The purpose of marketing is to create successful transactions. Marketing is about more than advertising. You can spend a fortune on advertising, but you won't make any sales if you have a lousy product at a terrible price. Marketing is about designing the product, setting the price, targeting potential buyers, getting the product to the customers and more.
Marketing activities include finding out what customers want and what competitors are offering (market research), designing the product and setting its price (called product design or designing the value proposition), helping customer find the product (advertising, promotion) and convincing them to buy it (often called sales, although the line between sales and marketing is blurry), figuring out how to get the product to the customer (distribution), and customer service.
There are four steps in the customer buying process:
- Stimulus - the thing that creates the desire e.g. "I'm hungry" or "there's a leak in my bathroom" or "that pizza ad makes me hungry."
- Search - the process of figuring out how to satisfy the desire.
- Buy - the process of completing the transaction.
- Change state - satisfying the desire by producing the desired result e.g. eating the pizza or fixing the leak.
Note that many people think that marketing's job is done when the sale is made. But if the customer doesn't get the change of state she wants she won't buy again.
The internet can play a role in every part of the marketing process. You can use blogs and social networking sites to identify customer needs and to spot trends. You can research competitors via their web sites. You can test reactions to products online and vary your prices. You can use internet advertising and viral video to stimulate a customer's demand. You can use search engines, wikis and blogs to influence the customer's search. You can use online retail stores, avatar sales reps and online chat to complete a transaction. Email and web feedback can tell you how well the product met the customer's needs.
A marketing strategy answers the following basic questions:
- Why will people buy?
- Strategy may be to be the lowest price, or to sell a unique product, or to meet the needs of one group of people better than anyone else
- This is called the value proposition
- How will people feel about our company and our product?
- This is the brand - the image of the company or product in people's minds
- How will we price the product (compared to competitors)?
- The product could be priced as a budget or economy item, or a luxury item, or comparable with the leading competitive product
- This is called the pricing strategy
- Who will buy?
- Could be children under ten, hardcore gamers, older adults, women …
- This is called the target market
- How will people hear about the product and be persuaded to buy? How much will we spend on promotion?
- TV, viral marketing, blogs, …
- This is called promotion
- Money spent on promotion is called the marketing budget
- How will people buy the product?
- Buy online, in speciality retailers, in supermarkets, via catalogs,…
- This is called distribution
The elements of a marketing strategy are often called "the 4 Ps": product, price, promotion, place. The combination you choose is called the "marketing mix."
See this marketing strategy checklist for a simple description of a marketing strategy.
Examples of Different Marketing Strategies
- Low prices (Amazon): usually requires less advertising once low-price brand becomes established and there are many repeat customers
- Unique or premium product (Apple, Eggland’s Best): try to convince customers that your product is superior; may require endorsements or heavy advertising spend to create a brand
- Fashion item—create fad or trend (Crocs)
- Ubiquitous distribution (Coca-Cola, SlimFast)
Marketing Strategy Example: Apple
Apple Inc. to come
- Why will people buy?
- Most user friendly
- Best graphics capabilities
- Design style
- Can run Windows and Windows software
- NOT because it's the cheapest computer
- Who will buy?
- Style-conscious customers
- "Artistic" people
- Status-conscious and image-conscious people
- People who love the brand
- How will people be persuaded to buy?
- Television and web advertising emphasizing coolness and performance versus PCs
- Cross-promotion with iPods
- iPod buyers in retail stores exposed to the computer products as well - expert salespeople
- How will people buy the product
- Apple retail outlets
- Apple online store
- Some large electronics retailers
- Analyze your product or service
- Features, benefits, positioning, why people will buy (value proposition)
- How it differs from competitors’
- Analyze your target market segments
- Who is most likely to buy your product
- Describe them in detail – demographics (age, gender etc.), lifestyle, purchasing patterns, buying objections etc.
- Develop a communications strategy; select media
- Find out where your target customers read and listen to information
- Select tactics: search engine, display, viral, affiliate, email, behavioral, PR
- Develop objectives, budget and performance metrics
- Estimate lifetime customer value; derive maximum ad budget
- Estimate conversion rate at various stages of the funnel
- Estimate costs (CPM or cost per click)
- Develop ad copy/ ad designs
- Track and monitor ad performance
- Track through the buying cycle
- Use tags, analytics
- Use feedback to improve ad design and targeting.
You need to pay attention to the marketing basics:
- What is your target audience?
- What do you want them to think about you?
- What do you want them to do?