goals. According to Phillip Kotler, the S. C. Johnson and Son Professor of International Marketing at Northwestern University’s Kellogg School of Management, “Marketing mix is the set of controllable tactical marketing tools that the firm blends to produce it wants in the market. The marketing mix consists of everything the firm can do to influence the demand for its product.” One of the key points in this statement is that a tactical mix is a “set of controllable tactical marketing tools.” Successful marketing efforts must have a coordinated set of tactics to achieve a greater result.
All tactics need to intertwine so the whole is greater than the sum of its parts. In short, all marketing needs to tie together. This goes for both business-to-business and business-to-consumer marketing efforts.
Goals and Measurement
In a sound strategic marketing plan, a company will establish measurements and goals. Remember, marketing is not just art—it’s also science. The goals of a marketing plan need to be quantifiable and tie back to the overall strategy, which makes metrics possible. (For more on measuring marketing’s results against business goals, read our research-based white paper on the topic and our article on marketing and the scientific method.)
Importantly, developing measures for a company’s marketing efforts creates accountability. When developing marketing measures, companies should outline at what intervals marketing reports results on activity. Measurement helps companies understand return on investment and helps marketing teams adjust how much and where they are spending their marketing budgets.
Develop a Road Map
A clear strategy provides focus. Without it, time, energy, and money are wasted. In dynamic companies, there’s a feeling that action must be constant, that planning is wasted time. But pointless, directionless activity without any planning can bring a company to its knees.
With a defined plan, a company is able to avoid reactionary marketing. Just because your competition is doing it does not mean it is the right long term thing to do. (For more on this mistake, read our article on five bad marketing habits and our article on orphaned marketing tactics.)
A company’s marketing strategy and plan are the company’s road map to achieving its goals. Once you have focused on what you are going to do, the strategic plan will provide a company’s employees with the “how we get there.” This is a company aligning document. It is how a company is going to market and how it is going to represent itself in the market. Everyone being on the same page with the company’s marketing plan helps keep employees engaged. (For more on employee engagement, read our article on the topic.)
Without a coordinated marketing effort, many companies struggle. Plans help companies coordinate activities, align efforts with global strategies, define messaging and positioning, and track results. Want to see this in action? Read a couple of our case studies by clicking here and here.
Note: This is the first in a series of articles that review marketing strategy. Click here to read the next article in the series.
Do you like the sound of a targeted marketing strategy and plan, but don’t know where to start? Call FrogDog – we can help!