Benefiting From Multiple Marketing Models, Part 1

This is the first installment of a two-part series about competitive, growth, multichannel and customer segmentation strategies. What I believe you'll find new in this article is the integrated use of consumer package goods (CPG), transactional and retail store strategies. And although the examples are B-to-C, many of the following strategies are applicable to B-to-B too.

Competitive Strategies
Competitive strategies refers to market segmentation, development indexes, product portfolio, pricing (different than prices), "driver items," sales channel and other strategies that determine how you will compete in the future.

Let's consider category and brand development indexes (CDI and BDI). The indexes allow you to quantify which markets are most attractive, help you identify where you underperform and overperform, and why, helping you increase sales in existing markets and prioritize new growth opportunities.

Often used with geographic markets by CPG manufacturers, you can use almost any market segmentation criteria. I used demographics and geography for a manufacturer selling online and through nationwide retailers.

The first step was to look at industry sales by state, listed as an index per 10,000 women between the ages of 25-34 (the core demographic) vs. for the country in total, arriving at a CDI for each state. Next, we looked at the manufacturer's sales, also as an index of sales per 10,000 women ages 25-34 for the country overall and for each state, creating a BDI for each state.

With the CDI and BDI figured out, we then identified which markets were more (and less) responsive to the manufacturer's products compared to the industry. In addition, we started to contemplate why certain markets outperformed others, identified shorter-term growth opportunities where the manufacturer was outperforming the industry, and began the longer-term strategy of improving competitiveness in markets the manufacturer underperformed in.

This example focused on only one of the six competitive strategies I listed above. If you picked up actionable insights with this example, you can expect to do the same with the others.

Growth Strategies
There are a handful of ways to grow a business long term: new sales channels, new products, new markets, market/customer penetration and diversification.

To illustrate the integrated use of growth strategies across business models for cross-channel marketing, the following is from a brand launch that included new markets and penetration strategies for a company selling via an e-commerce website and retail stores.

With e-commerce sales growing more rapidly, but retail store sales still accounting for a larger percentage of overall sales, the client needed an integrated strategy for both channels. For launch, we prioritized increasing sales through existing retail stores. However, given our market share, we needed to make sure we didn't cannibalize existing sales.

Conducting research with our client, we identified its needs, which products it sold most of, who its competitors were, and what differentiated it from those competitors. Also, we identified the largest, most rapidly growing consumer segment, as well as what their needs were — a segment of consumers whose purchases were rapidly moving online.

Armed with this research, we developed a product line as well as pricing and merchandising strategies, and launched a brand to increase sales in existing sales channels and to develop new market segments.

The results included the client's best sell-in to retailers in years, a partnership with a national retail chain for the product launch, and the ability to target a growing consumer market segment where there was less competition.

What I find works best with growth strategies is to try to simultaneously test a few markets, product assortments and channels to identify the sweet spots as quickly as possible.

In part two of this series, to be published tomorrow, I'll discuss multichannel and customer segmentation strategies.

Note: Though not addressed here, before you develop your strategies, conduct market analysis (e.g., market segmentation, trends, growth drivers, etc.), competitive analysis (e.g., product portfolios, pricing, channels, etc.) and a SWOT analysis to guide you.

Paul Becker's professional experience includes senior marketing and e-commerce positions with Ancestry.com, Hasbro, the United States Mint and eInvite.com. Paul can be reached at pbecker123@gmail.com.