| When the going gets tough, the tough get, well, | | | | built or acquired, but it may take quite some time |
| strategic! Let's face it, that is not the normal reaction | | | | before those new strengths are believable in the |
| of businesses that are performing at a sub-par level. | | | | marketplace. An effective market strategy will |
| The normal reaction is to begin slashing costs. | | | | underscore the strengths that are already perceived |
| However, while cost improvements without sacrificing | | | | and accepted by stakeholders. In essence, a |
| quality are always welcome, they are rarely the | | | | company's market strategy and its core strengths |
| answer to putting businesses on a pathway to | | | | become strongly linked, both externally and internally, |
| sustained growth and profitability. For that, | | | | with each supporting and strengthening the other. |
| businesses need to think and manage more | | | | Natural Customer Base |
| strategically. More specifically, they need a strategic | | | | An effective market strategy must appeal strongly |
| management process. | | | | to a customer base that is large enough to support a |
| An effective strategic management process can be | | | | company's financial objectives. There are cases |
| defined as having four major stages: | | | | where it appeals strongly to an entire broad-based |
| - Definition Stage, which culminates in the selection of | | | | market. However, those cases are rare indeed. More |
| a market strategy. | | | | likely, a company will need to do a segmentation |
| - Translation Stage, which deals with business | | | | analysis of the market to identify the segment, or |
| philosophy. | | | | segments, of customers that will embrace the |
| - Building Stage, the focus of which is designing | | | | company's market strategy and become the |
| performance measurement systems. | | | | company's natural customer base. The segmentation |
| - Operating Stage, which creates a continuous | | | | analysis should be deep enough to identify all the |
| improvement environment.The purpose of this brief | | | | various segments of the market, along with the |
| article is to review a few of the most important | | | | demographic attributes associated with each |
| elements of the first stage, or the Definition Stage, | | | | segment. |
| of a strategic management process. While all stages | | | | Buying Factors |
| of the process are important, the first stage is | | | | Buying factors can be thought of as "triggers" in the |
| perhaps the most exciting, because within it, | | | | selling and buying process, that either encourage |
| businesses define their market strategies. That | | | | customers to buy or discourage customers from |
| provides visible evidence that the companies are at | | | | buying. Many companies never really address buying |
| least beginning to think strategically. | | | | factors. That is a mistake. It takes a lot of hard |
| Market Strategy | | | | work to craft an effective market strategy and to |
| Many companies believe that, once they have | | | | identify a natural base of customers that will |
| defined their market strategy, their strategic process | | | | embrace that market strategy. That hard work can |
| is completed. Of course, nothing could be further | | | | be wasted if companies do not understand the |
| from the truth. However, there is no doubt that | | | | factors that can cause customers to make positive, |
| having an effective market strategy is critically | | | | or negative, buying decisions. Many times, buying |
| important to success. So, what makes a market | | | | factors can be obvious extensions of companies' |
| strategy effective? There are two attributes that | | | | market strategies and natural customer bases. |
| must be in place. | | | | However, it is important that companies recognize |
| Perhaps the most important attribute is | | | | and understand those buying factors and adjust their |
| differentiation. A company's market strategy must | | | | approaches in the marketplace based on them. |
| clearly differentiate them from competition. The | | | | While cost reductions can relieve stress on |
| emphasis here is on "clearly". It will clearly and | | | | companies that are performing at a sub-par level, |
| uniquely identify a company in the views of all | | | | strategic management is the answer to them |
| stakeholders, such as customers, suppliers, | | | | achieving long-term growth and profitability. Defining |
| employees, and shareholders. | | | | an effective market strategy, along with a natural |
| Secondly, an effective market strategy must build on | | | | customer base and buying factors, is the first step |
| a company's core strengths. New strengths can be | | | | on the pathway to better sustained performance. |