What is marketing?
Marketing is defined as encompassing all the promotional strategies a company uses to attract potential customers to its product or services.
These often include:
- Market research. Conducting market research to understand a company’s target audience.
- Advertising and promotion. Advertising its product to consumers or other businesses, or hiring an advertising agency that will create a campaign that aligns with its goals.
- Social media strategy. Promoting products or services on social media.
- Public relations. Reaching out to media outlets to broaden its reach.
- Customer acquisition and retention. Building relationships with consumers and the media to broaden the reach of the message
While the end goal is to sell products or services, marketing is about much more than that final click or swipe to buy. It’s about creating lasting relationships with customers and positioning a brand or product in the public consciousness.
How success is measured in marketing
A company doesn’t need to reset society’s ideals to be successful—but it does need to impact the business’s bottom line. There are several metrics a company can use to gauge the success of its marketing efforts:
- Revenue. Revenue is exactly what it sounds like: the total amount of money coming into the business.
- Sales growth. Sales growth measures the ability of a company to increase revenue over a fixed period of time. This is calculated by comparing sales revenue from different periods in time (such as from one year to the next, or even one quarter to another).
- Customer loyalty. Companies have multiple metrics to measure customer retention, including customer lifetime value (abbreviated CLV or LTV), which measures the profit margin a company can expect to earn from an entire relationship with an average customer; repeat purchase rate (RPR); and a customer loyalty index (CLI).
- Return on marketing investment. This number is the total revenue generated divided by a total marketing investment.
- Conversion rates from online marketing. These rates show the percentage of users that click on an ad, or click through to purchase.
The 4 Ps of Marketing
Marketing professionals refer to the components of their marketing mix as the 4 Ps. Achieving the right mix of these elements can be the key to marketing success.
A product is the thing or things a company offers to its customers. That can include an idea, a service, or an actual physical item. Marketers take the product and assess its “unique selling proposition,” or USP, which is how the product can fulfill a need in the market or the needs of your customers. In other words, the USP is the secret sauce that makes a product stand out from its competitors.
Marketing and a product’s price go hand in hand—it’s pretty hard to sell a $10 banana (it’s too expensive compared to the rest of the market), just as it’s hard to sell a $1,000 car (customers might wonder why it’s so cheap). Determining price isn’t quite as simple as slapping a price tag on a product. Successful marketers research competitors’ prices and understand how they can justify a higher product price—or ensure that a lower price won’t convey that their product is inferior to similar products in the market. For example, cosmetics pioneer and marketing genius Helena Rubenstein raised prices of her products that weren’t selling well to make women perceive them as more desirable.
Place is where and how a company distributes its product. Will it sell exclusively online, through a physical storefront, via partnerships, or through a combination of distribution channels? Marketers then drill down to figure out how that product will be positioned in its place. For instance, a company marketing potato chips will consider how high on the grocery shelf the product will be placed, and in the company of which other potato chips. Retailers often charge promotional, advertising, and stocking fees to feature products in a more prominent place in their stores. Grocery stores, for example, charge “slotting fees” to place products at eye level (or a bit lower, at a child’s eye level) so shoppers can easily see and grab products as they go through the aisles. According to the Center for Science in the Public Interest, companies pay upward of $50 billion per year for these trade promotions.
The fourth P is the way all these components are integrated into a comprehensive marketing strategy through promotion. Promotion can take many forms, including these popular strategies:
- Free trials or a free gift with purchase. incentivizes customers to try or buy a product
- Sponsorship of a sports team or event. Building brand awareness for a target customer
- Traditional advertising on billboards or on television. With a hard sell or memorable story that keeps a product or company in their customer’s mind
- Guerilla marketing. This uses the element of surprise or unconventional methods for attracting attention to a product, like projecting the number 30 on landmarks worldwide to promote an album titled 30
- Viral marketing. Where you create a hook or angle so catchy that word spreads on its own, without needing to spend money to fuel it.
Types of marketing
There are two primary categories of marketing: inbound and outbound. Inbound marketing is a technique that draws your target audience in to your business. Outbound pushes your messages out, usually by paying for advertising.
Inbound marketing is the process of building a relationship with a customer base, which marketers do through email campaigns, compelling content, shareable social media, or great web design. Inbound is generally a non-intrusive type of marketing where you are meeting the customer where they are looking for a solution.
Inbound marketing examples include:
- Influencer marketing. Brands leverage the power of an individual with a large public profile or following to promote their brand and influence potential buyers. While influencer marketing is commonly associated with social media and the world of “influencers,” or people with a large following on a social platform, the concept of using celebrities to promote a product is much older. A celebrity or influencer might be paid to feature a product on their Instagram profile, or be photographed in public using a product, or simply to appear in a traditional TV ad.
- Viral marketing. A product going viral—a phenomenon named for how quickly and broadly a message can spread—is the dream of many marketers, but the formula for virality is difficult to get right. Successful viral campaigns are in touch with their target audience, which feels strongly enough about the product that they share it. The fast-food chain Popeyes launched its chicken sandwich in 2019 with a campaign that is a prime example of virality. The campaign used a single, two-word tweet to spark a war of words on Twitter between brands, which subsequently created a word-of-mouth campaign so large, the product sold out nationwide within days.
- Search engine optimization. Marketers can make a product more searchable, and therefore more visible to potential customers, by using specific keywords and phrases in the product description or on the webpage. This helps search engines recognize what a product is and how to attach a product to specific search results so it appears higher or more prominently on the search page. Marketers can create content upfront that contains these words, or modify their website to include frequently searched words or terms.
- Content marketing. Content marketing makes the company a resource for information and advice, with the aim of increasing the credibility of the company and of the product it is selling. Content marketers employ storytelling, advice, and informative articles that fall within the general interest category of its target audience to build a relationship.
- Social media marketing. Marketers use social networks like Facebook, Instagram, TikTok, Twitter, LinkedIn, and other internet marketing to raise consumers’ consciousness about a product and as sales platforms.
Outbound marketing is when a marketer reaches out to customers. Outbound marketing is more of a direct hard sell. In outbound you are demanding the attention of the potential customer, hoping that they need your product or service.
Examples of outbound marketing include:
- Traditional advertising. A company advertises on TV, radio, print, and online platforms to sell its services or products.
- In-person meeting. Companies make marketing and sales calls with other companies and potential customers, enticing them to buy.
- Event advertising and sponsorship. A company pays for advertising in sports arenas and other high-volume places to increase its brand presence or awareness among customers. Beyond paying for ad space, a company may sponsor an event to generate more visibility via linked media coverage of the event.
Before you dive into building your comprehensive marketing strategy, make sure you understand who your customer is:
- Know your customer. What drives them, what they want, what they need.
- Have empathy for them. Truly understanding a customer means understanding the problems they need to solve—and what they truly value.
- Tailor content to your audience. Creating rich content for customers that raises a company’s credibility as an expert also raises the credibility and perceived value of its product.
Marketing is a creative, relationship-driven discipline. The most successful marketing campaigns understand their audience, craft messages for them, figure out creative ways to deliver solutions, and grow the credibility and authority of both their company and the products they sell. Ultimately, they can even change the way society consumes.