How Marketing Works: 5 Key Facts About Marketing You Need to Know

Marketing works like solving a puzzle.

Marketing is a set of activities designed to attract potential customers. In other words, marketing is a process of making people aware of your products or services and how your products or services can help them so they want to buy from you. Marketing is important for every business.

It centers around a set of tools, known as the Marketing Mix, that businesses use to pursue their marketing objectives in a target market. (Wikipedia) The marketing mix, also known as the 4 Ps of Marketing, includes:

  1. Product – what product or service will be offered
  2. Price – the price the consumer will pay for the product or service
  3. Place – the location where the product will be marketed
  4. Promotion – the method(s) that will be used to inform consumers about the product or service


There are two primary types of marketing strategies:

Direct Marketing

Direct marketing involves contacting individuals directly by mail, phone, fax, email or some other means with the intention of selling a product or service. Direct marketing includes direct mail, telemarketing, personal selling, and advertising.

Indirect Marketing

Indirect marketing involves building relationships with audiences, referral partners, and customers that will lead to sales over time. Indirect marketing includes blogs, email marketing, newsletters, social media content, and referral and affiliate programs.


How Marketing Works

The basic idea behind marketing is simple: get people interested in your product or service. This interest leads to a sale.


Marketing Activities


Experienced marketers use a 6-step process to generate consumer interest and drive sales.

  1. Build Awareness
  2. Provide Value
  3. Earn Trust
  4. Promote Products and Services
  5. Convert Consumers to Paying Customers
  6. Wow Them

Build Awareness

Before you can sell your products or services, consumers must know your business exists. So a major focus of marketing is building consumer awareness of your business and its products and services.

57% of consumers learn about new brands and their products and services on social media. (Sprout Social)

The top 3 social media platforms used by American adults overall are YouTube, Facebook, and Instagram. (Pew Research Center)
However, preferences vary widely by age group. (National Retail Foundation)

And building brand awareness is not just something you do once. It’s a process you will repeat throughout the lifetime of your business because consumers are continually entering and leaving your target market.

Provide Value

Effective marketing is about cultivating relationships that lead to sales. And the best ways to cultivate business relationships with consumers are: Entertain, Educate, Engage, Inspire!

Unfortunately, many who are new to marketing make a costly mistake: not spending enough time cultivating a business relationship before trying to make a sale and, instead, wind up losing the potential customer.

Younger consumers, in particular, are constantly looking for brands that provide entertainment and personal connection and are socially responsible members of society. (National Retail Foundation)

You can provide value that nurtures business relationships by sharing content that puts a smile on consumers’ faces or makes them laugh. Educate consumers about your industry; your business, products, services, team; how you are supporting your community and local charities. Start a conversation! Encourage others to share their experiences, thoughts, and ideas. Inspire people to take action. Show that you understand your customers and align with their interests, attitudes, and values.

Earn Trust

“All things being equal, people do business with, and refer business to people they know, like and trust.”
– Bob Burg, leading authority on influence and referral marketing


The most effective ways to earn trust are:

  • Provide excellent customer service
  • Create relationships that are mutually beneficial
  • Be honest, transparent, straightforward, and ethical
  • Address issues directly and privately
  • Be courteous and respectful
  • Ask for customer feedback and act on it when received
  • Share positive reviews and testimonials


90 percent of consumers read online reviews before visiting a business.
88 percent of consumers trust online reviews as much as personal recommendations. (Invesp)


Promote Products and Services

The 80/20 Rule used to be the standard for how often a business should directly promote its products or services. This guideline recommended that 80% of the time a business should focus on informing, educating, and entertaining its target audience, and only promote products or services 20% of the time in order to prevent marketing message fatigue.

Marketing message fatigue is the decreasing effectiveness of a marketing message over time which happens when consumers get tired of repeated exposure to the message and begin to ignore it.

However, experts argue that this rule is not as effective due to the increasing variety of marketing strategies.

As a result, marketing experts now recommend starting with the 80/20 Rule and testing to see what proportion of promotion works best for your particular situation. You may need to use a different promotion percentage for each product, service, or target market. So don’t just run one test and assume it will work for all your products, services, or audiences. You need to re-test each time you introduce a new product or service or target a new audience.

Convert Consumers to Paying Customers

This is the point where you give consumers a call to action – ask them to buy your product or service – and make sales.

Wow Them

You’re probably thinking, “Wait! What? I made the sale! What more would I possibly need to do? The customer knows about my products and services, obviously likes doing business with me, and will come back again.” And you would be WRONG!

Your competitors are out there constantly working to attract customers too. They’re using new marketing strategies and creating new products and services that can woo your hard-earned customers.

The best way to build customer loyalty and keep your customers coming back is to keep customers engaged. And the best way to keep customers engaged is to continue to provide value.


5 Key Facts You Need To Know About Marketing

5 Key Facts You Should Know About Marketing

To keep consumers interested and continue to generate sales, marketers must understand and implement the following five principles:

  1. Know Your Target Market
  2. Understand How People Buy Products and Services
  3. Create Value
  4. Communicate Effectively
  5. Conduct Market Research

Know Your Target Market

A target market is a group of people who share similar characteristics. For example, if you own a restaurant, then your target market may include families with children. However, if you own a bar, pub, or nightclub, then your target market might consist of only adults.

People buy from businesses that meet their needs. To identify customer needs, ask yourself questions such as:

  • What do my customers want or need?
  • Why do they buy from me?
  • Where do they shop?
  • Do they prefer shopping at stores or online?
  • Are they more likely to buy from large chain stores or small local shops?

The more specific you can be about your target audience the more effective your marketing campaigns will be.

But identifying a target audience can be daunting – especially for businesses that are just starting out. I get it! As a new business owner who desperately needs customers, you don’t want to miss out on sales or accidentally turn anyone away. And, in reality, your products or services may appeal to multiple different audiences. So how do you limit yourself to just one?

I’ll let you in on a little secret: Marketing to EVERYONE never works!

Did you catch that? Go back and read it again.

You may have heard many well-meaning marketing professionals advise that you should identify your “Ideal Customer” and craft your marketing messages based on that customer. That may be a good tactic if you already have a bunch of customers who are already buying a particular product or service you want to promote. But what happens if you don’t have any customers… or only a few… or if this is a brand new product or service?

That’s why I don’t subscribe to the “Ideal Customer” camp.

Here’s what I recommend instead. Start by marketing to one very specific audience at a time. Figure out what works with that audience. Then use what you learned to market that product or service to a new audience. This is a proven method for marketing success that’s used extensively by the best marketing professionals.

To help you get started, I developed a Customer Avatar worksheet you can download and use to identify your first target audience.


Understanding How People Buy

In order to know what your target market wants and why they buy from you, you first need to understand the psychology of purchasing decisions. There are five main reasons why people purchase products and services:

  1. They want gratification or satisfaction.
  2. They want to meet one or more of the 3 Basic Needs: health, wealth, relationships or status.
  3. They want to make a good, informed decision.
  4. They want to follow social norms or trends (be in the “in” crowd).
  5. They want to avoid loss or have FOMO (Fear Of Missing Out).

When someone buys a product or service, he or she is making a choice based on one of these five factors. If you can identify which factor is most important to your customers, you can design your marketing around that particular need.

Creating Value

Value is the difference between what a customer pays and what he or she gets in return. The more value there is in a product or service, the higher the price should be.

For example, a car dealer would charge twice as much for a new car than for a used car because the value of the new car is more than the value of a used car.

If you sell a $10 book, but it costs you $15 to produce it, then you have created no value. You will not make any money off the sale.

Communicating Effectively

Effective communication is essential to marketing. Good communication allows us to understand information faster and more accurately so we can make good decisions.

It also helps us build an emotional connection with our customers so they feel valued, understood, and comfortable doing business with us.

And effective communication helps us overcome marketing obstacles like cultural barriers, language barriers, etc. so consumers will trust and have confidence in our brand and offers.

Without effective communication, you cannot adequately reach your target market. Therefore, you must develop a plan to communicate with your target audience.

There are lots of methods that can be used to communicate with your target market. And the methods you choose will depend on what products/services you offer and who your target audience is.

The most effective methods for small business marketing are:

  • Content Marketing
  • Inbound Marketing
  • Social Media Marketing and Viral Marketing
  • Email Marketing
  • Direct Selling
  • Cooperative Marketing (ie: Cobranding, Affinity, and Cause Marketing)
  • Point-of-Purchase (POP) Marketing
  • Search Engine Optimization (SEO)
  • Search Engine Marketing (SEM) / Pay-Per-Click (PPC)
  • Account-Based Marketing (ABM) and Retargeting
  • Public Relations and Earned Media
  • Affiliate and Referral Programs (Word-of-Mouth Marketing)
  • Industry Events
  • Conversational Marketing (using chatbots and live chat)

I delve deeper into each of these methods in other articles. For now, just know that you have a lot of options for ways to reach potential customers.

To achieve the best results, you will want to use a combination of several of these marketing methods. But it’s important to start with ONE and master it before adding others to the mix.

The Importance of Market Research

Before you begin marketing your product or service, you must conduct marketing research. Only after you have researched your target market thoroughly can you create a successful marketing campaign.

Research is vital to the success of any marketing campaign. In fact, without research, you may end up spending thousands of dollars on ineffective marketing campaigns.

Do Your Homework

First, you must determine who your target audience is. Next, you must find out how many people in this group are interested in buying your product or service. Finally, you must learn what their needs are so that you can provide them with the best possible solution.

Once you know all of this information, you can begin planning your marketing campaign.


Marketing Strategy

The purpose of a marketing strategy is to help you define your marketing goals. An effective marketing strategy will include:

  • Target audience
  • Value proposition
  • Offer
  • Objectives
  • Delivery Method
  • Follow-up

A good marketing strategy helps you decide where to spend your time and resources. It also helps you set priorities and allocate limited resources efficiently.

A marketing strategy should be developed based on your target market’s needs. If you fail to understand these needs, you may waste valuable resources trying to meet unmet needs.


Developing a Marketing Plan

After you’ve determined your target market, you need to develop a marketing plan. The first step in developing a marketing plan is to identify your primary objective.

Your primary objective is the reason why you want to market your product or service. For example, if you’re selling real estate, your primary objective might be to increase sales.

Next, you’ll need to establish specific short-term and long-term goals for your marketing campaign. Short-term goals are things like increasing traffic to your website or getting more leads for your sales team. Long-term goals include improving customer satisfaction, reducing costs, and increasing profits.

Next, you’ll need to choose an appropriate medium for reaching your target market. You can use traditional methods such as direct mail, e-mail, print ads, radio, television, and billboards. Or you can use newer technologies such as social media sites, search engine optimization (SEO), online advertising, mobile marketing, and text messaging.

Finally, you’ll need to determine the budget needed to implement your marketing plan.

In conclusion, the key to effective marketing is to focus on one thing at a time. Don’t try to do too much at once. Instead, concentrate on one aspect of your marketing plan before moving on to another. This will allow you to make sure that each part of your plan is effective and moving you closer to your goals.

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