Welcome to topic 1 - Develop Marketing Strategy for Business Venture. It is a core tool for individuals planning to establish new business ventures. It details the proposed marketing activities the business seeks to implement to reach its target market and turn that market into customers of their products or services. This topic will explore the elements of a marketing strategy, its relationship to individual marketing plans, and its importance for the big-picture messaging.
By the end of this topic you will understand:
- The purpose and importance of a marketing strategy for new business ventures
- The difference between a marketing strategy and a marketing plan
- The importance of positioning when developing a marketing strategy
- The components of a successful marketing strategy
- Identifying customer base and a target market according to marketing objectives
- Ethical and cultural appropriateness.
Before starting to plan a business’s marketing strategy, you must identify the focus of the marketing activities by having a clear understanding of the business plan objectives and its products and/or services. The marketing objectives set must be aligned to the overall business plan objectives. Business objectives can be an important way to unify a company's intentions and vision. They might vary significantly between one industry or department and the next, or they might be very similar.
Read about How to Write Business Objectives. For further clarification about business plans, read "What's in a business plan?" which details how you will handle all the important aspects of your business.
‘Positioning’ is understanding how you want your customers to think about your products or services and is an integral part of the planning stage. This is called the ‘business niche’. Some of the questions you need to ask yourself are:
- Are my products or services affordable to my customers?
- Does my business offer prospective customers the range of products/services they need?
- Are my services only affordable and suitable for the top-end of customers?
You will learn where to focus your marketing efforts to give you the best return on investment for marketing. The results of the questions above will help you clarify:
- What your business does
- Your target marketing and characteristics (age, spending habits etc.)
- The point of difference from your competitors
- Skills and experience of your staff in your business.
Look at this table and identify how you can position and promote the key features of your business:
| Your location | Are you in a good location? Are you near small businesses that need your service? You could promote that you are a 'local business'. |
|---|---|
| Years of experience | Add together the years of experience that all your consultants, advisers and subject-matter experts have had in business, for example, '20 years of helping small businesses achieve their goals'. |
| Diversity of staff | Promote the diversity of your staff including the years of experience they have had working across the globe or with different groups of customers. |
| The range of industry experience or subject matter knowledge | Promote the services you can offer. For example, 'from a start-up business to business expansions and merger acquisitions' and 'solid experience and expertise in a range of industries including retail, hospitality, agriculture, manufacturing, logistics, importing, exporting, business services, financial services, accounting'. |
| Online reviews and positive feedback from clients | Capture the good reviews and feedback on social media or the qualitative and quantitive feedback from customer surveys for example. '90% of customers are extremely satisfied with our services'. |
Marketing is one of the critical activities of a new business venture. Effective marketing starts with a well-informed marketing strategy. The Marketing Plan fits into the Business Plan, and the Business Plan is a crucial input for the Strategic Plan.
Look at the following table that illustrates how each operates:
| Marketing Strategy | Marketing Plan |
|---|---|
| Sets the overall direction and goals for marketing | Relies on your marketing strategy. It includes a statement of how your business will achieve the marketing goals and how you plan to develop, build, and expand the business. |
| Includes marketing decisions for the long-term, looking forward over the next few years. | Focuses on the tactics to be achieved in the current year. This might include how you plan to promote your products and services to meet your target market's needs. |
| Is the game plan for the business. | Should include the resources required to implement the plan – the budget, people, tools, suppliers and consultants. |
| Helps you define your vision, mission, and clearly stated business goals. | The plan details your approach to implementing the marketing strategy. |
| Outlines the steps you need to take to achieve the identified business goals. | It can contribute to your business’ success, provided you put the time, resources, and commitment into the planning stage. |
| Your marketing strategy should be planned and developed as a team. | Contains financial data, including the marketing budget, as stated in the business plan, and the targets for revenue, gross margin, or profitability. |
| A marketing plan is based on actions, not historical data. |
Your marketing strategy should be planned and developed as a team effort. Here, you should include your experienced team members, managers and sales team in the consultation process. Use the strategy as a planning tool that:
- Describes your business and its products and services
- Explains your position in the market
- Profiles your target customers and compares you to your competitors
- States your marketing tactics
- Provides inputs for a marketing plan
- Provides details of your success measure
An effective marketing strategy will guide you to business success – to achieve your business goals. A good strategy will provide ways to build a strong reputation for your business and help target your products and services to your potential market. However, you need one or two powerful, innovative ideas to raise awareness of your business and motivate people to buy your products or services. The components in the following infographic are ideal for making the most of your marketing strategy.
Read about How to write a successful marketing strategy which expands on the learning in this section. Writing effective and clear marketing goals can increase the sales of existing products to existing customers and develop new markets.
Use the SMART method to set goals for your business and marketing strategy. SMART stands for:
- S = specific (set goals that are well defined and focused)
- M = measurable (set goals that include a number or outcome that can be measured against)
- A = achievable (set goals that are reachable and realistic)
- R = relevant (set goals that are based on current business conditions and climate)
- T = time-bound (set a time frame to accomplish your goals).
Watch this video on how to set SMART goals.
Gathering information is crucial to developing and maintaining your market. Think about all that you have learned so far on this topic.
- Explain some of the methods you can use to gather information about your market
- What are some of the different types of information you can gather when researching your market?
- What is trend analysis? How can you use this to help improve your business?
Task: Profile your competitors to identify your competitive advantage and develop strategies to support your marketing goals. Explore The 7 Ps of marketing: what are they and how are they used? Review the following table to help you to be more focused on this area. More information on the 7 Ps of Marketing is to be found on the Queensland Government website.
| The 7 Ps of Marketing | Explanation |
|---|---|
| Product |
Businesses should conduct research into the prospective customer and buying habits to ensure optimum commercial success. It refers to what you are selling including advantages or benefits that customers can enjoy from buying your goods or services. When marketing your product, think about the key features and benefits your customers want or need. |
| Price | Take into account all the costs associated with production, promotion and delivery of the product to market. You should also identify how much your customers are willing to pay, and mark up for your goods, in other words, the profit margin. |
| Promotion | Think about all of the marketing possibilities associated with your product. The key is your target market's needs and wants. Promotions and Direct Marketing are excellent examples of this. |
| Place | The placing of a product in a supermarket for example is a good example of this. Think also about storage and distribution, so that your customer can find you easily. |
| People | The team involved in the delivery of the product should be knowledgeable and enthusiastic. |
| Process | Customer satisfaction is key to the process. Similarly, compensation strategies if a customer is not satisfied. Your company should be easy to deal with. |
| Physical Evidence | This is all about ensuring that every component adheres to the same brand values as the product itself. Branding includes the physical, virtual and packaging of a product. |
It is recommended that you test your ideas using customer surveys, demonstrate products to customers, offer sample products and get feedback from prospective customers. For more information on understanding your customer read Understanding customers. Also, read about how to develop a marketing strategy.
Explore about how to test a product before launching. Please pay particular attention to the importance of trying your business idea before it goes to market. Then you can avoid unnecessary time and money on an idea that is not viable. As discussed earlier, a marketing plan is crucial in getting your project off the ground.
Explore this video by (Kettner, 2020)regarding testing your product idea with customers. Monitoring customer satisfaction is key to progressing your business and ensuring that your goals remain current is extremely important. This can be achieved through customer surveys, questionnaires and through phone calls and face-to-face meetings if required.
Other business documents which are inputs for the marketing strategy and marketing plan, and vice versa, include:
| Document | Description of Purpose |
|---|---|
| THE BUSINESS PLAN | The Business Plan is the overall plan and covers the business objectives, profit and loss statements, budget, mission and vision of the organisation, products and services, organisational structure, and general information about the establishment of the organisation. |
| MISSION STATEMENT | The Mission statement describes what the organisation does that makes it different from other organisations. |
| VISION STATEMENT | The Vision statement provides an overview of what the organisation aims to be in the future. |
| STRATEGIC PLAN | The Strategic Plan outlines and prioritises business direction and actions based on the Business Plan. |
All key stakeholders need to be consulted when establishing the marketing objectives and following the workplace procedures. Developing processes, procedures and standards is particularly important if you are in the early stages of establishing a business, or when you are trying to rebuild or grow a business that has been underperforming.
Business processes, procedures and standards are vital for training staff and induction programs, as well as formal processes like staff performance reviews. By creating standards and policies for your business, you set benchmarks that your staff must meet. Explore Business processes, procedures and standards for more contextual information, which will reinforce your learning in this area.
As illustrated in the following diagram, there are seven steps to identify, develop and align a marketing strategy.
Source: The Marketing Strategy Process: Developing a Marketing Strategy
Read the following article, entitled ‘The Marketing Strategy Process’, which will help you understand the seven steps of marketing and will help you to develop your marketing strategy. For more information on creating a pricing strategy, visit this website to find out what you need to consider when you price your products and services, including the pricing strategies, legislation obligations, what your price should include, and where to conduct research.
Businesses focus on various marketing strategies to increase their customer base whilst retaining existing customers. However, there are other activities they can implement to address changing market conditions. This section on ‘Lead Generation Activities’ by Ian Linton (2019) will help you understand the lead generation process, purpose and activities involved.
An excellent example of lead generation is if fundraising ticket sellers offering prizes such as new homes, new car, gold bullion, or other gifts uses lead generation activities. In a promotional e-mail, they might include the terms “Closing soon”, “Don’t miss out”, “All sold out last time”, and invite the reader to click a link to buy tickets.
Another example is companies offering potential investors the opportunity to learn about the top five investments of the year and provide a free report on how companies they recommended to investors have performed on the stock exchange over the last year. When the responder fills in the online form, a representative from the company will call them within 24 hours to see if they can interest them in a subscription or membership to their company’s investment services.
Finally, bank tellers or concierge staff may approach customers waiting in line and chat with them about new offers, products, or services. If the customer is interested, they ask the customer if they would like to talk with a Small Business Banker for more information.
Find two Lead Generation advertisements and explain the companies' process to generate leads via the advertisements. Then read this section on ‘Generating Leads Through Telemarketing’ in The Five Examples of Marketing Activities to help you understand telemarketing and the methods.
Find information on the rules of telemarketing and consumer rights in Australia through the article A guide to Australian telemarketing and spam call laws by Call Rail and answer the questions below:
- Explain the purpose of the ‘Do Not Call Registry’ in Australia
- Define ‘express consent’
- Define ‘inferred consent’
- Explain the rules around door-to-door cold calling customers in Australia.
Read the section on ‘Market Education and Price Justification’ in the same article Five Examples of Marketing Activities by Linton, 2019 to understand how market education can convince customers that the savings they make over the life of the product justify the higher price paid at the time of purchase.
Also, read the section on Channel Marketing Activities in the same article to understand what channel marketing is and the structures of channels.
David Jones and Myer have channel partners in-store, such as Anthea Crawford, Cue, Lancome, etc., who are employed to sell their products to David Jones and Myer’s customers. The channel structure could take any of the following routes:
Producer → wholesaler → retailer → customer
Producer → retailer → customer
Producer → value-added reseller → customer
Producer → customer
Can you think of other examples of marketing channels?
Read the " Five Examples of Marketing Activities " section on ‘Social and Relationship Marketing’ in the “Five Examples of Marketing Activities” by Ian Linton (2019) to understand the goal of social marketing and how relationship marketing can help strengthen customer loyalty.
Social marketing might promote a topic to raise awareness or encourage a behaviour change. It was done initially with billboards and newspapers, but today, it is through social media. A business might use its social media platforms to invite people interested in their information to join its group. The marketer might write blogs or post published articles. The Atkins Diet, The Paleo Diet and the Keto Diet are examples of social marketing that are extremely popular with people wanting to change their eating habits.
For more information on social and relationship marketing, visit the Australian Association of Social Marketing (AASM).
Targeting your prospective market means focusing your marketing budget and effort on a specific audience more likely to buy from you. It does not mean you are consciously excluding customers. Identifying your target market will help you determine where and how to market your products and services to reach that market.
Learning how to analyse the costs and benefits of your marketing strategies is a vital process in maximising both short-term and longer-term success. Identifying the cost of each one of your strategies, allows you to identify the benefits of your strategies, and estimate the value of each cost and benefit you identified. Such an approach allows for the calculation of the cost-benefit ratio of each marketing strategy.
Follow this link to explore how to analyse your target market.
To identify problems that you and your business need to solve, you need to address the following three steps:
- It is essential that you know what problem your business' products and/or services solve. For example, a motor vehicle repairer fixes a damaged motor vehicle - the latter is the problem.
- When you know the problem, you can identify the features of the service you offer. This might include features such as a 'high standard of work, a replacement vehicle for customers while repairs are done, a quick turnaround service, and the inside of the vehicle detailed before being returned to customers.
- The final step in this sage is to identify the benefits of those features. This might include customer recommendations, customer reviews, customers going about their daily lives while their vehicle is being repaired, vehicle return within a set period of time and vehicle being clean when the customer gets back.
Click on the headings below and consider the information in relation to your business:
Analyse your customer base through their demographics via a survey, verbal questioning or getting to know them. Find out why they are buying from you. Is it because of your location, the quality of your services or products, or another business characteristic? Is it because of the price point? Have you recently advertised a product or service in high demand in the market? When you know why they are buying from you, you could target other people with the same demographics.
It is most likely that your business is not the only business offering similar products or services to its customers. How do you stand out from your competitors? You must research your competitors and find a niche or customer problem; you can target. Research your competition by reviewing their website and catalogue and read their publicly available customer reviews and feedback. How are they doing compared to your business?
When you develop your business idea, its products or services, you should have some idea of the people most likely to buy from you and who can afford your price points. Game stores target people enthusiastic about online games, animation, collectable characters and other interests. You can target demographics such as age, gender, income range, education, occupation, ethnic background or spoken languages. When you know your target market, you can plan your marketing activities for that market.
Psychographics classifies people according to personal characteristics such as attitudes, values, beliefs, hobbies or aspirations. When you have this information, you can consider the following questions: How does your product fit the target market? What features will appeal the most to that market? How does your target market source information – for example, through social media, magazines, websites, blogs, or chatrooms? For example, in a large shopping centre, you might find three or four hairdressing salons or barbers and two or more nail salons. What makes customers choose one salon over another?
Evaluate:
The last step in the process of identifying your target market is to evaluate the target market. It would be best to ascertain whether your target market can afford your products or services and estimate the drivers for their buying decisions. This could be trends, fashion, popularity or promotion by an influencer. You also need to consider how your product or service will benefit your target market or if they need it. When you understand the above information, you can think about the best way to reach that market with a message – for example, advertising at the movies, text messages, e-mails, advertising on Facebook or Twitter or other mechanisms.
A well-developed marketing strategy will help you realise your business goals and target your products and services to the people most likely to buy them. Regular evaluation of your design is essential to ensure you do not continue spending unnecessary money on advertising campaigns that do not achieve results. Consider the following steps:
- Establish your marketing goals.
- Establish your Key Performance Indicators (KPIs) to measure your progress.
- Evaluate your marketing plan (7 ways to do it).
- Ensure ethical and cultural appropriateness.
- Align marketing strategy with industry expectations.
- Align marketing strategy with customer expectations.
Adapted from: Gainer, A (2020) How to establish your 2020 marketing goals and KPIs.
Evaluating Your Marketing Plan
The marketing plan must be evaluated for its effectiveness following its implementation of the marketing plan. Evaluation might include a staff survey or feedback from employees involved in the marketing process. It analyses whether the marketing plan has met the intended targets and goals. The evaluation process may look at the return on investment – was the marketing budget recouped through an increase in sales or an increase in customers or income from all sales?
Activity:
Seven Ways to Evaluate Your Marketing Plan
Read ‘7 Ways to Evaluate Your Marketing Plan’ by Steflon Walters to learn more about the importance of evaluating the marketing plan once it is set in motion.
Marketing should not be set in motion and left alone, but constantly reviewed, evaluated and adjusted to suit the needs of the company and the wants of the consumer. Describing the performance evaluation methods relating to marketing strategies is essential to developing your understanding. Complete the following activity.
Knowledge check
Establish Your KPIs
The above activity relates to key performance indicators or KPIs. When the goals have been set, the next step is to determine what you will use to measure your progress. Key performance indicators are used to measure goals. They state the purpose you aim to measure, how you will measure the goal and the measure of success. There are different types of KPIs, and the most common KPIs for your marketing plan relate to:
- Financial outcomes – revenue and net profit
- Customer numbers and clients – new customers, lead-to-customer ratio and number and source of client referrals
- Social media and conversions – customer traffic on websites that lead to a sale, e-mail conversion rates and closing rates
- Client satisfaction – sales team response time, overall satisfaction, Net Promoter Score – how likely a customer recommends the organisation.
Read the tasks below and action them accordingly:
CBSA wants to leverage the expertise of their staff by offering informative sessions, seminars or developing podcasts or TED Talks for customers. CBSA would like to build their reputation as an informed business offering affordable consulting services to customers, hoping customers would act as evangelists and spread the word of the benefits CBSA provides them. The range of services they want to offer would include the current services in the Business Plan and new services assisting customers in establishing an online presence, offering their products and services online, using shopping carts, bots and live online chat.
Write four goals to address the high-level vision for CBSA. You might want to use the following as guides:
- Purchases made through the online shopping cart
- Interactions with live online chats
- Informative sessions conducted
- New customers
- Range of services offered.
Visit the OnStrategy website, read the article, watch a short video on ’27 Examples of Key performance Indicators’ by Heyden Enochson, and learn the anatomy of a structured KPI.
Using the same scenario in the CBSA activity, develop a:
- Financial KPI
- Client/Customer KPI
- Social Media KPI.
Watch this video to expand your knowledge of the context of KPIs.
In Australia, the advertising and marketing communications industry is self-regulated. Advertising is expected to adhere to the Code of Ethics by the Australian Association of National Advertisers (AANA). Ad Standards Community Panel manages complaint resolution for issues and complaints about advertising and marketing communications Australia-wide.
Visit the AANA website and download and read the Code of Ethics.
The ethical and culturally appropriate practices relating to marketing new business ventures, are interesting and resourceful, and can be found in two distinct sections:
- Competitor complaints five (5) points and
- Customer complaints, seven (7) points.
Ensure that you are familiar with each.
| Competitor Complaints | Customer Complaints |
|---|---|
| Advertising shall comply with Commonwealth law and the law of the relevant State or Territory. | Advertising shall not portray people or depict material in a way that discriminates against or vilifies a person or section of the community on account of race, ethnicity, nationality, gender, age, sexual orientation, religion, disability, mental illness |
| Advertising shall not be misleading or deceptive or be likely to mislead or deceive. | Advertising shall not employ sexual appeal:
|
| Advertising shall not contain a misrepresentation, which is likely to cause damage to the business or goodwill of a competitor. |
Advertising shall not present or portray violence unless it is justifiable in the context of the product or service advertised. |
| Advertising shall not exploit community concerns in relation to protecting the environment by presenting or portraying distinctions in products or services advertised in a misleading way or in a way that implies a benefit to the environment that the product or services do not have. | Advertising shall treat sex, sexuality and nudity with sensitivity to the relevant audience. |
| Advertising shall not make claims about the Australian origin or content of products advertised in a manner that is misleading. | Advertising shall only use language which is appropriate in the circumstances (including appropriate for the relevant audience and medium). Strong or obscene language shall be avoided. |
| Advertising shall not depict material contrary to Prevailing Community Standards on health and safety. | |
| Advertising shall be clearly distinguishable. |
Sustainable Business
When we talk about ethical and sustainable practices in the fashion business, for example, we are talking about taking a stand against fast fashion and prioritising ethical practices. This might include adherence to the Modern Slavery Act and understanding the working conditions of workers producing goods for sale. Some producers are creating new fashion lines with eco-friendly materials.
But ethical practices encompass more than the above.
Breaking into international markets is not easy. When you develop a marketing message, you must be prepared to make the necessary adjustments if you want to break into new territories. The same statement may not work in other regions due to cultural and ethnic differences. To understand the impact your message might have on cultural values, focus on the dominant culture of the society in that territory. This might be religion, customs, rituals, clothing/dress or other factors. Also, analyse any subcultures that might exist, such as political, religious, belief systems and socioeconomic groups.
The Australian Trade and Investment Commission (Austrade)(Austrade export services, 2022), an Australian Government department, provides knowledge and advice to Australian businesses seeking to export their goods or services to the world. Their website is worth visiting if you want to understand better how you can market your products and services in international markets. Guidance is also provided on meeting etiquette, which looks at the most appropriate way to approach new markets.
It also provides links to Market Profile information about Export Markets. Information on business culture and other information about doing business with a specific country or region are provided.
Aligning the marketing strategy with customer expectations in any culture or ethical market is vital to understanding attributes that drive customer decision-making. When aligning your marketing strategy to customer expectations, aim to provide for as many elements as possible to increase your customer loyalty.
Read this website to understand how to align your business strategy with customer needs.
Sustainable Campaigns
Regarding profits and user satisfaction, the cultural implications of marketing campaigns are vital to success. Globalisation is practised when companies choose to go local. Marketing strategies developed to appeal to large groups must be tailored to be culturally relevant.
There are four broad cultural factors:
- Value
- Symbols
- Rituals
- Thought processes.
Ethical Sales and marketing is a school of thought. Responsible, fairness, and honesty are promoted through sales ethics and ethical marketing. This article on Nike and it's ethical (or lack of) practices. Also, explore the fast-fashion store Gap clothing in terms of ethical impact.
