Understanding business marketing concepts is crucial as an entrepreneur. Without effective marketing, consumers will not know that your product or service exists, no matter how revolutionary it is!
Successful marketing will drive profits and ensure a return on investment. As a business owner, it is crucial to understand basic marketing concepts.
In this article you will learn about:
The first marketing concept that is important for any business owner to understand, is market segmentation. Market segmentation aims to stratify the target audience to market to them more effectively.
Market segmentation helps narrow the focus of marketing efforts so that they are not directed to one large, general audience.
Instead, by understanding each segment of the market, a business can directly respond to the needs and desires of its audience.
By splitting up marketing efforts in this way, there is a greater chance for a return on investment because the marketing budget is not spent on an audience that will not likely be persuaded by a certain type of advertisement in the first place.
Market segmentation not only allows marketers to strategically market existing products, but it also allows entrepreneurs to create products based on the needs of a specific market.
There are four types of market segmentation:
Demographic segmentation: This type of segmentation involves creating groups based on demographic characteristics such as age, gender, occupation, race, etc.
Demographic data can easily be accessed and implemented, making it a great marketing resource.
Behavioral segmentation: A market can also be stratified by behavior.
For example, the customers of a product can be segmented based on their purchasing habits and brand loyalty.
Marketing to a customer who consistently purchases the same product from the same brand should be targeted differently than a customer who has only purchased the product once.
Geographic segmentation: Marketing can also be targeted depending on the location of consumers.
This will allow for more effective marketing of local businesses, who only want to target a small population, and international businesses, who need to develop specific messaging for each population that they serve.
Psychographic segmentation: The final type of market segmentation is psychographic segmentation, which stratifies a population by mental and emotional differences such as beliefs, values, and personality.
For example, there is a trend towards sustainability and eco-friendliness. If you are a brand with these values, it is important to target customers who also hold these values.
The 4Ps of marketing, or the marketing mix, help marketers better understand their product or service and construct the best ways to market this product to its target audience.
So you must be wondering, “What are the 4Ps?” The 4Ps are:
Product: This is quite simply the product of service a business sells. The product or service is evaluated based on how new it is to the market and what demands it serves.
Price: The price is how much the product of service costs, which includes how much competing products cost, and how much the product costs to make.
Price influences how a product or service is marketed.
For example, is it being marketed as an expensive, luxury product, or does the business rely on persuasive discounts to make a sale?
Place: Marketing is highly influenced by where a product or service is being sold and marketed.
Television marketing differs from social media marketing, which differs from print marketing.
In the same regard, products sold in stores require different marketing techniques than running an e-commerce platform.
Promotion: Promotion refers to what is most likely to come to mind when someone refers to marketing, which includes advertising, public relations, and the use of marketing channels.
KPIs or Key Performance Indicators measure the success of a marketing campaign.
They provide the necessary analytics for a marketer or business owner to better understand how to improve their marketing strategies.
Although there are many KPIs that can be measured, we will name two examples:
Sales Revenue: Probably the most obvious indicator of performance, sales revenue reveals if marketing efforts are leading to conversion.
As a business owner, it is important to understand which marketing efforts are a true return on investment. If a marketing tactic is not generating more money than it costs, it is not effective.
Traffic-to-Lead Ratio: Tracking web page analytics is a great way to understand if something is missing in your marketing campaign. Maybe your website is getting a lot of traffic, but these visitors are not buying products.
Understanding this data will reveal areas where your campaign might be missing the mark.
A call-to-action is exactly what it sounds like. It is a phrase to encourage consumers to take a specific action.
A call-to-action can be implemented anywhere, from marketing emails to social media posts, or buttons on the website.
For example, say you run an e-commerce website selling apparel, and you send weekly promotional emails to maintain top of mind awareness and to notify customers of sales.
However, you need people to go from their email inbox to your website.
Place a call-to-action button at the bottom of the email that reads, “Shop the Sale” so customers are more inclined to click on the link, which will direct them to the website.
A call-to-action can be as simple as the previous example or can be more specific.
For example, if you are running a Facebook advertising campaign for a new food delivery app, you can tell Facebook users that if they click the link and download the app, they will get 50% off their next order.
This is not only a call to action but also incorporates an incentive.
With e-commerce and technology becoming the driving force for business transactions and marketing, it is increasingly important for entrepreneurs to utilize search engine optimization (SEO).
SEO aims to boost a website’s ranking on search engines, like Google, which leads to greater website traffic. Google rankings are affected by page speed, keywords, and a host of other factors.
SEO is essential for digital marketing as it directly correlates to leads and sales.
It is a marketer’s job to produce high-quality content that optimizes webpages for search engines.
As an entrepreneur, you must think like a marketer. By fully understanding the consumer and how to stratify your audience, you are ensuring targeted, highly-effective marketing.
The success of marketing efforts directly translates into sales and profit. Therefore, thoughtful marketing is just as crucial as the product itself.
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