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The 5 Cs and Strategic Marketing Basics

Once you know the marketing mix, goals, and targets of your marketing effort, the nextstep is to develop the marketing strategy. A good guideline to make the right decisions,

while constructing a marketing plan and strategy, are the 5 Cs:

1. Customer Determine what needs from which clients youre trying to satisfy. A few

areas to research would be the market segments, benefits the customer wants, if the

value of the benefits outweigh the costs, frequency of purchases, quantity ofpurchases, retail channel, and needs based on trends over time.

2. Company Determine if your company can meet those customer needs. For

example, does your company have the right product line and/or technical expertise?A good tool to help determine your companys strengths and weaknesses is SWOT

analysis. This stands for Strengths such as innovative products, expertise, greatprocesses and procedures, Weaknesses such as the lack of knowledgeable technical

support or poor product quality, Opportunities such as a new international market or

a market led by a weak competitor, and Threats such as a new competitor or pricewar. This is a very good tool to analyze the internal strengths and weaknesses, andthe external opportunities and threats.

SWOT Diagram

3. Competition Determine who competes with your company in meeting the

customers needs. Is it an active competitor or a potential threat? What are theirproducts exactly? What are their strengths and weaknesses?

4. Collaborators Determine if there is any outside source that can help the company

such as distributors, suppliers, etc.

5. Context Determine if there are any limitations due to Politicalissues such as legal

problems, trade regulations, taxation, and labor laws, Economicconcerns such as

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growth rate, labor costs, and business cycle stage, Socialimpacts such asdemographics, education, and culture, and Technologicaldevelopments such as the

impact on cost structures. This is also known as PEST analysis. These forces canbe dramatic and difficult to predict.

Strategic marketing decisions are mostly based on price and quality. A product can beof exceptional quality at a high price like a Rolls Royce, or of a lower quality but lower price

like a Hyundai. Economically, it is not expected that the price of a Rolls Royce will be thesame as that of a Hyundai.A strategic decision companies face is to choose whether they will compete on price or

quality. Marketing would then focus its efforts on the results of that decision. For example,

if the company were a thrifty clothing store, the message would focus on the low price forits everyday goods. If the company were a Beverly Hills clothing store, the message would

focus on the elite quality and design with the price being of little concern.Companies also compete on service such as post-sales support and warranties. They can

also compete based on the novelty, design, prestige, ease of use, and technicalsophistication of the product. Product differentiation, like improved performance, improved

appearance, and improved image, is a good way to make a product different from otherslike it. Overall, the essential goal of a marketing strategy is to have a competitive

advantage and to get that word out to the marketplace.

A market-driven company looks for and listens to customers to learn why and howcustomers use their products. They look at trends in the marketplace in technology, pricing,and packaging, not to mention watching what their competitors are doing.

Marketers also try to understand who will likely influence the decision-making process fortheir target market. They will not only try to design their promotions around the buyer, but

also all those who may also be involved. For example, the father will make the decision onwhich vacation package he will buy, however, he will also be influenced on other factors

such as his wife and children. Here are the 5 decision-making steps:

1. The initiator, who might be the child who wants to go to Disneyland.

2. The influencer, who might be a travel agent.

3. The decider, who might be the parents.

4. The buyer, who might be the father who used his credit card.

5. The user, who reaps the benefits, which in this case was the child who was theinitiator.

The buying process consists of:

Problem recognition, whichcould be a simple need, to a complex want.

Information search, which ishow they will find the need or want.

Evaluation of alternatives, which is when they compare with other products.

Purchase decision, which is made after all alternatives have been evaluated.

Post-purchasebehavior, which is whether they were satisfied, or have a case ofbuyers remorse.

Whenever a new product is released, one way to look at how the new product will beadopted by buyers is the Product Adoption Curve. It states the there will be various

categories of buyers in a predictable order. Most buyers wait to buy something new untilthe more innovative buyers adopt the product first.

Example Product Adoption Curve, aka Technology Adoption Curve

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Each phase presents a different marketing and sales challenge. In the

introduction phase, the sales are slow and the challenge is spreading theword of the new product and finding the first customers, which are the

innovators and early adopters. In the growth phase, the sales rise,however, the challenge is to beat the competitors getting to the early

adopters. In the maturity phase, sales growth levels off and the challenge is

controlling sales costs, fighting for market share, and developing variations

of the product. Finally, in the decline phase, the sales decrease so thechallenge is to decide what to do with the product, such as whether it can berevitalized, or if even its still profitable enough to sell.

The length of any particular phase can vary for different products. Theproduct life cycle only applies to successful products. Those that dont make

it past the introduction phase are considered product failures. There is alsothe chance that a product that is in the decline stage can make a comeback.

6 Ways to Capture Value in a Competitive Marketplace

Knowing how to live in the woods doesnt make you an environmentalist any more than running

a business helps you to truly understand the underlying forces of the market. But the businessenvironment we operate in demands an understanding of what levers to pull in order to move

markets in our favor.

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Here are some levers that will help you create and capture value in a competitive marketplace:

Lever 1: Strategic Pricing

Pricing is often simply a tactical decision, i.e. the objective is to maximize economic profits.

However, pricing can also be an important part of a companys strategy and help differentiate thecompany from competitors. Being able to look at product pricing through a strategic lens means

getting inside of your customers head and segmenting your customers based on product

requirements, willingness to pay, and service opportunities. Once you have done this you will bein a position to come up with a set of product and service packages, which align with your

customers needs with what they are willing to pay.

Lever 2: A new lens on marketing strategy

It is common to look at marketing strategy through the lenses of product, price, place and

promotion. However, you can open up a new perspective on marketing by viewing it through the

lenses of strengths and capacity. Our marketing group has used this perspective to challenge thenotion that tactics and constraints are the foundation of marketing. The result is that our

enterprise objectives now define our future, and our capacity analysis informs us as to how wecan achieve these goals. This has led to better resource utilization leveraged in a coherent

direction.

Lever 3: Embrace and enable change

Change is at the heart of every situation in business. So seeing it for what it is and embracing itare powerful steps to cause positive change. That said, most of us know that forces acting on

organizational change are not naturally aligned around one simple idea like making profits or

creating shareholder wealth. Embracing change is only half the battle. If you build a companyculture where change is not only expected, but is also encouraged, your culture and youremployees will become enablers of change.

Lever 4: Going beyond awareness

Awareness and understanding are two different things. For example, Im aware of my golf

handicap, but I have no understanding of what I can do to improve it. On the other hand, golfprofessionals have both awareness and an understanding of how to improve their game. In

business we need to develop both awareness as well as an understanding of the forces affecting

our personal leadership effectiveness. To make broader improvements in our organization we

can use this same level of brutal honesty to move beyond awareness of problems and to seek adeep understanding on how to improve them. When you encounter a problem where you lack

understanding of the root causes, try a technique I call the 5 Whys. Ask folks involved in the

relevant area of your business Why the problem has emerged. Follow that up by asking Why tothe answer they give you. Ask Why 5 times and you will develop a deeper understanding of the

root cause(s) of the issue at hand.

Lever 5: Leverage your customers

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Open a new discussion on how you can utilize your customers organizations to help support your

marketing teams. Especially if you are a small organization, you may be surprised to find out that

some of your big customers have capacity that you can utilize. For example, we worked with alarge customer to leverage their social media techniques to build our product awareness. We now

encourage our staff to think about how our goals and our customers goals are aligned, and to

reach out to our customers for initiatives where we can realize mutual gain.

Lever 6: Dont just run the numbers - focus on the model!

Running a business on the numbers is rule number one, but so is dribbling in basketball. Imagine

leading an NBA team that spends the whole game dribbling. Numbers and data become much

more valuable and actionable when they are structured with a model that can account for risk,probability and statistical significance. Our sales forecasting used to be based on simple

arithmetic and a thumb in the air for growth projection, but now we base it on capacity,

performance, and regression models. The models consider distribution of performance in a more

realistic way than assuming that everyone performs at the same rate and with the same results.

This has enabled us to refine our forecasts, strategy, and operational planning based on a morecomplete understanding of how the numbers move based on independent variable. Focusing on

the model that frames your data empowers you to ask questions, make changes, and be aninformed consumer of data.