The memoirs of self-made millionaire and entrepreneur Chris Gardner were turned into 2006 movie ‘The Pursuit of Happyness’. Chris said, “One of the things young people always ask me about is, what is the secret to success?” He answered, “the secret is there is no secret. It’s the basics.”
Spending the time – and it does take time – to get the basics of a marketing strategy right are hours (days and even weeks) well spent.
Detailed analysis at the early stages of marketing planning is essential. Market research is needed to understand and identify market opportunities, but what do you do with the research once you’ve gathered it?
Even creative thinking requires structure, and whilst we are far from being academics, we do favour some of the traditional marketing models discovered in the lecture theatre and classic textbooks.
How useful is marketing strategy?
In a 2013 paper ‘How Useful Are the Strategic Tools We Teach in Business Schools?’ Academics – Wright, Paroutis and Blettner acknowledged that whilst strategy tools, developed by academics and consultancies, are disseminated to students daily, little research places practitioners in the driving seat.
They discovered that tools are more useful when they provide users with improved thinking around complex issues.
We asked our favoured LinkedIn groups ‘what tools do you use for your strategic planning?’ SWOT, PEST, Porters, Ansoff, Business Model Generation were all mentioned.
The most popular, the most intuitive, the tool easiest to follow and also most effective? SWOT.
Strengths and weaknesses
Strengths and weaknesses examine the company’s position or that of its product/service, customers, competitor activity and resources. Examples include:
- What you do better than anyone else in your industry
- Your reputation amongst vendors
- Customer support/service levels
- Elements of the (extended) marketing mix – price, product promotion, place, process, physical evidence, people and partnerships
Strengths and weaknesses should all be related to factors internal to the organisation.
At this stage you might consider just one of your products/service areas and/or that not all of your customers are equal and start to focus your efforts on a specific segment.
Opportunities and threats
Opportunities and threats take the review further by looking at external factors. Here elements from a PEST analysis should be included. Political, economic, social and technological issues.
A detailed understanding of key Industry trends and customer needs is essential.
Porters’ Five forces
Here the Porters’ Five forces model can also be useful. It was, after all, developed in reaction to SWOT analysis (which Porter found to be ad hoc). This model shows who has the power in a market and helps marketing practitioners and business managers to analyse the attractiveness and profitability of an industry sector. The five forces to be considered are:
- Threat of substitute product
- Threat of new entrants
- Bargaining power of buyers (customers)
- Bargaining power of suppliers
- Competitive rivalry
A good SWOT analysis will produce realistic and meaningful recommendations. The strategies should become self-evident if the analyses have been thorough.
A SO (strengths-opportunities) strategy will use internal strengths to capitalize on external opportunities.
A WO (weaknesses-opportunities) strategy will use external opportunities to improve internal weaknesses.
SO and WO strategies are attacking.
A ST strategy (strengths-threats) will use internal strengths to avoid external threats.
A WT strategy (weaknesses-threats) avoid threats and minimize weaknesses. It is most often used when an organisation is in a bad position.
ST and WT strategies are defensive.
American businessman John D Rockefeller said “The secret of success is to do the common things uncommonly well.” We couldn’t agree more. We would add that not only do the basics need to be in place, but they need to be constantly reviewed and revisited to stay ahead.
We recommend a SWOT analysis for every major project, reviewed on an annual basis.
For the other marketing models mentioned, we’ll visit these in a future blog.