The Fundamentals Of Marketing – The Principles That Guide Marketing Strategy
One of the most common challenges faced by businesses, if not the most common challenge, is how they’re going to market themselves to potential customers.
Poor marketing is the root cause of so many problems within a business. A lack of traffic? Poor-quality leads? Low average customer value or basket size? All these issues, and more, can all be solved by improving your business’ marketing strategy.
The good news is, despite what you might have been led to believe, marketing your company effectively doesn’t have to be that difficult. Better still, once you start to grasp a few marketing basics, you’ll understand how to better connect with consumers who are not only interested in but are actively looking for your products and services. It just comes down to a few important concepts.
With that goal in mind, this post explores the fundamentals of marketing and how you can apply them to your business in order to reach more of your target market, generate better leads, and ultimately, become more profitable.
What is Marketing?
‘Marketing’ can be defined in so many ways, but the simplest definition is that it’s the process of promoting – that is, raising awareness and creating interest – in a company’s products or services to a particular group of people. The ultimate aim of marketing is to make potential customers aware of your products or services and to persuade them to take profitable action.
To go into a little more depth, marketing is also all of the content, systems, strategies, tactics, and tools that a company uses to promote their brand.
Another way to think of marketing is as a conversation: you speak to your prospects and they talk back. This could be in the form of a purchase, enquiry, objection, etc. Naturally, you could receive no response – but that, in fact, is a response in itself. Silence usually means that you’ve got to try harder, that they didn’t hear you well enough or they’re not quite convinced about your offering – yet.
The 4 Ps of Marketing (The Marketing Mix)
The 4 P’s, otherwise known as the marketing mix, are a collection of the most important principles for marketing your business. Together, they form the foundations of any comprehensive marketing plan. The 4 Ps are as follows:
Product refers to what your company sells, whether it’s actual physical products, a range of services or both. It’s here you’ll determine product lines, variations, options, add-ons, warranties, and everything customers can purchase from you.
This also includes the features of your products and the benefits they provide. This is a crucial aspect of determining your target audiences as the more you understand the advantages of your products, the better you’ll understand who stands to benefit from them the most and, consequently, who’ll be most interested in them.
The product also pertains to how the products are presented, including its packaging, logo, colours, etc. The way a product is presented should be determined by its target market. For instance, products aimed at luxury markets need to throw more thought, effort, and money at their packaging than a mid-priced offering.
Price refers to how much your products and services are sold for. More importantly, however, it’s how you determine those prices, i.e. your pricing strategy. You can work this out by looking at what your competition is charging and setting your prices based on that. Similarly, you could look at the main alternatives to your product and how much they cost.
Other aspects covered by price included payment options, such as whether customers can pay in instalments, and if you’ll occasionally offer discounts.
Place refers to where your products and services are sold and, consequently, how they’ll be distributed to customers. This is where you determine whether a product will be sold in stores, where people can try it before their purchase, or will only be available online.
Before the internet and digital marketing, where your business was situated were supremely important: ‘location, location, location’ being one of the most well-known marketing catchphrases as a result.
Nowadays, online real-estate, such as your domain name, position in search engine results pages (SERPs), and social media presence (or lack thereof) is just as important. And its importance is only going to grow as time goes on.
Promotion refers to how you’re going to tell people about your company so they know your products or services actually exist. As well as creating and increasing awareness, promotion requires you to tell your target market why they need your products and, just as importantly, why they should pay the price you’re asking.
The two most important aspects of promotion are:
- What you’ll say to persuade your target market to purchase your products, i.e. your brand messaging.
- Where you’ll promote your brand, i.e. which marketing channels – search engines, email marketing, social media platforms (LinkedIn, YouTube, Instagram).
Positioning is the process of influencing how your target market perceives your brand, and its products and services, relative to your competitors. This is also known as your company’s value proposition, as it communicates how you intend on providing your target market with value.
You can position your company in terms of:
- Pricing: Is it high end or a budget option? Is it a status symbol?
- Quality: Is it a higher quality product, or is intended to be the best on the market?
- Differentiation: Is it different to everything else on the market, e.g. Tesla in automobile marketing?
- Customer service: Will you distinguish yourself by how you treat each prospect and customer?
- User group: Does your product perfectly fit the needs of a specific target audience, i.e. is it niche?
Positioning will affect the rest of the marketing mix (product, price, place, promotion). For a great example, look no further than Apple. Apple positions itself as being innovative and cutting edge, which makes their products sought after by anyone who sees themselves as forward-thinking. What’s more, they position their products as mass-market status symbols as well as consumer electronics. When you purchase an Apple product, you’re not just buying a phone or a laptop, you’re buying into a certain lifestyle and mindset. In a word, you’re buying ‘cool’. This is why Apple is able to charge more for its product range. They, much high-end fashion labels, don’t compete on price and, as you’ve no doubt seen over the last two decades, people literally queue up around the block to be the first to purchase their latest products.
The first step in positioning your company is to write a positioning statement: one or two sentences that succinctly outlines your business’ unique value in relation to your competitors. Of course, this will be aspirational at first – how you want your business to be – but it’s an important starting point to work from. It allows you to accurately assess the marketing copy on your website and determine if it lives up to your positioning statement. You can then do the same with your ads, social media posts, content, and any other marketing communication.
Before you begin writing your positioning statement you need to ask:
- Who is your target customer?
- What category does your business belong in?
- What are the biggest benefits your business provides?
- How are you communicating those benefits, in your marketing, etc.?
Better still, a good positioning statement can help you create, or improve, a tagline for your business. This tagline will act as a shorter version of your positioning statement, which succinctly tells your target audience why your company is best placed to fulfil their needs and solve their problems.
4 Types of Marketing Strategy
Once you understand the fundamentals of marketing, there are lots of ways to apply them. Here are 4 common marketing strategies that an organisation could implement.
Relationship marketing focuses on forging close relationships with your customers to create loyalty. In such marketing strategies, customer retention and satisfaction are key, so there’s an emphasis on customer service and listening to feedback. When done right, relationship marketing has a high return on investment (ROI) because it costs more to get acquire customers than keep existing ones. The longer your relationship with a customer, the higher your ROI on the cost of acquiring them.
Loyalty schemes, memberships, and referral schemes are examples of relationship marketing
Scarcity marketing is designed to create the perception of a shortage of products or services. It’s based on the psychological principles that people want what’s difficult to acquire and their built-in fear of missing out on something. When done correctly, scarcity marketing not only increases the desire for a product but the urgency to purchase it – as they may not be able to get it in the future.
Waiting lists and phrases like ‘ending soon, ‘limited edition’, and ‘while stocks last, all trigger our natural fear of loss. Similarly, telling people a product is sold out increases people’s desire to buy it when it’s back in stock – or they run the risk of missing out on it again!
Shrewd businesses take this one step further and will capitalise on an item being sold out by allowing customers to pre-order it, there and then, for when it’s back in stock. Note that it’s important for the business to offer the ability to purchase the unavailable item while it’s out of stock: as the desire for it is still high. If they rely on the consumer coming back to buy a product when it’s back in stock, they might very well lose interest by that time. Or, just forget about the product altogether!
Undercover marketing, or stealth marketing, involves marketing to people who don’t realise they’re being marketed to. Though this type of marketing requires creativity and often relies on word of mouth, it can be very effective when done correctly.
Discreetly giving out samples of a product is an example of undercover marketing. For instance, you attend a party or function where a particular brand of beer, wine or liquor is being served. However, you’ve never heard of the brand before – but you happen to enjoy it a lot. Soon afterwards, you see the same brand being sold in your supermarket soon afterwards, and at a special introductory rate no less; naturally, you snap it up. That is undercover marketing at work.
Cause marketing, or cause-related marketing, is when a company is linked to a charity or important social cause. This usually involves a mutually beneficial collaboration between a business and a non-profit organization.
The non-profit organisation, which typically has a limited marketing budget, benefits from increased brand awareness and exposure. The business, meanwhile, benefits from an improved corporate image and increased brand loyalty. Perhaps best of all, the partnership provides another way for them to stand out from their competition.
The Difference Between Marketing and Advertising
Most people, if asked the difference between marketing and advertising would tell you they’re that they’re pretty much the same thing. However, there is actually a distinct difference between them. Simply put, advertising is a part of marketing. The type of advertising, where you do it, and the message in each advert is all decided in your marketing strategy.
If put in term of the 4 Ps, or marketing mix, outlined above, advertising is the same as a promotion. However, you’d still need your marketing strategy to determine product, price, and place – as well as positioning.
Put another way, when you’re advertising, you’re always marketing. But when you’re marketing, you’re not necessarily advertising
Hopefully, this overview has provided you with a brief, but comprehensive, an overview of the fundamentals of marketing and how you can apply them to your business to tap into its vast potential. By understanding the marketing mix and how to position your company in your chosen market, you have far greater control over the consumer perception of your brand.
By better understanding some of the most important concepts in marketing, you’ll develop a greater understanding of your customers and how you can better communicate with them. As your ability to do that improves, you’ll be more effective at talking to them in terms of their needs and how your products or services are ideal for fulfilling them.