Marketing 101: SWOT => STP

When I ask the question, “What is marketing?” the most common response I get is “Advertising.”  The purpose of this Weekly Insight is to argue that advertising is but one part of your overall promotional mix, which is part of your overall marketing mix, which…well, let me start from the beginning.

Many and varied are the modern definitions of marketing.  I have selected two definitions that I believe capture the essence of marketing:

·        Managing profitable customer relationships

·        Meeting needs profitably

Note that the word “profitable” shows up in both definitions.  Why?  (1) If you’re not profitable, eventually, you’re just NOT.  (2) This “profitability” must flow both ways.  That is, you must provide value to your customer (i.e., be profitable to him) and your customer must allow you to capture a portion of that value in profit for your organization.

“Match” is another key word in this discussion.  There must be a “match” between what you can provide and what the customer needs/wants.  I disagree with the old saying, “Build a better mousetrap and the world will beat a path to your door.”  They’ll only come to your door if they need a better mousetrap and yours provides them with the best value! 

Conducting a SWOT analysis will help you determine your match or fit in the marketplace.  The acronym stands for “Strengths, Weaknesses, Opportunities, and Threats.”  The SW provides an inside look at your organization.  The OT provides an outside look at the marketplace.  This outside look must consider all the environmental forces that may have an impact on your organization (e.g., technology, government, cultural trends, demographic shifts, the state of the economy, etc.).  The goal is to match your strengths with opportunities in the marketplace and to counter threats you may find there as well.  Your weaknesses must be put on the table as well, particularly in those areas where your competitors are strong.

Once you’ve gained an understanding of who you are in the context of the marketplace as a whole, it’s time to think about whom to target with your value proposition.  For example, Daystar Consulting, Inc. is a management consulting firm.  In theory, I could attempt to reach any and all organizations since all organizations have to be managed, right?  Wrong.  There are a number of

reasons why this won’t work.  First, not all organizations need what I offer.  And, second, I don’t have the financial resources to reach all organizations.  Thus, I must segment (the S in STP) all potential organizations of interest in such a way that each segment is homogeneous but different from other segments in meaningful ways.  

For me, I choose to focus on one segment: Christian-owned organizations that employ 10-250 people.  Why?  My value proposition comes from my experience as a Christian executive working in both secular corporate America and in a Christian-owned company, and also from my research, now as an academic, regarding the integration of faith and business.  I believe that organizations with at least 10 employees may find value in my counsel (and have a budget for consulting). Also, I don’t have the resources available to help solve problems for large organizations.  This segment (Christian-owned organizations that employ 10-250 people) is my target market (the T in STP).   

Positioning

At this point, after you conduct a thorough SWOT, segment your market and select one or more segments to target, you will have answered two questions:

• What are the benefits of my product or service?
• Who will want to buy what I have to offer?

The next step is very critical.  How do I want to influence my target market to think about my product/service, in light of my competition?  That is, why will anyone in my target market want to buy from me?   

But before we delve into the details of developing a positioning statement and its value in developing your marketing tools (see the next Weekly Insight), we should consider what motivates us to do all this to begin with.  Here is where the Christian worldview has great influence.  What is our motivation to succeed in the marketplace?  Some thoughts to consider include: 

• To be creative (we are created in the image of our creator God)
• To serve Christ by serving others
• To demonstrate love in all marketplace relationships we develop

Marketing is a very powerful tool.  With the proper motivation (to serve selflessly) and the proper methods (ethical), we can improve marketing’s current image (think telemarketers) and provide value to each and every one of our organization’s stakeholders.  So...how would you evaluate your organization’s marketing? 

Keith 

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