Top Principles of Marketing

In this digital world, we must not forget basic Principles of Marketing. If all energies are being focused on Search Engine Optimization (SEO) the purpose of having SEO is lost. There are four guiding marketing strategy principles that if implemented properly can lead to business growth. Understanding each principle better and how they relate to your competitor is vital.  Below are the top four.

1. Specialization
2. Differentiation
3. Segmentation
4. Concentration

Specialization:  Determine where your sphere of activity will be.  It could be a product, service, customer, market that you want to focus on. Let me demonstrate with an example of The Hard Rock Cafe. The Hard Rock Cafe customer is someone who wants to eat an American style burger surrounded by cool rock and roll music history. They want a fun environment and a higher end burger meal. So, The Hard Rock Cafe constantly looks for legendary Rock paraphilia to hang on the walls so that customers will come and eat to see the historic decor. They would never do something that does not go with their specialization, for example, hang up a famous classical composer’s violin.

Differentiation:  This is what makes you different from everyone else.  Think about what makes you unique, or how is it that you are different and better than the others. Customers seek to find the reason they should buy from you and not the guy down the street.  Unique selling propositions (point) or USP lists (or list of attributes) should always be made.  

In Reality in Advertising, the respected Rosser Reeves outlines three basic rules for an advertisement that encapsulated his ideas about the USP: [1]

1. Each advertisement must make a proposition to the consumer—not just words, product puffery, or show-window advertising. Each advertisement must say to each reader: “Buy this product, for this specific benefit.”
2. The proposition must be one the competition cannot or does not offer. It must be unique—either in the brand or a claim, the rest of that particular advertising area does not make.
3. The proposition must be strong enough to move the masses, for example, attract new customers as well as potential customers.

Do not forget to include yourself in the USP. I once saw a show where they were looking at all the 7elevens on the East Coast.  One particular convenient store sold 35% more coffee than all other stores.  When they went in to find out the difference, they noticed that the cashier was a 70-year-old woman that had the ability to remember every customer’s first name.  She greeted each customer with a hello-and their name. Your personality, your confidence, your charm, your contacts, your way of doing things is very important.

Differentiation is one of the most important strategic and tactical activities in which companies must constantly engage.

Segmentation: Within the principles of marketing, segmentation refers to relating the characteristics of a product’s differentiation (or attributes) more closely to customer needs or requirements. Segmentation examines specific customers in the market who value an attribute(s) and will pay more for a product or service in a sphere of activity (Specialization). Once identified, those customers are more likely to buy from a business that has this attribute, or at least sooner than other customers. In short, the customers who most appreciate your area of preeminence is put into a segment away from the whole.  Big questions are answered. What are their demographics or geographics? See the graphic, five pillars, to the right. Where does your perfect customer fall after you have looked at them under the Five Pillars to Target Your Customer?

You may have to reorganize your data to find the perfect customer.  Data will need to be segmented into three stages:

1. Identifying different bases for segmenting using indicators of buying behavior,
2. Profiling the resulting segments, and
3. Measuring attractiveness

The core element is to base conclusions on customers’ wants, regardless of one’s personal preferences. It does not have to be scientific. If you have a firm understanding from being in the field, trade publication, or just talking to a capable sales team (a great source of data), then you don’t need to do an expensive research project.

Concentration: Concentration is an important principle of marketing. Concentration is focused on putting all emphasis & resources into the best target markets (your Segmentation) you can serve the best (your Specialization). You have determined the best market segments for what you do really well, you focus all your time, energies, resources, and budgets on acquiring customers from these markets.  But after you sell them your product or service, you must also remember to retain them.  You did all the work to find them do not lose them once you have found them.

Principles of Marketing

The principles of marketing  (Specialization, Differentiation, Segmentation, and Concentration) must be implemented and executed effectively in all four areas to thrive in nearly any business. A lack or weakness in any one area can lead to underachievement and even the failure of a business or enterprise. A business may change over time.  Thus, the variables within the Principles of Marketing must be re-evaluated.  There are four variables that need constant attention: price, product, promotion (communication) and physical distribution. This is called the Marketing Mix or “Four P’s” of Marketing and pertain mostly to the third principal, segmentation.  Of course, once the segmentation has changed a company’s Concentration will need to change.  In closing, if you do not apply the Top Principles of Marketing and relentless reapplying, then a business’s success will depend on the incompetence of your competition or luck — neither being reassuring.

1. Reeves, Rosser (1961). Reality in Advertising. Macgibbon and Kee. pp. 46–48. ISBN 0394442288.