There is a school of thought that marketing is not that important to start ups unlike it is to established companies. I disagree with this school of thought as marketing is very important to a start-up.
There are two fundamental truth when it comes to marketing a start-up.
Truth 1 – A great product alone is not enough to succeed.
Truth 2 – No amount of marketing can make a bad product very successful.
Marketing and product/service have to complement and support each other. They both have to coexist for the company to succeed. One without another is a recipe for failure. To understand the importance of marketing in a start-up, it is important to understand marketing first. Marketing is not sales nor is marketing business development. Marketing is also not just promotion.
Marketing guru Dr. Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”
Marketing is to sales as ploughing is to planting for a farmer—it prepares an audience to receive a direct sales pitch. Marketing tells people about your product, service, and company early and often. Marketing generates demand and sales leads. Marketing and business development start before any sales efforts can begin. Depending on the product or service, marketing efforts can start up to 12 months before the product is available to the market for purchase.
At the same time, marketing is not free or inexpensive. According to a survey of publicly listed companies, sales and marketing expenses were typically 1.5 to 2 times that of research and development expenses. Though this figure might not be applicable to start-ups still marketing expenses cannot be done away with.
Like a business plan and product plan, there has to be a marketing plan mapped to different stages of product lifecycle. Marketing strategy and marketing mix varies along with changes in product lifecycle.
The basics of a marketing plan include the objectives, the definition of the product or service, the customer profile, a description of the competitors, an action plan and market launch including budgets and resources required, pricing, and progress tracking.
Pre product/service launch stage
Early marketing strategies often focus on creating awareness for the product and the company resulting in lead generation. These leads and relationships should enable sales team to make deals and capture revenue once product is available. The initial marketing effort focuses on gaining a better understanding of the customers and their needs, planting the seeds to build customer relationships, and beginning a pre-launch awareness program.
Test marketing actively can help in course correction and cutting losses
Like any other aspect of business plan a marketing plan is based on assumptions. Start-ups make assumption regarding the problem their product solves. Reaching out to customers to prove or disprove the assumptions is critical to a start-up. Before jumping into a full blown product development and marketing effort, it’s important to make sure the problem is real and customers are urgently seeking a solution.
Incorporating customer feedback back into product development would ensure that you take necessary course correction for your product vision and roadmap. Listening to customers intently can really help a start-up in cutting its losses through necessary course correction.
Marketing is key to pivoting and getting right product market fit
Your product is based on one big assumption that the problem you have set out to solve really exists and your target customers are seeking a solution which your product or service provides. This assumption needs to be tested and proved one way or another and this should ideally happen as soon as possible. You connect and engage your customers through marketing which enables a two way flow of information. You communicate the unique selling proposition of your product to the right target audience and your target customer would communicate his feedback on the product or service.You have to listen intently to feedback and take critical decisions on pivoting or course correction. Marketing can be a real enabler in getting the product market fit which is one of key factors in determining the success or failure of a product
Hence in start-ups, Marketing should not be treated as a post launch activity but rather as a planned track which runs parallel with product development and product iterations. Having said that start-ups are on shoe string budget and most of which goes into product development leaving aside very little for functions like marketing.
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