April 7, 2020
What marketing is and how to do it (full guide through)

What marketing is and how to do it (full guide through)


I thought that only in Italy entrepreneurs don’t know what marketing is, but also here in the U.S., I’ve talked with many entrepreneurs and the concept of marketing is not actually clear. So, what does marketing mean and what’s the difference between digital and traditional marketing? Why is marketing so important for organizations and how has it changed over time? In this video, you will learn the fundamentals to manage and run marketing campaigns by yourself. I will go through the evolution of marketing till the holistic marketing approach. So, I will start explaining you what marketing means, the difference between traditional and digital marketing, and I’ll also show you some examples of digital marketing funnels and marketing, traditional marketing systems. Then, we will see the evolution of marketing, till the holistic marketing approach. According to Marketing and management of Kotler and Keller, marketing is the ability to identify and match human and social needs. And it is represented by two main components: marketers and prospects. Marketers are on the side of organizations and they search for a response from another player called prospect. In other words, we can say that prospects, in the language of marketing, represent our target audience. So, it’s clear that the role of marketers is understanding prospects’ needs and wants, stimulate their demand and provide a solution that satisfies both sides, organizations and consumers. Traditionally, the American Marketing Association defines marketing as the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. Everything starts from the consumer and their demand of goods and services. But what does demand actually mean? Well, in marketing there are many different types of demand. You can have a negative demand when consumers don’t like the product or service at all, and they are also willing to pay to stay away from it. Non-existent demand when consumers don’t have interest in buying the product or service, or are unaware of its existence. Latent demand is a strong request of a product or service, but the product or service itself doesn’t exist yet. It represents a huge potential for marketers. Declining demand: the need of a certain product or service is decreasing and consumers stop buying it. For a company, it represents the time to innovate or change the offering. Irregular demand: consumers purchase a product or service seasonally. It represents a risk for a company, since it causes an irregular cash flow. Full demand: the product or service is regularly purchased by consumers. Overfull demand: the demand of a product or service is greater than its availability in the market. And finally, unwholesome demand: consumers buy products or services that have negative social implications. For example, cigarettes, drugs alcohol and others. The concept of demand is critical for a company. According to a 2019 survey of CB Insights, the majority of startups fail because the market doesn’t need their products or services. Precisely, the 42% of startups fail for mismatch between their offering and demand. Now that we’ve understood what demand is, what about the market? What is the market? In marketing, market means a group of consumers who express the same demand. So, you have sellers on one side, and they belong to the industry, and buyers on the other side, and they belong to the market. When marketers target a specific audience, it means they are targeting a specific market. In a modern economy, there are usually five types of markets. As you can see from this image, manufacturers buy resources, raw material, labor, money and transform them into products and services. Then, they sell finished products to intermediaries, companies or individuals, that in turn sell them to the final consumers. Consumers sell their labor in exchange for money which they can spend to purchase products and services. The government collects and uses them to buy products and services from the other four markets to provide public services. And every nation’s economy consists of exchanging processes among interconnected markets. And if you think, this model is still valid in the digital world. We have different intermediaries, but they are still intermediaries, for example Facebook allows companies to reach their target audience. And a CMS, let’s say, I don’t know… a website on WordPress, facilitates the dialogue between the company and multiple users. Now, the sweet spot. We have the demand, the market, the industry, what actually is a marketing system? This image illustrates a basic marketing system which is represented by a mutually interactions between a market and an industry. This relationship is represented by an exchange of sellers’ goods, services and communications, I don’t know… like advertising or direct mail, for people’s money and information, like customer behavior or sales data. The internal loop portrays the flow between money and products or services. Instead, the external loop shows the stream of information. Maybe now, you think that traditional is different from digital marketing. But it’s not true. You just have to slightly adapt some rules, way of thinking and technicalities. Being more practical, digital marketing is a system that facilitates and stimulates the transactional relationship between online businesses and consumers. And for me, digital marketing aims at only one thing. Generating money from a specific target audience. In this image, I’ve reproduced a typical digital marketing system. Given a specific product or service, a business starts advertising to its target audience. The users who responded to the adverts are poured into a digital marketing funnel. A digital marketing funnel is a series of content that encourage users to take certain actions. It allows the business to skim qualified leads from those who are not in target or not interested. This process is part of what is called lead generation. In brief, I can define a lead as a prospect who has strongly and publicly expressed their interest in a company’s product or service. So, the user receives a sequence of videos where they are indoctrinated and learn more about the offering, like features, benefits, opportunities, value proposition and so on. If the user doesn’t finish the sequence, an automated system moves them into another mailing list and tries to bring them back to the video sequence. If they still don’t take the bait, it means the user is not in target or the offer must be reviewed. If the user finishes the video sequence and clicks to the final call to action, they are ready to receive the first offer. If they buy, they become customers and the company can try two different strategies: up-sell, trying to sell an upgraded version of the product or service, like a bigger size of French fries. Or cross-sell: trying to sell a related or complementary product or service, like French fries and a sandwich. For both cases, the loop starts again from the beginning. Customers must be educated on the offering, selected and persuaded to buy. If the user doesn’t accept the first offer, it’s useless trying to up-sell or cross-sell. It is more appropriate to activate a down-sell strategy: trying to sell a downgraded and cheaper version of the product or service. For example, a smaller size of French fries. Again, the digital marketing system repeats. If the user rejects the down-sell, it means they are not in target or the offering must be reviewed to be more appealing. Down-sell, up-sell and cross-sell are only possible if the business has a value ladder. A value ladder is fundamental in marketing and represents the key to increase profits and expand the customer base. The main point of a value ladder is having multiple offerings. So, you can start from a free product or service and then, increase the price of your offerings. Now that you have understood how to do marketing, what are the three worst mistakes that entrepreneurs make in marketing. There are many gurus that say make a list of passions, pick one and start a business on it! Or why not founding a business on your skills? You are so good at something that why can’t you make money from it? The last trap for laymen is starting a business on one of your interests. But why starting a business upon passions, skills or interests is so wrong? Because they are based on your individuality and not always they reflect the real demand for which people are willing to pay. The main takeaway from all of this is that everything starts from the consumer. So, study them, analyze them, find a specific niche and then, market your product or service which has to be built upon your target audience, upon their needs and wants. Marketing is not a perfect science, so as I always say, the best way to find out whether a marketing strategy is good or not is testing it on the field. And good marketing is achieved through a series of mistakes. In fact, companies should run many little tests on a consistent basis. And this is called growth hacking. Even if a marketing strategy should be tailored for each company, we still have some common guidelines. So, how these guidelines evolved over time and what made them evolve? Back in history, the first model was the production approach. Manager thought that consumers prefer cheap and widely available products. and this concept led companies to optimize manufacturing processes, distribution costs with scale economies and standardization. The production approach is not completely disappeared. It’s still used by some multinational companies that, for example, externalized and outsourced the production in China, where they could find very cheap labor. One of these is the largest PC vendor Lenovo which is using the production concept to dominate and expand its market. The second is the product approach and it is based on the fact that consumers express their preferences according to the quality, features or performance of a product or a service. But also this belief is a huge mistake for marketers. Sometimes, entrepreneurs and managers are so in love with their service or product that they think that having just the most innovative features is enough for customers to knock their doors. Unfortunately, a product success is not strictly related to its superior characteristics. Above all when other activities like sales, distribution, pricing and advertising are not carry out carefully. The third concept is the selling approach and it is based on the belief that consumers need to be pushed in order to buy a service or a product. Because they will not make the first move. But also this approach is a mousetrap. A good marketing approach should start from what people want. Companies should sell what the market wants, not what they make Besides, aggressive selling strategies can lead consumers to stop buying that product or service. Maybe, they can also review it negatively and spread a bad word of mouth. In the middle of the 20th century, finally, economists and theorists elaborated the first concept of marketing. In 1860, The marketing revolution by Robert Keith explains how businesses should find the right product for their customers, instead than finding the right customer for their product. For example, Dell’s e-commerce is not only a platform where you can buy a product, but it also allows to personalize them. In the same year, the American economist and Harvard Business School professor Theodore Levitt published Marketing myopia, where he showed the world how marketing was the answer to achieving organizational goals. And he wrote that selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it. Nowadays, marketing is a crossover element in a company and influences all the processes and activities. That’s why managers have to recognize this interdependence and build marketing programs that interact with each other. And this is exactly holistic marketing. As you can see from this image, holistic marketing is formed by four broad dimensions: relationship marketing, integrated marketing, internal marketing and performance marketing. Relationship marketing represents all the activities, strategies and processes that enable a business to establish and develop long-living and mutually satisfying relationships with its customers. And this concept leads to another principle which is “marketing network” which is a unique asset made out of the value of the relationships between a business and its stakeholders. And this is also the main asset on which modern companies are founded. In fact, they usually acquire or build strong brands, rather than buying expensive physical equipment. They delegate the production to external manufacturers that can fulfill to this purpose with lower costs. Relationship marketing is also focused on customer retention and, according to Marketing and management of Kotler and Keller, retaining a customer is five times cheaper than acquiring a new one. One of the strategies to achieve this objective is price the offering according to the customer’s life-time value. So, marketers have to understand and study very deeply their target audience. They have to get intel on their demographics, behavioral traits past purchasing trends and preferences, and price the offering to maximize profits over a customer’s life-time. Another method to retain customers is having a customer relationship management. For example, HubSpot links together sales, marketing and customers’ activities. With just a dashboard, you can have under control the historical records of what actions they took on your website, what email they left unanswered, what stage of the buyer’s journey they re in and so on. In this way, the sales and marketing team can coordinate to better satisfy customers’ needs. Integrated marketing is founded on two principles. The first one is that marketing activities can communicate, create and deliver value together. The second is that marketers should develop and implement marketing activities with all the others in mind. But what does it mean in practice? Let’s understand it with a step by step example. Consider a company which sells goods online. It needs an e-commerce to sell its goods; a system to manage payments from clients and also payroll for employees; a CRM, Customer Relationship Management, to manage the orders and its customers; an automated marketing system, let’s say, for example, an email marketing tool; an event manager for trade shows, exhibitions, new products launch and so on; a blog to promote their products or ideas; a monitoring system to keep track of all users’ activities and relevant KPIs; advertising strategies. Considering this list of must-have systems, the first principle of integrated marketing tells us that email marketing helps selling goods online and creates value for the customer. Because it lets customers discover new products, features and discounts. A blog post can organically, so without paid methods, attract people to your website. But it may be not enough to make them buy. So, let’s say that they leave your website after reading. At this point, you start advertising on social media by retargeting the visitors of your blog posts. If your content and advertising strategies are good, you are able to bring them back on board and make them become customers. Everything clear? Now, let’s consider the second principle of integrated marketing. A company shouldn’t choose a system just because it is the best in the market, but it should consider also other pros and cons. It should ask does this tool integrate with other platforms and activities? An example of bad integrated marketing should be using Magento as a CMS, MailChimp for email marketing, WordPress as a blog, HubSpot as a CRM, PayPal for online payments and QuickBooks for payrolls and bills. But why, why is it wrong? Well, first of all because you have six platforms that you have to pay and manage separately. You would slow down processes and increase cyber-security risks. Besides, the more tools you use, the more skills your employees need to have to manage them. I can bet that this is a problem of many businesses, above all here in the U.S. Every time that I enter an organization here, you use thousands of tools for simple things and you even don’t have a complex business model. So, how can you activate a positive integrated marketing? Considering this example, I would suggest to use Wix, because it includes an e-commerce, a CRM, an event manager, a blog, a payment manager with Wix Payments and an email marketing system with Ascend by Wix. Then, I would choose WaveApps for accounting, because it perfectly integrates with Wix. You can use it directly on Wix without switching platform. You have your online business operational and under control just from a one single interface. Attracting loyal customers is only half of the job, because finding, training, motivating and retaining great talents is also a marketing activity. The role of internal marketing is making sure that employees and partners are aligned with the mission and vision, and overall marketing strategy. In this way, they can provide the best service and send a unique branding message to customers during the many contact points. Finally, performance marketing is based on the understanding of monetary and non-monetary returns to a business. It goes beyond the pure concept of sales and it accounts also non-monetary factors like brand awareness, engagement, product quality, customer satisfaction and so on. It includes all the elements that can influence directly or indirectly a business performance. One of these is financial accountability. Marketers and managers should evaluate the profitability of marketing activities to justify the investments received. Another one is social responsibility marketing. Day by day, people are becoming more social conscious and businesses must match this trend by demonstrating that they are capable of preserving and enhancing the society. Incorporating social responsibility is also a way to differentiate from competitors. Now that you have discovered all these concepts, what marketing means, how to create a digital marketing system, what kind of changes would you make to your organization? Drop your thought in the comments below and let’s connect. If you liked this video subscribe to my channel, every week I come up with a digital marketing lesson, thank you for watching and see you soon!

Leave a Reply

Your email address will not be published. Required fields are marked *