What is marketing?
Put simply, marketing is all the activities and processes by which a company sells a product to a consumer. However, when you scratch the surface just a little you see it's far more complex.
Across the timeline from manufacturing to purchase, marketing a new product involves: market research, strategy, product development, pricing, establishing market segments, developing and executing advertising campaigns across multiple channels, branding, sales, delivering products, engaging with customers and processing feedback.
The billboards that we see on the street are just one small component of a much bigger process. The marketing process starts with identifying a consumer demand through research, followed by: developing a basic strategy, deciding on a product, executing a plan and delivering results.
The seven 'P's of marketing
A helpful way to understand all the elements of marketing is to look at the seven P's' of marketing. This core approach is recognised across industry as an essential standard for marketing tactics. Businesses have used this approach to bring products to market for decades, simply because it's effective.
- Product: Defining what the business is actually selling including all its features and benefits, and to whom, including all aspects of its development and market research.
- Price: The setting of a pricing system for your product and development of a model for profitability.
- Promotion: All aspects of a sales, advertising or promotion campaign across all channels, including: social media, content marketing, email, television, print media, business to business (B2B), etc.
- Place: Creating a uniform, recognisable location for your business, whether it's a website or a storefront.
- People: The human face of your business, including hiring personnel, developing a customer service approach and engaging with consumers online.
- Process: The process by which you get the item to the customer such as the point of sale (POS) systems in-store, the online store, purchasing and shipping systems.
- Physical evidence: This refers to everything the customer sees when they engage with the company, whether it's all aspects of the online branding and website design, product packaging or in-store window displays.
Getting each of the 'seven Ps' right plays a crucial role in determining whether a business will successfully bring a new product to market and come away with a profit or not.
How marketing benefits businesses
A recent study involving 930 startups found that compared to the control group, those businesses who had help from volunteer marketers grew their monthly sales by 51.7% on average, their monthly profits improved by 35.8%, total assets increased by 31.0%, and the number of paid employees rose by 23.8%.
That's a huge boost for these emerging businesses.
For entrepreneurs and small companies in particular, marketing is an essential tool to help grow your business and get information out there about your product to consumers. However, even big brands with established markets need to continuously engage with consumers to ensure their product is still relevant.
Marketing is essential to finding new audiences online
Last year, 2.14 billion people bought products online, compared to 1.32 billion in 2014. Ecommerce is booming, the world is increasingly mobile and digital, and companies know that they must reach new customers online if they are going to remain competitive.
Digital content marketing has an essential role to play in helping companies adapt and find new audiences in this new landscape. With one in three consumers now using social media to find new products, it's essential for any startup to implement a digital marketing strategy in addition to traditional marketing channels in order to reach new audiences.
Content marketing is highly effective in reaching new consumers. One recent study shows that 72% of companies say content marketing increases leads. Statistics from the Content Marketing Institute (CMI) also show that 91% of Business to Business (B2B) marketers use content marketing to reach new customers, while think content marketing is a key strategy in expanding a company's audience.
Advertising campaigns sell more products
Whether it's online via email or social media, or through traditional channels like TV and print, evidence shows that implementing a marketing campaign and using advertising to promote a product will consistently lead to higher sales.
Research in France shows that the average Return on Investment (ROI) for a TV advertising campaign was €4.9 in product sales for every €1 invested, while website traffic for brands increased on average by 61% during TV ad campaigns. For every dollar a brand invests in email marketing on the other hand, they receive a $42 ROI in sales increases.
Exposure to a brand and product via media campaigns develops familiarity among consumers which leads to a buildup of trust, greater brand recognition and customer loyalty, and ultimately to more sales.
After following a brand on social media, for example, 91% of followers then visit the brand's website or app, and as much as 89% of followers will then buy from that brand. This demonstrates just how important marketing can be in leading consumers to a product.
Marketing engages with consumers
Marketing is no longer a one-way dialogue. It's increasingly important for brands to listen to consumers and engage with them directly, particularly when chatter about brands is already all over social media.
Ignoring reviews, feedback or chatter online is ultimately just bad for business. Research has shown that customer-centric businesses are 60% more profitable.
By developing and executing an effective marketing engagement strategy, businesses can:
- Increase customer loyalty and trust
- Gain essential customer feedback and insight
- Improve the customer's brand experience
- Increases sales funnel velocity
Better customer engagement leads to deeper levels of trust, brand loyalty, and greater customer satisfaction. Ultimately, customer engagement through marketing channels like social media allow a business to benefit from all the free advertising provided by happy customers: positive reviews, social media sharing and word-of-mouth advertising.
The benefits of market research
Taking a new product to market is a risky business, because many fail to take off. One study shows that of 9,000 new products released at a large retailer, 60% were no longer sold within just three years.
Market research is the essential first step in any marketing process, and it can make or break the success of a new product in the market. There are many huge benefits to conducting market research, and it's importance in determining the success of a business cannot be underrated. Market research encompasses:
- Brand research
- Marketing campaign evaluation
- Competitor research
- Customer segmentation research
- Consumer research
- Product development
- Usability testing
Market research allows a business to gather essential information about the competition, their market segment and what media channels they consume. This essential data minimises the risk of taking a product to market, allows a business to maximise opportunities for growth, and to make better and informed decisions.
Market research also allows a company to design products that are truly meeting consumer needs, and creates an opportunity to test that product's viability before it's rolled out on a mass scale.
