A marketing strategy generally gives a long term plan for the company to reach the number 1 or number 2 position in the market. On the other hand, there are several short term marketing strategies which focus on how to beat the competition at present. Both type of marketing strategies are important as you need to make sure you survive in the current business environment, at the same time targeting the top 3 positions in your product market for the long term.
There are several factors to be considered before the formulation of a marketing strategy. But some factors stand apart and you can build your marketing strategy just from these crucial factors. I have outlined 3 such factors which are absolutely essential while formulating a marketing strategy. They are as follows.
1) Developing customer intimacy – Several marketing strategies talk about customer satisfaction and customer retention separately. But all things related to a customer can be classified as customer intimacy. A company can gain a lot by investing time in its customers, getting to know them, their likes, dislikes, preferences. To develop customer intimacy, a company should have an answer to the following questions
- How much is spent on market research with focus on customer satisfaction or customer retention?
- Do we have the proper customer insight at any point of time?
- Do we take notice of consumer trends to fine tune our marketing strategy?
- Is anyone representing the company in front of customers to take a direct feedback?
The Tata company at one point of time had a group of engineers for the heavy vehicle segment just to understand the problems being faced by customers after purchasing vehicles. One problem most common was overloading of vehicles. The Tata group immediately made changes to the axle of the vehicles which gave their vehicles more loading power and improved customer satisfaction to a great deal, and as we know, has retained customers for a long time with the Tata group.
Several studies over years have proved that improving customer retention increases the overall margins of the company. On the other hand, a company cannot survive without getting new customers. Thus, a marketer will need to consider his options for increasing customer intimacy while formulating a marketing strategy.
2) The health of the brand – The second most important factor while formulating a marketing strategy is determining the health of the brand. This takes the external environment into account. Several companies carry out regular market research studies to find out what the stakeholders, customers and other entities involved in the external business environment think of the company or the brand.
A perfect example in this case would include TATA company itself which has an ongoing “Tata brand track” market research study which studies the market standing of the Tata group from a stakeholder and customer point of view every 6 months. This provides the company with an external perception of the brand in terms of brand image, brand personality and brand familiarity. The ratings received from the brand study are compared with the competition in the same industry and the health of the brand is determined.
From these brand health studies we get an answer to several questions. Is our competitive strategy strong enough? What do our customers think of us? And where are we positioned in the customers mind?. These questions are important to determine the strength of a brand. Only by determining the brand health can you go ahead with formulating a marketing strategy. Because if your brand health is weak, you know that you need to implement short term and long term brand building plans strongly.
3) Innovation – “Innovate or die” is a famous quote by Tom peters, a legendary American writer on business management tactics. The same was repeated by Bill gates to his employees at Microsoft in 1997 when the competition was on the rise. An innovative culture in the organization is half the work done. This is why companies like Facebook, Google and Apple encourage their employees for innovation by allowing them to take out some office time for their own projects.
It is important to understand that innovation does not happen in one department only. It can happen in the supply chain department, the costing department, the accounting department and most importantly the product development department. A product innovation can increase the overall margins of the company because a new product generally uses skimming pricing which brings a lot of increase in the topline for a company. Naturally, companies focus on product innovation the most.
Furthermore, a company also needs to see the affect which innovation has on the customer mindset. Companies like apple are known as the most innovative companies ever and each one of their products are received with respect in the market from both – customers and competitors. Over time, these companies develop a lot of good will in the market thereby increasing their brand equity. This has an incremental affect on the revenues generated by the firm. Back to back innovation as done by apple, ensures top revenue generation by the company as well as amazing contribution to the topline because of continuous skimming pricing.
To sum it all up, Marketing strategy needs to make a positive connection between where the firm stands currently and where it wants to be in the future. The vision needs to be realistic. However, if the company wants an incremental growth, then above mentioned three factors need to be implemented properly in the marketing strategy to bring amazing results for the company. In the end, that’s exactly what you need from a marketing strategy – Results.