A lot of small business marketing fails because they don’t develop a foundational marketing strategy. Here is a marketing strategy overview with insights on how they’re developed and refined.
The Marketing Pyramid
Consider the parts of a marketing campaign as a pyramid.
At the top you have profitability – the place everyone wants to be.
However, realize that you can’t get to the top of the pyramid unless the levels below are complete. Obviously, you can’t do any execution unless you have tactics in place. Tactics are of no value unless you know what goals you’re trying to reach.
And none of this matters unless you have a broad marketing strategy. Investopedia offers a good working definition of a marketing strategy:
A marketing strategy is a business’ overall game plan for reaching people and turning them into customers of the product or service that the business provides. The marketing strategy of a company contains the company’s value proposition, key marketing messages, information on the target customer, and other high level elements. The marketing strategy informs the marketing plan, which is a document that lays out the types and timing of marketing activities. A company’s marketing strategy should have a longer lifespan than any individual marketing plan as the strategy is where the value proposition and the key elements of a company’s brand reside. These things ideally do not shift very much over time.
Problems arise when people conflate the marketing plan (execution and tactics) with having a strategy.
This is easy to do, especially with digital marketing where it’s easy to jump right into active execution. Small businesses, anxious to get their name out there and start seeing sales, dive into tactics with the general goal of “profit” but no strategy about how they’ll compete, who they need to target, or how they want to position their product.
This causes campaigns to break into a myriad of lost opportunities and fruitless efforts. As failure mounts, business owners hope to find direction in data. But the fine points data reveals do little to illuminate problems at the strategy level.
There was a time in the early 1970’s when Prego tomato sauce was about to go out of business. They tried without success to discover a “perfect” version of commercial tomato sauce that would beat out competitor Ragu.
They ran extensive studies with focus groups – and found something interesting.
Different people had their own preferences when it came to tomato sauce that broke up into three main groups. People either like plain flavor, zesty, or chunky sauce.
At the time, neither Ragu or Prego offered chunky tomato sauce.
This was astonishing to discover. Nearly a third of the public favored a type of sauce that wasn’t offered.
Prego changed their strategy. Instead of trying to create a perfect sauce to dominate the market, they started offering different types of sauce to fit different tastes.
Over the next decade, they made over $600 million in sales of chunky tomato sauce.
Clean Water and Cold Soda
Brita water filters did some competitive analysis to discover where they could gain the most advantage.
When placed with other filters in the kitchen appliances section of big-box stores, they were up against stiff price competition.
However, when their filters are placed in the bottled-water aisle at supermarkets, they had a competitive cost advantage. For consumers who wanted filtered water in their home, Brita was an attractive option over bottles.
Same product, different comparison set and basis for consumer decision.
When you buy a 24-pack of Coke in the supermarket, you pay about 25 cents a can. However, on a hot summer day at the pool, you’ll pay $2 for the same product from a vending machine.
You’re not paying 700% more for a better product. You’re paying that much because you value not having to remember to buy a 24-pack in advance, then carry it around in a cooler until you need it.
One of the things a marketing strategy does is help you understand the context in which the product will be bought and consumed. These specific consumption circumstances are considered at the strategic level, and inform goals, tactics, execution, and even profit margins.
Peep Shows and Sriracha Shrimp
Ed Sheeran is an internationally famous musician. Fans pay hundreds of dollars for front row tickets to his shows.
But YouTubers Hamish & Andy demonstrate, even a great product is almost impossible to sell with poor marketing:
The “peep show” experiment is an example of tactical marketing mistake, but in the real world of business marketing, this kind of mistake happens because of ineffectiveness at the strategic level.
This represents is a type of messaging that’s inappropriate for the audience. When there is a disconnect between how you’re trying to communicate value and the ways in which your audience will be receptive, no amount of tactical execution will make a difference.
Applebee’s learned about this strategic problem when they tried to rebrand themselves as a place for a more youthful and affluent demographic, including a swing towards millennials.
They started serving dishes like barbecue shrimp in a sriracha-lime sauce; chicken wonton tacos; and a pork, ham and bacon sandwich.
However, the younger demographic didn’t go for it. And in the process, they confused their core guests.
Applebee’s executive John Cywinski said, “From my perspective, this pursuit led to decisions that created confusion among core guests as Applebee’s intentionally drifted from its … middle-America roots and its abundant value positioning.”
Develop Your Marketing Strategy
There are two strategy elements here that small businesses must recognize.
Know your audience and know your competition.
The spark that ignites a marketing endeavor is value. You have to offer something people need or desire. Like Prego, you may go through a process of evaluation before you discover precisely where that need exists.
From there, you need to outline your strategy. Where is your audience, and what kind of content will they respond to? Who are they going to compare you to, and how will you make yourself seem like the superior choice?
These are not easy questions to answer. It requires that you step back from your product and the activity of executing marketing tactics. You must empathize with your audience and view your offering with their eyes – as if you were looking at it for the first time.
Once you develop a marketing strategy, it will impact everything else you do. It will inform your goals and tactics. If you come up with things that deviate from your strategy, you need to pause. Ask why you’re doing it and how it fits into your overall plan.
You’re building a website, gathering images, writing copy, and preparing ads. You’re accumulating inventory, pricing products, and planning fulfillment.
But do you have a marketing strategy? Does your team understand what that strategy is? Do you really know the consumers you’re trying to reach and the competition you’re going against?
Do you know how to position your product to maximize interest, competitive advantage, and profit margins?
To get to the top of the marketing pyramid, you must start at the bottom. Without a marketing strategy, you won’t be able to sell a drowning man a life jacket.