Marketing Basics 1: Marketing Strategy

We present a road map, a list of the elements every business needs to consider in order to develop a plan that will deliver.

[January 26, 2006]

This series of articles is being written by the graduate students of Prof. Guy Decatrel in his class, MKT602: Marketing Management, at National University's Fresno campus. The students are: Jessica Bueno, Daniel Champion, Sara Chism, Lupe Garcia, Gill Gurshakti, Robert Kosanouvong, Arman Kyurinyan, Pa Lee, LaKishia McCreary, Victor Ramayrat. Additional ISP-specific information is supplied by telecom consultant Peter Radizeski.

You aspire to start your own ISP business, or you are simply trying to grow one, knowing that you'll be competing against companies like NetZero, AOL, EarthLink, MSOs, RBOCs, and many other Service Providers.

You have everything you need to manage a successful ISP . It's working. You are king of your server room and are ready to start to grow the business. Or are you?

Marketing by instinct (or not marketing at all) may have worked in the nineties, but the playing field has changed. Today, the best routers or servers, the best filtering product or hottest software, does not mean that customers will come beating down the doors. It is no longer about the technology.

A strategy to win
What does it take? Planning. What is your plan, aside from just slugging it out with established competitors? How will customers know who you are? How will you get customers to choose you over other well-known ISPs? Why should they? What makes your service offering superior to a competitor's?

This article provides an overview of the process of planning your marketing strategy. It addresses how the product/services mix should be considered when developing a marketing plan. It examines the way a marketing plan will likely need to change at different stages in the product/service life cycle. Lastly, it provides a structure that an ISP can use to plan its marketing strategy.

Most small businesses do not have a written business plan. Usually, the business plan is a vague idea or dream, such as offering Internet access to everyone.

On the other hand, defining what your target market is, what services prospective customers want and need, what competitors are offering, what is missing in the marketplace, and how you are going to reach those prospects is what can make your business successful in this highly competitive industry.

Sound overwhelming? Perhaps that is why not many service providers consider business planning and marketing strategy development. The sports saying, "no pain, no gain" can also be applied to effective marketing management. The components that make up marketing management are:

1) Customer needs/wants, and other segmenting elements

a) Market definition
b) Market segmentation
c) Customer needs analysis

2) Your business:

a) Resources
b) Objectives

3) Competitors:

a) Current
b) Emerging

4) External Market Environment—Varied significant forces constantly hurl themselves at a business in mixed and changed forms. You never know just how these will present themselves.

a) Legislation
b) Technology
c) Economic
d) Social/Cultural

5) A Strength, Weakness, Opportunities, and Threats analysis (SWOT), which consists of internal and external factors:

a) Internal factors:

i) Strengths
ii) Weaknesses

b) External factors:

i) Opportunities
ii) Threats

6) The SWOT analysis will result in knowing facts about the above dynamics. It provides the data needed for:

a) Segmentation
b) Targeting
c) Differentiation
d) Positioning

Why marketing planning?
Let's agree on a definition before moving ahead: a market is the set of all actual and potential buyers/customers of a product or service. No business is going to get all of a market, but marketing planning can help in creating product/services that fill customer needs. This is the first step on the path to success. Marketing planning analyzes uncertainty. It reduces uncertainty and maximizes opportunity. It clarifies goals and makes it possible to communicate a vision to employees and others. To have effective marketing, a business needs a coordinated strategy for customer value, customer satisfying products/services, profitability, competitive pricing, communications, positioning, branding (promotion).

Your Marketing Plan is your road map that connects your customers to your services.

When defining a market, it is important to realize that you cannot be everything to everyone. Big companies with large marketing budgets can pull that off, but small and medium sized companies need to identify and target one or two markets. This doesn't mean other segments of the market won't hear you or buy from you. Filling a void in a segment or niche market with the needs of both today and tomorrow is the way to best plan.

Most customers looking for a new product will consult the opinions of people they know or go with what they have heard of. The ISP market is one where service providers abound, creating lots of noise through which your message has to be delivered.

You need a plan in this business, even if it is just to stay in business—a focused and targeted plan. Marketing is a key to the success of any business, but it is even more important now than ever before, and no marketing will succeed without a good marketing strategy. Attracting customers and knowing how you will service them now and as you grow are all part of marketing planning. Choosing your target market is a crucial step to build a solid foundation for business. An analysis of your entire market should provide you enough information to package and brand your product and services.

After determining your menu of services, there will be many other strategic factors to consider: pricing strategy, various selling strategies, an advertising strategy, plus a promotion strategy as well as publicity/ public relations strategy. All of these are significant components of your overall Marketing Plan. Please note that pricing connectivity at or below your largest competitor is not a strategy. As the SBA puts it: "Pricing your product or service is one of the most important business decisions you'll make. You must offer your products for a price your target market is willing to pay—and one that produces a profit for your company—or you won't be in business for long!"

Future articles about these considerations will be available over the next few months, here on ISP-Planet. These will include:

• Conducting an Environmental Scan of Your Target market
• Determining Customer Wants and Needs
• The Difference Between Marketing And Selling
• Understanding The Competition
• Conducting A Strength, Weakness, Opportunities, and Threat (SWOT) Analysis
• Determining The Value That AN ISP Can Profitably Deliver
• Targeting A Niche Market
• Designing A Value Proposition statement
• Designing A Marketing Communications Plan For Your Value Proposition

Marketing has been described by some as the collection of activities required to get and keep good customers (Fox, 2003) and as satisfying customer needs with the product and the cluster of things associated with creating, delivering, and consuming the product (Levitt, 1960).

In summary for now, the specific marketing aspects to consider when thinking about "why marketing" include the product/services mix; how to brand and package your product and services; how the product/service offerings are to be priced; sales initiatives, including some from your tech support team; advertising; direct marketing; sales promotions; and target market publicity/public relations opportunities to grow business. To produce and deliver products and services that people want at profitable prices and value that are relatively attractive to competing alternatives, and to generate revenues in excess of total costs is no accident.

More to follow.

—End

Sources:

Fox, J.F. (2003). How to become a marketing superstar: Unexpected rules that ring the cash register. (1st ed.). New York City, NY. Harper.

Levitt, T. (Jul.—Aug., 1960). Marketing myopia. Harvard Business Review, 45-56.

Understanding Costs and Pricing for Profit, SBA at http://www.sba.gov/test/wbc/docs/market/mk_4ps_pricing.html