4 Ways to Build a Foundation for Marketing
There is no single way to market a business. A company can utilise mainly traditional marketing methods like print advertising, radio and television, and direct mail. Likewise, a company’s priorities could lean more toward online marketing. This would involve things like social media and content marketing. Combination strategies are also possible.
The one thing all successful marketing campaigns have in common is this: they all have a solid strategic identity as the foundation. If it helps, look at it like a house. If all of a company’s marketing strategies are like the walls, doors, and windows of the house, its strategic identity is the foundation on which all of it is built.
There are a variety of ways to design a marketing strategy commensurate with four different strategic identities. Each identity is explained below.
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1. Cost Leadership
The first strategic identity seeks to develop a company whose main sales priority is volume. A business working this strategic identity is willing to sell at lower prices in order to move greater volumes of product. The idea is to make money by constantly increasing market share.
Cost leadership leads to lower margins, but higher volumes make up for it. A cost leadership company makes more on volume than competitors with smaller market share make on margin.
2. Cost Focus
Cost focus is similar to a cost leadership in that a company is still willing to sell at a lower price. Where it differs is in its target audience. A company with a cost leadership identity looks to attract as wide an audience as possible. A company with a cost focus identity is more concerned about a niche audience.
For example, this might be a company that forgoes selling a complete range of mobile phone accessories in favour of focusing only on cases for iPhones. They will sell those cases for less, but they will not expand into other brands or accessories.
3. Differentiation Leadership
The third strategic identity is one of differentiation leadership. A company embracing this identity purposely seeks to reach customers with some sort of unique product or service. Their success or failure is directly tied to the uniqueness of their product/service and its value to customers.
In a successful scenario, a product or service will be unique enough that the company is able to charge premium prices. Making this strategic identity work generally requires quite a bit of upfront investment. The company has to figure out how to be unique to a broad audience before they can begin marketing.
4. Differentiation Focus
Finally, the differentiation focus identity seeks to do much the same thing as the differentiation leadership strategy but with a narrower focus. In this sense, it is similar to the cost focus approach.
Differentiation focus still aims to distinguish a company by presenting a unique product or service. But the company does not cater to a broad market. It caters to a smaller, more well-defined market that has a specific need for its unique product or service.
The primary advantage of differentiation focus is less competition. But with less competition comes less demand. Differentiation focus is a strategic identity that comes with plenty of risk.
Your Strategic Identity
By choosing one of these four strategic identities, a company can begin building a comprehensive marketing strategy in line with its choice. Marketing based on a strategic identity provides clarity, purpose, and well-defined goals.
As a business owner, what strategic identity have you chosen for your business? If you haven’t settled on one, you really should. It will change the way you market.