The importance of an effective marketing strategy
June 2014 | FEATURE | BOARDROOM INTELLIGENCE
Financier Worldwide Magazine
For all firms, whether a modest start up or a multinational giant, an effective marketing strategy can serve as a crucial road map for the entire business. By developing and establishing a coherent and well considered marketing strategy, organisations can promote their business, court the right types of client and allocate their resources correctly, all while safeguarding the reputation of the firm.
As such, effective marketing strategies are comprised of numerous facets that companies must consider at all times. Shareholder value, reputational risk and the impact of digital technology are three of the most important considerations companies must take into account while attempting to market their services to the right audience.
Undoubtedly, a comprehensive and effective marketing strategy is something businesses must employ irrespective of their size. Consumers’ expectations must be taken into consideration, and a detailed analysis of a company’s operations will allow firms to view their business from a client or customer’s perspective.
The creation of an effective marketing strategy is often the task of a firm’s senior management team. By handing down a comprehensive marketing strategy from the c-suite, companies will help to create a more focused, business-wide approach to marketing. It is crucial, however, that the strategy is multi-faceted, realistic and implemented consistently over time. An effective marketing strategy must also serve to bridge any gaps which may exist between the boardroom and the marketers responsible for disseminating the company message. Marketing strategies often require company-wide discipline and governance to ensure they are being implemented effectively and efficiently.
One of the most important aspects of any marketing strategy relates to identifying growth opportunities by utilising SWOT analysis. Once a company has identified the strengths, weaknesses, opportunities and threats of any marketing scheme, it becomes simpler to address those opportunities and consider what course of action should be taken to mitigate any threats. It is equally important that boards remain engaged in the process of delivering their chosen strategy over a prolonged period of time. Senior management must ensure they stay informed and remain open to new ideas to further the company’s brand.
The overarching focus of the firm’s marketing strategy should be based on the concept of developing and growing awareness of the company’s brand, and on developing trust and confidence in that brand. A company’s brand is its most important asset, so attempts should be made to enhance and protect it throughout the marketing process. In order to achieve this, organisations must implement the right marketing strategies as quickly as possible.
The means by which companies now develop and implement effective marketing strategies have altered enormously in recent years. Where marketing attempts previously were limited, in the modern business climate there are untold means by which companies can successfully deliver their message. The dawning of the digital age has greatly bolstered both the scale and reach of many marketing techniques and strategies, while also posing a wide range of new questions and challenges to companies and their marketing teams.
The digital age continues to have huge impact on the effective management of marketing strategies. Companies are embracing new forms of media made available by the internet. Social media, in particular, is becoming a key avenue for many companies, yet despite the ubiquity of the technology it is very easy for companies and those acting on their behalf to misjudge their interactions in this area. For example, in February MasterCard Incorporated experienced a great deal of scrutiny and embarrassment as a result of its sponsorship of the British Music Awards. MasterCard’s PR agency, House PR, offered press accreditation to journalists in exchange for publishing promotional tweets on their own twitter accounts. As a result of the incident, MasterCard’s promotional hashtag for the event was co-opted by users of the social network who openly mocked the company’s efforts. Companies must be aware that social media interactions can have an extremely damaging effect on their reputation should those interactions be misjudged.
Social media and the wider internet can have a damaging effect on a company’s reputation in other ways. In 2012 there was an uproar surrounding how little corporate tax global leviathans like Google, Starbucks and Amazon, among others, were paying in the UK. Consumers turned to the internet and social media to express their anger at what they deemed to be underhand and borderline criminal activity. Irrespective of the fact that the firms had legally done no wrong, public opinion was swayed strongly against them. Incidents such as these should serve as a stark wake-up call to businesses. In April, as a result of the fallout from investigations into the levels of tax paid by multinational corporations in the UK, Starbucks announced it was relocating its European headquarters to London. The move to London echoes similar decisions taken by other multinationals over the last 12 months. Advertisers WPP plc, media group UBM plc, Aon plc, and two oil services companies, Rowan Oil and SeaDrill, have all relocated to the city. According to Starbucks, the move, which is due to be completed by the end of 2014, will result in the firm paying more tax in the UK.
The growth of the internet, particularly social media, has significantly accelerated the time it takes to disseminate information and for the public to respond. If organisations make the wrong move from a marketing perspective in the modern era, the damage that mistake can have on a company’s brand is magnified considerably when viewed through the kaleidoscope of digital technology and social media. The number of influential social media networks has continued to grow in recent years. Previously niche products such as Pinterest, Tumblr and Instagram have grown in popularity, providing businesses with a multitude of new options to produce engaging content and build their audiences. Any contemporary marketing strategy must incorporate social media and utilise it effectively. Social media should be embraced as a tool to effectively foster and maintain relationships. By developing relationships through effective marketing, companies can engender trust and admiration among their prospective customers. Credibility can be established, which extends beyond business transactions and helps to further develop a company’s brand.
If poorly managed, the reputational fallout of marketing miscalculations can be disastrous. Providing a poor or inadequate level of service through either digital formats or traditional means can have a major impact on sales, profits and stock. As such, it is vital that companies are aware of, and strictly manage, their marketing strategies in the digital space.
Mix and match
Evidently, the advent of the digital age has led to numerous changes in the way in which companies approach marketing strategy. This is only likely to intensify in the coming years. Going forward, companies will increasingly improve their standing and credibility with consumers by creating valuable marketing content through a variety of channels, both traditional and digital. By engaging and embracing a variety of mediums, companies can foster a strong relationship with their demographics. This relationship will develop into a genuinely loyal following. Some of the best B2B content marketing strategies see companies engage their customers on social media, contribute articles on the business’ website, produce eNewsletters, case studies, videos and articles on other websites. Traditional marketing via more established channels, such as television and radio advertisements, is becoming less effective. Again, the proliferation of new technology – tablets, smartphones and digital video recorders – is ensuring that consumers are paying less attention to traditional advertisements. According to data from Nielsen, 84 percent of smartphone and tablet owners in the US use those devices while watching television.
Instead of relying on marketing by traditional means, many companies are discovering that it is better for the development of their brand to concentrate on inbound marketing. Companies should incorporate the production of valuable, engaging content which is designed for a specific audience into their company wide marketing strategies.
One of the most important functions of all business operations is to create shareholder value. Shareholder value should serve as a guide to the strategic, financial and organisational choices made by chief executives and their colleagues in the c-suite. Value creation is also particularly relevant as it pertains to the marketing department. Implementing an appropriate and considered marketing strategy should help all major corporations drive shareholder value. The principle behind shareholder value states that if a company builds value, the stock price will eventually follow. The most effective means by which a company can build value in its name and its brand is with an effective marketing strategy.
An organisation’s existing brands, customer relationships and channels of distribution are pivotal when creating shareholder value. Accordingly, developing, maintaining and exploiting those assets should be foremost in the minds of a company’s marketing staff. Those assets should be subjected to regular and meticulous reviews. Companies should carrying out regular risk assessments of their marketing strategies as they would any other aspect of their business in order to help create value for shareholders. Although brand value does not appear on the balance sheet, it should be subject to the same scrutiny as other assets.
Organisations also need to tailor their marketing strategies to a specific audience. An effective marketing strategy should consider customer preferences and interests. Firms should attempt to instigate a data-capture strategy wherever possible. By capturing data from customers and clients, companies can build and develop trusting relationships which will further enhance the firm’s offerings. They can determine which issues and products are important to their customer base and tailor their offerings accordingly.
Increasingly in the today’s global business environment, companies are competing for the attention of consumers with a diminishing attention span. It is essential that those firms utilise all the tools at their disposal to create and maintain an effective marketing strategy. That strategy should reflect and complement the wider financial goals of the organisation. Firms ought to follow a clearly defined and considered path which directly targets the firm’s desired consumers. It is imperative, however, that firms’ marketing strategies are malleable where necessary. The best marketing plans prepare firms for any unforeseeable changes in the wider business environment, as well as on a microeconomic level. It is when unexpected and potentially damaging changes occur that companies most require a strong yet flexible strategic plan. Once firms have an appropriate an effective strategy in place, they should utilise that plan to protect and enhance their brand at all times.
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