Marketing 101: The Basic and Fundamental Principles of Marketing

For small-to-medium-enterprises, marketing is one of those things that come as an afterthought, with many businesses relying too much on word-of-mouth and other passive types of marketing to get the word out on their brand.

While word-of-mouth is an effective way to let people know how great your brand is, it’s simply not enough. Marketing is an essential part of any business, and ignoring it, or not spending enough effort on it, could spell disaster in the long run.

One of the underlying problems some small businesses have about marketing is their perception of marketing as this pseudo-mystical, jargon-filled discipline that’s designed to fool people.

That’s 100% wrong.

Marketing isn’t just about letting people know about your existence; it’s about giving them an image of what your company stands for, how your brand adds value to your customers lives, and what you are doing to improve the quality of life of your community. Of course, all that happens IF you do marketing right.

This is another problem that some small-to-medium businesses encounter when it comes to marketing: they’re inundated with all these different types of marketing, some of which might not even be the right kind for their brand. Unfortunately, some companies even fall prey to unscrupulous marketers who convince them on going on expensive marketing campaigns that either end up not being effective or being down-right damaging to the company itself.

So how can companies avoid being taken for a ride? Simple: learn about marketing.

Right off the bat let me put you at ease: no, you don’t need a fancy MBA (although it wouldn’t hurt) or tens of thousands of dollars to invest just so you can have a basic understanding of marketing. All it takes is learning the basics, applying certain concepts, and doing further reading on your own. No, it’s not going to be simple nor easy, but it’s not going to complex and impossible either. Learning the basics of marketing is all about critical thinking and the willingness to try new things in order to make your company grow.

For this article, we’ve compiled a few key marketing concepts that we feel are best for business owners with zero marketing knowledge. This article is designed to cover the most basic aspects of marketing to give you a good knowledge-base to start from when you’re ready to learn more.

Note: It is NOT an article you read if you already have marketing experience or resources. Rather, this is for those people who have never needed to market their products or services and are now looking to expand their company.

So What Exactly is Marketing?

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For the dictionary definition, marketing is a business discipline that“consists of all the activities of individuals and organizations designed to identify, anticipate, and mutually satisfy the needs of all parties involved in the exchange.”

In layman’s terms, marketing is any thing or activity that a company does to learn more about what their customers want, and how their company’s brand can fulfill that want. Moreover, it’s also a way for companies to provide a higher quality of life for their customers through their products or services.

That’s it in a nutshell, really: identifying what your customers want and why they want it, and then letting them know in the most effective way possible why your brand can satisfy them. It’s a simple premise, and keeping this in mind first and foremost will help you immensely. Anything else in this article circles back to the premise above, so remember it.

Fulfilling Your Customer’s Pain Points

In your marketing education, you’ll find yourself encountering a lot of jargon that could be confusing, but some key words to remember are pain points. At the surface, Pain points refer to a customer’s wants and needs, but it’s more than that: pain points also refer to the psychological desires and drives of the customer, the reason why they want a certain thing.

But don’t worry, we’re not getting into Freud here!

Satisfying your customer’s pain points is one of the key aspects of marketing. To address this, there is the concept of Marketing Utilities.

What are marketing utilities? To put it simply, marketing utilities are different approaches you can take in order to address specific pain points. There are 5 key marketing utilities that you need to learn about: form, time, place, possession, and information. Note: Some marketers might include Service as a distinct marketing utility, but for the sake of simplicity, we’ll stick with the first five.

The Five Marketing Utilities

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Form Utility

The first, and arguably simplest, utility is form. Form refers to developing a product or service based on the physical shape, size, format, and scope that your customer needs. For example, a restaurant that starts offering Keto-friendly alternative menus to clients on that diet. This is a type of form utility because the company is creating products that fit their customer’s pain points (which, in this case, is finding a restaurant that can offer them dishes based on their diet).

Time Utility

The second utility is time. Time Utility refers to how fast and efficient a brand can deliver a particular product, service, or solution. A common customer pain point is fast delivery, which is why many companies offer their services as fast as possible in the highest quality possible. Restaurants, auto body shops, and repair shops all have Time Utility in mind when creating their brand because they know that their customers want their products/services quickly and conveniently.

Place Utility

Similar to Time Utility in terms of addressing convenience, Place Utility refers to brands that make their products or services available to clients in the most physically convenient place possible. Applying Place Utility to your marketing program can involve placing warehouses at optimal locations or opening brick-and-mortar stores at high traffic areas. Place Utility addresses the customer pain point of not having to go far for a particular service or product, and brands that are able to do that first and best will most often gain a huge advantage over their competitors.

Possession Utility

Possession in marketing terms refers to a customer taking full ownership of a purchased item, usually used in the automobile and real estate industries. Possession Utility, then, is the concept of designing your products to be possessed by your customers as quickly as possible, with payment usually being either on credit or on an installment plan. Some companies might balk at the idea of releasing a product before full payment is made, which is why they usually require bank or insurance policies to be taken out. This way, all parties concerned get what they want.

Information Utility

Finally, information utility refers to the type of communication, or the communication channels, that your company uses in order to reach and engage your customers. Communicating with your customers isn’t just a simple hi and hello: every communication effort you engage in should ideally trigger buying activity from the customer and push them further down the sales funnel. The goal of an Information Utility mindset is providing your customers with as much relevant data as possible to help them choose your brand over competitors. Note that we emphasize the word RELEVANT. This is because marketing materials that contain too much fluff are often ignored, while short and sweet messages that are information-heavy are often preferred by customers.

Making Sense of it All

During your education into marketing, you’ll encounter dozens of different types of marketing strategies, techniques, and methods. In order to make sense of them all, you’ll need some basic marketing management concepts.

Basic Marketing Management Concepts

The Production Concept

The production concept is the idea that customers want products that are cheap and convenient. Companies that focus on this marketing management concept usually gear their business towards mass-producing products, mass-delivery of services, as well as maximizing the efficiency of their production or delivery processes.The idea behind the Production concept is that companies can reduce the cost of their products while increasing the supply of their products in the market. Usually, this is reserved for larger companies that can operate in economies of scale, which operates under the assumption that a decrease in production costs can maximize profits.

The Product Concept

Companies that use the Product concept operate under the assumption that customers will prefer products of superior quality, and that it would choose superior quality over cheap and available products. Often, companies that employ the product concept invest extensively on research and development, as well as producing a product or service that is miles ahead of their competition.

This type of concept can generally be seen in the digital industries, where products and services are reliant on high-quality delivery of solutions rather than price or speed. However, a big problem with the product concept is that it relies too heavily on a singular purchase consideration (i.e. high-quality products/services) that it can drive off potential customers that may have other considerations in mind, like availability, convenience, or price.

The Selling Concept

While the previous two concepts focused primarily on how they produce their products/deliver their services, the selling concept is focused entirely on, you guessed it, selling the product or service. The Selling Concept is primarily concerned with finding ways to get your customer to purchase your product, regardless of quality, price, availability, or if it satisfies a customer’s pain point.

The idea behind the Selling concept is that customers will purchase a product or service if the company tries to sell it in the most aggressive way possible. While it does provide the company great initial results, the aggressive nature of the Selling concept means that no friendly relations are built between company and customer, so repeat sales, or even customer satisfaction, are rare at best.

The Marketing Concept

The Marketing concept places marketing strategies at the center of its business process. This means putting the needs of the customer at the fore ground and building your strategies around their needs, wants, pain points, desires, and drives.

Every activity of a company with a Marketing Concept mindset will be geared towards learning more about their target market and finding ways to add value to their target market’s life. From product/service conception all the way to final sale, every action of a Marketing-centered company will be based on actionable intelligence from market researchers as well as customer surveys.

Adding Value, Creating Satisfaction

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We’ve discussed how adding value and satisfying your customer’s pain points are crucial to the success of your marketing campaign, and your business as a whole. But what does “value” and “satisfaction” actually mean?

Value

Far from being a completely subjective term, value is a measurable index of success and can be viewed as an equation.

In general, value is calculated by dividing the cost of a product/service by the benefits it provides, as shown:

Value = Benefits/Costs

Benefits, in this case, involve both functional benefits (i.e. what that product/service does) and emotional benefits (i.e. what that product/service makes the customer feel). Costs, on the other hand, involve monetary costs (i.e. the actual price of the product), time costs (i.e. how much time it takes to purchase the product), energy costs (i.e. how much physical effort it takes to purchase the product), and psychic costs (i.e. how much emotional and psychological effort it takes to purchase the product).

So to further breakdown the equation above, Value can then be expressed as:

Value =Functional benefits + emotional benefits / monetary cost + time cost + energy cost + psychic costs

Satisfaction

While value as a concept can be broken down into a measurable factor, satisfaction is a little trickier. In essence, satisfaction refers to a customer’s positive or negative emotional response to a product or service’s performance in relation to an individual’s expectations and in comparison to other brands.

Expectation, in this case, is usually derived from an individual’s past experience with similar products or services, word-of-mouth from friends and acquaintances, promises by marketing materials, and experience with competing brands.

Although the goal of any marketing campaign is to provide customers with positive satisfaction, companies must also focus on trying NOT to provide a negative experience, as customers are twice as likely to express their dissatisfaction with a particular product or service as compared to a positive one. Not only will this have a negative effect on your sales, it will also have a negative effect on employees, who will view it as a failure on their part.

The Four P’s of the Marketing Mix

 

In your companies pursuit of creating the best product or service possible, it will inevitably use as many tools and strategies as possible. The marketing mix is one of the foundation concepts of business and is essential in guiding entrepreneurs in the most efficient way of hitting their business objectives by providing a set of best practices to follow.

Depending on whom you talk to, there are 4 to 7 marketing mix variables that must be taken into account when creating a product. For the sake of simplicity, we’ll focus on 4. These variables are known as the Four P’s (or 7 P’s) of the Marketing Mix. These variables are usually explored after a company has researched and chosen its target market.

The marketing mix variables are controllable factors that occur within the company’s business processes. They include:

  • Product
  • Price
  • Place
  • Promotion

Product

The Product variable describes all the things that make up the physical aspect of your product. This can include everything from quality construction, available features, aesthetic design, packaging design, branding, shape, labels, as well as variants.

Price

The Price variable describes everything related to the price of a product. This includes all factors regarding the pricing and not just the list price, this can include discounts, promos, installment plans, payment periods, and credit purchases, among other things.

Combined, all these factors will come into play in deciding the final price of your product.

Place

The Place variable deals with all things distribution. This includes physical aspects and considerations such as coverage areas, inventory location, brick-and-mortar locations, and other locational aspects. Thinking of where you’ll be deploying your product can play a deciding factor on the success of your product.

Promotion

The Promotion variable describes any activity of effort by the company to let people know about their product, whether it’s a special event, posters, print ads, social media campaigns, and basically anything that would raise visibility and awareness for their product.

Great Marketing Starts with the Right Mindset

Marketing is one of the pillars of business development and is an absolute necessity for small-to-medium companies that are looking to either expand their operations, or to simply serve their customers better. In the 21st century, numerous technologies and practices have made marketing even easier to scale, not to mention afford. Because of the wide variety of available technologies, channels, and other factors, a company’s marketing strategy can be uniquely tailored to fit not just their particular products or services, but their customers as well.

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But regardless of what strategy you choose, a successful marketing campaign starts with the right mindset. Whether you’re a first-time business owner or an experienced entrepreneur, it’s always best to approach marketing with the right mindset. The right mindset includes being informed about what you’re doing, getting to know your target market as intimately as possible, maintaining a public persona that’s accessible to your market, and remaining flexible to change.

Research is Essential

Intuition and experience are all important in reaching your business objective, but they’re worth zilch if not backed up by data-driven research. Yes, it’s tempting to rely on “gut feel” and doing things “like I’ve always done it”, but without proper data and evidence, you might as well play poker with your business!

Objective data, that is, information that is verifiable and measurable, are a must when determining the kind of marketing strategy you’ll execute. Instinct and experience can help you craft creative materials, but it’s research that will confirm and substantiate whether or not those will work on your market at this time.

Focus on gathering data that can be used as key performance indices. This way, you can measure the success of a particular product, the efficacy of a marketing campaign, or simply to track sales figures.

Build Bridges with Your Customers

Your target market are more than just the people you’ll be selling to; they can be existing customers who want to continue patronizing your company, potential customers who are on the fence between you and a competitor, or business clients that are considering you as trading partners.

Whoever they are, always make sure that you build bridges and connect with them on a human level. In the 21st century, customer-centricity is what wins hearts and minds; consumers don’t want to deal with faceless corporations, they want brands that they can communicate with and identify with.

A Consistent Brand is a Successful Brand

Your brand is your company’s public identity, its social media persona, and the face that will deal with your target market. It is at the core of marketing initiatives, social media campaigns, storefronts, labels, visual designs, and other things.

Because of this, you’ll need to craft a brand that is consistent in its messaging, stalwart in its values, and appears similar across different communication and media channels. A brand’s consistency is key to retaining customers as well as enticing new ones. Make sure that you have a “brand bible”; a set of rules for your marketing team to follow anytime they do something that will affect your target market.

Research then React Accordingly

Finally, we go full-circle and land back into research. Analyzing raw data regarding your company’s performance should give you all the information you need to either adjust your strategy, to elevate and improve it, or simply to maintain the status quo. Reacting to things as they happen, however, is a great way to stay on top of external factors, not to mention remain relevant in the eyes of your target market.

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