Traditional marketing strategy consists of three components, known as the “three C’s”:
- Company: Know the strengths and weakness of your firm.
- Competition: Know the same about your competitors.
- Customer: Know who they are and what they want.
- Competitor strengths and weaknesses
- Whether new competitors are entering the marketplace, or existing ones are leaving
- The product or products that your competitors rely on for most of their revenue
- Ways to overcome the threat of substitute goods Develop a Marketing Program
- Product: What you are selling
- Price: How much you will charge
- Place: Where you will sell your product
- Promotion: Special incentives you will use to get people to try your product Craft a Market Development Plan
- Does recent data show the market for your product is growing?
- Do you have a plan to offer new products or line extensions in the first few years?
- Are there other ways to position your company more competitively in the marketplace?
- Does your marketing plan offer ways to grow overall demand within your industry sector?
Analyze the Competition
Of the three C’s, the competitor analysis may give you the toughest time, especially if you are new to the marketplace. First, you should look at your direct competitors. Take, for example, a McDonald’s restaurant in a busy downtown area. Its direct competitors would be any nearby Burger King or Wendy’s restaurants. Its indirect competitors would be other restaurants in the same downtown area, even upscale ones. Customers eat lunch just once a day, and all these restaurants are fighting for this finite group of customers.
Examine any substitutes. Instead of going out for lunch, some people may opt to bring lunch from home, or skip lunch entirely. These are both factors McDonald’s would need to examine when analyzing a location’s competitive position.
Assess the Marketplace
Once you’ve identified your direct and indirect rivals, as well as substitute competitors, you’ll want to gauge your potential fit in the marketplace. Some issues to consider:
After you have addressed the three C’s, you can move on to developing a marketing program, which involves analyzing “the four P’s,” collectively known as the marketing mix:
You’re now ready for the final phase of your marketing analysis – crafting a market development plan. The information you provide here likely won’t come into play until you’ve established your company and have been running for a few years, but investors will find it helpful to see how you envision your company evolving. Your market development plan should address such questions as:
These marketing and competitive analyses are vital parts of your business plan and will likely be the most extensive portion of it. Take the time to do thorough research on your competitors and how the market has behaved in recent years. A disorganized marketing strategy can ruin even the best of products, simply because your target customers will never hear of them.