Smart Marketing Growth Strategies

This first version of this article appeared in the April 2021 edition of Catalyst - the magazine that provides high quality, exclusive content to members of the UK's Chartered Institute of Marketing.

This is an updated version that uses the additional space available to include extra visuals.

The article draws on thinking from The Smart Marketing Book (UK: lnkd.in/deayvyx; Worldwide: https://lnkd.in/dR7HyCZ).

As businesses get back on their feet after the shock and aftershocks of Covid-19, marketers should take the lead in returning their companies to growth. Marketing budgets are likely to re-build gradually, especially in sectors worst hit by the pandemic, so it makes sense to adopt a staged approach. For example:

1.    Review your marketing strategy

2.    Take some baby steps

3.    Extend your brand

1. Review your marketing strategy

Marketing strategies should always be reviewed regularly but as we emerge from Covid-19, the need to rethink and recalibrate is more important than ever. Start by establishing your strengths and weaknesses. The most effective strategies are inspired by what your brand and company does best and don’t allow your weaknesses to get in the way. Even if your brand has the same benefits as it did before Covid-19, these may have become less, or more, relevant since. If you’re unsure how customers’ priorities have evolved, market research can provide an up-to-date picture of what people want from the category and what they value most about the brand.

Next, consider external threats and opportunities, using the STEEL framework as a reminder of the factors that might help or hinder future success.

Beyond its economic and environmental impact, Covid-19 has affected societal attitudes and behaviours and accelerated the adoption of certain technologies. You can learn about these changes without doing primary research by accessing the many free reports published by research institutions over the past twelve months.

Once your strengths/weaknesses and opportunities/threats are clear, cross-reference them using the ‘SWOT/TOWS’ framework to help identify growth strategies.

The return you achieve from all your marketing activities will depend on the quality of your strategy, so it’s worth allocating enough time and the right people to strategic development. A day spent reviewing and refining your marketing strategy every six to twelve months is an excellent investment.

2. Take some baby steps

If your marketing budget is modest during the early phase of recovery, you will need ingenuity and creativity to maximise its impact. Identify activities that cost little to implement but will provide a good return on investment if executed with style and flair. Here are a few illustrations of what’s possible.

Limited Editions

Limited editions of a product are often a good way to draw attention to your brand, boost its salience and drive sales. Walkers crisps used this tactic to great effect in 2008, 2012 and 2017. The public was asked to vote for their favourite flavour. This encouraged trial and generated considerable word of mouth and awareness for the brand. Limited editions are particularly effective if your brand has a community of enthusiastic followers. The psychological effect known as the ‘scarcity principle’ means that people value something more if it’s rare and are more likely to talk about. Car manufacturers exploit this by producing special versions of their flagship models. In 2011, Fiat teamed up with fashion brand Gucci to design a special edition of the Fiat 500 featuring a striking convertible roof, Gucci seatbelts and a velvet-effect radio panel. Only 3,000 were produced.

Packaging

Packaging innovation can stimulate growth without necessarily affecting production costs significantly. In 1963, the Pittsburgh’s Iron City Brewing Company bought the licence for a new ring pull design so that their beers would be easier to open and increased sales by 233% within a year. In the 1980s, dairy product manufacturer Muller introduced ‘Muller Corner’, a yogurt with a separate compartment that allowed different flavours to be added to the plain yogurt just before eating. This helped the brand become market leader in the UK and the same design helped Chobani dominate the US market with ‘Chobani Flip’ in 2013.

In recent years, innovations in packaging that reduce environmental impact have captured the public’s imagination. Many of the world’s biggest brands are developing eco-friendly alternatives. In 2019, Carlsberg unveiled a new bottle made from recyclable wood fibres and Adidas is set to launch the world’s first fully recyclable shoe, Futurecraft Loop, later in 2021.

Competitions

Competitions have always offered marketers a low-cost way to publicise their brand. Since 1987, McDonalds has run a competition for a limited period each year based on the Monopoly board game. Diners collect tokens corresponding to a property space on the Monopoly board to win a cash prize or free item from the McDonald’s menu. 

Any brand can run a competition and publicise it cost-effectively via social media. The ideal competition encourages trial whilst reinforcing the brand’s core values. US cosmetics brand Sephora ran a competition on Facebook to win a surfing holiday in Costa Rica to promote its Surf range. The theme reinforced the appeal of the product and the grand prize was attractive to the brand’s young, fashion conscious target.

Competitions like this are easy to execute but have the potential to pay back many times over through their impact on both short and long term sales.

Collectables

In 2019, M&S introduced its ‘Little Shop’ promotion, the first UK example of an idea that has proved effective for retailers across the globe. For every ￡20 spent in M&S Foodhalls, shoppers received a miniature model of an M&S product, to put in a toy basket or trolley. The scheme appealed to children in particular, keeping them happy during the weekly shop, thereby encouraging parents to visit M&S.

Between 2011 and 2018, insurance price comparison site Comparethemarket.com gave all new customers a collectable toy meerkat, based on the characters in the brand’s famous advertising campaign. The promotion injected fun into an otherwise dull category and helped the brand consolidate its dominant position in the market. 

Collectables schemes work in a similar way to competitions - keeping the brand salient and providing another reason for people to choose it or return to it.

Service enhancements

For service companies, growth can often be achieved by rectifying aspects of customer service that detract from sales conversion, retention or advocacy. The Customer Interaction Performance Grid, taken from The Smart Marketing Book, highlights the five stages of a typical purchase journey and four criteria that determine how positive the experience is for customers.

Brands can improve their customer experience dramatically by taking three steps, guided by market research as needed:

1)   Determine how well the brand performs in each box

2)   Establish which areas have most influence on satisfaction

3)   Make changes in the most influential areas where the brand is currently weak

3. Extend your brand

When it comes to defining your long-term growth strategy, the first question to ask is: should I continue promoting existing products to the current market, extend to a wider audience or introduce new products? These options are captured in the matrix introduced by mathematician and business leader Igor Ansoff in 1957.

The answer depends on multiple variables, but some of the key considerations are:

·     What growth remains from existing products and markets?

·     How much time and money would it cost to take our products to new markets?

·     Do we have new products in the pipeline with strong potential?

The choice of strategy is vital because it governs where the whole company’s time and money should be focussed.

Market penetration

This strategy is for companies with a product that is stronger than competitors but hasn’t yet been discovered by much of its target audience. In other words, it still has a lot of ‘headroom’ for growth that could be unlocked by investing further in distribution-building, sales and marketing.

Market development

This is an effective strategy if the brand is reaching saturation in its current market but could replicate its success among different types of consumer or in new geographies. Success depends on delivering impactful marketing activity, as well as efficient ways to reach new audiences.

Product development

This is a viable strategy if existing customers have a high regard for the brand and would be receptive to new products it offers. UK fast food chain Leon, for example, has used its distinctive visual style and association with wholesome Mediterranean food to launch a successful range of cookbooks, cookware and tableware products. If the brand’s associations are a poor fit, however, the chances of success are slim. Dental products brand Colgate launched a range of frozen meals in 1982, which did not sell well and were soon discontinued.

Diversification

This strategy is rare since it requires the company to have enough money to develop new products and expand geographically at the same time. This only occurs if the company has a technology or capability that is way ahead of the curve and has plentiful financial backing.

Brand licensing offers a way to expand quickly with less money. If a brand is widely known and popular, it could consider licensing other companies to develop and sell products using the brand name in return for royalties. This allows the brand owner to generate profit from other categories without investing time and money developing new capabilities. Disney was one of the first companies to license its assets and continues to multiply its profits by partnering third parties.

Conclusions

As businesses finally move away from survival mode and look to the future, marketers will be able to do what they do best - inspire and engineer growth. With a well-researched, multi-stage strategy in place, they can start to make progress even with a modest budget. Baby-steps can involve low-cost activities executed with imagination. If these go well, the money generated can fuel more ambitious brand extensions that unlock major growth. Despite all the economic problems Covid-19 has created, there is cause for optimism for many sectors. As the global lockdown is eased, people whose livelihood has not been affected by the pandemic will be receptive to brands that allow them to get back to normal and live life to the full once again. Let’s put the right marketing in place so we can all let’s enjoy the ride!