The Secret to Success: Creating Value (Part 3)

The G-STIC Framework (cont.)

T – Designing the Tactics

Tactics are the set of activities that are used to execute a specific strategy. These tactics are defined by seven elements, commonly referred to as the marketing mix. These are the key decisions that build on the marketing strategy.

Product: It’s key functional characteristics. Implies transfer of ownership.

Service: Also reflects functional characteristics, but does not transfer ownership. Services are inseparable from service providers. 

Brand: Create a unique set of associations that enhances the product/service value beyond simply the functional benefits.

Price: The amount of money the business charges for the product/service

Incentives: Tools used to enhance the value for customers, collaborators, and/or employees. Can be monetary or non-monetary.

Communication: Informs current and potential clients about the offering. Can include elements from the other six marketing mix variables.

Distribution: The channels by which the client receives the offering.

I – Defining the Implementation Plan

Implementation is the logistics of executing the offerings strategy and tactics. There are three main components.

Business Infrastructure: Refers to the organizational structure. Involves identifying the business unit in charge of the offering, and identifying key personnel and collaborators.

Business Processes: Depict the activities involved in designing and managing the offering (flow of information, goods, and money).

Implementation Schedule: Identifies the sequence and time frame for tasks to be performed.

C – Identifying Controls

Controls serve two functions: to evaluate a business’s progress toward its goals and to analyze the changes in the business’s environment.

Performance Evaluation: Monitors the business’s progress toward reaching goals and maximizing performance.  

Environmental Analysis: Monitors the environment to be sure that the action plan remains optimal.

Conclusion

A visual representation of the G-STIC framework as described in the action plans that we’ve presented in the previous two posts can be seen below.

 Figure 1: The G-STIC Action Planning Pyramid

Because the purpose of any marketing plan is to guide the business’s actions, this framework is the most important component that will determine the viability of the marketing plan.

The Secret to Success: Create Value (Part 2)

The G-STIC Framework 

G - Setting a Goal

This is a pivotal part of the strategic planning process. Without a clearly defined goal, the other elements of the value creation process, and the overall success of the business, are doomed for failure.

There are two decisions involved with goal setting: identifying the focus of the businesses actions and setting specific benchmarks for measuring the business’s performance. The focus determines the key element of a business’s success and often includes elements such as net income, sales revenues, and market share.  Benchmarking looks at the goal and defines its temporal and quantitative aspects.

S - Developing a Strategy

A strategy outlines the activities that are needed to accomplish the business’s goals. This element is characterized by two key decisions: Identifying target customers and developing a value proposition.

The markets in which a business’s offerings compete can be best illustrated by the 5-C framework.

Figure 1: The 5-C Framework

Customers: Potential buyers who have needs that the business’s offerings aim to fulfill

Company: The business managing the offering

Collaborators: Entities that work with the business to create value for target customers

Competitors: Business’s whose offerings target the same customers

Context: Relative aspects of the environment in which the business operates

Target Market

Identifying your target market involves two key decisions: selecting which clients to serve and identifying actionable methods for reaching these clients.  Selecting which clients to serve, also known as strategic targeting, is done based on the businesses ability to fulfill a client’s needs in a way that is beneficial to the client, business, and collaborators. Often, a client’s needs are not easy to see, so a business will need to identify observable characteristics that can be used to reach the client, also known as tactical targeting. These characteristics may include demographic, psychographic, geographic, and behavioral factors.

Value Proposition

As you have probably noticed, mutually beneficial value is a major theme in almost all discussions about marketing. True business success is achieved if a business creates a product offering that provides a client with more value than the competition’s offering in a way that creates value for the business and the collaborators. The value proposition is simply a definition of the value that the offering creates. This value proposition includes all of the benefits and costs associated with the offering. The next step is to define the positing strategy, which highlights the most important benefit of the offering. The most important benefit should be poignant and serve to differentiate the product in the mind of the client.

The Secret to Success: Create Value (Part 1)

As we discussed in the first post, the very heart of marketing is value creation. In fact, this leads us to the key marketing principle that serves at the foundation of all marketing activities: Optimizing value for the business, its collaborators, and its customers. A business’s success is reliant on value optimization. Because this is the fundamental marketing principle, value management is at the forefront of designing a marketing strategy and tactics.

The process by which a business creates value can be explained by the following set of five key activities:

    

Figure 1: G-STIC Framework

Congratulations! We’ve just been introduced to our first framework. This process for creating value is also known at the G-STIC framework for action planning. In our next post, we will discuss these elements in greater detail. 

Setting the Stage: Frameworks

We’ve all seen it. Clinics who attempt to make critical business decisions and solve problems using a trial and error approach as a learning process. While this approach can have positives, overall it is a poor way to reach solutions because there is no consistency. A more systematic way to approach problem solving is by utilizing frameworks.

Frameworks act as a guide to problem solving. Instead of moving directly from a specific problem to a specific solution, as the trial and error approach suggests, a manager would look at the specific problem and be able to generalize it into a more abstract problem that can be addressed by a particular framework. Then, the manager would use the framework to determine generalized solutions, and finally, be able to translate that generalized solution to solve the specific problem.

My next post will discuss the key marketing principle of value creation and the process by which this value is created. We will be introduced to a framework for action planning and be well on our way to laying the foundation for marketing management.

So what exactly is marketing?

I can’t tell you how many times I’ve been asked, “So what is marketing? It’s just selling things, right?” In a word, no. Marketing is not just about selling things. If you are among this line of thinking, that’s ok. Hopefully by the end of this post, you will see that a true view of marketing as a business discipline is broad and encompasses so much more than sales activities.

The goal of marketing is to create a product or service that sells, not to sell a product or service. Products that sell are products that have value. Now we’re getting to the heart of marketing – it’s the art and science of creating value by designing and managing successful exchanges. Hm. Ok. Now we’re getting somewhere. I think that everyone can agree that creating a product or service that has value for a customer and receiving something in exchange for that product or service is a strategic concept that has positive implications for business. Now that we’ve laid this groundwork, the broad definition of marketing should make more sense. Marketing encompasses the activities, set of institutions, and processes for creating, communicating, and exchanging offerings that have value for customers, clients, and society at large. 

OK, so we’ve defined marketing, and I’m going to guess that you’re feeling pretty positive about the concept of marketing as a business strategy component. But how should you go about approaching marketing in your small business? The answer is developing a marketing strategy. We will look at the specifics of developing a marketing strategy in future posts, but let’s take a quick look at the definition. Marketing strategy is the integrated pattern of decisions that specify crucial choices concerning products, markets, marketing activities, and marketing resources in the creation, communication, and delivery of products that offer value to the customer in exchange with the organization to achieve specific objectives.

I hope this overview of marketing and its accompanying strategy has helped to provide a framework for our future discussions. I’m looking forward to exploring the concepts that I’m learning in my marketing strategy course through this blog. I welcome your feedback, so don’t hesitate to throw questions my way.