What is marketing strategy? (CEO Journal).

I received an e-mail the other day from a friend. He wrote to ask my advice about marketing strategy, a subject we've discussed many times in the past. He asked my opinion about university-level continuing education courses in the subject. I advised him not to attend because these courses are rarely manufacturing oriented and never adequately address the concerns of a basic industrial business like ours.

My advice to him, and now to you, is to read a few good books instead. I suggested that if he wanted to learn about foundry marketing strategy, he should read about market research-based planning, manufacturing strategy and strategic industrial selling. Here's what he'd learn if he took my advice.

First, he'd learn that marketing strategy is altogether different from business strategy and that marketing planning also is different from business (strategic) planning. Creating a winning marketing strategy does not involve developing a mission statement, deciding what business your company should be in, or determining what manufacturing capabilities it should have. These issues are the proper domains of strategic business planning.

On the other hand, a company's strategic business plan also is the genesis of its marketing strategy. Marketing strategists need to understand the mechanics of business planning. This includes the market research that underpins it as well as the marketing implications of the plan's "strategic" aspects. Moreover, my friend would recognize that his foundry already has invested millions in manufacturing technology, and he could not afford to abandon it in search of the illusive "unmet market need."

My friend also would learn that marketing strategy is rooted in market research (information about customer markets), strategic business planning and manufacturing strategy (which defines how the foundry's manufacturing capabilities create synergy with the company's overall business strategy).

Next, he'd learn that marketing strategy is all about translating manufacturing strategy and capabilities (existing and planned) into terms that are meaningful for the marketing effort and customers. These include weight, size and volume mix, annual and order quantities, core intensity, process complexity (non-destructive testing, secondary operations, etc.), alloy mix and so on.

Finally, he'd learn that marketing strategy is about differentiating his company's product and service offerings from that of its competition. The marketing planning process must include sufficient customer market research so that a package of products and services (such as guaranteed delivery or quality) can be developed to enable the foundry to win business from entrenched competitors without simply slashing prices. This also means that the marketing planning process must be intimate with the manufacturing planning process so that the messages carried to the marketplace by the marketing team actually can be delivered by the manufacturing team.

Planning Marketing Tactics

That's where the strategic part of marketing strategy ends, but do not make the mistake of underestimating the power of what has been accomplished so far in the process. If all has gone as it should, a market research-based business plan and powerful mission statement (see "Igniting a Turnaround" MODERN CASTING, February 2002 for more on this subject) have been created. You've ensured that the business and manufacturing strategies are synergistic and that the manufacturing and marketing strategies are synergistic.

Where does the foundry marketing strategist go from here? On to the planning of marketing tactics. Personal selling is 90% of the industrial marketing effort and the hallmarks of effective personal selling are strong sales management, strong account management and knowledge-based pricing. So focus your efforts here, as they can have a much more powerful impact on your business' success than advertising, web site development, trade shows and brochures.

In closing, I recommend to both my friend the e-mail writer and to you the reader a few marketing and strategy books that I found helpful: Michael Porter's Competitive Strategy (especially the chapter on mature Industries), Wickham Skinner's Manufacturing Strategy and Strategic Selling by Robert Miller and Stephen Heiman. I further encourage you to seek out those who have been through the marketing planning process in their own foundries, as their experiences can do much to enlighten and enable those who seek to apply the theories contained in books and university classrooms.