Marketing basics

The good news is that marketing will be around forever.
The bad news: It won't be the way you learned it.

Philip Kotler

Table of Contents

In this course, we’ll try to provide you with the basic marketing concepts and logical marketing framework that will help you organize your marketing activities. Since digital marketing comprises vast and versatile knowledge, covers all aspects of business and is evolving in high peace, it is important to build an understanding of its main elements. We hope the learning materials ahead of you will serve as a good foundation in your future marketing endeavors. 

Basic marketing concepts

What is marketing?

There are numerous definitions of Marketing and it’s functions. We are not going to bother you with some proficient academic-level statements, instead, we’ll focus on understanding the very core of Marketing.

The concept of marketing can be applied to every organization, as well as on every individual. The first thing an organization must define is its mission and vision. The mission answers the questions about the purpose and sole existence of an organization, and the vision states its wanted position in the future. A good mission should highlight the core values the organization creates.

Values come in all forms and shapes. It can be the product or service you create, ideas you stand for or knowledge and experience an individual brings to an organization. It is precisely the value creation where marketing comes into play. There is no point in creating something if it has no real value on the market. To achieve its vision, an organization (or individual) must understand what value it creates, for whom and how to successfully deliver that value to the end consumers. The process of value creation and exchange underlies all fundamental functions of marketing.

So in the end, what will you say when someone asks you what marketing is? You could say that marketing is one of the most important functions in an organization that comprises all processes and activities focused on the creation and successful exchange of values.

Highlights

 

  • there is no single, universal definition of marketing.

 

  • the concept of marketing can be applied to profit and non-profit organizations, as well as on individuals.

 

  • defining the organization’s mission and vision is the first step in understanding the role of marketing.

 

  • marketing functions are based on value creation and exchange.

 

Marketing functions

Once again we find ourselves in front of a difficult task on how to determine exact functions of marketing, and once again there is no firm consensus among marketers. In an attempt to describe the same visible effects and functions, marketers have developed numerous various categorizations, among which some have become more popular and generally accepted. One of them is the famous 4 Ps of marketing, created by McCarthy in the ’60s. He pointed out 4 main functions:

  • Product
  • Price
  • Promotion
  • Placement

Those functions were insufficient in the era of the Internet and were soon expanded with additional functions such as People, Processes, Physical Environment, Public Commentary, Privacy, Personalization, and Partnership. The solution seemed to be to just add another ”P”. If you want to dig deeper into the subject on marketing functions we recommend reading a great post by economic discussion. We at AdHolistic decided to present you with a simpler overview of basic marketing functions that rely on value creation and exchange.

 

VALUE CREATION

Product research & design. Brand development. Innovation.

VALUE EXCHANGE

Marketing channels. Distribution methods. Promotion strategy. Public relations. Content strategy. Advertising.

VALUE POSITIONING

Market research. Competitive analysis. Market segmentation. Customer Journey. Marketing Psychology.

VALUE MANAGING

Marketing objective. Pricing methods. Coordination of marketing strategy and overall business strategy.

What is digital marketing?

Digital Marketing uses the Internet and other available digital technologies, alongside traditional marketing methods in order to successfully accomplish marketing objectives. Over the past decade, the nomenclature has changed (ie. Internet Marketing, Electronic Marketing, Online Marketing, Interactive Marketing, and finally Digital Marketing), but the main principles remained the same. 

  • it uses Information technology to reach marketing objectives.
  • it creates, communicates and delivers values in digital surroundings.
  • it emphasizes the role of consumers and invests great effort in creating long-term relationships.
  • it is a part of overall marketing management (simultaneous implementation of online and offline marketing activities).

The rapid development of technology influences all segments of society and all types of businesses, marketing is no exception. In Digital Era there are unstoppable trends that shape the way of value creation and exchange. 

Trends that shape digital era

Digitalization & Connectivity

Adaptation to consumers

Internet Availability

New types of agents

More digital devices

More data

More  content

More digital media

To show you just how fast technology shapes the field of Digital Marketing, we’ll use a great example from MarTec. In just 8 years, the number of marketing technology solutions increased from 150 (2011) to staging 7040 in 2019. Observing those changes, it becomes more evident that finding your way through the digital marketing world can sometimes be ”mission impossible”.

MarTech Landscape 2011-2019

Digital Marketing Key attributes

Information based

Collecting, analyzing and disseminating information using any medium or form. Distribution of quality, relevant information to consumers, who in exchange give back some of their personal information used later in marketing processes. 

Examples: search sites, newsletter…

Interactivity

Centered on individual consumer’s actions. It is a one on one marketing experience which allows consumers to express their behavior by triggering specific interactive web-elements. 

Examples: online quizzes, interactive e-books, online calculators…

Direct response

Customers can react instantaneously to the marketing offer, and the response can be measured in real-time.

Examples: call to action elements like subscribe or ”buy now” buttons, email marketing…

Measurability

Generating useful information and reports by using various analytical tools on collected data. The results are focused on Key Performance Indicators.

Example: number of web site visitors, bounce rate…

Traditional VS Digital marketing

Segmentation.
Microsegmentation and Virtual communities.
One-to-one.
One-to-many / Many-to-many
Mass marketing (push, outbound)
Personalized marketing and mass customization. (pull, inbound)
Consumer is the target.
Consumer is partner.
Monologue.
Dialogue.
Brand communication.
Brand interaction.
Intrusive (interruption model)
Non-intrusive (permission model)
Difficult to measure.
Easy to measure.
Slow.
Fast.

Digital Marketing framework

To come up with the marketing plan, it is important to have an organized approach. Using a predefined framework makes the job much easier and clear. There are many different frameworks out there, and they all cover the same basic elements: your business, your customers, the massage, marketing channels and marketing objective.

For a good marketing plan, all elements must be taken into a consideration.

Here is the digital marketing framework we at AdHolistic find most suitable:

WHAT?

What is your offer? In other words what products or services are you marketing for your business or organization? You need to define the main activities and core products/services of your business. Define the business model and value proposition in a way that reflects your mission and vision.

WHY?

Refers to your marketing objective. State why are you engaging in marketing and define the SMART goals you want to reach with your marketing activities. Examples of marketing objectives are to increase sales, raise brand awareness, get new subscribers, etc.

WHO?

Your audience/customers. In this part, it is important to properly develop and describe your customer persona.

HOW?

How will you shape the message and create content to successfully engage your customers?

WHERE?

Where will your message be broadcasted? In other words, where will you find your customers, trough which marketing channels? Here you need to choose the right channel among many new and traditional in a way it suits best your customer persona.

WHEN?

Decide the exact time frame to send your message, regarding the customer journey.

MEASURE & OPTIMIZE

Track your progress towards the goals and optimize the performance when results are underperforming.

By answering all the questions, you will lay the foundation for a prospective marketing plan.

The first three elements are the backbone of every good marketing plan. To successfully implement tactics, it is crucial to define your customers, to represent your mission and core competencies and to develop SMART goals. 

The last three elements (message, channels and time frame) represent your marketing tactics. Tactics are the means or actions you need to undertake to successfully execute the marketing plan. 

The last thing to keep in mind is the need for constant optimization and measurement of your marketing activities. Everything in marketing can be evaluated and tracked, therefore it is important to monitor and manage your KPIs (Key Performance Indicators) and promptly take corrective activities. 

Keeping your framework in mind helps you not get lost in all the options and choices you’ll have when you start planning your marketing activities.  

Let’s see each element in more depth.

 

WHAT? - Your business

It’s important to always keep in mind the bigger picture after all marketing is a function within a larger business so it’s good to understand the business you are working for a bit better before you start. As a marketer, it is useful to know the basic elements of the business, the value proposition and the business model the company has.

Core components of the business

Every good marketing plan starts with an understanding of the core components of the business. Those components are:

Revenue sources

How do you make money?

Costs

What are your fixed and variable costs of production?

Product/Service

What is it that you produce, what value does it have for customers?

Customers

Who are they? Consumers, businesses, the Government? How do they interact with you (online/offline)?

Value Proposition

The value proposition is a way to express the benefits and values you create for consumers. State why they should choose your product/services and how it can help them. It is important to define the value proposition, so everyone in the company is on the same page on what the company is trying to achieve. It should be clear what the company does even to the people who never heard of you. To write a good value proposition is not an easy task, but some guidelines and templates can help you cover its basic elements. 

Elements of good value proposition

  • What are your products/services?
  • Their main benefits.
  • Who are your target customers?
  • What makes you unique?

Value proposition examples

Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And payment is completely cashless.

Build, Publish & A/B Test Landing Pages Without I.T. (unbounce)

A messaging app for teams who put robots on Mars!! (slack)

Value proposition template

Six line template by Goefflry Moore.

FOR_____(target customers, who are you talking to?)

WHO_____( statement of the need/opportunity of your target customer)

OUR_____( product/service is, categorize your p/s generically, no differentiation just statement what is)

THAT____( statement of primarily benefit, usually a solution to WHO)

UNLIKE_____(closest competitors, state legitimate alternative that your customer would think of)

OUR OFFER_____(primary differentiation, should not state your offer is better, rather they are good for this, and we are good for that).

Example from hypothetical company ”NewHorizon” that makes outdoor hiking equipment, and their legitimate competitor ”Everest”. 

Built for climbers who know no limits, our hiking equipment that is suitable for all weather conditions, unlike ”Everest” comes with an integrated GPS tracking system. 

Business Model

The business model holds information on how the company makes money. The complexity of business models depends on the size of the company and the nature of the business, but it typically conveys basics on how the value is created. 

As a marketer, it is important to know which markets the company operates:

  • is it Business to Consumers – B2C (e.g. online store fo women).
  • Business to Business – B2B – (e.g. Marketing Agency).
  • Business to Government – B2G – (e.g. Railroad company)

You should be familiar with the basic economic concepts such as Return on Investment (ROI), Profit and MarginsRevenue, type of Costs, and other key performance indicators (KPIs) like Average Order Value (AOV), Lifetime value (LVT). If you want to learn more about KPIs, please take a look at our course on Marketing Analytics. 

Business Life Cycle

We’ll close the WHAT part of the marketing framework with a picture of the business life cycle. Your marketing activities will be different, depending on which stage your company is.

For a startup, the most important thing is to establish seed capital and to find and develop potential markets. Since the marketing budget isn’t large, activities should be focused on organic growth and SEO, word of mouth, viral marketing and building social network and brand awareness.

In the growth stage, marketing activities are oriented to tracking growth over a while. The expansion to new markets and increasing the market share is in the focus of the company. 

Mature companies exploit their established position on the market. They focus on profit, ROI, and LTV. Important marketing activities are maintaining a strong brand and creating customer loyalty.

Businesses in decline are in pursuit of new markets and incentives. They invest in innovation and rebranding.

WHO? - Your customers

Now that you know more about your business, it’s time to define your customers. Every business can choose between two different approaches to value creation:

  • create something you believe has value, put in your marketing efforts, and hope someone will buy it.
  • find out what people/consumers value and create something that incorporates those values, tailor your marketing activities around those people. 

No matter which way your company chooses, you will have to invest time and energy to find out as much information about your current and potential customers as possible.

Customer segmentation

When you learn about your customers, it is useful to group them into segments. Customers in each segment share one or more similar attributes such as:

Demographic

Psychographic

Geography

Behaviour

Lifestyle

Beliefs & Values

Emphaty maps

After segmentation, you’ll want to know more about each type of customer. You can conduct online surveys, interviews or even visit customers in their environment to study their behavior. To make the customer research more clear, marketers present collected data in the form of empathy maps.

Empathy maps are usually represented as a four-quadrant map, with each quadrant describing a specific attribute of a chosen type of customer:

  • what do they think and feel?
  • what do they hear?
  • what are they see?
  • what are they say and do?

 While making the empathy maps, use the actual words and phrases your customers use and be as specific as you can. A good empathy map helps you to keep your customers in mind throughout all future marketing activities. To make it more understandable, let’s take an example of a travel agency. The travel agency segments their current and potential customers and finds out that few typical customer groups buy more often. Some of those typical customers might be newly married couples, people retiring or students in their graduate year. For a graduate student, an empathy map could look something like this:

example of an empathy map for a graduate student
emphaty map created on www.creatlr.com

Customer personas

After creating empathy maps for types of customers you plan on targeting, the next step is to develop the customer (or buying) personas. They help you to shape your message more accurately and personalize your offer. When thinking of customer personas, try to address them as if they were real persons. In such a way you will tailor your message and communicate the values with a more realistic approach. Therefore it is advised to give your persona a name and to attach an appropriate picture, along with the description of attributes from empathy maps. You will, of course, have to create more than one persona, each representing your target audience, and remember, when you talk to your persona, you are communicating with all customers from the selected audience.

To present and organize the  personas in a fashionable and visually acceptable way, there are numerous useful online sources and services, with templates and detailed instructions for creating exactly what is needed for your business. We provided a list of useful sources at the end of the lesson. 

Most common attributes for describing the customer personas are:

  • background and demographic,
  • needs,
  • barriers
  • hobbies, and
  • goals

Here’s an example of how customer persona template might looks like.

customer (buyer) persona practical example
Customer persona, image source dribble.com

WHEN? - Customer Journey

Up to now, we learned about segmentation, empathy maps, and customer personas. Giving the right approach, creating a useful and exhaustive description of users is a serious and never-ending task. But no matter how good your template is, or how precise your data are, working on the above-mentioned attributes represents only one dimension or perspective – a static or passive one. To empower their approach, marketers must introduce a new dimension, the dimension of time, embodied by the concept of the customer journey.

The story behind the customer journey started with the concept of the marketing funnel, which marketers have been used for decades. It is a model used to describe the process of acquiring customers. From the first stage of awareness through the consideration and finally action, a normal user is considered to pass through every stage step by step. The rise of technology changed everything, empowering consumers to take action and get information when and how they want it. The process is no longer linear, users bounce from one touchpoint to another. 

The marketers from every corner of the Galaxy came together on a Great Marketing Conference and decided to mark this buzzy user behavior as a Customer Journey. The highlight is on users’ experience and their interaction with the brand. Let’s see an example of an ordinary user who’s into buying a new gaming laptop. Here’s how his customer journey might look like:

  • he first searches on Google for ”best gaming laptops”
  • after finding a few potential laptops he reads comments and recommendations on various forums and specialized sites
  • latter that day, he gets on his mobile device and watches a Youtube ad for a new MacBook
  • in the evening he talks with his friends who recently bought a new Acer 
  • the next day he compares the prices of the selected laptops and searches for sales
  • on the weekend he goes to the shop to see the laptop’s features first hand
  • after a few days, he gets a mail with 35% sale on the laptop he likes 
  • in the end, he gets an almost new laptop from his older brother and decides to postpone buying a new one for a year.

From this example, it is clear that users can come to know you and your products at any point through their journey, not only in the awareness phase. Their behavior will be impacted by how well you present and communicate your values in each phase. To make things more clear, marketers divided the customer journey into stages, each containing a typical set of marketing activities and suggestions for best results. Here’s one representation of the customer journey through five stages (flip it to see more):

Awareness
How and when customers get to know about you. Present yourself in the best light and establish a recognizable brand.
Interest
Customers know about you and want to learn more about your offer, be at their service and provide them with useful information.
Desire
Customers know about you and want your product. Make sure that they understand what benefits you offer and why they should choose you over another company.
Action
Customers know about you, want your offer, and are ready to take action. Make customers comfortable to take action and give them a great user experience.
Post action
After customers have taken action, stay in touch with them, provide them with additional information and services to increase brand loyalty.

WHERE? - Marketing Channels

So by now, you understand your business, who your customers are and when you want to reach them, it is time to figure out where in the digital world to reach them. Traditional places where marketer spread their message are TV, radio, printed media, billboards, all representing a great example of one-way marketing communication.
With the development of technology, there are numerous new ways of reaching your customers, like websites, social media networks, email, search, messaging, virtual assistants, mobile phones, VR, with new ones appearing every year.
With so many options it seems quite complex to decide which channel to use. On the bright side, new technologies make possible to target exactly the right customers for your offer. Thanks to technology, customers can share their opinion and talkback, it’s no longer a one-way communication. This opens the door for real and valuable relationships with your customers.
Marketing Channels represent the way you reach your audience and potential customers. They can be divided into four general categories:

Broadcast channels

Online places where people pass by, like billboards of the digital world. The best examples are display ads and listicles. We’ll cover more about broadcast channels in Display Advertising Course.

Direct channels

This is a more direct and intimate channel. Examples are personalized emails or SMS and the messaging app. It’s a great opportunity for a marketer to speak directly to one client and no one else. We’ll cover more about direct channels in the Email Marketing course.

Search channels

Search platforms are a great way for users to find what they are interested in. Marketers have the opportunity to use keywords and search phrases to appear in search results as a solution or answer to the search query. Most popular search platforms are Google, Yahoo, Bing, Playstore, Booking search, and Youtube. More about how Search works in Course on SEO and SEM.

Social channels icon

Represents the ”word of mouth” of the internet. Social channels connect people with similar interests. Marketers use social channels to ignite conversations about a specific subject that is connected with the product or services.
Some of the most used social channels are Facebook, Linkedin, Youtube, Instagram, Tik-Tok, and Pinterest. We’ll get into more details in the Social Media Course.

This is just one possible way how to organize your approach to marketing channels. There is no standard or rule on dividing them because marketers often come up with different ways to express the same ideas and processes. Find the best way that suits you and your business and you’ll have a clear set up in your mind when thinking about marketing channels.
You should also keep in mind that some channels like Facebook incorporate several different types of channels in one: Facebook Messenger as one on one channel, Facebook Ads as a broadcast way to reach customers, and Member post as a social channel.
It is not that difficult to place your business on any of these channels, the more challenging task is how to reach a target audience with your message in mind.

HOW? - Shape your message

Creating the message is possible only by creating the content (or media). There are several ways you can develop your content, it can be shaped as an ad, video, post, article, etc.
Generally, there are three main categories of content:

Paid

You need to pay to place the content on the websites or platforms you don't own and control.

Owned

Includes all content you produce and place on your website and platforms.

Earned

When others write about you, without you paying for it.

The best strategy is to explore and create all three types of content. Looking back on the concept of the customer journey, it is evident that marketers need to adjust their content to customers in each stage.

In the awareness stage, the customer still doesn’t know about you or your offer, it is thus important to find a way to present your business in front of them. The best way to do that is to use broadcast channels and paid media. For instance, marketers pay display ad on a website where target customers spend most of their time. The main goal here is to grab customer attention with an appealing offer.

In the interest stage, marketers use social channels to provide more information about the benefits of their product or services, along with news, updates, and announcements regarding the offer. For instance, a marketer can sum up all those information in the form of a blog and share it on various social networks.

In the desire stage, customers know they want a product but they still haven’t decided which brand. Here, social marketing and search are the best choices. To assure customers to choose your brand, as a marketer you can, for instance, find an influencer who can endorse your offer on different social platforms, or you can launch a paid search ad campaign to reach users with interest in product/services similar to yours.

In the action stage, customers are ready to make a purchase. They know which product/service they want to buy, where to buy it and from whom. Here is where search channels come in handy. Marketers can run ads against several specific keyword searches which usually include their brand name and point directly to the action place.

In the post-action stage, it is important to stay in touch with your customers and to build a long-lasting relationship. This is where one on one channels come to play. You can send a transactional email confirming the purchase or make available your 1:1 customer support.

The above-stated examples don’t represent some rigid rules, rather guidance, so you can make sense of the logic behind choosing the right channel for different stages of the customer journey. Some channels are better to build a brand, while others have a more direct approach. In the next course, we’ll go into more detail on how to plan and create engaging content.

WHY? - Marketing Objective

Marketing objectives, goals, KPIs

The final question to answer is WHY are you going through all this effort? What is the purpose of all your marketing endeavors? You need to know where are you going with your marketing plan, otherwise, chances are you won’t be going anywhere. If you want to avoid mistakes and save yourself from losing time and money, you need to plan and define the objectives.  Simply put, the marketing objective is a statement of what you want to achieve with your marketing efforts. You can have one or several marketing objectives, such as:

  •     build a brand,
  •     increase sale,
  •     drive traffic to your website,
  •     increase the number of followers,
  •     convert leads into sales,
  •     increase customer loyalty,
  •     get more subscribers.
A good marketing objective consists of the following attributes (short term SMART):
smart marketing objectives
State clearly what is the main goal you want to achieve, that can be interpreted only one way.
All the outputs and results can be evaluated and measured using analytical tools.
You can successfully accomplish set goals using available resources.
Relevant to your business, product or service, and overall strategy.
It refers to a defined timeframe and has a starting and ending point.

If your marketing objective is SMART it will be easier for you to track your marketing performance and to plan your marketing activities. To help you better understand, here’s a few examples of SMART marketing objectives:

Get 1000 new subscribers for my Youtube channel in the next month.
Grow newsletter subscription by 20.000 subscribers, by offering a new ebook in the next financial year.
Raise brand awareness by driving 15.000 new unique visitors to the website this month.

Key performance indicators

When you define your SMART marketing objective, you want to be sure that you’ll reach it. Therefore every good marketer needs to choose a set of KPIs.

KPI stands for Key Performance Indicators. KPIs are used not only in marketing but rather in any serious industry with SMART objectives. Even more, it is used throughout several other departments in the same organization, such as the sales department, IT, finance and HR. Each department has its own set of KPIs, but we will focus only on digital marketing KPIs.

KPIs show how you are performing against set objectives. Since they are indicators, they are usually represented as a metric or value, but you should not interchange KPIs with metrics in marketing. The metrics tell the story behind the KPI, and your KPI shows whether you are reaching your marketing objective.

A good approach for setting KPIs would be to define the most central activity, or the most representative one and then extract one Primary KPI on which you will evaluate your progress. Depending on your marketing objective you need to find a fitting KPI. 

Choosing the right KPI:

  1. You have a clear understanding of how the chosen KPI is derived.
  2. KPI is relevant to your marketing objective, it can be controlled and used to evaluate the progress.
  3. KPI value can be used against a benchmark, in aggregate or as a comparison.

Once you choose your primary KPI you should define other metrics that will help you understand your customers and evaluate the success of your marketing strategy. Metrics are measurable units, usually expressed as a number. Which type of metric you will choose depends on the type of marketing campaign and channels you are using to reach your customers. Some common metrics are:

  • CTR– click-through rate,
  • BR – bounce rate,
  • CR – conversion rate,
  • CPC – cost per click.

To make your marketing effective, you should remember to:

  1. identify your marketing objective,
  2. select primary KPI,
  3. map the metrics to your primary KPI.

KPIs on their own don’t say much, they have to be a part of a larger picture, in other words, they have to tie back to your marketing objective. It is important to constantly monitor your KPIs so you can react on time and adjust your strategy when performance is lower than expected. 

Key takeaways

social media key takeaways

Huh, that was a long journey! Congratulation on finishing your first course! We hope that you now better understand the basic marketing principles and ideas. Before you go to the next course, let’s quickly recap the main points.

  • Marketing is a crucial part of every organization that cares about value creation and exchange.
  • All marketing functions are developed around the value concept (creation, exchange, positioning, and managing).
  • As the world embraces new technologies, marketing changes with it in the form of digital marketing, acquiring new attributes of interactivity, measurability, direct response, and informatization.
  • You need to organize your marketing activities using a predefined framework, to increase efficiency and reach maximum outcomes. The suggested marketing framework consists of 6 elements and considers your business, customers, offer, marketing objectives, the message and content, and time frames.
  • Before you start with the marketing endeavors, be sure to completely understand your business, defined value proposition, mission, and vision.
  • Understanding of customers is based on marketing segmentation, empathy maps, customer personas, and the customer journey. This is the most important part of every good marketing strategy since all other activities are centered around it.
  • Depending on the nature of your business and offer, and who your customers are, you need to define the marketing channels that will best suit your objectives. There are four main types of channels: broadcast, direct, search and social (organic).
  • Shape the message and create the content that will resonate with your customers. Engage them in the conversation and lead them on their customer journey. Remember that the content you create and share will shape the awareness of your brand.
  • Give yourself a clear path to reach the marketing objective. The goals you set should be specific, measurable, attainable, relevant and time-based. Define the key performance indicators to help you track campaign performance and optimization.

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