Making business strategy simple, reducing the planning gap and using product extension to open up new markets
This outtake is from an hour of discussion recorded exclusively for our Pivotal Marketer Community on Facebook sees Angela Hatton, marketing consultant, trainer and published author and MMC’s Rene Power discussing business strategy being quite simple (three key questions), reducing the planning gap and using product extension to open up new markets.
It’s the fifth and final part of a series of serialisations on marketing management, be sure to check all new posts as they publish (or see the recommended reading below).
I see a lot in B2B, particularly, like manufacturing in products, where most of the time you’re trying to switch somebody from buying Company’s A paint to Company’s B paint and there’s not a lot of difference in it.
So you’ve got to talk about ease of use… all sorts of things that are potentially benefits to user, to the buyer, to the decision maker, to whoever they are.
But what I think you can do quite effectively, and this idea of having a market and then identifying the segments within it, if you’re clever about it, you can have transitional segments.
So when people suddenly don’t fit in one but they identify with another, you don’t lose them. And so you still have this customer for life.
But you’re right. This all takes work and thinking and research and asking questions and being inquisitive, and wanting to always seek to improve.
And these are all traits that I think the leading marketers have. And they’re the sort of things that I think some of the guys listening along to this and watching this on demand, these are the things that are going to help you in your career.
Don’t just accept everything for what it is right now but actually look and think and be that voice in the business who is saying, “But what about if this? Or what about if that? Or what about if the other?”
And I think you’ve stressed that in a number of points today, that they are really important skills and behaviours to have.
Yeah. And again, you started off by talking about the simplicity of the Marketing Plans book (session 1).
But I remember hearing Costas Markides, the management guru, speaking at Harrogate. Scarily, at the CIPD conference, the Institute of Personnel Development, were bringing these big names in to talk about it.
Business strategy is simple
But him saying, “Business strategy is really simple. There are just three questions that companies have to answer and it starts with which customers do we want to serve? And which not? What products do we want to offer them and what not? And how do we want to engage with them and how not?”
And his point was it was all the, “how nots” that was the really challenging thing because there was this temptation of people to go, “Well we’re targeting teenagers but actually we quite like the 20 year olds as well and…
You’re getting into the niche there and having the gumption to say, “That’s a service that we’ll niche and that’s where we’re going to go and that’s where we’re going to excel and this is how we’re going to deliver it and if people aren’t right for us or we’re not right for them, that’s cool.”
Then having the gumption to do that. Yeah, the people that do it can be very, very successful and the companies that do it can be very successful but it takes a certain mindset and a certain will to do that and stick to it sometimes.
Yeah, it does. And very frustrating for the marketers who get what they should be doing but they can’t kind of get that audience. So they need to just have that plan as to how that’s going to happen. Take the CEO out for a drink or something. Or…
If all else fails, yeah, socialise. Appropriately, according to where you’re watching this.
The Planning Gap
If they have the chance to show one diagram that would make an impact, I believe it’s the Planning Gap with a sensible analysis of the environment and what it’s doing.
In other words, are we looking at declining sales because we’re in mature markets that are going into decline, petrol engine cars, the speed with which or growing markets.
And what the company’s objective is because that will be reported in various ways as to what an acceptable rate of growth is. More if you’re owned by venture capitalists, arguably. That kind of thing. And then that question of how do we fill the gap?
And that’s where marketers should be working. That strategic role is which products and which markets, i.e. Ansoff Matrix essentially, can we develop and win a value proposition for that fills that gap?
Yeah, I mean, I love the Ansoff Matrix and whenever I’ve used that in training you get people brainstorming around that and then they go away and think about which ones are the most viable.
And you’ve then got research projects that you can begin to undertake. You can start going and asking customers. You can go and start doing feasibility studies and I think that’s one of the better models. Or one of the better, simple models that when you actually start to unpack that and unroll that, there’s potentially quite a lot to that. So yeah, yeah, I think that’s a good one to kind of mention.
And I think the thing to remember for people when they’re talking to powers that be about it if they are, is that fundamentally the bottom line of that planning gap is what we can realistically get with the current offer in the current market. So that’s fundamentally what that bottom line tells you.
Therefore if the company wants to grow, it has to grow somewhere. If they come back with the answer product, you already said, it can years to develop new products or modify products. So actually we have to invest in markets.
And then you’re into that question of which markets? Where’s the research? Where are we going to… And that doesn’t mean countries necessarily. It’s new segments, new users, whatever.
Product extension as market strategy
Yeah, it’s interesting. And I know as an example in the pharmaceutical space, they’ll get a licence for 15 years on a particular product. It will take them eight years to get it to market, not like Corona vaccines which they took five minutes!
Surprising. It’s surprising how quick it can happen.
But normally… Well their argument is that they did it all in parallel rather than normally it would be a sequential thing but I suspect there were things kicking about in Petri dishes for sometime anyway. They probably played with something that was already in existence…
But anyway, this isn’t the Corona Channel. The point that I was going to make was, yeah, in pharmaceutical, so you’ve got 15 year licence on a product before the generics can all start copying it and so what they typically do is they’ll do eight years of studies get it to the point where they can use it for the indication that it’s been designed for.
But then very quickly will get it contra-indicated into a related illness or disease, and get another 15 years on it.
So I worked with AstraZeneca… on some of their respiratory products that were initially for asthma. Then when the asthma licence ran out, they got it into COPD and they got it into… And you can get… Then that’s-
Yeah, extended life cycles.
But the point is, they’re looking for a different market, different segment, where they can sell the same thing and it has a positive impact. So yeah, for everybody watching, you start thinking about a product or a service and who else could potentially take it, even if it needs a sort of bit of repositioning for them to do it. It’s still essentially the same thing and you’re extending the product life of a particular product or a service rather than starting over. But that’s marketing strategy, isn’t it? That is thinking bigger picture and that-
Go-to market strategy.
Yeah, go-to market strategy.
Got right there at the end. But-
I’ve noticed we’ve hardly talked about comms and promotion.
Because that comes at the very end of that value proposition piece.
And that’s good because these sessions aren’t really about that. And I think we’ve given a very comprehensive, colourful overview to marketing strategy in some ways that marketers can add value in their businesses and elevate the conversation and potentially be part of a more strategic conversation within their businesses.
So I think there’s quite a lot in there for people to go at. So we’ve dropped the book link into the chat and fantastic to have you on, Angela. Obviously, I’ve had the books and things and they’ve been a real good tool for me for, yeah, certainly a couple of decades.
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