Marketing Strategy Basics

• Marketing focuses on both strengths and weaknesses of a business
• Focus on understanding the target audience, including demographics and behavioral aspects
• Identify the pain points that customers face to solve them
• Analyze direct and indirect competitors in the market
• Leverage valuable partners, suppliers, and anyone else that can help the business
• Context, PESTEL includes all external factors that influence business operations

Framework for Marketing Strategy

• Marketing aims to create and retain customers
• Differentiation involves the delivery of unique value
• Transforming customers into brand ambassadors is a key goal
• STP involves the aspect of aspiration decisions including segmenting, targeting, and positioning

The 4 P's

• Product refers to what is being offered and includes the core product and added value
• Promotion focuses on how customers will learn about the product through ads, social media, and influencers
• Place refers to the distribution channels, like store, online, or direct to consumer
• Price refers to the value exchange, such as premium pricing versus discount strategy

Implementation and Evaluation

• Execution involves aligning resources, setting budgets, and operations
• Monitoring & auditing involves tracking performance and adjusting strategies

Situation Analysis

• Need refers to an unsatisfied customer or their existing pain points
• Product characteristics and product benefits include those that provide cost savings, comfort, and efficiency

Decision-Making Process

• It includes what triggers the need and what precisely that need is
• The consumer must consider where to buy and if they are price sensitive
• Consider the role of stakeholders, such as plumber or sales representative

Numeric Distribution

• The percentage of stores selling items

Weighted Distribution

• This is weighted by the stores' importance to total sales

Formulas

• Year-on-year growth = (Value t1 – value t0) / value t0) or (new-old)/old
• Market concentration includes the extent to which a small number of firms dominate the market = value firms / total market
• Market share = the percentage of the total market in units or value
• Market penetration = customers who have purchased a product in the category divided by the total market = current market / total potential market
• Forecast unit sales = Number of consumers multiplied by awareness and availability
• Return on sales (ROS) = net profit / sales revenue
• Return on investment (ROI) = Net profit / investment
• Marketing return on investment (MROI) = incremental financial value created by marketing - cost of marketing divided by the cost of marketing
• Price premium includes brand price minus benchmark price divided by benchmark price
• Sales force effectiveness ratios consists of their sales, contacts with clients, potential, and active accounts

Estimating Market

• Market minimum refers to demand without marketing
• Market potential refers to the maximum demand achievable with marketing
• Market environment includes the external factors affecting demand
• Demand calculation is the market demand in units multiplied by the average retail price
• Product demand in units multiplied by the average retail price

Market Sizing

• Estimate the total number of potential buyers for a product/service

Potential Market

• Includes total possible demand for a product, including all possible customers

Available Market

• Represents a portion of the potential market that has the ability and willingness to buy

Target Market

• A specific group of consumers a business aims to reach

Market Forecast

• It predicts future demand, focusing on market trends and provided data

Market Demand

• The total quantity of a product demanded by consumers in a given period

Product Demand

• Demand for a specific company's product within a market

Market Share

• A company's percentage of total industry sales

Relative Market Share

• Relates to a company's market share compared to its largest competitor

Market Penetration

• Refers to the percentage of a target market that has been reached by a product

Product Penetration

• The percentage of potential customers who have purchased a specific product

Numeric Distribution

• The percentage of stores carrying a brand or product

Weighted Distribution

• The sales volume of stores stocking a product relative to total category sales

Market Concentration

• Relates to the extent to which a few companies dominate a market

Return on Sales

• A profitability metric that measures net profit per dollar of sales

Return on Marketing

• Measures the effectiveness of marketing spend in generating revenue

Sale Force Effectiveness

• Evaluates how well a company's sales team performs

Comparative Pricing Index

• A benchmark that compares a product's price against competitors

CAC or Cost of Customer Acquisition

• The total cost of acquiring a new customer

Customer Lifetime Value

• The projected revenue a business expects from a customer over time

Sell-In vs. Sell-Out

• Sell-in refers to sales from a manufacturer to a retailer, while sell-out refers to sales from the retailer to the final consumer

Portfolio Analysis

• Evaluates a company's range of products to identify high-performing and underperforming ones

BCG Matrix

• A tool for analyzing product life cycle stages including Stars, Cash Cows, Question Marks, and Dogs

Product Life Cycle

• The four stages a product goes through, including introduction, growth, maturity, and decline

Cannibalization

• When a company's new product impacts sales of existing products

PESTEL Analysis

• Analysis of external factors, including political, economic, social, and legal considerations

Porter's 5 Forces

• A model for assessing market competition with five forces: rivalry, supplier power, buyer power, and threat of new entrants

Market Opportunity

• The potential for a product to generate revenue in a given market

Setting Objectives

• Establishes clear marketing goals that align with the business strategy

Coherence and Consistency

• Ensures all marketing activities align with the overall brand strategy

Market Growth

• The increase in total sales or revenue within a given market over a certain time

Market Share Growth

• Expanding a company's share of the market through marketing, innovation, or acquisitions

Stakeholder Analysis

• Identifies and assesses the interests of different stakeholders including customers, employees, and investors

Perceived Value

• Worth that customers assign to a product based on its benefits

Product-Market Fit

• Achieved when a product satisfies strong market demand

Minimum Viable Product

• A simplified version of a product used to test market demand before full-scale development

Value Based Pricing

• Setting prices based on the perceived value to the customer rather than cost

Push vs Pull Demand

• Push strategy involves promoting products to retailers, while pull strategy involves direct promotion to consumers to drive demand

Tapped vs. Untapped Market

• Tapped markets have established competition, while untapped markets offer new opportunities for innovation

Market Definition

• Establishing clear boundaries for a market based on customer needs, geographic reach, and competitive landscape

Segmentation

• Dividing a market into distinct customer groups based on demographics, psychographics, behavior, and needs

Targeting

• Selecting specific market segments to focus marketing efforts on, such as mass marketing, differentiated marketing, or niche marketing

Strategy

• Inside out relates to strategies based on internal capabilities, strengths and resources
• Focus on what the company does best
• Outside in focuses on understanding customer needs, market trends, and external factors

Qualitative Personas

• Consider personas that are measurable and quantifiable
• Segments related must be clearly associated with one profile
• All segments must be different
• Actionable relies on ability to test implemented strategies on a segment by segment basis
• All segments must be big enough to target

Jobs to be Done

• Customers “hire” products to perform specific functions
• Understanding customer context is crucial
• A great product must align with functional, emotional, and social considerations

Market Definition

• Broad definition can identify adjacent opportunities and track market shift
• Narrow definition provides clarity in competition and target customers

Market Segmentation

• Market Segmentation is based on demographics, geographics, psychographics, behavior, and needs
• Mass marketing involves one product for everyone
• Multi-segment is targeting multiple segments with different products
• Niche marketing focuses on serving a specific customer group

Market Sizing

• Includes TAM as total addressable market
• And SAM as serviceable available market
• SOM represents serviceable obtainable market
• EVG represents earlyvangelists and most potential customers

Strategies of Growth

1. Market penetration relates to existing market and existing product
2. New product development involves existing market and new product
3. New market development involves new market and existing product
4. Differentiation includes new market and new product

Market Growth Strategy

• This includes growing the market while holding the same share within a new larger market

Share Growth Strategy

• Growing your share of the market and keeping market size unchanged

Overcoming the Market

• Focus on niche market first
• Develop a complete product solution
• Leverage early adopters as references
• Reduce risk for early majority
• Create a compelling market positioning by combining innovation with practicality

Laddering and brand pyramid

• Values are the state of mind consumers are trying to achieve
• Consequences contain emotional and functional components

Positioning

• Defining how a brand wants to be perceived by its target market compared to its competitors
• Target market defines who you are trying to reach
• Frame of reference defines the product strategy or market context
• Point of difference describes what makes a brand unique
• Reason to believe is supportive confirmation of your claim
• Strong positioning requires relevance, clarity, and credibility
• A brand must deliver uniqueness, attainability, and sustainability