Marketing Strategies, that make selling redundant
Mentor Speak
This series of short write ups provide pearls of wisdom from Global Leaders and Mentors who are associated with us. They bring in a practitioner’s perspective and serves as an effective combination of advice that has authenticity, experience and most importantly – relevance.
Marketing, often misunderstood and described as the art of selling products, is debunked by marketing guru Peter Drucker as “Aim of marketing is to make selling superfluous”. A good marketing strategy should result in a customer who is ready to buy. To do just that, marketing gurus have come up with specific actions to build a solid marketing strategy.
Let us understand these concepts…
Needs, Wants and Demands
Needs relate to basic human requirements. Needs become wants when they are directed to specific objects that might satisfy the need. Demands are wants for specific products backed by ability and willingness to pay.
Myth - “Marketing creates needs”. Needs pre-exist, marketing influences wants. e.g. marketers may promote the idea that Mercedes would satisfy a person’s need for social status, they do not create the need for social status, they are merely pointing to the fulfilment of this need by Mercedes, thereby creating wants and demands for Mercedes. We all know they have been quite successful in doing so.
Understanding customer needs and wants is a complex combination of science and art. One needs to deeply understand the five needs. Let’s understand these with an example.
Customer states he wants an inexpensive car -
Stated Need: Wants an inexpensive car
Real Need: Wants car with low operating cost not necessarily lowest on the initial price
Unstated Need: Wants a good after-sales service.
Delight Need: Would like to have integrated navigation and music system
Secret Need: Wants to be seen as Savvy buyer
Responding only to stated need would short change the customer, creating buyer remorse and a bad name for your brand.
Target Markets, Positioning and Segmentation
It is rather impossible to cater to everyone in the market. Mercedes and Maruti cannot address all types of customers. Marketers then need to identify distinct groups of buyers who might see the most value in their products. This shall entail understanding aspects of demographic, psychographic and behavioural differences. This is called Segmentation.
Based on which segment presents the greatest opportunity, marketer decides on target markets. For each of them, the firm then develops a market offering. Offerings should be positioned in the mind of buyers as delivering key benefits. This is Positioning.
Offerings and Brands
The intangible value proposition is made physical by the offering, which typically is a combination of products, services, information and experiences. A Brand is an offering from a known source. A Brand makes the buying decision simpler and faster.
Value and Satisfaction
Offerings are successful only if they are seen delivering value and as further derivative, satisfaction. Value reflects the perceived tangible and intangible benefits and costs to the customer. Most of the time customer value triad (quality, service and price) is most effective in showcasing the value.
Value is the central marketing concept. Marketing is therefore responsible for identification, creation, communication, delivery and monitoring of customer value.
Satisfaction reflects buyers comparative judgement resulting from a product's perceived performance in relation to expectations. Do note the words comparative and perceived here, it’s all relative here, making marketing more of an art than science.
Marketing Channels
Much less talked about these days, a marketing strategy is incomplete without discussing channels. In a nutshell, there are three types of channels one should think of:
Communication Channels
Distribution/Sales Channels
Service Channels
Supply Chain
While a supply chain is the subject of operation, to a marketer it presents an opportunity to increase the profitability of the firm. A Supply chain represents a value delivery system. The chain flows from various raw products, modifications, various processing steps and by the time the final product is delivered there are many players that enable the total value generation. Your firm would then account for a percentage of this total value. Marketers always look to increase their percentage of value. If you hear of companies buying other firms, its always aimed at capturing a higher percentage of their value chain either by buying competitors or other players of the value chain.
Competition
Competition is always good. It is an indicator of a healthy market. However common mistakes are made when only actual competitors are studied. Competition is not only from producers of the same products in the market but also producers of substitutes. Your corporate video service competitors could be other studio’s, yet the substitutes like billboards, flyers, newspapers ads could chip away the purse you are going after.
Marketing Environment
Other than the competition, there are broadly six environments one must consider in the marketing strategy. Demographic, Economic, Physical, Technological, Political-Legal and Social - Cultural. These environments contain forces that could have a major impact on your marketing strategy. One needs to pay close attention to trends and developments in these environments and make timely adjustments to marketing strategies.
In conclusion -
A company’s long term prosperity often depends on its marketing ability. Marketing deals with identifying and meeting human and social needs in ways that provide value for customers and stakeholders.
Note: This article is greatly influenced by the teachings of marketing Gurus like Peter Drucker, Philip Kotler, Keller, Vithal Rao and Joel Steckel, one of who was my teacher too.
