What sets winning organizations apart from their competitors?
One study examined 40 industry groups of 4 companies in each, all with similar financial numbers and apparent prospects. They noticed that what separated winning and losing companies (as measured by total shareholder return) were two factors: strategy and execution.
1. Winning organizations devise and maintain a clearly stated, focused marketing strategy The marketing strategy is a simple value proposition that is based on a deep understanding of the customers. It is an organization’s ability to create superior value for its customers and, in the process, give it a competitive edge over its rivals. If a company has a clear and focused marketing strategy, it is more likely to succeed than if it has an unstable strategy, such as Kmart, who couldn’t decide whether to go upscale to avoid competing with Wal-Mart or go head-to-head with Wal-Mart, which simply confused customers and led to its bankruptcy.
2. Winning organizations execute their marketing strategy flawlessly The second factor that separates winners from losers is their ability to execute their marketing strategy. There is a gap between devising and implementing a good strategy. Someone in top management may have the idea that customer service is a good strategic priority for the business, but unless they win the hearts of employees, the execution of the strategy is likely to be weak.
What is marketing?
Marketing is a disciplined process used by organizations to solve business problems. Problems solved by marketing in a for-profit organization:
* Low-priced competitors flooding the market
* Lack of differentiation from competitors
* How to generate more revenue
* Managing the explosion in media and channels
* Dealing with more sophisticated and price-sensitive customers * How to build a customer-focused organization
Problems solved by marketing in a non-profit organization:
* How to differentiate from other non-profit organizations * How to increase awareness of our brand
* How to increase funding from donors
* How to build partnerships with for-profit organization
* How to motivate volunteers
Marketing is a disciplined process to solve business problems
Marketing process step #1: understand customers
* Customer needs: the very first step. Different customers have different needs. (Ch. 2) * Customer segments: the first step in figuring out which customers we want to serve is called market segmentation. (Ch. 3) * Target customer: the second step in figuring out which customers we want to serve is called targeting (target marketing). These steps involve recognizing different sets or groups of customers based on their needs and other criteria. (Ch. 3) *
Marketing process step #2: create customer value
The next marketing step is to create value for the chosen target segment. This is done through four strategies, which are called the marketing mix. They are: * Product strategy (Ch. 5)
* Pricing strategy (Ch. 6)
* Channel strategy (Ch. 7)
* Marketing communications strategy (Ch. 8)
Marketing process step #3: deliver customer value
The understand-create-deliver-manage value marketing process described here is captured in a strategic document called the marketing plan. It describes what target segments it will serve, how it will serve them, and how it will win by differentiating itself from its competitors. Although many strategies in the plan are implemented by the marketing function, many marketing strategies are implemented by other functions such as sales, customer service, and shipping. A marketing strategy of customer focus may not be implemented well because another function is implementing it. To accomplish delivery of value, two things must happen: 1) Sales execution: marketing strategies must translate into sales strategies and other functional strategies (Ch....