To grasp the concept of what is marketing, you have to understand that the key idea behind it is to maximize profit from a product or service.
Sure, you may be retaining a 25% profit margin on all your sales, but what if I told you that with the help of effective marketing, your profit margin would skyrocket?
For example, studies show that effective email marketing has an average return rate of $40 for every $1 spent.
Want to know the difference between Burberry and GAP? A quick Google search revealed that a plain black, cotton T-shirt at Burberry would cost you $436 more than GAP. Yet, people buy it.
The only difference between the two is branding. Just because Burberry is marketed as a classy, exclusive brand – customers consider it high end. This makes marketing a crucial part of every brand. The way you communicate your brand to customers will determine how they perceive it and what they are willing to pay for it.
The basics of marketing
To understand what is marketing properly, it is important to know some of the basic techniques associated with it.
The ‘4 P’s’ of marketing are the foundation of a good marketing plan. These represent the main decisions you make whilst marketing your product or service.
The idea of the 4 P’s was popularized by Neil Bordon in the 1950s. The P’s stand for Product, price, place, and promotion.
- The first P is that of the Product.
A product can either be a tangible service that a business is providing, or an intangible service.
Whatever you may be selling, you must have a clear understanding of your product and its unique properties before you can market it.
For example, in the case of the iPhone6, Apple marketed the fact that it was an advanced smartphone with leading-edge performance. Other unique features like its high-resolution camera or Vast App Ecosystem were also highly advertised.
- Next, we have Price.
Price refers to how much a company wants to sell its product at.
While setting the price, a business has to look at a lot of different variables such as individual unit price, expenses, what pricing strategies to apply, etc.
Other than that, a business also has to keep an eye on their competitors’ prices as they will play an important part in determining the price for their product.
At the end of the day, price determinations will impact profit margins, marketing strategy, demand, and also supply.
An example of an intelligent pricing strategy can be seen in the growth of OnePlus, the Chinese smartphone manufacturer.
To enter the market, they applied the strategy of penetration pricing and offered high-end phones for lower prices than their competitors.
Now, they offer premium-priced phones.
- Promotion is another key element in the marketing mix.
Many businesses often make their mistake in this department.
Promotion is going to focus on the different ways you can market your product/service to the public.
It includes a variety of tasks such as advertising, selling, public relations, sponsorship, etc.
To promote your product, you must also decide on your target market.
A business can save lots of money efficiently promoting its product to the right age or gender group.
These days, one popular way of promoting your product is through online multiplayer games like Fortnite, Call of Duty, etc.
For example, in recent times, Marvel has collaborated with the popular videogame Fortnite and has given access to its characters to the game.
Now whoever plays the game will use these characters, and this helps to market the Marvel movies those characters are in.
- The final P that we have is Place.
This handles the distribution of the product or service.
The ideal locations where the product or service will be purchased by the customers are identified in this process.
The idea behind ‘place’ is to convert potential clients into actual clients.
Some businesses choose to have actual retail stores, while others may choose to sell their product/service online.
For example, skiing equipment is best sold at skiing resorts because that is where the demand for that sort of equipment is at its peak.
This is the reason why companies such as Amer Sports provide their skiing equipment to these resorts so that they can sell them to customers as they need them.
Following the 4 P’s has led to many advantages for businesses and growth has been recorded wherever it was applied successfully.
A study published in September 2018, held in the Al-Buraimi governorate of Oman, shows that the ‘4 P’s’ or the marketing mix strategy has had a huge role to play in helping the SME sector in Oman achieve a competitive advantage.
In fact, the price can increase the level of competitive advantage concerning Al Buraimi SMEs by 85%.
However, it is important to remember that this marketing mix compromising of the 4 P’s was created in a time of no social media.
In recent times, there has been a rise in the importance of the service sector in both developed and developing countries.
Studies show that except in a few major developed nations such as Indonesia, China, and India, the services sector contributed over 60% of total value added in 2017 in all major economies.
One of the indicators of a countries economic progress is the service sector.
Today, the service sector is going through a rapid change and we keep seeing new services that cater to the needs of the consumers. Examples of such services are FoodPanda, Uber, Airbnb, etc.
So, there are a few updates that have been added over the years to this list keeping in mind the importance of service-based businesses.
The 7 P’s include:
- People can be game-changers:
The people you hire can change your business for better or worse. One brilliant mind could fast-track things and find brilliant solutions.
Hiring the right people is very important. And so is making sure that they get along.
For example, fast-food restaurants have to be very careful in picking their employees as they do not want to risk arguments with customers.
These restaurants also have to pick good conversationalists who can use the technique of upselling to their advantage.
If the employee can convince the customer to spend more by upgrading to a premium product, then it is a major win.
That is why businesses like McDonald’s or Burger King prioritize hiring people who are friendly and patient in their dealings.
- Figure out the right process:
For example, food panda is a food delivery service in South Asia. It is a service-based business that figured out that using the process of door to door delivery was the most beneficial for them.
- Physical Evidence is important:
In the world that we live, seeing is believing. No matter what information we find on anything, we believe what we see. This is because of an increase in photo editing skills and so customers are not sure about products through just an image.
That is why it is important to make the product available to the customer to examine.
For example, for Airlines such as Emirates, Qatar Airways, etc., the flight in itself is intangible.
However, the comfort of the seats, the food they offer, and also the perks they offer to their First Class or Business Class passengers are what set them apart from their competitors.
Providing the best services in these departments encourages the customers to spend higher and upgrade their tickets to get maximum comfort.
At the end of the day, as long as you have your product figured out, you should have no problem with marketing it.
Different types of marketing strategies
Most people assume that the only way you can successfully market your product/service is through the use of huge amounts of money.
That approach may have been correct before social media entered the game however, now the case is different.
Whereas money is always handy when it comes to practically anything, it is not the only thing you require to market your product or service.
In short, if you don’t have the money, make sure you have the time required to make your product a success.
To better understand what is marketing, it is important to look at some of the strategies that you can use even on a tight or nonexistent budget!
- Use Social Media to your advantage:
A powerful social media presence is perhaps one of the best ways to inform people about your product.
In 2011, a social media marketing industry survey was held which showed that 67% of self-employed owners and 66% of small businesses stated that social media was very important to them.
In the beginning, it may seem like a hard task, but over time posting regularly on social media becomes easier.
Through direct messages, contact your customers or even other businesses that could collaborate with you.
- Video Tutorials will increase popularity:
Create video tutorials and make people more familiar with yourself and your product/service.
The second-largest search engine in the world after Google is YouTube.
That is why it is highly important to maintain a video presence on that and let viewers know how or why your product can help them.
- Understanding SEO will improve search rankings:
SEO can be a very powerful tool for businesses if they learn to use it properly.
SEO requires time and effort however the sky is the limit if you understand it.
Many businesses have been using SEO successfully and have reported positive results.
Through SEO, you can make sure that your webpage competes for the top spots in the Google search engine.
Studies show that 67% of all clicks on Google go to the first five organic results.
As of 2016, SEO spending is an essential part of every business’s budget.
- Hire Influencers:
Getting influencers to promote your product on their social media accounts is one very popular way of marketing your product.
The trick is to find the right influencer in your niche so that you target the right audience and don’t end up wasting time. Learn how to hire influencers to promote your product.
- The Use of Automated texts and emails:
These can be very beneficial for a product or service as they help in getting the message across to a large group.
They can also serve as gentle reminders of your product or service to the customer as they have considered using your product and could have forgotten about it in their hectic routines.
In recent times, the text messaging industry has seen great success in helping businesses market their products and services to customers.
Marketing is a term that will forever have different meanings for different individuals.
To understand the true essence of marketing, we have to once again ask ourselves the question of what is marketing and what purpose is marketing supposed to serve?
The common perception today is that marketing is only about selling the goods in the bag no matter what it takes.
However, as a wise Peter F. Drucker once said,
“The aim of marketing is to know and understand the customer so well, the product or service fits him and sells itself.”
So in essence, marketing is not really about selling. It is not about closing the deal quickly or talking fast.
It is about the deep psychological understanding of your customer’s needs. It is about figuring out what your customer requires and providing it to him.
One great example of a successful businessman is Steve Jobs. He understood what the people wanted and set out to fill that gap.
Marketing is all about the customer’s insights, and that makes the job of every employee very important.
Especially in this age of social media, every person who is linked to any business is known to be a representative of it.
Thus, it is essential to make sure you hire the right people.
Furthermore, you must remember that the business or brand that puts its customers first, is the one that makes the most sales.
48% of customers state that their first purchase or interaction with the brand is the best to earn their loyalty.
So it is very important to follow the golden rule of first impressions are last impressions.
The customer has to know or feel that this brand’s objective is not to earn money but to provide high-class goods that are not available at this price elsewhere.
77% of marketing leaders say a strong brand is critical to their growth plans.
So, it is very important to make sure that your business becomes a brand that is trusted by consumers. This trust is however earned over some time.
Why marketing is important
By now you should have a good grasp on what is marketing however that is not all you need to know.
Understanding the importance of marketing will help you in creating a better marketing strategy for your business.
- Marketing is an effective way of engaging your customers. When your customers are engaged, they develop a sense of belonging.
- Marketing will help to develop and maintain the reputation of your business.
- Through marketing, a relationship is formed between the business and the customer.
- Marketing helps to boost sales.
- Marketing provides insights into your business.
- Marketing creates more revenue options when you are tight-budgeted.
- Marketing helps the management team to make well-informed decisions.
Marketing is a personal experience for every individual and it is highly unlikely that people will have similar stories to each other. The same sort of marketing will not benefit every product or service.
To figure out what is marketing, you have to figure out what works for your business and work on that.
If you succeed in doing so, your business will soar to heights that it has never seen before.