Nowadays, the words market and marketing are used for many different aspects and in various contexts in business. It is therefore understandable that we sometimes sense some confusion when talking to our customers. Let´s face it, we all hear about marketing plans, market strategies, go-to-market strategies, market data, positioning and more, but do we really understand what it is all about? Here I will try to clarify the difference between market strategy and marketing strategy, how they are connected and how a good execution of these can directly increase your companies profit.
Let us compare two well-known companies within the mobile phone industry, Nokia and Apple. We probably all recall how it went: Nokia opened and dominated the mobile phone market with phones that had amazing specifications. When Apple entered the market, they launched a phone that lacked many of the functions that the Nokia phones presented. Still, many people really wanted that iPhone and Apple is now one of the largest players whereas Nokia has made an exit from the mobile phone industry. How come? The answer partly lies in Nokia´s non-updated market strategy. Nokia kept focusing on what they believed their strength and competitive edge was -technically advanced functions and platform-, instead of listening to their customers and understanding what was relevant for them. Apparently most customers did not consider that purely enhanced functionality was a benefit. In contrast, Apple designed their products based on their customers needs; they analysed and understood their lifestyles and adapted their products, with technical state of the art to their customers needs. By doing that, they developed a mobile phone with an attractive design and extraordinary user experience. They did not sell the technology itself, but understood how to adapt it to benefits for their customers. Apple had defined a relevant and clear market strategy.
So, developing a market strategy will give you a better understanding of your customers, their needs and wishes and how your product or service could answer those needs. Primarily, it is not about your know-how or your products but about what your customers want from your products and why they like them. They might not even know this if you ask them, but this is what you need to find out. It’s about putting yourself in your customer´s shoes. Ask yourselves questions like: “Who really are my customers?” “What characterises them and what are their true needs and desires?” “How loyal are they to my products/brand and why?” “What are the aspects and key benefits that my products present that pleases my customers and that I need to keep?”. “How much are they willing to pay for my products or service?”. Basically, your market strategy will provide knowledge on the current customer behaviour and trends and how to become more successful. In other words, what is your “reason-to-be”. This is not a “once for all” done exercise, it needs to be updated as consumer behaviour and trends are evolving. Those all seem basic considerations and most companies will tell you: “We know that very well after all these years being in the business”. But so did Nokia…..
Once you have a clear market updated strategy in place, you are ready to reach out to customers with a, for them, relevant message. This is what we call a marketing strategy or “go-to market plan”. It is basically the execution of the market strategy. Here we try to find answers on questions like: “Where are your customers?” “How do they look for information about the products?” “When and where do they buy?” “How can you reach them most effectively?” “What type of marketing are they receptive to?” “Should we use printed matter, social media, word of mouth marketing or all sorts of marketing?” Your marketing strategy will define the best way to reach the full market potential of your product or service.
To summarise, you first need a clear understanding of your customers and their needs (market strategy) before you can start reaching your chosen customers and communicating the benefits of your products to them (marketing strategy). Well-researched and thought-through market strategies in combination with a strong execution will help you and your company to reach its full market and ultimately, profit potential.