The Top Five Marketing Strategies
- The goal of a marketing strategy is to identify the best customer and market growth opportunities and then engineer customer and business outcomes to maximize company revenues.
- However, for many the goal remains elusive. Research shows that 29 percent of marketers do not create an annual strategy and an additional 25 percent develop ineffective strategies that fail to deliver financial benefits. Both groups would benefit from a proven development framework.
- Marketing strategies built with supporting models and templates leverage proven processes and accelerate results.
Marketing strategy research shares that effective marketing strategies deliver double-digit improvements to the sales pipeline, revenue attainment and Return on Marketing Investment (ROMI).
However, the research also finds that about half of all marketers struggle to develop an effective strategy. Leveraging existing models can help. This post shares the five most recognized models.
The Growth-Share Matrix
A widely used tool to assess and orchestrate product mix and potential is the growth-share matrix, or sometimes called the BCG Product Portfolio Matrix.
Each quadrant in the matrix identifies growth and market share potential. For example, new product releases are question marks, with the potential to become stars and the certainty to evolve into cash cows or dogs.
The growth-share matrix assists in creating a balanced product portfolio. A portion of cash cows fund question marks, a portion of question marks are resourced to become stars and a portion of stars grow the company.
This marketing strategy is best suited for product-centric companies with broad product categories and periodic new releases. Using the growth-share matrix to assess market size and potential, along with the competitive landscape, provides data to align the company's business growth strategy with a balanced product portfolio.
Growth Strategy Matrix
This growth strategy is also called The Ansoff Matrix and the Product/Market Expansion Grid. It was originally designed by Igor Ansoff in 1957 but has since been extended.
The two dimensions to grow your business are product growth and market growth. Expanding your products or customer markets in various combinations will reveal up to four choices.
You can i) sell more existing products to your existing customer markets (a market depth strategy), ii) take your existing products to new markets (a market growth strategy), iii) expand or create new products to sell to exiting customer markets (product growth), or iv) create new products for new markets (a disruptive or transformational growth strategy).
Each option offers different levels of financial risk and revenue impact. For example, for new market expansion, you must be sure to examine not just if there is a gap in the market, but if there is a market in that gap.
Your strategy explores, models and identifies the optimal combination of these growth options.
Which option is the best? Every company's appetite for risk and reward is different, but for most companies a balanced mix of options makes the most sense. A well-structured growth portfolio allocates resources across options in a way that collectively maximizes the company's growth strategy.
An orchestrated combination of incremental to transformative growth lowers risk, creates synergies, delivers a steady stream of new offerings, and produces the greatest financial upside.
Porter's Five Forces
This framework was first published in 1979 by Michael Porter of Harvard University. He developed this planning framework in reaction to the then popular SWOT analysis, which he found ineffective.
Its purpose is to assess the five forces that determine competitive intensity and profit potential for an industry. The forces are rivalry, buyer power, supplier power, threat of substitutes and barriers to entry.
Three of the forces – substitute products, rivals, and new entrants – stem from horizontal competition while the other two of suppliers and customers are based on vertical competition.
A measured change in any of the forces creates either an opportunity or an increased challenge and therefore directly impacts the strategy.
This model is particularly useful if planning or pursuing a disruption strategy and therefore assessing the attractiveness of various industries to disrupt.
Crossing The Chasm
Developed by Geoffrey Moore and published in his book Crossing the Chasm in 1991, this is another product-centric growth strategy.
Moore suggests that scaling a new product requires crossing a gap which exists between the early adopters (which he calls enthusiasts and visionaries) and the early majority (pragmatists).
To cross that chasm Moore shares techniques such as defining a precise target market, grasping the whole product concept, developing the right marketing strategy, positioning the product pursuant to its evolution, selecting the right distribution channel and pricing.
This model is most useful for startups or innovative companies in the software and technology industries.
Johnny Grow Framework
This marketing strategy framework was created from research designed to show what the highest performing marketers do differently than their peers. It is a simple but effective 3 step model. It shows how to align with the company's business strategy, how to design an effective marketing strategy and how to cascade that strategy into a Go-to-Market Plan. Because its created from research that identifies the specific methods used by the highest performers it is less theoretical and more practical.
The Point is This
Applying proven models that have stood the test of time is one way to bring structure and accelerate progress.
But don't think of these frameworks as substitutes or competing alternatives. Instead, view them as compliments or specialized add-ons. Each is purpose built for a specific objective and brings something unique to your planning and marketing strategy.