3 Steps to Developing a Great Marketing Strategy for a small business.
Marketing Strategy is a big fluffy word. Marketing people can use it to impress clients or prospects. You know developing a marketing strategy for a small business is not that hard if you are willing to learn and commit to the process.
You just need to have a good model to follow. This article is going to help you with that in a minute. You can also subscribe to my YouTube channel
I’m going to explain in this article what Marketing strategy is and how a small business owner can develop one.
What is a marketing strategy for a small business?
In simple words, Marketing strategy is your answer to the “How?” question. Let me put it this way:
- it is your personal answer to how you are going to solve a problem for the buyer or customer.
- How you are going to do it, is your strategy. Simple.
You can call this a marketing strategy or business strategy but the basic concept is the same i.e an answer to all the “Hows”.
In essence, there are three 3 steps to developing an effective marketing strategy. I suggest you take these 3 simple steps and hold a review meeting with your team.
I’m sure you will discover and learn a lot about what your team is doing and what the customer expectations are.
3 Steps to Developing a Great Marketing Strategy
You can refine the business processes around these 3 steps as a continuous process.
Let’s start reading the steps.
#1 Study and identify different groups of customers
In order to select the target customer market, you must undertake the customers’ segment analysis. It includes studying the whole demographics in order to determine what options you have.
Demographics is about dividing people into different groups based on age, gender, education, race, religion, behavior, personality, region, etc. The demographic analysis should help you decide which potential buyer you can serve in the market.
Marketing people call this process the Segmentation analysis. It can be a simple day-to-day observation that helps you identify a target customer or a business opportunity.
Example
You might discover that there isn’t any laundry shop in your neighborhood. You can go ahead and open one and solve this problem.
Of course, most of the business decisions won’t be as easy and simple as the example given above. Ideally and professionally, you would have to dig deep into the demographic elements such as age, income, status, interest, values, religions, culture, region, life, and aspiration.
You need to do this homework before you start a new business. The demographic analysis serves as the basis of a marketing strategy.
#2 Deciding on what customers to target in the market.
Most of the processes in a business, especially the marketing side of the business would not remain the same. The solutions and the related problems continuously change. As a small business owner or an entrepreneur, you need to constantly review the customer’s expectations and respond accordingly.
It doesn’t matter whether you are a new or old business, I strongly suggest you ask your team the following three questions:
- Do you want to serve all segments with one product? (undifferentiated)
- Do you want to serve several segments with different products? (differentiated).
- Do you want to serve a single segment with one or several products? (focus/niche).
The answers to these questions would determine your approach. Now, let me share examples.
The undifferentiated approach
You have got one product and you offer it to all the consumers in the market. It is not only simple and straightforward but also economical.
Example
You sell normal salt in a regular container. There are no variations of the product.
Advantage: Selling such a product gives you the advantage to have one marketing program. It is cost-effective.
Disadvantage: Just one marketing program everywhere would not work when customers vary in their likes and dislikes. Generally speaking, undifferentiated targeting is not a good idea, especially, when technology has made customization so easy now. People want variety.
The Differentiated Approach
As people tend to be different in their lifestyle, personality, habits, and social status, it makes sense to offer them a product that suits them. You have to sell each group of people (called a segment) a different product as that’s what they want.
Example
People are not going to buy just one regular container of salt. People are going to have different wants or needs. That’s exactly why there are more than 10 different types of salt being sold in the market.
Here are some of the salt products for different wants in the market:
- Celtic Sea Salt
- table salt
- Koshar salt
- Iodized salt
- sea salt
- Himalaya salt
- Black Salt
- iodized salt
Advantages: You can fill the market gaps by offering many different products to several groups of buyers or customers. It should earn a lot of market share for your business.
Disadvantage: Offering different products/services to many customer groups is a great idea but it is also not easy. It is expensive to design and develop a different product for each and every customer group. Hence, there is more risk involved in following this strategy if you are not already an established business.
The Niche Approach
The niche is a marketing strategy where you only focus on one or two segments of the buyers or customers. You can offer them a lot of variations of your product or service.
If you follow the niche approach, you intend to go really deep into one particular segment of buyers or customers.
Example:
When a web development agency focuses on only developing WordPress Websites, we can say it is following a niche strategy. You can even further refine the focus and say that we offer WordPress Development services only to hotels and restaurants.
Advantages of a Niche Marketing Strategy:
The best option for a small business is to go for a niche. A niche is the segment of a customer that you would like to serve best and you are just super focused on it.
It is because of this relentless focus that you are able to defend your market share against competition. It is hard to beat niche businesses because they have established great trust and relationships with their customers.
Disadvantages of a Niches Marketing Strategy: It is possible that you grow following a niche strategy and never grow of it. What I mean is that as a business establishes itself in a niche, it should expand and move into other segments.
Sometimes, a niche business doesn’t have enough opportunities to really grow in the long run.
#3: Creating & Communicating the Product/Service
Now, you have successfully identified the customer group suitable for your business idea. You have also decided on how you are going to go about the business i.e the targeting strategy.
You also went ahead and created the product or service.
Now, you are ready to tell the world that you exist and that they need to take notice of you.
Yes, you begin raising awareness about the product or service. Raising awareness about a product or service is called promotion. It is about the communication part of your marketing strategy.
The communication of a product/service includes essentially all elements of promotion to reach the target audience i.e the customer.
The communication or promotion program may include some of the following depending on the nature of your business:
- Sales discounts
- Advertising on Radio/TV etc.(if can afford it)
- Direct selling
- Online advertising
Example:
You can buy a display ad inside a shopping mall to promote the salt product. If you want to spend less money, you can also try running an online ad on the internet.
There are many options depending on how much cash you want to spend on the promotion. You can also get a local influencer from a cooking show to promote the product.
Please, note that you have to be clear about whether to brand or not brand the product. If you go the branding route, then you have to spend more money on the communication & quality of the product. Branding will create an identity for the salt and it is going to take some time and effort.
You know It is going to be a challenge to differentiate a generic product like salt. Branding a salt is more difficult as often the consumers don’t care much about the difference.
The solution to this problem is going to be somewhere between excellent brand communication and establishing a great partnership with the retail stores in this case.
