If the company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make their own key strategic decisions and develop a marketing strategy designed to maximize the revenues and profits of the firm. The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth, market share, long-term profitability, or other goals.
To achieve the desired objectives, marketers typically identify one or more target customer segments which they intend to pursue. Customer segments are often selected as targets because they score highly on two dimensions:
- The segment is attractive to serve because it is large, growing, makes frequent purchases, is not price sensitive (i.e. is willing to pay high prices), or other factors
- The company has the resources and capabilities to compete for the segment’s business, can meet their needs better than the competition, and can do so profitably. In fact, a commonly cited definition of marketing is simply “meeting needs profitably.”
Relationship Between Marketing Research and Marketing Strategy
Marketing research and marketing strategy are ongoing processes. Your customer base and their preferences may shift over time as your business develops and grows. Adjust your strategy in response to new marketing information. Keep up on new technologies that can become a part of your marketing strategy. For instance, mobile marketing is a relatively new area that is can be particularly effective for local businesses that are trying to reach customers nearby. If your marketing research shows that your customers are avid smartphone users, then this can be a smart way to go. Stay flexible and make the gathering of marketing research and formulation of strategy a regular part of your business routine.
Marketing research is a broad term that encompasses the process of gathering and understanding data about your customers, demographics and business climate. Marketing strategy involves putting the information discovered through marketing research to work. These are the concrete plans that a business uses to reach new and existing customers.
It can also involve the development and testing of new products or services. Information is the basis of marketing research. Businesses gather this information through seeking out demographic studies, test marketing products, conducting surveys and informally requesting feedback from existing customers. A strategy may start with identifying a specific marketing problem, such as increasing sales, expanding the customer base or introducing a new local business to the community.
Local businesses can research statistics about their local community, including income levels and other demographic information. An online search is a good place to start. Strategy takes into consideration the budget that you have available For example, a small local retailer with a very small marketing budget may decide to put its funds toward an email and online campaign designed to raise awareness locally. This could involve creating social media profiles, building up a customer list and sending a regular email newsletter with updates and special coupons.
Marketing research apart from a sound strategy will not benefit your organization. Constant research needs to keep your finger on the pulse of your target customer. It will alert you to pressure from competitors and opportunities to launch new products. Conversely, it should tell you when a new product is not right for the market. Reviewing your strategy, in light of your current research, several times a year will keep your advertising and sales efforts on track and allow you to discern if changes in your marketing approach need to be made.