Developing a marketing strategy is an essential ingredient to ensure the growth and longevity of any company. This is because it allows a company to make the most use of its available resources, position itself ahead of its competitors, and ensure profitability. This essential marketing component brings together activities like selecting market segments, designing and developing new products, and analyzing competition.
Selecting target markets is in essence determining which cohorts the business should direct its marketing endeavors to. Businesses can choose prospect clients based on demographic criteria such as age, gender, income, or through psychographic factors like values and interests. A well-defined target market ensures the success of the product because it allows a company to make marketing strategies which are cost-effective, sustainable, and with higher likelihood of converting prospects into actual paying customers.
When a company plans on bringing a new product into the market, they need to make sure that it will have functional utility, sales appeal, and competitive advantage to similar offerings provided by other companies in order to be successful. This activity is known as product design and it is something that companies should do because the consumers nowadays are very discerning and are easy to switch allegiance when something better comes along.
Identifying the strong and weak points of existing and possible market rivals is an essential step in developing marketing strategies. These variables are assessed through competitive analysis. By doing this strategic assessment, a company can come up, implement, and adjust their marketing strategies accordingly to ensure that customers consider them first when the latter is looking for particular goods or services. Competitive analysis ties up several activities as well. At the outset, you would need to identify the businesses you will be competing against. For instance, an individual planning on opening a small store can drive around a particular location and note for other stores that offer the same products. He may also look up businesses similar to what he is planning to put up on the local phone directory or online.
The next task would be conduct competitor profiling. Factors such as what products they offer, why customers buy from them, how they go about pricing, which promotional activities they employ, the advertising companies they outsource are all considered in competitor profiling. You can get these pieces of information by going to the place of business itself, or through their website. Alternatively, you may ask their customers and clients and suppliers. Going to trade expos is another excellent way to carry out competitive analysis.
While there is no question to the usefulness of competitor analysis, a lot of companies rarely do it, if at all. Relying solely on informal impressions is bad for business because some opportunities that are otherwise profitable and risks that lead to failure which are avoidable in most cases are overlooked.
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