A FiveStep Approach to Creating a Marketing Strategy

1
A Five-Step Approach to Creating a Marketing
Strategy 

• Author Kevin Clancy 
• Created by Craig Kohn

2
Overview

• If you are a company that sells a service or a
  good, you must acquire customers and keep them.
• The best product in the world will never be sold
  if it is not marketed. If economics is one half
  of the pie, marketing is the other half.
• You need BOTH halves to succeed in business.
• For more information http//www.marketingpower.co
  m/ResourceLibrary/Pages/Best20Practices/AFive-Ste
  pApproachtoCreatingaMarketingStrategy.aspx
• Kevin Clancy has published numerous articles on
  advertising, marketing, and social science
  research and has consulted for three decades with
  major corporations around the world, including
  American Express, ATT, McDonald's, ExxonMobil,
  Pepsi, Pfizer, Saks Fifth Avenue, The New York
  Times, and Universal Studios.

3
Overview (cont.)

• Creating an effective  marketing strategy is
  based on a five-step process
• Step 1 Get to know your market what are your
  strengths and weaknesses? Whos on the fence?
  Why are they on the fence?
• Step 2 Develop a strategy to tip the fencers
  over to you.
• Step 3 Build a step-by-step plan based on your
  strategy
• Step 4 Activate the plan
• Step 5 Evaluate the plan

4
Marketing, in a nutshell

• All successful marketing strategies must begin
  and end with the customer
• They cannot be an afterthought or taken as a
  given
• Marketers avoid making assumptions about their
  customers.
• Research them
• Talk to them
• Understand them
• Marketing is about finding the RIGHT customer.
• Its like baseball youll win some, youll lose
  some, but its the close games that get you to
  the post season.

5
Marketing, in a nutshell

• A Roadmap
• to
• Creating and Delivering True Value
• to
• Distinct Groups of Customers

6
Here we go
7
Marketing Confusion

• What do you think of when you hear marketing
• Visual identity
• clever tag lines
• creative "essence" advertising
• edgy names
• well-designed Web sites
• big ticket giveaway promotions
• publicity buzz-making
• These are not marketing in themselvesjust
  gimmicks. Marketing itself is much more.

8
Marketing

• Real marketing strategy provides a roadmap to
  creating and delivering true value to distinct
  groups of customers.
• Marketers simply find the customers that wont
  buy unless they are convinced by a strong
  message.
• Some youll get no matter what you do
• Some youll never get no matter what you do.
• Some you get only with good marketing this is
  what marketing is for.

9
The National FFA

• For example, in the FFA there are some people
  that will always join with few exceptions.
• There are other people that would never join FFA
  no matter how good our marketing is.
• Finally, there are the fencers those that are
  undecided and trying to find a reason to join or
  to not join.
• This last group should be our target market, or
  the group we focus our marketing towards.

10
Whats in Your Wallet?

• What goes into a marketing strategy? A cohesive
  combination of
• Targeting Who are our fencers? How can we
  describe them? Who are they? How can we
  convince them most effectively?
• Positioning How are we different from everyone
  else? What makes the best option for our target
  market?
• Company Attributes What can our good or service
  do for others?
• Marketing Communications How do we talk to our
  target market?
• Pricingwhat price will you charge to be
  competitive and profitable?
• Distribution How do we get our product to the
  customer?
• Customer ServiceHow do we retain and keep our
  customers?
• The Four Ps of Marketing Product, Pricing,
  Placement, Promotion

11
We Deliver for You!

• Of these components, targeting and positioning
  are the two most critical elements.
• Anything multiplied times 0 0
• i.e. if you are targeting the wrong group or have
  the wrong message, it doesnt matter how great
  your marketing is - youll never get a sale.
• There are two top priorities in all of marketing
  The Right Customer, and The Right Message (i.e.
  targeting and positioning)
• The rest is just details

12
Nurofen. Targeted Relief For Pain.

• Targeting is knowing where to concentrate forces.
  
• "To win a war you need to know where to attack,"
  Dwight Eisenhower
• Marketers need to know how to most efficiently
  use their resources.
• It does no good to market to the group youll get
  no matter what you do.
• It is equally ineffective to market to the group
  that wont buy regardless of how good your
  marketing is.
• You need to focus on the group that is undecided.

13
Be Like Mike

• To find your target market, you need to know how
  to describe them. Are they
• Men or Women
• Teens or Middle Aged
• Urban or Rural
• Rich or Poor
• A Family or Single
• Spenders or Savers
• Emotional or Rational
• Etc., etc. etc.

14
Market Drivers

• A Market Driver is a term for the target markets
  breakdown. It is a way to further describe your
  target. For example
• Category involvement how important purchases in
  this category are to the buyer?
• Product preference motivators what
  characteristics are most motivating?
• Product purchasing patterns how frequently do
  they buy?
• Media habits what do buyers watch, read, listen
  to?
• Sociographics how strong is their ethnic
  affiliation and religiosity? Are they rural or
  urban? Do they belong to oragnizations?
• Demographics what is their income, age, and
  level of education?
• Psychographics what are their lifestyle
  attitudes?

15
The Taste of a New Generation

• The key to nailing targeting is finding the most
  efficient, scientific way of segmenting the
  market and to choose a target group based on its
  potential profit contribution.
• Marketers can calculate with reasonable accuracy
• how much it will cost to reach people in a target
  group
• how many will buy the product or service
• and how much money they will give to one
  particular company using both secondary and
  primary data.

16
Pax Gasolina

• CASE STUDY For years, gas stations never had to
  compete for customers people bought gas when
  they needed gas.
• It was a necessity, not a luxury and people paid
  whatever price was determined by the market.
• Gas stations merely had to charge what everyone
  else was charging.

17
Oh OhSpaghettios!

• By the 1990s, gas price wars had begun.
• Major businesses had to separate themselves from
  the crowd to make enough from their sales.
• Why couldnt they just charge above the
  equilibrium price?
• What does this imply about the role of marketing
  in economics?

18
Taking on the world's toughest energy challenges

• Mobil Corporation (now ExxonMobil), one of the
  most innovative marketers, commissioned a
  large-scale study to better understand its
  customers and prospects.
• The study results, reported in the Wall Street
  Journal, form the basis for the Mobil Friendly
  Serve campaign.
• The study found five distinct consumer groups,
  all roughly the same size numerically.

19
Car Buffs

• Car Buffs are generally high-income, middle-aged
  men who drive 25,000 to 50,000 miles a year.
• They buy a premium gasoline with a credit card,
  purchase sandwiches and drinks from the
  convenience store, and will sometimes wash their
  cars at the car wash.

20
Loyalists

• Loyalists are men and women with moderate to high
  incomes who are loyal to a brand and sometimes to
  a particular station.
• They frequently buy premium gasoline and pay in
  cash.

21
Speedsters

• Speedsters are upwardly mobile Gen Xers.
• They are constantly on the go, live in their cars
  and snack heavily from the convenience store.

22
Soccer Moms

• Soccer Moms are usually housewives who shuttle
  their children around during the day and use
  whatever gasoline station is based in town or
  along their route of travel.

23
Price Shoppers

• Price Shoppers generally are not loyal either to
  a brand or to a particular station and rarely buy
  the premium line.
• They are frequently on tight budgets and efforts
  to woo them have been the basis of marketing
  strategies for years.

24

• Analysis of the data revealed that while Car
  Buffs and Loyalists represented only 38 percent
  of the population, they accounted for 77 percent
  of the potential profitability.

25

• Once Mobil knew the target, it knew
• whom to talk to
• where to find them
• how to communicate with them
• with in what media
• about which products and services
• at what price

26
Have It Your Way, Everyday

• As the Journal reported
• These targets want classier snacks from the
  convenience store
• human contact
• quality products
• top-notch, quick service
• privileges for loyal users
• attendants who recognize them
• and a nationally available brand.
• They also want a reasonably competitive price,
  but thats not the most important consideration.
  
• i.e. dependability means more than price and
  theyll pay more for reliable customer service

27
Pardon me

• Mobil addressed the needs of these two groups
  with Friendly Serve a marketing campaign
  characterized by
• clean restrooms
• cappuccino in the convenience stores
• a concierge to assist customers
• and an efficient card-payment system.
• Stations that have implemented the Friendly Serve
  program have seen double-digit sales and profit
  increases.
• How does this relate to the demand curve?

28
This Is Your Brain

• Clearly making the right targeting decision takes
  time certainly more than the five minutes most
  marketers dedicate to it.
• Intuitively obvious target groups are rarely the
  most profitable

29
The Idea People

• Marketers that take the time to devise a market
  segmentation plan and discover the most
  profitable target will find themselves far ahead
  of the competition even this early in the
  marketing strategy process.
• Landing at Normandy was necessary to win the war
  but it didnt happen until 1944. Take the time
  to find your Normandys!
• Nutshell take the time to find your most
  profitable target audience!

30

• Once a marketer has identified the financially
  optimal target group, the next step is
  positioning.
• Buyers have very little time to ponder product
  decisions
• Products and services that stand for something
  important or remembered for something significant
  have an advantage.

31

• A powerful positioning leads to a powerful brand.
• Positioning
• The reasons for buying a product
• As they apply to a specific customer
• At the correct price
• Should make the product unique in comparison to
  other products from other companies
• I.e. Your target market needs to know that for
  them personally, your product is better than any
  other similar product from other companies.
  Youre the best, no doubt.

32
Positioning

• For example
• Pepsi became famous in marketing in the 1950s
  when it sought after teenagers as its target
  market.
• Despite selling an almost identical product as
  Coke, it was able to convince teenagers that it
  was The Taste of a New Generation.
• Coke was for their parents Pepsi was for them.
• This is positioning at its finest.

33
Positioning, officially

• The reasons (as they apply to a specific
  customer) for buying your product at the correct
  price should make the product unique in
  comparison to the same product from other
  companies.
• Pepsi, for the 1950s teenager, is different from
  Coke because it is meant for young people. At
  the same price, it is the best product for hip
  young people because the other products are not
  theirs only Pepsi is.

34
Accepted Everywhere You Want to Be

• Usually, the positioning is a one- or
  two-sentence statement that captures the message
  a marketer wants to imprint in the minds of
  customers and prospects.
• It could even be one word!
• It describes your product or service and how it
  is different from and therefore better than
  the competitions.
• It is entirely dependent on what your target
  market wants to hear how do they benefit?

35
Egs

• Examples of long-running positioning strategies
  for companies or brands include
• Easy to useApple
• Performance for driving enthusiastsBMW
• SoftnessCharmin tissue
• Guaranteed next-day deliveryFederal Express
• Wholesome family entertainmentDisney

36
Egs

• StrengthHefty plastic bags
• Accepted everywhereVisa
• SafetyVolvo
• Nutritious, low-fat, low-calorie foodHealthy
  Choice
• Pure, clean, naturalIvory Soap

37
Because those other guys suck

• At its core, positioning is the reason why people
  buy one product rather than another.
• This statement describes how you offer greater
  value, strength, prestige, fun, safety or
  nutrition (or some combination of elements) than
  another product or service.
• It is NOT advertising it is what advertising is
  based on, as well as all marketing.

38
A Diamond Is Forever

• If marketers had unlimited time and undivided
  attention, they could describe everything about a
  product or service.
• But a company does NOT have endless time, and
  consumers have the attention spans of goldfish on
  caffeine.
• The most any business can say are those few
  things customers care about and will remember.

39
It's the cheesiest.

• Marketers want to fix a succinct message in
  peoples heads to
• induce trial and use among prospective buyers
• -Or-
• reinforce current purchasing among current
  customers.
• Positioning is valuable because when you have it,
  the other marketing elements follow naturally
• pricing
• marketing communications
• marketing promotion
• distribution

40
Breakfast of Champions.

• When you find your target market, and as you are
  writing your position statement, ask yourself
  what they want from each of the following
  categories
• Product
• Service
• Personnel
• Image

41
Does she or doesn't she?

• The goal is to generate a long list of attributes
  and benefits from buying a product that might
  form the basis for a powerful positioning
  strategy.
• i.e. you wanna make a laundry list of all the
  good stuff that happens when you buy product X

42
Need A Moment?

• A list of benefits should include tangible and
  intangible benefits
• Tangible any real feature of the product
  taste, quality, nutrition, safety ratings, spare
  parts delivery or installation a regular
  service visit a warranty agreement
• Intangible an aspect of the product that has a
  value but is difficult to see or describe (for
  instance, peace-of-mind, reliability,
  consistency, popularity, coolness).

43
Positioning, defined

• Your laundry list of benefits should include not
  only why someone would buy a product, but also
  the less obvious benefits of the product.
• E.g. you buy a car because it gets good mileage,
  has a good engine, looks good, etc., but you
  would also consider the warranty and the
  babes/dudes youll pick up in your new corvette.

44
Reveal Your Inner Beauty

• To make a benefits list, companies rely on
  different methods, including
• category scan
• exploratory research
• personality assessment
• social values analysis
• emotional exploration
• or some combination of all five.

45
Category Scan

• A category scan is a close review of all the
  products attributes and benefits, tangible and
  emotional, that competitors in the category
  employ.

46
Exploratory Research

• Exploratory research includes focus groups,
  in-depth interviews, or both.
• The focus groups do not produce the positioning,
  but rather ideas for the list of attributes and
  benefits.

47
The Rest

• Marketers also use personality assessments,
  social values analysis, and emotional exploration
  for positioning information.
• These are beyond the scope of this course they
  require intense research from people who devote
  their entire life-long careers to forming
  expertise in these areas (i.e. not us).
• So forget you ever heard the last three items.

48
Good to the last drop.

• From your benefits list, you would then decide
  what items would be most appealing to your target
  market.
• These items then go into your Positioning
  Statement.
• Like the targeting decision, the positioning
  decision is not one that should be made on a
  whim.

49

• After marketers discover what motivates their
  target market, they can rank-order a final list
  of category characteristics or potential
  positioning themes.
• Surveys, research, and interviews can help
  marketers determine what the target market wants
  to hear.
• From these responses, you would write a position
  statement the includes your top ranked benefits
  from your product.

50
Better things for better living through chemistry.

• Now the task becomes a creative one.
• Marketers develop a message strategy from their
  position statement.
• This strategy focuses on what the target market
  most wants to hear.
• From there the advertising and marketing
  communications people go to work, using the
  position statement as a guide for their strategy.

51
Green Mountain Power

• CASE STUDY For example, facing deregulation, a
  tiny company called Green Mountain Power (now
  Green Mountain Energy) located in Burlington,
  Vermont, started to worry about competing with
  national power companies that could afford price
  cuts to attract customers. The company could not
  become the low-cost provider.

52
No Coal, No Nuke, No Kidding

• Instead, it began to look at other
  differentiating factors for power.
• The company discovered a significant number of
  customers wanted clean energy and would pay more
  for environmentally friendly power.
• Green Mountain created a powerful positioning
  statement,
• Power provided by the raging rivers of North
  America, the prevailing winds, and the sun. No
  coal, no nuke, no kidding.

53
More Bang For Your Buck

• As the Green Mountain example illustrates, do not
  automatically select a low-price positioning even
  in a commodity category.
• i.e. even if you sell a luxury, where small
  changes in pricing creates a big change in
  demand, having the lowest price may NOT be the
  best idea!

54
It takes a licking and keeps on ticking.

• Offering the lowest price only works in the long
  run when the company is the lowest cost producer.
  
• Otherwise the lowest-price positioning is not
  sustainable and will drive the company toward
  bankruptcy.

55
A Mind Is A Terrible Thing to Waste

• Formulating the remaining components of marketing
  strategy should reflect the needs, interests,
  habits, and behaviors of the target group and the
  motivating attributes of the positioning.
• Before starting a marketing campaign, you MUST
  know your
• Target Group needs, interests, habits, behaviors
• Positioning attributes and benefits from buying
  a product, as well as tangible and intangible
  benefits

56
Summary

• Companies must acquire and keep customers this
  is the purpose of marketing.
• A marketing strategy provides a roadmap to
  creating and delivering true value to distinct
  groups of customers.
• successful marketing strategies must begin and
  end with the customer
• many confuse solid marketing strategy with pure
  tactics - supporting elements must be part of a
  more comprehensive plan
• Marketing strategy is primarily composed of
• Targeting to whom are you going to market your
  products and services?
• Positioning how are you going to differentiate
  yourself from competitors?
• Also Product/service attributes, communication,
  pricing, distribution, and customer service
• Targeting is knowing where (or on whom) to
  concentrate forces.
• The key to nailing targeting is finding the most
  efficient, scientific way of segmenting the
  market and to choose a target group based on its
  potential profit contribution.

57
Summary

• Positioning Buyers have very little time to
  ponder product decisions
• Products and services that stand for something
  important or remembered for something significant
  have an advantage.
• The reasons (as they apply to a specific
  customer) for buying your product at the correct
  price should make the product unique in
  comparison to the same product from other
  companies.
• Usually, the positioning is a one- or
  two-sentence statement that captures the message
  a marketer wants to imprint in the minds of
  customers and prospects.
• It could even be one word! E.g. SafetyVolvo
• At its core, positioning is the reason why people
  buy one product rather than another.
• Marketers want to fix a succinct message in
  peoples heads to
• induce trial and use among prospective buyers
• -Or-
• reinforce current purchasing among current
  customers.

58
Summary

• Strategy The goal is to generate a long list of
  attributes and benefits from buying a product
  that might form the basis for a powerful
  positioning strategy.
• i.e. you wanna make a laundry list of all the
  good stuff that happens when you buy product X
• your laundry list should include not only why
  someone would buy a product, but also the side
  benefits of the product.
• To uncover these attributes and benefits, a
  company might do a
• category scan- a close review of all the
  products attributes and benefits, tangible and
  emotional, that competitors in the category
  employ.
• exploratory research - focus groups, in-depth
  interviews, or both.
• After marketers discover what motivates consumers
  and the perception of their products or services
  and those of competitors, they can make a final
  list of category characteristics or potential
  positioning themes.
• From there the advertising and marketing
  communications people go to work.

59
Additional Sources

• Full Text Article http//www.marketingpower.com/R
  esourceLibrary/Pages/Best20Practices/AFive-StepAp
  proachtoCreatingaMarketingStrategy.aspx
• American Marketing Association
  http//www.marketingpower.com/Pages/default.aspx
• Marketing Terms
• http//www.bizjobs.com/business_glossary.php

60
(No Transcript)