This economic context leads to uncertainty that “agitates” the management teams who must anticipate them to guarantee the growth of their organization. To achieve this, they must build and strengthen their brand, putting the CMO at the forefront because he is the guarantor through his various missions.
explore the situation
A good strategist must first deploy his map, explore his environment, the context and his own equipment. Once this initial work is done, he can finally chart his course. This analogy applies to business. Examining their situation, through market research, can be a good starting point. It will make it possible to know its current and potential customers, as well as their consumption habits. Or to establish the positioning of the brand in relation to the competition and to identify the resources at their disposal.
Then it is necessary to evaluate the implementation of the strategy: which activities were effective, which were not and why? What trends and other market dynamics have had an impact?
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Finally, powerful analytical tools, such as business mix models, can provide an overview of business activities and other influencing factors, in order to measure their effect in a uniform and concrete way.
If the current strategy is not working or if problems in the near future are foreseeable, changes must be made to adapt it.
To take decisions
Michael E. Porter, professor at Harvard Business School, advocates simplifying the concept of “strategy” and viewing it as a clear selection of decisions. These are long-term thinking and aim to develop a competitive advantage. The starting point must be a value proposition: what needs will the company satisfy? Who are its potential customers and what will differentiate it from the competition?
But it’s not just what the company offers to customers (the value proposition) that needs to be clearly differentiated, but also how it’s delivered (the distribution). If these two elements are deliberately matched to the brand’s skills and specific capabilities, the competition will not be able to imitate or offer the same thing more effectively.
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Still according to Porter: “The essence of strategy consists in choosing what one will not do”. “Compromises” therefore play an important role because these are decisions that the brand will not make. They also make it possible to use limited resources in the most promising places, rather than dispersing them.
Take the example of a grocery store. The competitive advantage it wishes to obtain lies in lowering costs. For this, the manager decided not to offer a large selection of different brands, not to fill the shelves but to place the products on the shelves in a space-saving way in pallets or boxes, and to limit the service staff in the checkout area.
So the rule is: less is more. You have to ask yourself, what differentiated value proposition should you aim for? What activities and trade-offs form a value chain that makes the most of key skills? Finally, which could be imitated (or not) by competitors?
Differentiate strategy from tactics
A good strategy generally takes at least three years to produce its full effects. Changing strategic direction every 12 or 18 months wastes time and hinders longer-term growth. Any good marketer knows that building a brand is long-term because it helps secure base sales and gain new customers. According to Binet & Field, this means that ideally 60% of the marketing budget should be invested in brand communication and 40% in performance.
However, in reality, CMOs are under tremendous pressure to deliver short-term results. Therefore, a CMO is reluctantly forced to focus on short-term campaigns in the first year, and gradually increase their investments. This way, short-term goals can be achieved – and at the same time, evidence of the longer-term influence of brand investment can be created.
Think and act long term
The balance between brand investments and performance is of course just one example among many, but it shows the need for long-term planning. In the field of marketing optimization, we often speak of “Adapt, Evolve, Thrive”. The first year (Adaptation), it is important to communicate the objectives set and translate them into the 4 Ps of marketing (product, price, place and promotion). In most cases, the implementation of these new activities is done gradually. Contracts are often still in place, data gaps are discovered, or the effectiveness of a new initiative has yet to be proven. Effective change management is key here.
During the second year (Evolution), the first successes can be measured and the activities readjusted. To this end, processes and data flows have been further standardized and, thanks to the improved data situation, even more detailed information can be obtained and longer-term effects proven.
During the third year (Prosperity), the cycle of strategy definition, tactical implementation, measurement and optimization is finalized. The simulation tools are used independently and other business areas (such as customer relationship management or operations) are integrated into the process. Only then can the success of the underlying strategic decisions be meaningfully assessed.
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A good strategy should be simple at its core. First you have to create an overview of the situation. Then it is crucial to make a small number of decisions that clearly indicate how the brand will differentiate itself in terms of offering and creating value, and what competitive advantage the company wants to obtain. Then – and only then – the tactical implementation must begin. Besides courage and decision-making power, everything requires a good evidence base. Only those who know where the gaps are, where things are working or not, what are the new opportunities, can continually make improvements, assess the quality of decisions and navigate their business safely and agilely in a complex competitive landscape.
Tribune by Clément Bély, Consultant of Analytic Partners France.