An excellent product nobody knows about will not succeed, while an ordinary product with smart marketing may spread widely. But marketing in new ventures differs from marketing in large companies: the budget is small, the brand is unknown, and every customer matters. In this chapter we cover the foundations of marketing, from choosing the customer and positioning, to the marketing mix, the customer journey, digital marketing and measuring results.
After studying this chapter, you should be able to:
Many people reduce marketing to advertising or posting on social media, but advertising is a small part of it. Philip Kotler, one of the best-known authors in the field, defines marketing as the process of creating value for customers and building strong relationships with them, in order to capture value from them in return. In other words, marketing begins long before advertising: with understanding the customer, choosing whom to serve, designing an offer that suits them, delivering it, and then keeping them.
Marketing conditions in a new venture differ from those in large companies: the budget is small, the brand is unknown, and customers do not trust something they have not tried. A new venture therefore needs focused, smart marketing more than broad, expensive marketing.
Before deciding what to say and where to advertise, you must decide whom you are talking to, and how you want them to see you. This is the STP model, three consecutive steps:
Dividing the market into groups with similar needs and characteristics, using the bases explained in Chapter 5: demographic, geographic, behavioral and psychographic.
Choosing the segment (or segments) you will focus on. The target is chosen with three questions: Is the segment large enough and profitable? Can we reach and serve it? Can we outperform competitors in it? Trying to target everyone makes your message generic and noticed by no one.
Positioning is the place you want your venture to occupy in the customer's mind relative to the alternatives. Al Ries and Jack Trout explained in their famous book Positioning that customers are exposed to thousands of messages, so they file products in their minds under a single simple word or idea: this one is "the cheapest," that one "the fastest," a third "the most luxurious." A venture that does not define its position is placed wherever the customer pleases, or forgotten.
Positioning is usually defined by one main advantage, not a long list of features. This template helps you write a positioning statement:
A positioning statement is not an advertising slogan to publish, but an internal compass for the team: every decision about pricing, design and advertising should be consistent with it.
Once you have defined the customer and the positioning, you translate them into practical decisions about four elements, formulated by E. Jerome McCarthy in the 1960s and popularized by Kotler:
What exactly are we offering? This includes the product itself, its quality, design, packaging and name, and the services that accompany it. The most important question here is: what is the benefit, not the specification? A customer does not buy "a 20-liter waterproof backpack"; they buy "a bag that protects your laptop and books in the rain." That is why it is said that people do not buy a drill; they buy the hole in the wall.
How much does the customer pay, and how? Price is not just a number but a marketing message: a high price suggests quality and distinction, while a low price suggests economy and may suggest poor quality. Price must be consistent with positioning. We discuss pricing methods in detail in Chapter 9.
Where and how does the customer get the product? In a shop, online, by delivery, or through a distributor. The rule is to be where your customer is, and to make getting your product as easy as possible. Every extra step the customer needs in order to buy reduces the number who complete the purchase.
How does the customer learn about your product and become convinced by it? This includes advertising, content, public relations, offers, personal selling and digital marketing. We expand on it in the fifth section.
Because a service cannot be touched before it is bought, researchers added three elements for service marketing, making the mix seven elements (7Ps):
Customers do not buy in a single moment. They go through stages, from the first time they hear about you to becoming a regular customer who recommends you. Understanding these stages helps you see where you lose customers:
| Stage | What happens | A question for the venture |
|---|---|---|
| Awareness | The customer learns you exist for the first time | Do our target customers even see us? |
| Interest | They want to know more | Is our message clear, and does it speak to their problem? |
| Evaluation | They compare you with the alternatives | Why would they choose us? Do we have evidence and trust (reviews, a trial)? |
| Purchase | They decide and pay | Is buying easy? How many steps does it take? |
| Experience | They use the product or service | Does the experience deliver on the promise? |
| Repeat | They come back to buy again | What makes them come back? |
| Recommendation | They talk about you to others | Is the experience worth talking about? |
Note that keeping a customer is much cheaper than attracting a new one, which is why marketing does not end at the sale; it starts there.
Digital platforms have let small ventures reach their customers at low cost, but they have also made competition for attention fierce. Here are some practical principles:
Do not try to be on every platform with poor quality. Choose the platform where your target customer spends time, and master it. Gabriel Weinberg explains in Traction that most successful ventures grew at first through one main channel they discovered by experimenting.
Useful content builds trust before the sale: show the problem and how you solve it, behind-the-scenes work, real customer stories, and useful tips in your field. People follow those who help them, then buy from those they trust.
Short video has become one of the most widespread forms of content on the platforms. It does not need professional equipment; clarity, honesty and a good idea matter more than filming quality.
In close-knit societies like ours, buying decisions are strongly influenced by the opinions of relatives and friends. A satisfied customer who talks about you is more powerful than any advertisement. You can encourage this with an experience worth talking about, or with a referral program that rewards whoever brings in a new customer.
Accounts with fewer followers who are interested in your field or in your city are often more useful, cheaper and more credible than celebrities. Make sure any collaboration with them is clearly disclosed, in compliance with regulations and out of respect for the audience.
A fast, polite reply and solving the problem when it happens create loyalty. A complaint handled well can turn an angry customer into one of your most loyal.
One advantage of digital marketing is that it can be measured. The most important metrics for a new venture are:
The basic rule: customer value must be clearly greater than the cost of acquiring the customer, or every new customer loses you money. In the example above, if customer value is SAR 600 and acquisition cost is SAR 50, the model is healthy. But if a customer buys once for SAR 40 and costs SAR 50 to acquire, the venture loses money with every customer.
Marketing that succeeds over the long term rests on trust. So avoid exaggerated promises you cannot keep, fake reviews and ratings, undisclosed advertising presented as personal opinion, and hidden fees or conditions. Comply with the regulations governing advertising, e-commerce and consumer protection, and respect your customers' data and privacy. A reputation built in a year can be destroyed in a day, especially in a society where news travels fast.
The answers are on the Answers to Self-Assessment Questions page. On the interactive course page you can answer and check these questions directly, with practical tools linked to the chapter.
Write a positioning statement for your venture, then read it to someone outside the team: did they understand why you are different?