Best Practices: Marketing Strategy

Marketing: An Overview

Marketing is the process of planning and executing the development, pricing, promotion and distribution of products and services to targeted customers. Using this standard, say TEC marketing experts Mitch Goozé and Jack Harms, everyone in your organization is ultimately involved in marketing in some way -- not just some narrowly defined "marketing department."

Marketing-oriented organizations focus like a laser beam on customer needs and wants. They anticipate demand. They enlarge demand through promotions and advertising. Then they satisfy that demand.

Unfortunately, too many companies either don't understand this basic principle or lack the resolve to see their strategies through to completion. In fact, many businesses start thinking about marketing campaigns only after sales have begun to sag.

Other reasons why marketing plans fail:

• No sense of the future. Successful marketing is an investment in your organization's future. Be creative, the TEC experts advise. Focus on new opportunities. Always think of new ways to enhance exposure for your product.
  
  
• No measurement of results. Like any other initiative, marketing projects must be tested and measured. To measure results, assign someone to capture sales and customer information and give them access to all revenue and expense data. Once results are measured, analyze them and share them throughout the organization. Then spend money on what generates the best return.
  
  
• Too much interference. Some CEOs approve a marketing plan, then insist on constantly making adjustments. Sometimes, the best approach is to wait until marketing efforts can be suitably measured and then fine-tune the plan. Constant meddling only distorts results and demoralizes the people in charge of driving the campaign.

For some organizations, maintaining a full-blown marketing department may be too costly and impractical to justify itself. One option in these circumstances is hiring a professional marketing consultant to ensure that your product meets customer demands the way it should.

The TEC experts suggest the following to ensure getting the most out of a marketing consultant:

• Start with clear goals. Define what you want from him or her, and don't hold things back. Keep in mind that no one understands your company's culture or history as thoroughly as you do. Offer all the details you can so the consultant has more to work with.
  
  
• Don't leave the consultant dangling. The marketing consultant you hire is a technical expert; he or she uses specialized tools to solve the problems you know intimately from your day-to-day business dealings. If you take the time to work together, you'll see better results than if the consultant is left trying to figure out everything on his or her own.

Marketing Strategy

Effective marketing doesn't come naturally to most businesses, according to the TEC marketing experts.

"When reaching out to customers, many companies describe what the product is, explain their product better, and then explain to the customer why they should buy it," Harms says. "This is also how most salespeople make sales presentations. All too often, however, they leave out the part about how the product benefits the customer. But the only time the customer is ever interested is when you tell him how the product will improve his life."

Of course, it's impossible to highlight your product's benefits if you don't know what your customers want. That's where market research comes in.

Step one in market research is determining what you genuinely need to find out. Are you considering entering a new market? A new market area? A new product line mix? The kind of information you're after will influence the type of research you want to do.

Other key questions:

• What's the current size of the market?
  
  
• How fast is it growing?
  
  
• How can we hope to reach it?
  
  
• Can the market be segmented into targeted customer groups?
  
  
• What makes our product distinctive among others in the marketplace?
  
  
• What types of people buy our product or service?
  
  
• What's most important to buyers when choosing a product (price, quality, delivery time, etc.)?
  
  
• What do customers like about our competitor's products that we're not offering?

The Marketing Plan

The best marketing plans always focus on the customer. Therefore, the plan should be organized to address specific questions:

• What does the customer really need?
  
  
• Where do they want to buy it?
  
  
• How do they want to buy it?
  
  
• How much are they willing to pay?

A solid marketing communications strategy is also crucial as well. Goozé asks: "Do you know what your target customers read and listen to? What are the best ways to get their attention?" This aspect of the plan should address your organization's promotional goals ("promotions" include everything from advertising to public relations). Other key questions:

• How can you communicate more about your product's specific benefits?
• How much money are you willing to spend to get your message across?
• What media would work best for your specific product?
• How will you evaluate the results of your promotional efforts?

Plan ambitiously but be realistic about your objectives. Consider what you hope to accomplish in terms of what can be realistically achieved. Ask yourself:

• How can we want to set ourselves apart from our competition? By price? Product benefits? Other attributes?
• Is our ultimate goal improving sales of a specific product or service or do we want to focus on generating more qualified leads?
• Is customer retention our real objective?

General statements like "We're committed to getting more business" or "We want to boost sales" are essentially meaningless, Goozé says. "Ask questions in order to clarify your goals. Keep working on your answers until you've identified your most important objectives."

Customer Focus

To think like your customers, your company must encourage a customer-oriented culture. "Your decision-making process should include a mechanism for collecting and understanding customer input," Harms says. "Before you design, test and sell your product, make sure you've gathered, interpreted and synthesized all the customer information you can find. That way, you're not making the product in a vacuum, but backed up instead by solid data."

Where does this information come from? Harms describes several fundamental sources:

• Customer complaints. Look at complaints your business has received over the past few weeks and months. Does your management team seriously examine what's behind these complaints? Does the team offer solutions to reduce the number of complaints?
  
  
• Customer surveys. This is still considered among the most effective methods for collecting reliable, objective data about your customers.
  
  
• Industry trends. Study patterns in your industry. Read trade publications. Monitor new trends and approaches to customer care.
  
  
• Face to face contact. Do you know -- really know -- how your customers buy your products and exactly what they do with them? Nothing beats getting out of the office and meeting with customers directly.

Market research offers crucial information about customers' buying habits, needs, preferences and opinions. Goozé describes five basic methods used by most businesses:

• Survey. With a well-designed questionnaire, you can evaluate a sample group that represents your target market. (The greater the sample, the more trustworthy are the results.) One-to-one surveys -- usually conducted in high-traffic areas like shopping malls -- offer an opportunity to distribute samples of your product and gather immediate feedback.
  
  
• Focus groups. In this format, a trained facilitator uses a scripted series of questions to lead a discussion among a group of selected individuals. These sessions are held in a "neutral" location (often at a place with videotaping equipment and an observation room with one-way mirrors).
  
  
• Personal interviews. This method is more concentrated than surveys, and while the results aren't statistically reliable, they can yield valuable insights into customer buying habits. They also unearth unexpected concerns that may lead to improvements in customer service or product design and distribution.
  
  
• Field trials. In this situation, the company places a new product in selected outlets to test customer response under authentic selling conditions. It's a valuable opportunity to modify product or packaging before final rollout.

"The best customer benefit is worth more than all of your product's features combined," Harms says. "Do you know how your product benefits your customers? This should always be the focus for your marketing campaigns."

To keep that goal in sharp focus, Goozé suggests asking these questions:

• How do our customers profit from using our product?
  
  
• How much money does it save for our customers?
  
  
• How much money can it earn for our customers?
  
  
• Does our product have built-in intangible benefits? Is there a way to quantify these intangibles?

"Identify the benefits your customers get from your product and then make those the centerpiece of your company's message."

The CEO and Marketing

A marketing-oriented CEO works hard at intimately understanding the customer's needs. Broadly speaking, these needs fall into three categories:

• How to increase productivity
  
  
• How to reduce the cost of doing business
  
  
• How to improve their competitive status

"The CEO is -- or should be -- the chief marketing officer," Harms says. "He or she should avoid getting stuck in a 'product-thing' mentality that asks, 'What are our customers buying from us? Why should they buy from me instead of my competition?' Instead, the question should be: 'What value or benefits do my products provide?That's the only question that truly matters."

Goozé urges CEOs to spend a substantial amount of time out in the field, meeting with customers and prospects -- "not for the purpose of selling, but to better understand their needs, wants and demands. CEOs are uniquely equipped to do this. They know their own business, so they'll likely understand what their business can do to address customers' issues. Many CEOs think this is what they've hired salespeople to do, but in the 10 years I've been advising CEOs, every single one has said it's the best thing they've ever done."

Above all, the CEO has the power and influence to ensure that marketing is considered a primary function within the organization. Don't look at marketing efforts as an expense. Sales is an expense. Marketing is an investment in your company's future. Do everything possible to get the best people involved in marketing activities and see that this ethic is incorporated into the culture as a whole.

Direct Marketing

Direct marketing is a system by which a business communicates directly with targeted groups of customers in order to generate a response and/or conduct a transaction. Despite changes in technology affecting virtually all aspects of marketing today, direct marketing remains one of the most measurable and cost-effective ways to sell products and services.

Should your company include direct marketing in its promotional mix? Here are the experts' guidelines:

• Your primary, or significant, method of distributing your product is through the mail or directly to your customers. The key to doing this effectively is acquiring and maintaining an accurate database of targeted customers. The most successful direct marketing businesses make having excellent databases a number-one priority.
  
  
• Your product offers a variety of benefits. Trying to convey multiple product benefits in a print or electronic medium can result in confusion for your customers. Instead, a well-composed direct mail letter can communicate all of these benefits and announce special promotions like discounts or contests.
  
  
• Your product is expensive. Again, a direct mail letter offers greater opportunity to expand your product's appeal (and convince potential customers to spend a little extra) than the limited space of advertising.

E-mail marketing has become an increasingly valuable form of direct mail. "E-mail ads are a great supplement to traditional methods," Harms says, primarily for three reasons:

• They are, in essence, free.
  
  
• They can be changed quickly.
  
  
• They aren't confined in shape or length.

Goozé's other tips include:

• Know whom you're talking to. One way to make your e-mail message stand out from the flood of others is by speaking to your customers in their own language. Through the use of industry buzzwords, you demonstrate that you know who they are, what they need and what you can offer them.
  
  
• Include a meaningful offer. Customers are more likely to respond when they're offered something free (an industry "white paper," for example, or free seminar). Other eye-catching offers include coupons for discounts, free shipping, reward or points program.
  
  
• Don't overdo it! Because of its ease of use, you could fall prey to sending "exciting" e-mail messages every day or many times a week. That's overload. A cogent, well-designed e-mail message sent once (or, at most, a few times) a month is preferable. And only send it when you have something worthwhile to share.

"Direct response" marketing invites the customer to take action by:

• Placing an offer directly in front of the customer
  
  
• Asking the customer for additional information or to make the decision to buy
  
  
• Tracking customer response in order to measure the return on your marketing investment

Contributing Experts:

Mitch Goozé

Mitch Goozé is president and founder of Customer Manufacturing Group. Previously he served as president of Teledyne Components, a division of Teledyne, Inc., from1985 to 1990. His broad scope of business experience ranges from operations management in established firms to start-up and turn-around situations and mergers. His book, "It's Not Rocket Science: Using Marketing to Build a Sustainable Business," was published in 1997. Mitch is a long-time TEC member.

Jack Harms

Jack Harms is CEO of The Marketing Department, a Milwaukee, Wisconsin-based marketing consulting firm which he began in 1985. The firm specializes in creating and implementing highly effective marketing and sales strategies and programs. Jack is a nationally recognized speaker and marketing/sales strategist, with more than 30 years of corporate marketing and sales management experience. He has been a TEC speaker since 1988.

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