Developing a marketing strategy requires understanding the overall concepts behind the marketing principles and effectively knowing when to apply them. Rather than giving you the shortcut version, I will guide you through the step-by-step manner and let you look at this diagram and understanding the processes.
The basics of formulating marketing strategy formation can be simplified in this chart below.
In the initial stage, the analysis occurs from the Five Cs:
A. Customers Analysis (The Most Important Cs of All)
Finding the customer’s key needs and the decision-making process (DMP) of potential customers of your product are key in understanding the customer analysis. Key questions you need to ask are:
- How your customers uses your product?
- How did your customers became aware of your product?
- Who were the decision-making unit (DMU) in purchasing the product?
The DMU concept comes from the six major influential players and takes considerations of how a potential buyer came into the final decision of “I would like to buy this” at the cashier location. Most business want their customers to arrive at this point quickly, but there are five people you have to go through:
These are the people who are actually going to work with the purchased goods or services and they exert influence on the specifications. Both customers and employees may take on this role.
They can exert influence on the purchasing process by setting preconditions. They can be found at all levels of the organization.
The buyer is the actual negotiator with the supplier. The buyer negotiates about contract terms and eventually places the order. The buyer takes up one of the most important roles within the decision-making unit.
The initiator is the player who recognizes a problem and tries to find a solution for this problem. This is the most important person in the decision-making unit or DMU.
The Decider is the player who is ultimately responsible for choosing the supplier and as a result takes up an important position within the decision-making unit or DMU.
The Gatekeeper is responsible for the information provision within the decision-making unit or DMU. The Gatekeeper determines the type of information that will be delivered to a certain player and as a result they can influence the decision-making process strongly.
We often tend to ignore the users but when it comes to the purchase, the users ultimately needs to answer: “Do I want this?”.
After finding the DMU (whom often can be taking six roles together), various methods can be applied to understand how each of the DMU affects the user. You can do either qualitative or quantitative surveys (focus groups, discussions, customer interviews and others).
- Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units.European journal of operational research (EJOR), 2(6), 429-444.
- Kotler, P. (1965). Competitive strategies for new product marketing over the life cycle. Management Science, 12(4), B-104.
- Pollay, R. W. (1968). A model of family decision making. European Journal of Marketing, 2(3), 206-216.
B. Company Analysis
There are two important concepts you have to know for this section:
- Know your company’s weakness & strengths
- Know your company’s core competency in developing – (a) creating customers’ perceived values, and (b) building competitive edge/barriers around the perceived values (ex: patent, high startup-cost, copyright, trademarks, others)
Once you understand the company’s weaknesses and strengths, as well as its target audience, the approach to the product must with the company.
Simply: Do a SWOT analysis of your company. Develop a competitive edge around your customers’ perceived value of the company’s products/services.
C. Collaborator Analysis
You need to analyze the set of external assets that maybe assessed to complement the weaknesses of the company.
For example, if your organization lacks the large-scale manufacturing ability, you need to find collaborators that can support your development need and large-scale production.
Collaborators have been called alliances, networks, informal partnerships, and other names. However, the term collaborators works well because it implies a company and another party engaged in an ongoing relationship. In today’s business climate, companies must be flexible and able to change quickly. Working with collaborators helps companies adapt to constant changing business environment.
(Note: Two types of collaborators exist: 1. Upstream collaborators will help you make the product, while 2. downstream collaborators will make the products easily accessible.)
D. Competitive Analysis
Two important key ideas to take away are:
1. Understand who your competitors are now
2. Understand your competitors’ future position and who they are likely to be in the future
To effective access your competition, you need to first have the fundamental understanding of its strengths and weakness.
Marketers can gain competition knowledge through various marketing research activities by analyzing:
1. Competitors’ financial statements and reports, stocks
2. Interview with potential customers about their perceived values of competitors’ products/services
3. Conduct independent surveys, discussions and focus groups of competitions’ customers
E. Context Analysis
Context is one of the most ambiguous concept, yet it is always important know it. This can change, and bring surprises in the business future direction.
Because the products and services acquire meaning from their advertised/marketed place in a culture, they acquire economic value from that meaning. This can be bit confusing, but think of the following:
In South Korea, flower delivering services is highly regarded importance in company events. Therefore, the flowers can cost up to $2000 to $1000 in placing huge display of the company’ name. Many corporation take consideration of the flower display to show respect and clients/vendors will send large flower vases to company ceremony. The flowering service, in this sense, the flower delivering takes higher meaning in Asian countries than that of the western business events. (Flower gift giving is regarded as important business function in maintaining good relationship.)
The rest of the marketing strategy formulation will continue next time… Stay tuned for
1. Decisions Stage
2. Action Plan Stage
3. Outcome Stage
Thank you for reading this blog post. Follow me on Twitter @hyunkim85 for more business updates.
Other interesting articles you can check are:
EQ is important than IQ
Four Common Mistakes on Google Adwords Usage
How to Stay Focused At Work.