In order not to get lost in the world of e-commerce, entrepreneurs need to have a pre-prepared strategy that serves as a compass, guiding all their efforts towards achieving their goals and ensuring sustainable development. This compass is called a marketing strategy.
Despite its critical importance, many still do not fully understand its essence and significance. Often, it is only resorted to in times of crisis, when faced with difficulties. However, this approach does not allow the business to reach its full potential.
At the same time, the effectiveness of the compass correlates not only with the thoroughness of its development, but also with the level of its integration into the main business plan. Only in this case can it become a powerful management tool that will take the business to a higher level. That is why we will tell you in detail what a marketing strategy is and how to use it correctly.
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This document serves as the basis for planning your advertising campaigns. Without a clear strategy, you risk spending significant amounts of money on testing disparate theories, which will prevent you from understanding current metrics, hinder scaling in profitable areas, and obscure potential errors.
The main goal here is to determine the qualities of the promoted product and understand how to present it. To achieve this goal, you will need a step-by-step action plan, an understanding of the advantages and disadvantages of the competition, and a search for the ideal niche. The result of this work will be the creation of a practical guide to action — a marketing strategy.
Although a business can operate without developing a marketing strategy, in such cases, efforts are chaotic in nature, and their usefulness correlates poorly with actions.
Why is it necessary to develop a marketing strategy?
Creating a marketing strategy plays a key role in the success of businesses. Here are the main reasons why it is so important to pay special attention to it:
Increase your market share. By conducting thorough research and testing various hypotheses, you can reach previously untapped user segments and strengthen your position in already established niches. This allows you to expand your presence.
Profit growth. Thanks to a deep understanding of your target audience and correct positioning, it becomes realistic to stimulate sales and increase revenue. Additionally, you can identify the optimal moments for promotional campaigns and develop compelling offers for customers.
Increased competitiveness. By analyzing your strengths and advantages, you can effectively use them to strengthen your market position, which in turn sets you apart from your competitors and helps you win consumer loyalty.
Defining your target audience. By focusing your efforts on those consumers who are most likely to become buyers, you can achieve higher conversion rates and optimize costs.
Quick adaptation to changes. With a ready-made strategy, you can respond quickly to trends and consumer needs. By analyzing market trends, businesses can develop relevant products and services that meet demand in a timely manner.
Increased return on investment. By carefully analyzing various advertising activities, the company can identify effective promotion channels and reallocate funds in their favor.
Easier start. At the initial stage, when you are just entering the market, a ready-made action plan will provide optimal ways to attract your first customers, build a recognizable brand, and occupy your niche. The same applies to rebranding situations.
Decline in demand for a product. If interest in a product or service begins to decline, a marketing strategy allows you to identify the reasons for this trend and develop a set of measures to stimulate demand.
Important! Developing a comprehensive marketing strategy is advisable for companies with more than 10 employees. With fewer staff, the time and resources required to create such a voluminous document may not be economically justified. In such cases, it makes sense to focus on individual elements of the strategy, adapting them to the existing scale of the business.
What types of marketing strategies exist?
Each type has its own unique course of action aimed at achieving specific goals. To choose the best path for development, consider your strengths, current position, and long-term prospects. Let’s take a closer look:
Basic
They lay the foundation for further development. They determine whether you will expand your business, maintain your current position, or reduce your market presence. Basic strategies can have several key directions:
Specialization. Focus your efforts on becoming the leader in a narrow market niche. This will help you become an expert in your field and offer a truly unique product that best meets the needs of your target audience.
Differentiation. Creating distinctive characteristics for the items being sold. This can be achieved by improving the product range, the quality of the items themselves, introducing innovations, or special brand positioning.
Cost leadership. Prioritizing cost control and increasing production. As part of this strategy, it is important to carefully calculate the return on each investment, optimize costs, and strive to offer competitive pricing.
Global
Global strategies focus on expanding sales geography and areas of activity. This is well expressed in the following areas:
Internationalization. A company’s entry into foreign markets and the opening of new sales channels outside its original territory. A striking example is the Chinese electronics brand Xiaomi, which started as an online store and now has offline points of sale in many countries around the world.
Globalization. Creating a unified product that meets the general requirements of the global market, but is adapted to local characteristics. This will make it possible to offer audiences in different countries a recognizable brand with understandable characteristics.
Segmentation. Focusing on specific consumer groups, taking into account their specific needs and preferences. Different versions of the product can be released, adapted to the demands of individual target audience segments in different regions.
Diversification. Parallel development of several areas, which reduces risks and ensures sustainable growth in the long term. At the same time, it will be necessary to monitor promising niches and develop new areas of activity in a timely manner.
Cooperation. Establishing partnerships with other market players to achieve synergistic effects and mutual benefits. An example of this is the partnership between Google and Apple—two giants that jointly promote their brands and reap mutual benefits.
Growth
This involves scaling up production, increasing market share in target regions, and sometimes a combination of these approaches. This requires courage, ambition, and a willingness to make significant investments. Key options include:
Strengthening the position. This is achieved through the aggressive use of large-scale advertising campaigns. This is particularly relevant when launching sales in new locations where the company is not yet known.
Market development. Searching for untapped consumer segments for an existing product. Unlike a global strategy, this involves gradually testing hypotheses and adapting products to the specific characteristics of different customer groups.
Product development. Offering target customers products that complement or expand the existing line. This is often used in cosmetics and household appliances, where items can attract interest due to the success of already familiar brand-name products.
Company expansion. This refers to the acquisition of weaker market players and the use of their capacities to increase production volumes and strengthen market positions.
Penetration into an occupied market. Distribution of products similar to those already existing, but with characteristics and conditions that are more attractive to consumers (e.g., cheaper).
Competitive
The higher the level of competition in a niche, the more effort is required to attract and retain customer attention. Let’s consider the main options for competitive strategies:
Leader. A company that occupies a dominant position in its market segment. The main task here is to expand the product range, stimulate demand, and attract buyers. Leaders also seek to increase the loyalty of existing customers and motivate them to make more frequent purchases.
Follower. This refers to a business that follows the niche leader, adopting some of its successful decisions. However, followers do not simply copy their leader’s actions, but look for opportunities for development. A good example here is working with an audience that the leader is not interested in.
Challenger. They challenge the niche leader by releasing an analogue or a product that is as similar as possible. Challengers try to surpass the leader in areas where it is vulnerable, for example, by offering more affordable prices or emphasizing the environmental friendliness of the product.
“Nicher.” Seeks market segments not covered by leaders and focuses its efforts on working with them. Nichers offer specialized services tailored to the specific needs and preferences of certain consumer groups.
Marketing strategy structure
Although everyone chooses their own approach to strategy development, there are basic sections that should be included in any case:
Purpose
It determines the direction of all subsequent actions and decisions. The goal must reflect your business priorities. To set a goal correctly, we recommend using the SMART method.
It implies that the goal should be:
Specific. Clearly and precisely formulated, without vague wording.
Measurable. Expressed in numerical terms so that progress can be tracked.
Attainable. Ambitious, but realistic given the available resources and constraints.
Relevant. Consistent with the overall strategy and objectives.
Time-bound. Having a clear time frame for achievement.
By applying the SMART criteria, you will be able to formulate a goal that will serve as a reliable guide for your strategy. Remember that it must remain inspiring and motivating, but at the same time realistic and achievable.
Positioning
It determines what place your brand should occupy in people’s minds. Competent positioning provides an opportunity to stand out from the competition and even form a unique selling proposition (USP).
The two main positioning tactics are legends and prices. In the first case, you create a certain image and story around the promoted item to stimulate the emotions and associations of buyers. In the second case, you emphasize the price advantage compared to other market players.
During the positioning development process, your corporate identity is also defined—logo, color scheme, fonts, communication tone. All these elements should work together to create a consistent and recognizable image.
Assortment
It is a list of everything you offer. As a rule, the product range contains several lines or categories targeting different segments of the target audience.
Creating an optimal product range is a common problem for small and medium-sized businesses, especially in the retail sector. However, as a company grows, its product range matrix is constantly changing and expanding.
Marketing plan
Combines all elements of the strategy. It includes:
Target audience profile. A detailed description of the ideal buyer, their characteristics, needs, and pain points. The more detailed the profile, the easier it is to create personalized offers and communications.
Promotion channels. A list of platforms and formats through which you will interact with customers. Choose channels based on your target audience’s preferences and budget constraints.
USP (unique selling proposition). Your strengths and competitive advantages that will be conveyed in advertising messages.
Loyalty program. A set of measures to increase repeat conversions and strengthen relationships with your target audience. Develop a system of bonuses, discounts, and promotional offers for regular customers. Encourage feedback and respond to it.
How to build a company’s marketing strategy based on the 4Ps principle?
However, one of the most popular approaches to strategy development is the 4P concept, also known as the “marketing mix” or “integrated marketing.” This model assumes that a development strategy is based on four key elements:
Product
This is the starting point, because the success of all other components depends on its characteristics and quality. Here, marketers have to make a number of decisions about the product even before it goes into production and distribution. In particular:
Analyze the cost of your product portfolio. Assess the profitability of each selected product item, find out which ones are leading and which ones are lagging in terms of margin. With this knowledge, you can optimize your product range and focus on truly profitable items.
Determine the stage of the product life cycle. This will determine the choice of advertising tools and the intensity of their use. For example, when introducing a product, the focus will be on informing, and at the maturity stage, on encouraging repeat purchases.
Assess the potential for developing new products. Innovation is the key to long-term growth and competitiveness. Analyze trends, customer needs, and technological capabilities. Identify areas for developing your product line.
Price
Pricing directly affects your financial results and how consumers perceive you. There are three main options for determining prices:
Based on value. The price is set based on how much the buyer is willing to pay to solve their problem.
Based on costs. The desired markup is added to the cost price.
Based on competitors’ prices. Market prices for similar goods serve as a benchmark.
To choose the optimal price, you need to find a balance between these factors. Depending on your goals and product characteristics, we recommend using one of two common strategies: “skimming” and “penetration.”
The first involves initially setting a high price to emphasize the value and exclusivity of the goods, and then gradually lowering it to attract buyers. The second involves starting with a relatively low price to attract attention, and then raising it as your popularity grows.
Promotion
To attract attention, it is important to present the value of the product correctly. Various tools and tactics can be used for this purpose:
Advertise on online and offline channels. Place advertising messages where your target audience will see them—on social media, thematic websites, billboards, in the media, etc. Adapt the format and content of your advertising to the characteristics of each platform and the interests of your buyers.
PR activities to strengthen your image. Build relationships with journalists and opinion leaders, initiate publications in authoritative media, participate in relevant events, etc. Communicate your expertise and values, and increase trust in your product.
Sales promotion programs. Launch promotions and special offers, prize draws, and bonus programs. Create additional incentives to make a purchase here and now.
By skillfully combining these tools, you will achieve a synergistic effect and maximize your return.
Place
Sometimes also referred to as “distribution.” The choice of distribution channels determines the availability of goods to consumers and, as a result, sales volume. Today, there are several options for organizing sales:
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Direct sales through your own offline or online stores, marketplaces, and other platforms. This gives you maximum control over the process, but requires significant investment.
Cooperation with intermediaries (distributors, retailers, etc.) who will sell goods to end buyers. This will help expand the geographical reach, but reduces margins.
When working with “location,” pay attention to your desired market coverage. Depending on your choices and capabilities, focus on one of three approaches: intensive distribution, selective distribution, or exclusive distribution.
Step-by-step guide to creating a marketing strategy
Depending on the specifics of the business, the details of the strategy may vary. In some cases, more attention will be paid to competitors, in others—to a detailed analysis of the audience. Nevertheless, there are a number of mandatory components that are essential. Their presence ensures that the final document will be logical, complete, and applicable in practice.
Market analysis
This is the first key block. It is necessary in order to objectively assess the current situation and prospects for development. Without this information, it is impossible to make informed decisions.
It involves studying the purchasing power of people in a specific region or country. In addition, the geopolitical situation and current legislation should be taken into account.
If you are not only a seller but also a manufacturer, it is important to analyze the raw material base and the availability of substitute goods. You should also find out the size of the target audience and the total market capacity—how many potential buyers are there.
Data sources can vary greatly. Use any publicly available information—statistics, reports, research. Conduct surveys and organize focus groups. Another effective method is to create an MVP (minimum viable product). This will allow you to see real demand and gather feedback from early users.
Competitors
Understanding your competitors will help you understand what offerings are already on the market and the strengths and weaknesses of other players. This analysis involves several steps:
Identify your direct and indirect competitors. Make a comprehensive list of brands and companies you will be competing with.
Study their product range. See what exactly they offer and what their priorities are. Pay attention to their pricing policy and reviews. Focus on the problems their customers face.
Analyze the types and tone of advertising. Study in detail how communication with customers takes place—on which platforms and with what messages. Pay attention to the presence of loyalty programs and the nature of communication on social networks.
Research your competitors’ target audience. Try to find segments that your competitors are overlooking. These may be people from other regions, age groups, or income levels.
Target audience
Describe its characteristics—demographic, psychological, social, and behavioral. For better results, divide the audience into separate groups.
For example, they could be students aged 16-26 from art universities who are interested in technology and video games. Or families with babies living in the suburbs who pay a lot of attention to health and education.
Describe each group in as much detail as possible. What products and services might interest them? What are the best channels for interacting with them? What are their pain points and needs? By answering these questions, you will be able to tailor your offering and communication to people’s expectations.
Trends
To ensure your offer is relevant, you need to keep your finger on the pulse of the market and understand what makes its heart beat faster. Information about trends can be gleaned from various sources:
Open data from government agencies;
Field research can be conducted—observing how consumers behave in stores and at events.
Valuable insights can be obtained through social media and analysis of search engine queries using Google Analytics and Keyword Planner.
Industry reports from specialized research agencies will also be helpful, if available.
By gathering all this data, you will be able to better understand what is truly important and interesting to people here and now.
Risks
At the same time, don’t forget about the risks. Carefully study all possible factors that could hinder you — macroeconomics, geopolitics, technical difficulties, social aspects, and much more.
For example, if you plan to start a pizza production and distribution business, make sure that the chosen region is favorable for this in terms of consumer preferences and cultural characteristics. Otherwise, you risk repeating the fate of Domiinos Pizza, when the company tried to promote American pizza in Italy and received a huge amount of negative feedback for not meeting local standards.
Positioning
Determine how you want to be perceived. What associations and emotions should people have when they think about you? How do you stand out from your competitors? Which user groups are you primarily interested in?
When answering these questions, rely on the data obtained in the previous stages. Competitor analysis is particularly important here. You cannot simply copy them. Look for your own characteristics and advantages that will help you stand out in the market.
Developing the plan
Once the positioning has been determined, you can move on to creating a detailed plan. It will help you structure your further work and not overlook any emerging nuances.
Objectives
Start by setting them. Base them on your capabilities and ambitions. Be specific: “Increase profits sevenfold in three years” or “Expand into three new countries in two years.” Goals should be measurable and time-bound.
USP
When developing a unique selling proposition, consider the following questions:
What is special about your product?
How is it better than similar products?
What characteristics should be emphasized in advertising?
The USP must be realistic and backed up by product quality. Otherwise, reputational risks are inevitable.
Important! The USP must correspond to the price positioning. If you work in the “economy” segment, there is no need to talk about elitism and premium quality. This will simply cause consumer dissonance.
Promotional tools
When choosing advertising tools, you need to consider all possible channels and ways of interacting with future customers. Of course, you can use outdoor advertising, radio, or television, but today, online advertising is proving to be the most effective.
So think about whether advertising on social media is right for you. It’s a good option when your audience spends a lot of time online. If the answer is yes, think about your content strategy, how often you’ll post, and your potential budget.
If you need to attract the attention of search engine users, it makes sense to use contextual advertising, for example, through Google Ads. It will allow you to attract a “hot” audience to your website, ready to make a purchase.
You can also turn to influencers. They can be particularly effective if your services are aimed at young people. The main thing is to choose bloggers whose audience overlaps with yours.
Budget determination
This includes allocating available resources to various activities: from research to launching advertising campaigns. Competent budgeting helps to set priorities and understand what can be achieved with the available funds.
In addition, a clear spending plan will allow you to control costs and adjust them in a timely manner. This is necessary to maintain financial stability. There are several budgeting methods worth considering:
A method based on historical data. It involves analyzing previous marketing expenses and using this information to plan spending for the next period. It is convenient because it is simple and clear. However, this method does not take into account possible future
Goal orientation. In this case, specific tasks become the starting point. For example, if you need to increase sales by 20%, most of the funds are directed toward activities that contribute to this goal. This method allows you to establish a clear link between goals and expenses.
Budgeting based on market share. Let’s say your current market share is 5% and your budget is 1 million hryvnia per month. If you want to grow to 15%, your marketing expenses must increase at least threefold. This method helps you align your ambitions for expanding your presence with the investments required to achieve them.
Threshold level. This option involves determining the minimum budget required to achieve basic goals. It is usually used in difficult times when the main priority is not to grow but to maintain position. Here, it is important to set priorities wisely and not to skimp on what is critical for survival.
Percentage. This approach links expenses to actual or projected revenue. For example, if you earned 20 million hryvnia last month, you can allocate 10% of that amount, or 2 million, to advertising campaigns. However, when revenue falls, expenses also decrease, which can exacerbate conversion problems.
Launch
Right now, all your actions matter, and their results depend on the coordinated work of the entire team. If you are betting on social media, think through a content plan that will include a variety of formats—posts, videos, live streams, infographics. Don’t forget about targeting—it will help you attract your target audience.
Don’t limit yourself to online promotion. Take advantage of offline events such as exhibitions, conferences, and trade fairs. This is an excellent opportunity not only to present yourself to customers, but also to establish relationships with potential partners.
Don’t underestimate traditional tools such as telephone bidding. Cold calling may seem like an outdated method, but it still yields good results. The key is to develop the right conversation script and train your managers.
Analysis of results
With it, you will understand whether the activities carried out were effective and to what extent the set goals were achieved. Let’s look at the metrics you need to pay attention to:
Effectiveness of advertising campaigns. Track user feedback: number of positive reviews, reach, and conversion.
Profit dynamics. Compare changes in cash flow with the previous period. Analyze net profit — the difference between income and expenses.
Inflow. This refers to the number of people attracted over a specific period of time. It is important for you to understand how quickly your customer base and the number of repeat conversions are growing.
Conversion volume. Look at it by individual product categories and study the dynamics of the average check. This will give you an understanding of how marketing is influencing sales.
Your share. Compare your performance with your competitors. An increase in market share is a sign of a well-chosen promotion strategy.
Recognition. Analyze survey results, frequency of mentions in the media and social networks. The more people know about you, the better your strategy performs.
Perception. Also analyze how your image has changed in the eyes of society. The tone of mentions on the internet and the ratio of positive, neutral, and negative reviews are important here.
Use end-to-end analytics, CRM systems, and online monitoring to collect data. Be prepared to adjust your tactics based on the insights you gain. Marketing is a continuous process of experimentation and optimization.
Common mistakes in developing a marketing strategy
Don’t neglect research. It is the foundation of success. By relying solely on your own assumptions, you risk missing out on important insights. When creating products that you personally like, don’t forget to study real demand. Seek a balance between your ideas and the expectations of others. This is the only way to create a product that is in demand.
Define your niche. Don’t try to reach all potential customers at once. Segment your audience and focus on specific groups. This will allow you to target your advertising more accurately and build more personalized communication.
Don’t forget to track your metrics. Even if you see good results at the start of your marketing strategy implementation, don’t relax. Continue to monitor your metrics so that you can identify problem areas in time and make adjustments.
Be patient. Don’t expect instant results from your activities. Some tools, such as SEO optimization, produce results gradually. Give them time to work. If you change your approach haphazardly without seeing quick results, you risk missing out on potential success.
Don’t get hung up on one scenario. Even a perfectly crafted plan can fail. Be prepared for changes and adjustments on the fly. If your usual tools stop working, quickly look for others.
