Understanding the Fundamentals of Marketing
For any business, understanding and applying some of the basic principles of marketing can be the difference between success and failure. Marketing focuses on the customer and is concerned with identifying and satisfying customer needs profitably. There are a few ways marketing can be used within a business, and this article focuses on marketing fundamentals that can be applied in any business.
Segmentation, Targeting and Positioning
This model looks at how you can make the most of your marketing budget by identifying customers that have a need for your product or service, choosing the most profitable segments and creating a brand they will relate to.
Segmentation – The first stage of using this model is customer segmentation. It may be easy to think that everyone has a need for your product or service, but this isn’t true even if you do have a very universal product like light bulbs.
It is very important to segment your market into different groups of people who have similar needs or demographics. For example, for people who have a need for shoes, you could break them down into sports shoes, work shoes, and casual shoes. These could then be broken down by age and gender; sports shoes for men aged 21-40, sports shoes for women aged 40-55.
Targeting – Once you have identified relevant segments of the market, you will need to decide which you think are the most profitable to target. If you are selling shoes to younger people, then you are more likely to sell them to young people who are working rather than students who don’t have a job and no money.
Positioning – This is the crucial final step and one that many people jump to in the first place and get wrong. You cannot market the same message to everyone. Older people are looking for different triggers to purchase vs young people. This is why the segmentation and targeting are so important. Once you know who you are targeting, you can craft bespoke messages that speak to those people specifically and position your brand to make them more likely to purchase your product.
However, further education is one key way to expand your knowledge of segmentation of your target audience. For those who are already working in marketing and that are interested in taking their learning further, you could choose an online graduate certificate in marketing. This will build on the basic principles you already know and could enhance your career prospects.
The 7P’s of Marketing and the Marketing Mix
Once you have gone through the process of segmentation, targeting and positioning, you will be better placed to understand and use the 7P’s of the marketing model. The first 4P’s apply to both product and service companies, whereas the final 3P’s only apply to the service industry.
Product – Without a product or service, you don’t have a business, so this is the most important one to get right. The key factors to consider here are what is your product and what makes it stand out in the market? What is your USP? If your product is just the same as every other product on the market, then people won’t have a compelling reason to purchase from you. Product is concerned with how it meets the customers need but also the packaging and labeling.
Price – Price in itself is fairly obvious, but it’s very closely linked to value. When people are thinking about making a purchase, they are considering the value of the product. Is it worth my money? Will it add value to my life? Will it save me time? Marketing is an exchange between two parties and both need to be gaining value from the transaction.
Price is also one of the key ways to compete against competitors and has a significant impact on brand positioning. If you are selling to students with no money, it’s unlikely that they are going to buy anything expensive. Therefore, creating a premium brand with high prices is not a viable option. To compete against competitors in the market who sell similar products you will need to monitor their pricing to make sure you aren’t too cheap or too expensive.
Place – The place that you sell your products is very important because it heavily relies on the work you have done in the STP exercise. Identifying where your target customers usually buy a product like yours will help you to decide on the best place to sell it. There are several different ways and places you can sell your products, including online, through retailers or through distributors.
Promotion – This is another crucial element that will draw on the work you have done on identifying your target customers. Your promotional strategy will outline how you will reach your target customers and let them know about your product or service. Marketing to 70-year-olds on Facebook isn’t going to be as effective as using print advertising or advertising on the radio. Speaking to your existing customers will give you a steer on where the best places are to use your marketing budget.
These three P’s are usually only applied to business in the service industry.
People – Ensuring you have the right people that work for you and that can deliver work to high standards is vital in the service industry. It’s also important to have the right customer service personnel who are experts and dealing with customers.
Process – This element is concerned with how the service is delivered, how easy it is to use, and how quickly it can be implemented. Having established and well-tested processes in place will ensure that you are delivering true value to the customer and delivering on their expectations. You should also be testing the process the customer goes through to use your service to ensure the customer experience is a good one.
Physical Evidence – More so in the business to business space but also in the consumer space, physical evidence can be the key to getting customers to sign up or make a purchase. Testimonials and reviews are an important factor that gives customers confidence that you are a genuine and well-respected company.
Another way to look at physical evidence is the assets your company has and the image it portrays. If you turn up to meetings in a banged-out car or hold meetings in a cold and dark office, what does that say about your business?