Modules for Investors
Understanding marketing and strategy
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What is strategy?
Remember Rajiv and Akshay - the two businessmen - from the previous chapter? To reca, both of them were in the business of selling clothing. While Rajiv relied only on word-of-mouth marketing, Akshay went all out and dedicated 25% of his budget to print marketing and social media marketing. Rajiv’s marketing saw poor results, but Akshay’s delivered reasonable success.
What’s the difference, then? The strategy of course. Rajiv had a poor marketing strategy in place, but Akshay aced his marketing strategy. But, let’s back up a bit and understand what a strategy is, in the first place.
What is a marketing strategy?
A marketing strategy refers to a business entity’s or an individual’s plan of action to spread awareness about its products and/or services to its prospective and existing consumers. The aim of a marketing strategy could be to convert potential leads into active consumers, or to retain existing consumers. It involves various aspects, such as the business’s brand messaging, its action plan involving its value proposition, and what it does with the data points that it has on the intended target demographic.
A marketing strategy is often viewed as one comprehensive plan, but when you break it down, it involves multiple minor and major marketing campaigns that target different segments of the intended consumer base.
Why is a marketing strategy important?
A good marketing strategy can turn things around for any business. Some of the reasons strategic planning in the form of a marketing strategy is essential are quite obvious. Let’s look at these first.
A marketing strategy is important for all businesses and brands for the following reasons:
- It results in increased sales and conversions for the business.
- A good marketing strategy makes it possible for business to meet and exceed customers' expectations.
- It creates enduring growth for the company.
- It helps companies strengthen their relationship with the target customer base and build up their brand.
Aside from these fundamental reasons, a marketing strategy also needs to be two things:
A repeatable marketing strategy essentially means that it is easy to replicate for different campaigns. There may be minor tweaks, additions or removals to the strategy, but the overall template remains the same, making it easy to use the strategy almost instantly, at short notice. Sure, a repeatable marketing strategy may not work for all products or services that are either being newly launched or upgraded. However, if it’s sufficiently repeatable, it can be used for most marketing campaigns.
Now, on to scalability. A scalable marketing strategy is important mainly because it can be expanded or cut down to meet the needs of every marketing campaign. Scalability builds upon repeatability. In other words, a strategy first needs to be repeatable before it can be scalable. Once a company has succeeded in building a repeatable, scalable strategy, it is free to improvise and build upon that blueprint for future campaigns.
What are the essential components of a good marketing strategy?
There are five essential components in any good marketing strategy.
- Target audience
- Competitor analysis
- Content development
Let’s break these down one after the other.
The target audience for any business is the group of people who will be interested in using the product or service being marketed. Sometimes, mass marketing may be the order of the day, particularly for products or services that everybody will benefit from, irrespective of their individual characteristics. But for the most part, marketing strategies are designed around specific target audiences.
These target groups can be segmented based on any of the following parameters:
Geographic segmentation involves identifying a target group based on their location, language, climate or culture, while demographic segmentation is based on factors like age, gender, marital status, income level, and so on. Psychographic parameters include value systems and beliefs, lifestyle choices and personal or collective opinions, and behavioral segmentation relies on the customers’ behavior or actions on the company’s app, website or add posts.
The second most important component of a good marketing strategy is a set of goals or objectives. Once a business has identified its target audience, it needs to address the question of what it aims to achieve, with regard to that target audience. For best results, goals are quantified to the highest extent possible. There are five defining boxes that the objectives need to check.
Abbreviated to form the acronym S.M.A.R.T, they are:
For example, take these two objectives.
- Objective option 1: Revamping the content on the company’s website.
- Objective option 2: Revamping the content on the services section of the company’s website within the coming 2 months.
As you can see, the first option is neither specific, nor is it measurable. It’s vague and has no timeline attached. The second option, on the other hand, does a better job of checking all the right boxes.
Analysing the competition is a huge part of developing a marketing strategy. It never hurts to stay informed about what the competition is doing. Analysing competition gives a business insights into the opportunities and the threats that lie before it. When these data points are factored into the strategy, the marketing campaign has a greater chance of being successful.
Content is another core area of every competitive marketing strategy. No, we’re not just talking about text here. Depending on the type of marketing (recall the types from the first chapter in this module?), the channel of marketing chosen and the target audience, content can include one or more of the following:
- eBook guides
There’s no marketing strategy that doesn’t involve content of some kind. Businesses often realize this too late. Merely allocating an adequate budget for a strategy isn’t enough. The resources need to be applied judiciously to give the business the best possible content for that particular campaign.
Aside from the above components, marketing strategies also need to be based on concrete metrics, like the following measurements.
- Website traffic, which gives insights into how many users visit the business’s web pages
- Industry benchmarks, which help compare internal data against the averages for the industry
- Social media analytics, which offer the details of how successful social media posts are, what the target audience is interest in, and how they are currently reacting to the business’s social media presence
Marketing strategies that worked
All of this theory is important, but if you look at some real-life examples of successful marketing strategies, you’ll find that it’s easier to understand how this works. It’s like putting a face to a name. Let’s discuss two such instances where good marketing strategies proved to be very successful.
1. Asian Paints
Asian Paints is a brand that’s been around for nearly 80 years, as of 2021. Here’s what has worked for the company over the past years.
- The use of a relatable brand mascot - Gattu - created by the legendary cartoonist RK Laxman
- An ad marketing campaign that peaked during festival seasons
- The launch of 1kg distemper packs, which were ideal for small homes
- Collaborations with painters, architects, decorators and home designers to offer customized painting solutions that came hand-in-hand with furnishing and decoration
- Tie-ups with Japanese and American companies to increase the share of Asian Paints in the industrial paint segment
2. Godrej Consumer Products
Godrej is a leader in the FMCG space, and a lookback at its journey so far shows us how it has, time and again, managed to stay relevant by adapting its marketing strategies to the need of the hour. Here’s what has worked in its favour.
- A diversified product portfolio that includes essentials like soaps, toiletries, hair care and household maintenance products
- A product strategy within each segment where each product was slightly different than the other - like talcum powders in jasmine and sandal variants
- Price differentiation strategies to appeal to different consumer budgets
- Bundling of products to attract the masses
- Rural-focused penetration to increase their customer base
- A massive retail thrust that aimed to make all of the company’s products available at all of its retail outlets
Marketing strategies that failed
To appreciate the good, you often need to understand the bad, isn’t it? And so, in this segment, we’re going to be looking at a couple of marketing strategies that failed spectacularly.
1. Coca-Cola’s New Coke
Here’s what happened. In 1986, to celebrate 100 years of their brand, Coca-Cola pulled off an unexpected, and in hindsight, a less-than-sensible move. They introduced a new product, called New Coke. Before its launch, the focus groups who tested the product did love the flavour. But, as it turns out, the masses hated it. Things escalated to such a degree that the company had to hire a psychologist to handle the complaint calls they were receiving - at the rate of about 1,500 per day.
Why did it fail?
It turns out that the reason for New Coke’s failure was quite ironic. Coca-Cola had been so good at marketing their original signature product that when they tried to introduce a new rival product, their customers didn’t like it one bit. Interestingly, Pepsi took advantage of the situation and won over some of Coke’s market share. That, as it turns out, was good marketing.
2. Pepsi’s poor piggybacking of the BLM movement
For all its good marketing in the 1980s, Pepsi also had a remarkable marketing fail in 2017. That was the time when the Black Lives Matter movement had gained significant traction. Now, there’s nothing new about brands piggybacking on social and political movements. But Pepsi’s ad, which was developed in poor taste, was naturally not well-received. The ad marketing the brand featured Kendall Jenner watching, and then joining a protest with vague placards, manned by strict police officers. Jenner is seen walking up to the front line and offering an officer a can of Pepsi. The officer’s mood instantly lightens, and the protestors cheer.
Why did it fail?
The Pepsi ad failed because it came at a time when the BLM was picking up pace, and instead of offering constructive social commentary, it struck a nerve for many viewers. The ad also drew many visual parallels with the now iconic image of Ieshia Evans, who, as it turns out, was arrested. She did not get to lighten the moment as the ad fancifully portrayed. The moral of the story was that brands need to create marketing strategies with integrity. Artificially co-opting social messages into the campaign is never okay.
Well, this gives you quite a bit of idea about marketing strategies and what goes into their making, isn’t it? Coming up in the next chapter is the lowdown on the Marketing Mix. Curious to know what that is? Well, you know what to do then, don’t you?
A quick recap
- A marketing strategy refers to a business entity’s or an individual’s plan of action to spread awareness about its products and/or services to its prospective and existing consumers.
- A good marketing strategy must be repeatable and scalable.
- There are five essential components in any good marketing strategy: Target audience, objectives, competitor analysis, content development and metrics.
- Some marketing strategies work, while others fail. Businesses need to toe the line between keeping their strategy relevant and ensuring that they don’t adopt approaches that are distasteful or uncalled for.