An Introduction to Creating a Marketing Strategy
No product decoration business can simply create a product or service and become a leader in the market overnight. It takes thoughtful planning and execution of a marketing strategy to take a product or service and turn it into a business. A marketing strategy is a business’s comprehensive game plan for approaching and penetrating its target market through competitive advantages and unique selling propositions. There is a significant local and national competition in the product decoration industry. However, with a marketing strategy in place, a business knows how it will compete and ensure its place in the market. A good marketing strategy begins before you enter the market and continues to evolve once the business has established itself. Marketing strategy is both a fundamental aspect of, and a basis for, a business’s marketing plan. The marketing plan, on the other hand, lays out step-by-step the ways that the business will go about executing its marketing strategy.
Why Create a Marketing Strategy?
A good marketing strategy is essential to both the growth and survival of a decoration business. A good marketing strategy takes account of the things that a business does best and uses them to help entice consumers and generate sales. It could be a decoration process that you excel at, a skilled artist that you employ, or perhaps even an excellent website to sell your products. Businesses strive to create competitive advantages, which are typically achieved through their core competencies, critical success factors, and unique selling propositions. Competitive advantages, which are a condition or circumstance that puts a business in a favorable or superior business position over their competition, are then used as a part of a marketing strategy to attract customers. Unique selling propositions are factors (like a lower price, better quality, or unique feature) that set a product apart from its competition. Core competencies, which are any processes or skills at which a business excels, are also a type of competitive advantage. When a business is trying to develop a competitive advantage they often first determine the critical success factors, which are any specific work activity or other work-related factors that are necessary to achieve a competitive advantage. So, if a decoration business wants to create a competitive advantage through price, then one of that objective’s critical success factors is the ability of the business to lower its production costs without harming the business’s bottom line.
Understanding the 80/20 Rule
There are often patterns to be found throughout a business. By recognizing these patterns, and using them to their advantage, businesses have the ability to improve their internal processes and generate more revenue. One such pattern is the 80/20 rule, which is also known as the Pareto Principle. The 80/20 rule is a theory that states approximately 80% of a business’s sales come from approximately 20% of its customers. This is especially true of the product decoration industry, where most customers bring in occasional small orders. What is really valuable for a decoration business is the client who brings in larger orders on a regular basis. While it is good to have a mix of each type of customer, these clients with larger orders are where the real money is made.
This pattern is not solely attributed to sales, however, as you can find examples of the 80/20 rule throughout most businesses, and even throughout the world. In fact, Vilfredo Pareto who first noticed this phenomenon did so by discovering that 80% of the peas grown in his garden came from 20% of the pods. Acknowledging this phenomenon allows a business to concentrate its marketing efforts in that 20% because they are that much more valuable than the remaining 80% of customers. However, while a business should focus on that 20%, it should not completely abandon the remaining 80%. That would mean forsaking the opportunity to convert some of that 80% into the 20%, and it would also be ignoring 20% of sales, which is still a significant figure. Recognizing patterns and trends is a large part of marketing for a modern business, and the 80/20 rule merits investigation by businesses looking to develop or improve their marketing strategy.
Business Growth Strategies
A business’s ability to grow is vital to its marketing strategy. Growth strategies often determine the marketing strategy that a business will pursue. Growth strategies plan out how the business will be developed over the years to best position itself in the market. Businesses can grow in a few different ways, including horizontal integration, vertical integration, and diversification.
Horizontal integration is growth of a business through acquisition of a smaller business, or a merger of two businesses, within the same industry. This strategy helps increase the market share of the resulting business. Horizontal integration often has a large impact on the reputation of the resulting business. The acquirer can be considered a bully, and both the acquirer and the merged business can be considered monopolizing the industry. Disney’s acquisition of Lucasfilm is an excellent example of horizontal integration. Disney and Lucasfilm both make movies, and yet Disney’s acquisition of Lucasfilm was a major boon to the company. This is largely because Disney acquired the rights to create the next trilogy of Star Wars movies. It is fairly common for a decoration business to buy another, or at least to buy the clients of another decoration business.
Vertical integration is the growth of a business through a level before or after it is present in the production process. By bringing a new part of the production process in-house, whether by acquisition of another business or through expansion, a business can potentially lower its costs and increase its efficiency. For instance, rather than continuing to allow third party retailers to sell their products and services, Verizon Wireless began opening their own retail stores. In the product decoration industry, it is more likely that a business would insource an activity like sales or a new decoration process instead of attempting to insource production of blank apparel.
Diversification is the growth of a business through a new market and the development of a new product or service. Diversification allows a business to expand without directly impacting its current market. In the product decoration industry, diversification is the most common growth strategy. Since there are so many decoration processes, it is rare that most businesses start out offering more than one or two of them. That leaves room for them to add new decoration processes over time. There are two types of diversification- related and unrelated. Related diversification is a strategy in which a business expands its activities into product lines that are like those it currently offers. This would be like a screen printing business beginning to sell screen print transfers. While the medium being printed on is different, it is still screen printing. Unrelated diversification is a strategy in which a business adds new or unrelated product lines and penetrates new markets. An example of unrelated diversification would be a screen printing business beginning to offer sublimation print products, which have very little overlap with screen printed products.
An Introduction to Creating a Marketing Plan
A business plan is more than just a tool to help acquire investment for a business. Just like the business itself, each section of the business plan is vital to the whole. The marketing plan, however, is one of the most important sections of a business plan. A marketing plan describes activities involved in achieving specific marketing objectives within a set time frame. No business can survive without a steady influx of customers, and an effective marketing plan lays out how the business will obtain those customers. Decoration businesses are always looking for new customers, and they must have a plan in place to be able to increase their reach.
Before efforts to market the business can begin in earnest, there are steps that the business can take to help assure that those efforts are not wasted. The first step is often to set the marketing budget, an estimated amount of total cost that will be required to produce and promote products or services. The budget can be dependent on the revenue of the business, the scale of the marketing efforts needed, or several other factors. For a decoration business, large-scale marketing efforts are unlikely as most have small marketing budgets. Rather, a product decoration business must be intelligent and efficient in its marketing efforts. Accounting for the budget before delving into marketing efforts is an essential step in creating a marketing plan for a decoration business. The budget will dictate exactly what is possible in terms of promotion, and likely what type of media will be used. Decoration businesses these days focus primarily on online marketing, as traditional mass media are both less efficient and more expensive.
Marketing Plan (4Ps)
Once marketing goals and objectives have been decided on, the marketing plan must detail how the business will go about achieving them. Identifying and developing the 4 P’s of the marketing mix (product, price, place, and promotion) is a good way to organize the marketing strategy section of the plan. After all, the old marketing adage is that marketing is about putting the right product, at the right price, in the right place, at the right time. The strategy should focus around any competitive advantages that the business has created, as these points give the business its best chance to be successful. A competitive advantage could come from any of the 4 P’s, as the business might have a unique product, a lower price, a convenient location, or even an excellent promotional strategy.
Conclusion
A marketing plan will in many ways determine just how well a decoration business will fare the market. Even if the business has managed to perfect its operations and decoration processes, the business will not succeed if it cannot find anyone to purchase its products. Marketing efforts will evolve over time, and so the business’s marketing plan, as well as the entire business plan, should be a living document. It will be continuously edited and expanded upon as the business grows. As the business finishes campaigns and achieves its objectives, evaluation of those efforts will ensure that the business is making the most of its marketing budget. With a solid business plan and effective marketing strategy,any decoration business will be poised to succeed from its inception.
