Can smartphone makers Apple and Xiaomi use similar marketing strategies? No, they cannot.
There could be a slight overlap, however their core strategy will be totally different. For example, both may promote design features. However the core marketing message would be different. Audience targeting too can’t be the same. While Xiaomi talks about cost effectiveness, Apple’s entire strategy is based on differentiation.
Marketing strategies have to be aligned to the overall business level strategy.
What should be your brief for the marketing team or agency? If you follow a business level strategy similar to Apple, you cannot use “cheap”, “cost effective” as your marketing theme.
Who you target and what you say has to be a reflection of the firm’s business level strategy.
What is business level strategy?
Business level strategy is a firm’s roadmap and action plan to increase market share and stay ahead of the competition. It defines how the firm plans to provide value to its customers and develop a competitive advantage.
Michael Porter advocated three business level strategies for firms:
- Cost Leadership strategy – stay ahead of the competition by manufacturing products or providing services at a lower cost that your competitors. This has to be the most common business level strategy
- Differentiation strategy – this is when a firm distinguishes its offering based on unique or significantly better features (design, technology, superior performance or customer service, specifications etc.)
- Focus strategy – to target a niche or specific, smaller segment of the market
How does business level strategy give direction to marketing strategies?
As a marketer, you are often expected to hit the bull’s eye. Create a campaign, reach out to the target audience and get leads and inquiries to meet the sales goals. Well, you may not be asked to hit the bull’s eye all the time. But you for sure are expected to be close to the bull’s eye.
Now what do you need the most to hit the bull’s eye?
A bow and an arrow yes. However, what you need the most is the “bull’s eye”.
You may use a stone if need be, but even if you are the best of the archers, you will miss if you don’t know what target to hit.
This is where the business level strategy influences the firm’s marketing strategies.
The business level strategy defines the following:
- Who is the buyer?
- What are we selling?
- Why does the buyer care?
Who is the buyer?
In my previous post (What are the best strategies for marketing your small business?), I have discussed how important it is to “know your customer”. The answer to “who is my customer” cannot be broad and vague.
The marketing team will get it all wrong if they are not chasing the real buyer. Define the geography and demography for your buyers. Each group has different likes and dislikes. The channels and strategies will vary based on who you need to target and engage.
Are you planning to sell to senior citizens? People in their 50s or 60s living alone. Or are you targeting senior citizens living with their children or grandchildren? Is your buyer group old people with a guaranteed source of income such as pension or insurance? Or do you need to connect to old people who are struggling with their daily finances and need help?
Especially if you run a small business, do not give too big a market to your marketing team. If you want them to hit the bull’s eye, take them closer to the bull.
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What are we selling?
Okay, this is not to be taken literally. It is a straightforward answer – selling a smartphone or selling an insurance policy.
The answer to this question is “what features or benefits” are we selling to the buyer.
Like Apple, are your selling the best performance and design? Or like Xiaomi, are you selling a smartphone that “meets expectations” at a significantly lower cost?
Knowing the “what” determines “how” we communicate to the buyers.
Why does the buyer care?
Never leave this unanswered.
Recently there was a lot of debate on whether Grofers made the right move by rebranding the company Blinkit. Grofers pivoted to a new business level strategy – “everything delivered in 10 minutes”.
There are competing viewpoints to the company’s new mission “to make commerce faster and more sustainable”.
The core think tank at the company would surely have debated and answered this question: “Does the customer care enough for a 10 minutes grocery delivery?”
Without a lot of research and consumer insights, this would be a very expensive move.
Whatever be your business strategy, cost or differentiation, you need to know why does the buyer care. Again, this allows the marketing brains to address the “Why” in their communication.
Conclusion: Impact of business level strategies on marketing strategies
When spending time, money and resources to reach out to your prospective buyers, you would be planning to fail if you leave the “who, what and why” uncovered.
- Who is the buyer?
- What are we selling?
- Why does the buyer care?
The “how” and “where” to communicate comes for figuring out the “who, what and why”.
If you would like to discuss and validate your firm’s marketing strategy, send me a message or hit me up on Twitter or LinkedIn.
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