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Marketing strategy
In step 1 and 2 we defined and refined the value proposition that the company is offering. Like a chess board, you now have an overview of the different players in the field and your own position next to them. Subsequently you have to decide what your next move will be. From a marketing perspective this means you have to decide what specific target customer you want to “attack” and what value you would like to offer them. So again, this step will help us to finetune our value proposition even more, making it more relevant and detailed in its statement.
Identifying and specifying the target market
In this step we in particular zoom in on customers. What different customer groups make up the market (all the pieces of the pie) and what specific group of customers would we like to attract (what piece(s) of the pie)? When picking a target market we should take into account their profitability and accessibility (e.g. can your sales team easily reach out to them?). In this step we double-check our initial approach and gut feeling, for example by considering more customer groups in “the pie”. When it is clear what target group(s) we are focusing on we can make a more detailed customer profile (e.g. persona) and fill out their specific buyer preferences regarding price, product features, marketing and distribution.
Specifying your value proposition
With these new customer insights you can fine tune your value proposition even more. How will you win over the 1 or 2 target markets and how is your offering different from the competition? Is your value that of a discounter, luxury brand, the most sustainable option, or something else? Although a value proposition is formulated in a somewhat broad manner, on a strategic level, it should hint at directions at the tactical level, in the realm of either promotion, product, price or distribution features.
In summary, in this step you need to take the following actions:
- What customer segments are available to approach. What does the “customer” pie look like in total?
- Among those customer segments, what segments seems worthwhile to target, based on their profitability and accessibility? You usually pick 1 or 2 segments as your preferred target markets.
- What are the characteristics of the target customers? How would you make up a profile for them, e.g. by designing a persona where, besides factual and behavioral characteristics, you state their psychological preferences regarding several aspects of the customer experience: product features, marketing channels, distribution channels and pricing
- Finally, how are you going to attract those 1 or 2 segments that you identified? In essence, what will be your value proposition for each of them? With the new insights gained from constructing the persona, we can fine-tune our value proposition.
Go to step 4