Today’s consumers have access to more information and choices than ever before. Grabbing their attention with an effective marketing plan can make all the difference between a successful small business and a failed one.
But what is marketing, exactly? And what tools should you use to build a modern marketing strategy for your business?
What is marketing?
Marketing is the practice of creating interest in a product or service and convincing potential customers to buy it.
The term “marketing” encompasses a broad range of strategies designed to identify, reach, and convince prospective buyers. These marketing strategies include:
- Market research. Whether you’re in business-to-consumer or business-to-business marketing, conducting market research can help you better understand your target audience.
- Advertising and promotion. Connect with consumers by advertising a product or service yourself, or hiring an advertising agency that will create a campaign that aligns with your goals.
- Social media strategy. Reach potential buyers where they spend their time by creating conversations about your product or service on social media.
- Public relations. Reach out to media outlets to broaden the reach of your brand.
- Customer acquisition and retention. Build relationships with consumers and the media to expand the reach of the message.
- Print marketing. Connect with prospective customers via signage, newspapers, magazine ads, and other traditional distribution channels.
- Digital marketing. Reach consumers via internet marketing on social media, video platforms, search engines, blogs, and other digital marketing channels.
While the end goal of marketing practice is to sell products or services, a great marketing plan is about much more than that final click or swipe to buy. It’s about positioning a product in the public consciousness and creating brand loyalty built on lasting relationships with customers.
How success is measured in marketing
A company doesn’t need to reset society’s ideals to be successful, but it does need to drive consumer interest that advances the business’s bottom line. Some metrics a company can use to gauge the success of its marketing efforts include:
- Total revenue. This is the total amount of money coming into the business. The more people receiving and receptive to your marketing, the more revenue you’re likely to generate.
- 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 is total revenue generated divided by the amount of money you’ve invested in your marketing campaigns.
- Conversion rates from online marketing. These rates show the percentage of users that click on an ad, fill out a form, and eventually make a purchase.
The 4 Ps of Marketing
Marketing professionals refer to the components of their marketing mix as the 4 Ps. Achieving the right combination of these elements is the key to marketing success.
A product is the thing 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. Essentially, your USP is the secret sauce that makes a product stand out from its competitors.
Marketing and a product’s price go hand in hand. No matter how talented your marketing department is, it’s difficult to sell a $10 banana (it’s too expensive compared to the rest of the market) or 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 Helena Rubinstein raised prices of 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. This can take many forms, including these popular strategies:
- Free trials or a free gift with purchase. Incentivize customers to try or buy a product.
- Sponsorship of a sports team or event. Attach your brand to an activity or pastime that your target customers follow, thereby building brand awareness.
- Traditional billboards or television advertising. Hitting an audience with a hard sell or memorable story that keeps a product or company in consumers’ mind.
- Guerilla marketing. Use the element of surprise or unconventional marketing methods for attracting attention to a product (e.g., projecting the number 30 on landmarks worldwide to promote an album titled 30).
- Viral marketing. 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 via paid 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 to 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 with other businesses, creating a word-of-mouth campaign so large that the product sold out nationwide within days.
- Search engine marketing. 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. These kinds of practices, known as search engine optimization (SEO), enable search engines to recognize a product and increase the chances that it will appear higher or more prominently in the results of your target customers’ searches. Marketers can use search engine marketing tactics to 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, and LinkedIn to raise consumers’ consciousness about a product. Social media marketing can help you build interactive relationships with your audience where they already spend their time.
Outbound marketing is when a marketer reaches out to customers. Outbound marketing is more of a direct hard sell—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. Invest in market research to find out what drives your audience: what they want, what they need, and where they go to look for it.
- Have empathy. Truly understanding a customer means understanding the problems they need to solve, and what they truly value. Having empathy for your customers will help you create a marketing plan that speaks to their needs, rather than yours.
- Tailor marketing 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 target audience, craft powerful messages, find creative ways to deliver those messages, and, ultimately, grow the credibility and authority of both their brand and products.