This article is about my understanding of marketing, which I learnt in week 2 of the Digital Deepak Internship Program.
Let
me ask you a question. Do you agree with the following quote: “It's not the
best product that wins, but the best-known one that wins”?
Whether
you answered “yes” or “no”, I think you will agree that this question needs to
be explored in greater depth. How does a product become successful? And
consequently, how does a business grow?
Since
the beginning of organized business, people have used marketing to reach out to
potential customers. In the pre-industrial era, during the years 1750 to 1850,
businesses mainly used word of mouth communication. After the industrial
revolution, during years 1850 to 1920, when villages grew to larger populations,
newspaper ads and magazine ads were used to reach the masses. In later years,
advertisements were used in radio, television & billboards. Post year 2000,
social media channels have been used, along with all the other existing
channels.
So,
we see that businesses have always required marketing to survive and thrive. Since
it is such an important function, we will seek to understand what marketing is,
and how it can be used best to reach business goals.
Understanding customer needs
As
per recognized global data providers, it is observed that, in the last 5 years:
-
90% of new startups fail.
-
75% of venture-backed startups fail.
-
Under 50% of businesses make it to
their 5th year.
-
33% of startups make it to the
10-year mark.
-
Only 40% of startups actually turn a
profit.
-
82% of businesses that fail, do so
because of cash flow problems.
-
The highest failure rate occurs in
the information industry (63%).
What
is the reason for this large failure rate? Obviously, there are multiple
reasons for this, but the main reason is a lack of understanding of market
requirements. Most startup founders seem to believe that the product they have
developed, is the modern equivalent of the magic lamp of Aladdin. The question
they don’t address is: who wants to buy my product?
The
primary thing to be done is to understand customer requirements extremely well.
In an ideal situation, the market should pull the product out of the business.
In other words, businesses should have such a clear understanding of what the
customer wants, that they end up creating a product that is a perfect fit for
the customer. This marketing function is known as ‘Product – Market Fit’.
‘Apple’
company was the market leader in smartphones, when ‘Xiaomi’ wanted to enter the
same market. Xiaomi observed that many customers were looking for cheaper
smartphones, and would be quite satisfied if the phone had near equal features
as Apple iPhone had. This led them to do the following:
-
Sold only through online channels, made
spare parts locally, thereby reducing their marketing costs drastically
-
Communicated to their people, the
production team, what customers were looking for. Produced smartphone which had
almost all features that Apple iPhone had, but still was priced it at half the
price
The
result of the above actions was, within 3 years of launching their phones,
Xiaomi became the third largest seller of smartphones in the world.
Creating Perception
The
next function of marketing is to create the right perception of the product, in
the minds of prospective customers. According to Forbes magazine, “fostering
positive perceptions can help companies build a sustainable, loyal and growing
customer base”. What this means is, if businesses succeed in creating the right
perceptions, customers will come on their own to companies, instead of
companies chasing customers.
Creating
perceptions is all about establishing right communication, between companies
and customers. Businesses have to communicate effectively, consistently and
sincerely. This is not about exaggerating the benefits of the product. Rather,
it is about broadcasting the value, which the company has to offer. Without
this, customers will never come to know of something which could be of great
value to them, and for which they would happily part with their money.
Creating Trust
The
next function of marketing is to build trust, in the minds of customers, for
the product. This is called brand building, which is really a matter of
building trust.
Today,
customers are very different from what they were a few decades ago. Today, we
have the internet and other information channels. Customers can easily conduct
research on a brand or product, before they make their purchase. Also, word of
mouth marketing is still the best marketing. People trust the opinion of other
people, who have used the product or service.
So,
building trust or building a brand, comes down to four things:
-
Develop a product or service that
truly provides value
-
Engage customers in a two-way
communication
-
Host events
-
Be consistent in providing value
Traditional marketing vs Digital marketing
As we saw earlier, marketing has
always been used by businesses. Traditional marketing includes methods like
word of mouth, newspaper & magazine ads, radio & tv ads, and
billboards. Digital marketing is marketing using websites, apps, social media
channels, email and mobile marketing, to promote and sell goods & services.
Digital
marketing has great advantages over traditional marketing, some of which are:
-
It is considerably less expensive
-
customers can be reached easily &
effectively by using email marketing, mobile marketing & social media posts
-
It lets you communicate directly with
the customers who see your content
Finding business niche
The
next thing to understand in marketing is selection of ‘niche’. A business niche
is a specialized or focused area of a broader market. Businesses can serve customers
only when they differentiate themselves from the competition. It is not
possible to serve the needs of every segment of the market.
Businesses
should not enter a non-competitive market, even if they believe they have a
great product for that market. If there is no demand, if customers are not
expressing their interest in a particular market segment, it does not make good
business sense to create a product / service in that segment. What would be
good business sense, however, is to enter a competitive market, but have a
unique selling point (USP) in that market. The formula for wealth creation can
be summarized as below:
Wealth = Niche ^ CATT
In
other words, the amount of wealth that a business can generate, is equal to the
strength of its niche, times CATT, which is an acronym that stands for:
C
= Create relevant Content for your market segment
A =
Drive Attention or traffic to
company website, using SEO (search engine optimization) methods, paid ads, social
media, and referrals.
T
= Build Trust with customers and leads. Regularly send communications to
them, that are very personalized & to the point.
T
= Get Transaction done, convert leads to customers. Use natural sales
methods. Also have sales webinars, sales pages and make customer calls.
The
CATT is implemented successfully, when all components of digital marketing is
integrated & worked together. Rich and meaningful content is first created
in company website, so that website gains high rank. Paid ads are used to drive
traffic to website. Further, the content is shared in social media posts to
drive more traffic to website. Finally, email list of prospects and leads is
procured from this traffic. Next, email marketing is used to promote goods
& services to the website visitors. Hence, we see that every component
works together to produce the desired result.
Personal Branding
Marketing
of goods & services can also be done by developing personal brand of the
business owner. The business can brand it’s products by using the name &
identity of it’s owner. This is called personal branding.
Personal
branding is the conscious effort to create public perception of an individual,
by positioning him or her as an authority in their industry. Whatever the owner
does, it will build his personal brand.
Quite
often, personal branding is more effective than business branding. An example
of this is, Elon Musk has a bigger following than his companies SpaceX and Tesla.
People want to hear from people. An individual sharing his content strikes a
better chord with readers, than a business logo sharing its content. A person
can speak to his followers on a personal level more effectively than a company
can.
Even
a person who is entering the market, can create his or her own personal brand.
He has to learn a new skill, and practice the procedures related to that skill.
He can take up a job or freelance assignments, in order to gain real time
experience. He can share his knowledge and experience in his blog.
The
more he writes, the more people come to know about him, and trust his
abilities. People will approach him with their business requirements. He can
provide consulting services to them, for which he can charge fees. Once he has
gained sufficient knowledge, he can teach the same to other people, who want to
become digital marketers. He can also open an agency or startup company, mentor
his employees and continue to build his personal brand in his special niche.
This
is called mass trust building, and its steps are shown pictorially below:
Summary
In
conclusion, we can say the following about marketing:
-
It is about understanding customer
requirements deeply
-
It is about building trust, by
providing genuine value
-
It is about creating the right
perception about our product
-
Both traditional marketing &
digital marketing have to be used
-
It is about finding a unique niche in
the market
-
It is about building brand, both
personal and business
Marketing
is not just about selling. It is about keeping customers happy, by adding value
in their lives. It is about nourishing the relationship with customers after
sales has taken place, and continually provide great customer service.
As
the old quotation goes, “Customer Service is not a department, it’s an Attitude.”
And for any organization’s growth, it’s Attitude determines it’s Altitude.
Note:
For more insights into the benefits of digital marketing, please read below blog:
https://mohithdigi.online/digital-marketing-tactics-to-your-business-grow/
