Too often, marketing is framed as the art of getting people to buy shit they don’t need – promoting consumerism and materialism. They do this with a mix of slick charm and lies about the efficacy of their products.
While there are dishonest, conniving salesmen trying to pawn off inferior products on unsuspecting customers, these are the bottom of the barrel and probably unsuccessful beyond targeting elderly pensioners like scam call operators. Of course, Elizabeth Holmes and other modern day scams still do pull of unbelievable heists. The vast majority of salesmen, however, would do well to speak the truth.
I love this interview with Jordan Belfort, the man who inspired the Wolf Of Wall Street series. A good marketer is not one that pushes, but rather has an understanding of the target customer and their needs. They use this information not just to tailor communications but also for product development.
Place
This refers to where you are selling the product – your distribution channels. Do you sell online by establishing your own audience, or through a retailer that already has an existing customer base? This is a deceptively simple aspect of marketing. Richard Branson recounts how Virgin Cola disappeared off the shelves of supermarkets. The rise of direct-to-consumer (D2C) brands such as Warby Parker and Dollar Shave Club also exemplifies the means in which new technology can disrupt existing distribution channels.
Product/service development
Marketing is vital to creating an iterative loop between product development and customers. That is why many lean startup principles focus on speaking with your customers and pivoting from there. Geroski, back in 2003, considers how firms meet inchoate demand, or the demand for products that consumers don’t even know they want. Customers should be co-creating your product with you, since they are ultimately the ones who will judge whether your offering provides value or not. No one else’s opinions matter.
Pricing
Pricing is something that can theoretically be changed easily, but not pragmatically. Price too high, and you won’t even get a sufficient critical mass of early adopters. It will be difficult to reverse a high price rapidly, because you would piss off the early adopters who had faith in your product, but now find themselves holding a cut-price product. You can set a low price to penetrate a market and treat it as a marketing expense, but this could also distort the product validation. Furthermore, people could drop-off when you raise the price, resulting in wasted costs of onboarding.
Furthermore, products do not simply follow a simple demand curve – a higher price connotes quality in an information asymmetrical world, though this effect has a limited effect on demand.
You can also price discriminate for different customers – compelling those who need your product more to pay more, hence maximising your own surplus.
Promotion
Every customer undergoes a decision-making process:
- Need recognition
- Information search
- Evaluate alternatives
- Purchase
- Post-purchase
A marketer’s aim is to inform consumers who have a need of the product about why the value the product will bring is greater than the opportunity cost. As a marketer, you want to:
- Appear to the consumer when need recognition appears – That is why pop-up notifications from McDonalds are far more enticing near mealtimes, because you perceive your hunger then
- Appear when the consumer seeks out information. Whether that is the consumer asking friends for recommendations or asking Google, you want to pop up through word-of-mouth or through Search Engine Optimisation
- Have an established place in the consumer’s mind – that way, when a consumer conducts an evaluation of alternatives, your brand will be considered as a contender. That is why McDonalds continuously bombards us with advertisements, even when they are not at meal times. This is an expensive proposition, however.
- Ensure the purchase method is easy and convenient – there is a reason why Amazon’s 1-click (to save payment details) is deemed a highly valuable patent
- Provide post-purchase support to ensure people are kept happy and will come back
Getting attention is very, very expensive these days. As consumers are bombarded with advertisements underpinning the rise of every giant technology company, the cost for advertisements will only rise. While we may see viral campaigns that arise rapidly, through memes and social media, it is wise to remember that these are by definition very difficult to engineer. If you have limited resources, you want to focus on 1) advertising to a very narrow target market and 2) purchase and post-purchase support to ensure that customers become regulars, saving you the cost of getting someone else’s attention
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