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Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. Marketing includes advertising, selling, and delivering products to consumers or other businesses.
Content Provided From Investopedia.com. By: Alexandra Twin - July 2022
Marketing Key Facts
Marketing refers to all activities a company does to promote and sell products or services to consumers.
Marketing makes use of the "marketing mix," also known as the four Ps—product, price, place, and promotion.
Marketing used to be centered around traditional marketing techniques including television, radio, mail, and word-of-mouth strategies.
Though traditional marketing is still prevalent, digital marketing now allows companies to engage in e-mail, social media, affiliate, and content marketing strategies.
At its core, marketing seeks to take a product or service, identify its ideal customers, and draw the customers' attention to the product or service available.
Marketing as a discipline involves all the actions a company undertakes to draw in customers and maintain relationships with them. Networking with potential or past clients is part of the work too, and may include writing thank you emails, playing golf with prospective clients, returning calls and emails quickly, and meeting with clients for coffee or a meal.
At its most basic level, marketing seeks to match a company's products and services to customers who want access to those products. Matching products to customers ultimately ensures profitability.
The 4 P's Of Marketing
Product, price, place, and promotion are the Four Ps of marketing. The Four Ps collectively make up the essential mix a company needs to market a product or service. Neil Borden popularized the idea of the marketing mix and the concept of the Four Ps in the 1950s.
Product refers to an item or items the business plans to offer to customers. The product should seek to fulfill an absence in the market, or fulfill consumer demand for a greater amount of a product already available. Before they can prepare an appropriate campaign, marketers need to understand what product is being sold, how it stands out from its competitors, whether the product can also be paired with a secondary product or product line, and whether there are substitute products in the market.
Price refers to how much the company will sell the product for. When establishing a price, companies must consider the unit cost price, marketing costs, and distribution expenses. Companies must also consider the price of competing products in the marketplace and whether their proposed price point is sufficient to represent a reasonable alternative for consumers.
Place refers to the distribution of the product. Key considerations include whether the company will sell the product through a physical storefront, online, or through both distribution channels. When it's sold in a storefront, what kind of physical product placement does it get? When it's sold online, what kind of digital product placement does it get?
Promotion, the fourth P, is the integrated marketing communications campaign. Promotion includes a variety of activities such as advertising, selling, sales promotions, public relations, direct marketing, sponsorship, and guerrilla marketing.
Promotions vary depending on what stage of the product life cycle the product is in. Marketers understand that consumers associate a product’s price and distribution with its quality, and they take this into account when devising the overall marketing strategy.
Marketing is comprised of an incredibly broad and diverse set of strategies. The industry continues to evolve, and the strategies below may be better suited for some companies over others.
Traditional Marketing Strategies
Outdoor Marketing: This entails public displays of advertising external to a consumer's house. This includes billboards, printed advertisements on benches, sticker wraps on vehicles, or advertisements on public transit.
Print Marketing: This entails small, easily printed content that is easy to replicate. Companies often mass produce printed materials as the printed materials delivered to one customer does not need to vary from other. Examples include brochures, fliers, newspaper ads, or magazine ads.
Direct Marketing: This entails specific content delivered to potential customers. Some print marketing content could be mailed. Otherwise, direct marketing mediums could include coupons, vouchers for free goods, or pamphlets.
Electronic Marketing: This entails use of TV and radio for advertising. Though short bursts of digital content, a company can convey information to a customer through visual or auditory media that may grab a viewer's attention better than a printed form above.
Event Marketing: This entails attempting to gather potential customers at a specific location for the opportunity to speak with them about products or demonstrate products. This includes conferences, trade shows, seminars, roadshows, or private events.
The marketing industry has been forever changed with the introduction of digital marketing. From the early days of pop-up ads to targeted placements based on viewing history, there are now innovating ways companies can reach customers through digital marketing.
Search Engine Marketing: This entails companies attempting to increase search traffic through two ways. First, companies can pay search engines for placement on result pages. Second, companies can emphasize search engine optimization (SEO) techniques to organically place highly on search results.
E-mail Marketing: This entails companies obtaining customer or potential customer e-mail addresses and distributing messages. These messages can include coupons, discount opportunities, or advance notice of upcoming sales.
Social Media Marketing: This entails building an online presence on specific social media platforms. Like search engine marketing, companies can place paid advertisements to bypass algorithms and obtain a higher chance of being seen by viewers. Otherwise, a company can attempt to organically grow by posting content, interacting with followers, or uploading media like photos and videos.
Affiliate Marketing: This entails using third-party advertising to drive customer interest. Often, an affiliate that will get a commission from a sale will do affiliate marketing as the third-party is incentivized to drive a sale for a good that is not their own original product.
Content Marketing: This entails creating content, whether eBooks, infographics, video seminars, or other downloadable content. The goal is to create a product (often free) to share information about a product, obtain customer information, and encourage customers to continue with the company beyond the content.
Benefits Of Marketing
Well-defined marketing strategies can benefit a company in several ways. It may be challenging in developing the right strategy or executing the plan; when done well, marketing can yield the following results.
Audience Generation:. Marketing allows a company to target specific people it believes will benefit from its product or service. Sometimes, people know they have the need. Other times, they don't realize it. Marketing enables a company to connect with a cohort of people that fit the demographic of who the company aims to serve.
Inward Education: Marketing is useful for collecting information to be processed internally to drive success. For example, consider market research that finds a certain product is primarily purchased by women aged 18-34 years old. By collecting this information, a company can better understand how to cater to this demographic, drive sales, and be more efficient with resources.
Outward Education: Marketing can also be used to communicate with the world what your company does, what products you sell, and how your company can enrich the lives of others. Campaigns can be educational, informing those outside of your company why they need your product. In addition, marketing campaigns let a company introduce itself, its history, its owners, and its motivation for being the company it is.
Brand Creation: Marketing allows for a company to take an offensive approach to creating a brand. Instead of a customer shaping their opinion of a company based on their interactions, a company can preemptively engage a customer with specific content or media to drive certain emotions or reactions. This allows a company to shape its image before the customer has ever interacted with its products.
Long-lasting: Marketing campaigns done right can have a long-lasting impact on customers.
Financial Performance: The ultimate goal and benefit of marketing is to drive sales. When relationships with customers are stronger, well-defined, and positive, customers are more likely to engage in sales. When marketing is done right, customers turn to your company, and you gain a competitive advantage over your competitors. Even if both products are exactly the same, marketing can create that competitive advantage for why a client picks you over someone else.
So What Is Marketing?
Marketing is a division of a company, product line, individual, or entity that promotes its service. Marketing attempts to encourage market participants to buy their product and commit loyalty to a specific company.
So Why Is Marketing Important?
Marketing is important for a few reasons. First, marketing campaigns may be the first time a customer interacts or is exposed to a company's product. A company has the opportunity to educate, promote, and encourage potential buyers. Marketing also helps shape the brand image a company wants to convey. For example, an outdoor camping gear company that wants to be known for its rugged, tough goods can embark on specific campaigns that embody these traits and make these emotions memorable to prospective customers.