Tuesday, October 01, 2019

MBA in a Nutshell #7 - Marketing : Market Strategy

From the last article, I have only advanced one page of text. Marketing strategies are surprisingly simple consisting only of three basic strategies which I share below :

a) Concentrated strategy

When you apply a concentrated strategy, you have an intimate understanding of the customer and can produce a product that caters only to this target market.

As trainers, we can do more of this and yet not fall into the trap of competing for every soul out there in the market. Sadly we don't do this well enough in this industry yet.

One example outside my expertise is a financial program tailored to employees of a particular company. Succeeding in one sale made to HR translates to many students in a program. What is stopping me right now is what kind of sane company will pay to have someone teach their employees to retire before their 40s. It might make sense before a major retrenchment exercise though...

Another possibility is a course on couple finances that allows dating or married couple to participate in planning their finances together. Again, this unlocks the possibility of working with SDN and gaining a captive audience. 

Oh, how much I would love a captive audience from my stand-point at the moment !

b) Differentiated Strategy

A differentiated strategy breaks the customer down into multiple segments and then attempts to come up with a product to target each segment. This is more common in my field because my partner Dr Wealth has different programs catering to different kinds of investors.

This is a practical strategy because different product lines can target complementary segments that expand the revenue broadly.

Personally, I believe that a profitable line targetting Millenials and Gen Z exists in this space right now but I think no one has yet to figure out how to create a useful program that fits within the price point most Millenials are willing to pay for.

The conventional train of thought is that Millenials are too poor to pay for an investment program. My train of thought is that Millenials are too poor NOT to pay for  a good investment program. That is because they have the longest time to compound any investment that they can get into.

c) Undifferentiated Strategy

The undifferentiated strategy creates a product that is not targeted at any segment much like products like Coke or Tide detergent.

I think a lot of training programs fall into this category because of general ignorance of the program developer. These guys are typically finance and not marketing people.

While trainers know quite a bit about value investing, for example. I believe that it's a mistake to think that it works for all segments of society. If someone's investing methodology does not enable dividends, for example, then it is best not to target senior citizens who need dividends to pay their regular bills. In similar vein, a heavily quantitative program has no choice but to sacrifice poets and humanities majors who balk at the lack of a good story behind every investment move they make and a different program will cater to them much better.

You can actually assess an investment training program based on how careful the provider is at who the program is meant to target. An inexperienced provider will always claim that their investment know-how works for everyone who can live and breathe but someone with some experience will be able to safely tell you who is program best designed for.

I don't believe in a one-size-fits-all strategy. An investment methodology that works for everyone, in essence, works for no one.

1 comment:

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