November 2006        •       www.visionsmc.com       •        410-849-8095   

 Editor's Note

This past weekend, I sailed in my last regatta of the season, the J/105 East Coast Championships. It was exciting because the wind really picked up the last two days. We were sailing in over 20 knots of wind, with gusts up to 40.

How windy is that? On Saturday, when we had to go upwind from the finish of the last race to get into the harbor, our 20 horsepower diesel motor didn't have enough power to move the boat into the wind. We had to sail upwind into the harbor.

Unlike San Francisco, the Chesapeake Bay isn't typically known for strong breezes. Because our crew doesn't have a lot of experience in heavy air, we're not as good as we are in lighter air.

However, we did get better as the weekend went on. We got more aggressive with our boat handling, we got more confident with our tactics, we improved our starts, and our hearts were beating fast because we were at the front of the pack, not because we were worried our boat would tip over. We won a race on the last day, and had a few other high points throughout the weekend. After eight races, we finished the regatta in fifth place out of 35 boats.

As our sailing got better this past weekend, so, too, do business disciplines evolve and become more sophisticated over time. Undergraduate business programs have evolved from an easy degree to a valuable education for a successful career. In this issue, we're going to explore what strategic marketing means today.

Molly Hughes Wilmer   

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 Feature

Strategic Marketing: The Big Picture

Strategic marketing is smart marketing. It's working with a plan, and it's looking at "how you go to market" holistically. And while this sounds really great, so many companies don't use it for three reasons:

1. Strategic marketing threatens executives
2. Strategic marketing is perceived as unwieldy.
3. They don't make time to plan.

Let's break down what strategic marketing really means, and look at how it can benefit you.

A definition: "Strategic marketing allows a company to make products or services available that satisfy customers, while making profits for the company."

Wow. That's pretty broad-making products, satisfying customers, making profits. That goes way beyond advertising and public relations, or logos and web sites.

Here's another definition: "Strategic marketing is that part of the process of production and exchange that is concerned with the flow of goods and services from producer to consumer through the "four P's":

• product (development/refinement),
• price (pricing strategies),
• promotion (publicity, public relations, advertising, word-of-mouth, sales) and
• placement (distribution channel, shelf position, competitive positioning, and/or availability)."

Did you recognize "promotion" in there? Phew. There's a comfort zone. That's what marketing does. But look again. It also goes far beyond that. It has to, if it's dealing with making products, satisfying customers, and making profits.

Strategic marketing stretches far across a company-from product development through sales. Can you see how it threatens executives? "Marketing" is usually in charge of advertising, logos, posters. Sales is another department altogether. Research and development rarely talks to marketing. And finance and sales develop pricing strategies. Unwieldy? How are all these people supposed to work together-on one thing?

Strategic marketing conducts the orchestra of the organization, cueing product development, transitioning to other departments, emphasizing solos, encouraging the chorus, letting everyone crescendo to a profitable high. The conductor's baton? The strategy.

Strategy is essential to ensuring that product development is focusing on a defined target market's future needs, that pricing is competitive and profitable, that the brand is well-defined and the people answering the phones and delivering the service are representing it, that dying markets are phased out and emerging markets are targeted. Strategy turns marketing expenses into corporate investments.

How does it work? Here are some examples:

• Saul is a landscaper whose strategy is to deliver what he promises or more, charge by the project, not by the hour, and to work mostly in and around a targeted geographic area. He can help develop solutions to landscape challenges, which makes his project pricing smart. His travel time between jobs is minimal allowing him to manage several crews on small projects on the same day, and schedule customers flexibly. He knows the challenges of the hilly and wooded terrain, giving him greater value to his customers. He sources materials from nearby suppliers; giving them the majority of his business and making him a large enough account to get benefits in both availability and pricing. And when locals drive past a neighbor's and see him working, or run into him at the closest gas station or garden supply, it reminds them to call him to get going on their next project.
  
  
• An IT company developed a software solution-but didn't have a target market in mind. They opportunistically sold it to whomever they could: a trade association, another IT company, a university, a medical office, a large manufacturing chain, an accounting firm and a utility. After each sale, the company would assess the competitive landscape, and discover that many of those companies were in vertical industries that had very sophisticated, tailored solutions sold by large competitors. As a result, they didn't get any substantial referral business. At the same time, to help meet payroll, they offered diverse IT services to additional clients who couldn't use their software. After ten years, and a disparate client list and service/product offering, they found their customer niche, but they needed to further refine their software for the niche, and hadn't yet generated a return for the investors. A good strategy would have helped this company find their niche and generate profits in much less than ten years.
  
  
• Product development at one of the leading cell phone manufacturers stopped meeting anticipated customer needs. Loyal customers were forced to switch to the competition when they needed to upgrade their phones. The company lost market share, profits, and eroded their brand reputation. New buyers were costlier to convert than loyal customers. Eventual product innovations weren't initially trusted, and greater expense was needed to generate credibility. A good strategy would have ensured that product development stayed ahead of the curve, maintaining the company’s competitive edge, and their profitability.

Starbucks and Home Depot don't take advantage of great real estate prices to develop new locations without market research. And they are continually fine-tuning their product offering.

And while you may or may not be as big as Home Depot or Starbucks, wouldn't you like to have their profits? And their growth prospects? A little strategic marketing can go a long way toward helping the bottom line.

What Can You Do? Do you have a strategy? Does everyone know what it is? Is everyone working together? How does your symphony sound? - Develop or update your strategic marketing plan. Be ambitious and holistic. Solicit company-wide input, but utilize judicious executive level decision making. - Plans give people confidence that you know where you are going. Shout it out from the rooftop. Communicate the plan and educate all involved in execution. - Execute to the plan. Evaluate deviations and exceptions, managing to the plan, not the exception. Need help? Call Vision Strategic Marketing & Communications.

Ask the Expert Question What should a strategic marketing plan entail? Answer It depends. A wishy-washy answer, but it depends on what type of company you have, and what your challenges are. A rough outline is online in our document, "What to Expect from a Marketing Plan" Submit your questions to the editor: molly@visionsmc.com

 Want to Know More?

Successful companies have plans, and if the companies are public, often their plans are, too. Research one of your favorites or check out these: Read about Starbucks recent analyst conference where they outline their core strategies. Warren Buffett explains his strategies in his letter to shareholders. What are they doing that you can learn from?

© Molly Hughes Wilmer, Vision Strategic Marketing & Communications, 2006. All rights reserved.

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