All of what I learned in my MBA in marketing, here it is in a nutshell what every entrepreneur needs to know – the simple guide to startup marketing basics.
I have been the in marketing for over 15 years and I have to say most people really don’t know the actual definition of marketing, including most Indian companies. To put it simply marketing is everything besides sales, which enables sales.
Startup Marketing Basics
Let’s go over the six basic guidelines that every entrepreneur needs to know for marketing their startup.
1. Understand Why Marketing is Crucial to Your Business
Sales are what generate the revenue, and marketing is what generates sales.
From choosing and optimizing a product to setting its price to focusing on where and when it should sell, everything’s covered in marketing. As a startup, marketing is THE most important job for you. Without proper marketing, the best products will fail. And with marketing, you CAN create the best products that YOUR customer wants.
2. Marketing is All about the Long-Term
In India, sales is not considered very fancy. Thus most sales professionals and companies call their sales functions & teams as “marketing”. Most Indian companies are sales oriented, as they drive the revenue and get a bigger say. However, sales departments have a short-term view. They don’t look at the big picture.
One very famous classic example is Xerox, which is now synonymous with photo copiers. Xerox used to be so much more, it created the first PC with graphics user interface, which later got copied by Apple & Microsoft.
Why? Xerox management got so skewed by its sales of photocopiers that it stopped investing in other long-term projects. The sales head got the maximum say in meetings, since they drove the revenues. This later lead to its current state, when it could have been so much more.
3. Remember the 4 P’s of Marketing
Most people consider marketing to be synonymous to communication. They believe the job of marketing departments is primarily to focus on advertising & promotion of their product. However, this is just a small part of it. Philip Kotler defined marketing as, “Satisfying needs and wants through an exchange process.”
Now this definition may be at an advanced level and too in generic to comprehend. To make its simpler, Philip Kotler also defined marketing with the concept of 4P’s i.e. Product, Price, Place and Promotion. Notice there’s no mention of the word sales here. Most people treat 4P as a buzz word or some lecture they attended in their business school. But it is core to understanding marketing fundamentals.
3a. Product: Focus on Creating a Product that Fills a Market Gap
So for a startup or any other business, the most important is the product (or service). If they are not able to convincingly cater to the concrete needs of a customer, they will not be able to succeed. This is one of the most common mistakes first-time entrepreneurs make – not understanding their target audience well, or creating a product their target audience does not need.
For this you need to be extremely clear about the customer or customer segments who you are about to cater to. A product’s value proposition should be so good that it should sell itself.
3b. Price: Constantly Work on the Value Proposition of Your Product
When I say value proposition, I mean the cost vs. benefit of a product. Creating value is one of the most important startup marketing basics. For example, you have superb dependable product like laptop. Now if this laptop is priced high, people will ask themselves whether it’s worth its price. They will also compare it with other available laptops, how does it fare in comparison to them. A marketer’s job is to ensure that a product’s value is properly delivered, and that it should be priced right.
I may have oversimplified price value proposition here, but the key to any product’s success is this balance of price vs. the value it delivers. A start-up needs to constantly work on this aspect.
3c. Place: Patiently Choose Your Markets to Gain a Market Share
Once product & pricing or product value proposition is taken care we move on to the other 2P’s i.e. place and promotion. Place is where and which markets you want to compete in. A startup’s ideal market is where there are no competitors, so that the company gains a monopoly. But this seldom is the case.
A startup needs to prioritize which markets it wants to focus on to gain some share. This is a very hard lesson, as most startup want to grow rapidly.
To give you an example here, let’s compare two businesses. One was a specialty restaurant business that wanted to expand to 5 cities in 1 year. This turned out to be a disaster as it lost focus, and did not have enough top management bandwidth to manage the show, as 4 new cities had 4 different types of challenges that a business should be willing face simultaneously.
On the other hand, there was a retail chain that didn’t expand to multiple cities until the time matured its scale and operations. Instead it focused on setting up 10 stores in a single city. And this business, 15 years later, had a successful run.
4. Think of Your Startup’s USP
Before we get to the last P, let’s talk a little bit about something that every startup needs.
Businesses and startups need to be unique. Every business needs to have a USP or Unique Selling Proposition. In the words of Peter Thiel who I regard as one of greatest business minds of our generation, “What do you know that nobody else understands?”
He also says that businesses should always aim at being so unique they can create a monopoly. Common businesses try to project themselves as unique, where as monopolistic businesses try to portray themselves as common place, in the fear of being penalized by the market regulators. I would highly recommend entrepreneurs to read the book Zero to One: Notes on Startups.
5. Be Open to Failure: That’s What Entrepreneurship is All About
You may have read startup success stories. But nobody talks about the constant failures that are behind every success. Now this doesn’t mean we should glorify failure and actively seek it. It means having grit and being open to course-correcting.
Even if you know all the ins and outs of building a brand or startup marketing basics, there’s still no guarantee that your strategy will work, since there are so many variables, like timing of the business, the right product, being in the right market.
Entrepreneurs need to be realists, they cannot be in denial if their startup is not going the right direction. Startups need to ask themselves daily where they are heading. This is not an easy question to ask ourselves and truthfully answer. I believe this is the most difficult part of starting a new business, as there is no one to guide you.
It’s easy to put hard work and effort once you know the right direction, but continuously finding the right direction is the most difficult part for an entrepreneur. But there is no greater teacher than failure. It’s failure that finally leads the way to the successful path, and all you need is grit to face failure again and again, and learn from them.
6. Promotion: Your Communication Needs to Be Sharp
Coming to the last P i.e. promotion. Once you have thrashed out you core value proposition, you need to create a sharp communication pitch that is simple enough to comprehend. In today’s world, there is so much noise that it’s become very difficult to communicate your idea to the customer.
So how you talk about your product needs to be crisp and easy enough to understand exactly. It’s one of the most important startup marketing basics when it comes to branding, which I’ll talk about in my next article. This communication goes everywhere – on your website, on your product packaging, on social media, directly to your customer through employees, friends and by you at casual parties. If your pitch is not sharp enough, no amount of advertising expense can help you market your product. Your marketing pitch needs to be continuously sharpened, it takes time to for this to happen.
In the end, if you’re clear about your product’s value proposition, you will find a market place for it and develop and communicate a marketing pitch. All the 4P’s are very important. However I hold product (or service) to be of utmost importance. Product value is the core of the business. Without it, the other 3P’s (Price, Place and Promotion) are useless. That’s Marketing 101 for you. Please feel free to share your thoughts about our guide to startup marketing basics in the comments section below, or connect with me on Twitter @slubguy.
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