I have been working with a management team who have dreams of growing their small business by developing their market offering. Most small businesses grow because the products and services that they offer happen to find favour with their customers. How refreshing it is to work with business people who plan for growth.
We started by reviewing the marketing strategies that Bill, Gary and Tim have for their four products. Some products are doing well but one of them needs to be re-positioned in the market and Tim worried about how this might change the company strategy.
Options in Your Market
For each product, we explored four distinctive marketing strategies:
1. Penetrate your current market to reach more customers (with your current product).
2. Extend your marketing to reach customers in new markets (with your current product).
3. Develop a new product for your current customers (to replace the current product).
4. Diversify the products you offer in ways that complement your current product.
Small companies tend follow one strategy for each product at a time and, as Bill rightly pointed out, it takes 18 months to properly test the market response to a strategy change. So we discussed the strategy for the product A.
Gary is the technical design member on the team so he liked the third approach – selling new products and services to the current clients.
Bill has more sales skills and favoured the first approach (selling the existing products and services to new clients who are similar to the current clientèle) together with the second approach (reaching clients in new areas of the market).
Options with Your Products
For each product, the team considered, discussed, argued and finally agreed what they wanted to do. Next we folded the ‘product strategies’ into a ‘company strategy’ by working out how the marketing of each product would impact the marketing of the others.
This resulted in a decision to treat products A and D as a pair and to find complementary products for the B and C products – aiming to have seven products in their portfolio by next year.
Building the strategy into the business plans
With this company strategy, Tim then amended the Business Plan to reflect the decisions taken while Bill and Gary amended their respective Marketing and Production Plans.
How their clients respond to the new marketing push will be interesting and Tim, Gary and Bill will need to amend their plans as they see what happens. My hope is that developing their marketing portfolio like this, they will have more control of where their company is going and what their clients buy from them.