In this month's Insights newsletter we progress to the next module in our Marketing of Innovation program: strategy. After having gained a deep understanding of your market and competitive environment, you now can develop a strategy that will determine the overall focus, impact and results of your marketing program. This issue will outline the core components of the Marketing of Innovation program's strategy development.

Targeting - By studying the needs and competitive demands of various target markets, you can determine where your products and services will have the greatest impact and competitive advantage. First assess your sales history and examine the characteristics of each market segment. Next, evaluate the attractiveness of each segment, including unmet needs and risk level, among other criteria. Because it will be difficult to satisfy the needs of every market better than all of your competitors, the last step is to prioritize one or a few select markets to target.

Positioning - Once you've selected your target markets, you must decide how your products should be positioned in the marketplace. Begin by developing a strong value proposition - the total value your company offers its customers in terms of evaluating, purchasing, using and maintaining your products and services, minus the total cost of doing so. You should also understand your competitors' value propositions to determine how your company and products match up to customer needs versus available alternatives. Create a matrix as a visual representation of this comparison, then ensure that your strategy positions you as the obvious choice, especially when customers consider intangible benefits such as best service or best quality.

Communications - To create the perception that you are the market leader - the "go to" company - create an effective communications strategy that identifies, reaches and builds relationships with the most influential 10% of industry participants, including customers, channel partners, journalists, industry association leaders, analysts and industry "gurus." Identify your key target audiences and their interests, motivations and needs; interview your company's executives, customers, investors, the media and other industry stakeholders and influencers; define your core messages; explore the full range of communication options; and create a communications matrix.

Branding - Your brand instantly identifies you and differentiates you from the competition. The goal of branding, ultimately, is to establish brand loyalty so that your customers purchase your product without considering other options. You can build this loyalty through a series of positive customer experiences. Effective brand development includes creating brand identity, building brand awareness and recognition, and delivering a positive brand experience.

By utilizing your research to define a comprehensive strategy that includes targeting, positioning, communications and branding, you will establish a strong foundation for your marketing program. An effective strategy will help you focus your efforts and resources, make a powerful impact in the marketplace and generate results. Next month, we will cover the tools and channels to communicate with your customers.

Some of our favorite thinkers on marketing strategy:

Jack Trout
Author of Positioning: The Battle for Your Mind, Trout was instrumental in developing the concept of positioning as a key element of marketing strategy.

Clayton Christensen
Professor of business administration at the Harvard Business School, Christensen has studied new markets for new technologies and authored several best-selling books.

Regis McKenna
Advisor and consultant, McKenna has helped many of the leading Silicon Valley entrepreneurs develop their marketing infrastructures.

Crossing the Chasm
Geoffrey Moore's book addresses the key challenges facing emerging technology companies as they go from early market success to mainstream market leadership.