The first step in creating an awesome marketing strategy is to define your target audience clearly and succinctly. The target is the key to everything else.
What is Marketing Strategy?
I find it is always helpful to start with a clear definition. If you Google ‘Marketing Strategy’, a myriad of different results and definitions will appear. [i] [ii] [iii]
As you can see, not all academics agree. Everyone has a slightly different spin. After 25 years in the field, I like a simpler more pragmatic definition:
A marketing strategy clearly defines the market segment and target audience, where your solution is uniquely positioned to meet the emotional and rational needs of the target audience.
This definition more closely aligns with the concepts in A Lafley and R Martin’s book “Playing to Win”[iv]. My definition of marketing strategy answers their first two questions, namely in which markets to enter and how can we be effective.
So why all this time spent on definitions? It is to save you time, money, and aggravation. It allows us to focus on what is most important, and skip the rest.
The importance of a marketing plan cannot be overstated. It is very akin to driving without GPS. You might eventually find your way. But, you’ll arrive at the right destination faster if you have the right guidance.
What are All the Steps?
There are six key steps when developing a marketing plan. Those steps are outlined in the graphic below
In this blog post, we are going to cover the first three. We will cover the last three in our next post.
Market segmentation is all about relevance. It’s about finding the group or groups within the larger market where your product or service has a unique advantage and/or where it will be perceived to be providing its greatest value.
The first step in developing a marketing strategy is to perform a market segmentation. The concept behind market segmentation is relatively straight-forward. It is about dividing the market for your products and services into smaller, more manageable groups.
A market segment has three main components. First, the members of the segment share common attributes and needs. For example, families of school-age children learning from home due to COVID. Second, it is distinct from the other market segments. In the case above, these families would be distinct from other families who can send their children to school. Lastly, they have to respond to the market in similar ways. Using the school-age example, they may not. Here, we may need to segment more by income. For example, high-income families may respond to the market differently than lower-income families.
Market segmentation is critical to determine the relative size of the opportunity. The purpose of this exercise is to find the largest segment where you have the greatest competitive advantage. For example, you would look at the opportunity differently if your best target market is only 2% of the total market than if it were 20%. Sometimes 2% is better than 20% if you can charge more and be more relevant. It all depends on your product or service. However, it does provide you with a quantitative tool by which you can prioritize.
How to Do It?
You can use this relatively straight-forward 5 step process.
This checklist can also be useful as you sort through your possible segments:
By using these tools, you can go beyond basic demographic information into richer more relevant details. Once you have selected your market segment, then we are ready to move on to defining our target audience.
If the segmentation was done correctly, the target audience is defined by the market segment. If they all truly respond to the market in the same way, then your target audience is defined by membership within the chosen market segment. If not, you will need to find the largest group within the segment where your product or service has a meaningful benefit.
Building a Persona
The classic definition of a persona is the public face a person presents. It’s a role they play. The character isn’t real, but he or she is relatable and believable. It is different from a stereotype in that it is based on observed behavior, not just assumptions. A persona is a relatable person. A stereotype is simply the lowest common denominator of traits a group may or may not possess.
Building a Persona – Video Overview
How Does This Apply to My Digital Marketing Strategy?
It doesn’t matter if your marketing digitally or using older analog methods, the target is the key to both.
Digital Tools Allow Us to Learn About our Target Like Never Before
What has changed is that digital tools such as social listening, for instance, give us a window into the life of our customers. Through Facebook, Twitter, etc., people share a considerable amount of personal information on social networks. Personas don’t have to be guesswork. You can observe your target audience directly. There’s no need for focus groups or interviews. Finding the influencers through @ mentions and understanding the important # tags will greatly speed up the process. These digital tools can help you find the data to answer the 5 points outlined in the video.
How Does This Apply to My Small Business?
Every business needs a marketing plan regardless of size. The methodology is the same whether you are a corner mom and pop store, or a mega Fortune 500 company. You are still marketing to people. Human psychology is the same. The only real difference is the amount of data that is available to you and the resources you have to analyze it.
Digital Tools Allow Us to Build Our Plans Faster and Cheaper
As I mentioned, the digital tools that we have at our disposal today have leveled the playing field significantly. Historically, you would spend months doing a proper segmentation. This would be followed by more months of customer research using focus groups or interviews, for instance. It would cost so much time and money, few could afford it. Today, that dynamic has changed. Social monitoring can be as cheap or as expensive as you want it to be. It’s a matter of dollars spent on people or software.
Here are the most important takeaways from this post.
1. Develop a Marketing Strategy: It takes time. It takes a concerted effort. But, it will save you both time and money in the long-run.
2. Market Segmentation is Key: The more targeted you are, the more relevant you will be. Just remember the three key questions when determining your segment: Is it homogeneous? Is it distinct from the rest of the market? Will it react to the market in the same way?
3. Take the Time to Build a Real Persona: It can be tempting to rely on stereotypes. But, if you skip this step, you’ll likely be less effective. Given how easy it is today, using available technology, it’s worth the effort. If you screw up the target, the rest of the market will fail.
In our next post, we will cover how to use this newly found target to help position yourself within the market and how to create marketing communications that will motivate your target audience to act.
[i] P Kotler & K Keller, Marketing Management, Pearson, 15th Edition, 2016
[ii] Aaker, David A. & Mills, Michael. (2005). Strategic market management. Milton, Qld : John Wiley & Sons
[iii] Michael Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors , NY, Free Press, 1980
[iv] Lafley, A. G., & Martin, R. L. (2013). Playing to win: How strategy really works.