Go To Market Strategy Mckinsey – Great marketing starts with a strong customer value proposition. No amount of marketing can overcome a weak value proposition. Leadership often blames marketing for the company’s real problems, when the reason is a weak value proposition.
If you start with a strong value proposition, an effective marketing strategy can reinforce that proposition to target customers and unlock the company’s growth potential.
Go To Market Strategy Mckinsey
The value proposition is the rational and emotional benefits that customers receive from products and services, minus the price that customers pay as part of competitors’ value propositions.
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Since 1967, Southwest Airlines has focused on being the cheapest and most affordable airline on the market. Their “Transparency” campaign and message reinforces the rational differentiation of their value proposition, which consists of low prices and additional fees. There is also an extensive network of point-to-point routes to get you from point A to point B efficiently, along with the most missed double points. The success of the business model and marketing made it the largest airline in the United States, carrying 350,000,000 passengers a day.
One aspect of Southwest’s campaigns is its “Love” messaging, which prioritizes its excellent service, people and benefits over race. This embraces the emotional side of the customer value proposition and is supported by the highest standards of customer satisfaction and quality.
Marketing communication is enhanced through marketing channels. There are four main types of markets. Categorized by ROI standard, they are promotional channels, proprietary channels, distribution channels and paid. Details of these channels are below.
Southwest consistently implements its messages of “Openness” and “Love” through advertising channels, owned media and paid channels. Interestingly, they do not use third party distribution (eg Expedia, Travel Agencies) to compress the value chain and cost structure and pass these savings on to customers in the form of lower prices.
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At the heart of an effective marketing strategy is an understanding of the gaps and opportunities in a company’s customer buying context. Campaigns and programs are strategically positioned to increase customer awareness, feedback, conversion, loyalty and advocacy, ultimately driving growth.
Southwest uses paid channels to increase customer awareness and feedback, and uses social media to drive engagement, conversion and loyalty, especially loyalty and advocacy. When Southwest opens in a new city, they increase their spending on paid channels (such as advertising, events, online and TV ads) to raise awareness.
Experiment and learn from different combinations of communication, media, timing and how top marketing teams drive ROI on their ad budget and scarce resources. Read our Experiments and Hypotheses sections to learn more.
The first result of a marketing strategy is the campaign. A campaign consists of target customers, objectives, messages, creative, media mix, budget and schedule. Campaigns define “what” the marketing team offers. If the campaign can uniquely communicate and reinforce the differentiation of the value proposition to the right target customers through effective channels, marketing will drive growth.
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The second output of the marketing strategy is the marketing operations strategy, which describes the overall goals and initiatives of the marketing team. Goals can be about marketing assets (eg web traffic, social, loyalty program), ROI, sales, branding and other metrics. Key initiatives focus on improving the organization’s processes, people, infrastructure and partners.
To create an effective marketing strategy, you need to follow the four steps above. People often get stuck on how much effort they need to put into these four steps. For some teams, solving deep problems over several days or combining these four steps with management is the right answer. For some teams, if the stakes are high and the options a little vague, it may take a months-long marketing strategy project to get the right response.
To create a successful campaign and marketing strategy, you need to dive into insights about your target customers, customer journeys and value proposition. It’s nearly impossible to create a killer campaign and marketing strategy without having a distinct customer journey and value proposition. As you and your team conduct research and insights emerge, turn insights into potential marketing strategy and campaign ideas.
Who is your target customer? What is important to them? What motivates them to buy? What is their media use/consumption?
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What are the purchase methods and decision criteria? What are your customer funnel metrics and competition?
What is the value proposition difference? How does the price compare to competitors?
The best marketing teams are constantly improving their marketing assets and campaign ROI by leveraging new and evolving technology. To optimize, first base your marketing assets, campaign ROI and marketing trends.
What are the marketing trends and innovations in the market? Where are the white spots on the market?
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Once you’ve created strategic concepts and grounded your marketing, it’s time to develop your campaign and get your creative juices flowing. The end result of any solid marketing strategy is a great campaign that will strategically grow and improve conversion at the customer’s point of purchase (i.e. awareness, consideration, conversion, loyalty and advocacy). The three elements of a great campaign are: campaign objectives, creative messaging, media mix, and schedule.
What are the strategic objectives of the campaign? What are the financial budget and high-level ROI/measures of success?
What is the key creative message to reinforce the value proposition to target customers? How will creativity live in all marketing assets?
What high ROI media mix fits the customer journey and funnel gaps? What is the campaign schedule?
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It should summarize the perfect campaign into a one-page plan that synthesizes the client’s goals, opportunities, objectives, distinct messages, creative, campaign schedule by media channel, and overall budget.
The engine that creates and executes marketing processes and campaigns. Developing a marketing plan to improve organizational effectiveness and efficiency will increase marketing ROI and impact. A marketing performance plan includes improvement initiatives for the marketing team’s operations, people, partners and infrastructure.
Synthesizing your marketing strategy into one simple page will help you prioritize, communicate, and execute your strategy. For key metrics on a page, goals and objectives should include the initiatives needed to achieve the goals.
Effective marketing has the potential to enhance the development of a strong value proposition by strengthening customer-oriented value. As you develop your marketing strategy, focus on creating a strong campaign and marketing operations plan based on results, insights and analytics, and learning to optimize messaging, media mix and timing through creative messaging and ongoing testing. If you need to develop a marketing strategy, schedule some time with me and we’ll start figuring it out together.
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I look forward to receiving new ideas and perspectives. If you want my contributor endorsement, Joe Newsum, spend some time here. I am a McKinsey alumnus with extensive experience as CEO of the 9th fastest growing company in the US, managing a $120 million marketing budget, leading the transformation of 20,000 employees, and successfully leading two companies from the ground up. 25 years of experience. I love coaching clients and they get great value too. You can see some of their testimonials here. I have deep experience in this area, strategic planning, career development, promotion, workshops, leadership, developing and delivering presentations, onboarding new roles and more. Read my thoughts on developing a strategy. Click here to learn more about me or book some time. Many people agree that the COVID-19 pandemic will have a long-term impact on our economic structure and may be the opposite of the Great Depression. What the next chapter will be is difficult to determine at this point, but I believe we can revisit much of our recent past to prepare for the future. I think McKinsey & Company can be a great example because there is so much quality content out there for so many of us.
Disclaimer: I have no experience with McKinsey and base everything I write on an outside perspective.
A good starting point is Chris Bradley’s explanation of The Power Curve and an assessment of where a company is positioned. This video list is a great collection for additional information.
After looking at it, I think it’s pretty clear that a lot of the curve is going to disappear no matter what industry you’re in because of the current economic climate. Surprisingly, don’t sell the bottom as quickly as in most recessions, it’s the lost middle. People reduce risk by turning to better-known, higher-quality brands or by choosing lower prices that allow for lower out-of-pocket expenses.
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Once you’ve settled in, think about how you approach the job.