The Foundation of Start-up Marketing - Coursework Example

The Foundation of Start-up Marketing Abstract The topic of foundation of start-up marketing covers the strategies and approaches that new ventures use in a bid to gain a foothold in their respective industries. In practice, new companies face a lot of challenges on the one hand and immense opportunities on the other. The challenges that new companies face arise from their lack of enough resources to take on their established rivals. Also, new companies are not known and they have to develop build brand awareness and loyalty. However, start-ups have the capacity to use their small sizes to learn about the preferences of their customers and adapt to them fast. Also, new companies can establish customer loyalty fast by relying on effective customer relationship management practices. A lot of research on the subject of foundation marketing has been conducted. This paper examines findings of some of the recent studies on the subject. From the examination, it can be seen that new ventures heavily rely on nonconventional marketing strategies such as viral marketing and social media marketing to establish their new brands in markets. Also, it is seen that start-ups rely on marketing activities to build their brands in new industries and gain a competitive advantage. Lastly, it is found that start-ups base their marketing activities on the needs of their customer. To this end, new companies seek to establish and maintain a highly loyal clientele for their new products and services. Introduction The essence of this paper is an examination of the foundation of start-up marketing; that is, the importance of and various ways in which start-ups carry out their marketing activities. The paper addresses various aspects of the general subject to how and why start-ups conduct marketing activities. In the first section of the paper, a detailed examination of literature related to the subject of the marketing activities of start-ups is presented. Some of the things that the paper looks at in this section are the specific reasons as to why start-up companies carry out marketing activities. Also, the paper in this section examines the particular strategies that start-ups use to market themselves and the relative importance of these strategies to the objectives that new business ventures have when marketing their new products and services. The second part of the paper contains a detailed discussion of the findings on the subject of foundation of start-up marketing. Here, a few important conclusions on how start-ups approach the issue of marketing are presented. The conclusions also cover the importance of various aspects of marketing such as the customers, products and relationships that companies establish with their clients to the success of the marketing activities of start-ups. Foundation of Start-up Marketing: A Review of Literature   Studies have examined the particular reasons as to why start-ups engage in marketing activities (Augustini 2014; Cox 2012 & Mansour 2015). A brief examination of the results of some of the leading studies on this subject shows that researchers agree that new companies engage in marketing activities for various reasons. For example, it is observed that new businesses engage in marketing activities for the main reason of defining their approach towards business and establish their presence in their new industries (Bressler 2012, p. 2 & Kociaslki 2010, n.pag). In the same vein, it is stated that since new firms usually face a considerably high level of competition from established firms in the industry as well as other start-ups, they heavily rely on marketing activities to establish their presence and have an impact on the market (Augustini 2014 p. 7). What these observations imply is that new organisations rely on marketing as the only means of establishing their identity and differentiating their products and services from those that already exist on the market. Therefore, it is clear that for new businesses, marketing provides a highly effective means of not only defining their operations but also making their presence known in the industries in which they operate. In other words, new business ventures use marketing to draw the boundaries for their operations and define their planned products and services in any given industry. Interestingly, many other studies examine the different ways in which new business ventures use particular marketing strategies to achieve a competitive advantage in the specific markets in which they operate. For example, Bressler (2012, p. 3) states that new business ventures need to develop unique attributes that they can use to beat their competition as a necessary measure of achieving success in any industry. It is further observed that one of the hallmarks of any competitive advantage that any new business venture can develop lies in its ability to help the business market its products and services better (Bressler 2012, p. 7). Elsewhere, Isaksson (2015, p. 9) points out the importance of marketing in helping small businesses carefully define their brands and use the results to build a form of competitive advantage in the market. It is observed that many new ventures follow the basic marketing process of first defining their brand strategy, then developing a specific brand image before finally implementing the strategy as a core aspect of their marketing activities (Isaksson 2015, p. 10). Furthermore, it has been observed that for new businesses to achieve a competitive advantage in their operations, they attempt to adopt their pricing, product, place and promotion strategies to their unique capabilities on the one hand and the specific needs of the market on the other (Mansour 2015 p. 16). In other words, businesses that successfully match their marketing activities to the unique needs that exist in the market are the ones that achieve and maintain a competitive advantage in their product or service offering. Thus, it can be seen that marketing processes provide unique ways in which new business ventures can create highly effective strategies that can help them gain a competitive advantage in their new operations. By examining the various marketing strategies that start-ups can use to gain a competitive advantage, studies focus on various aspects of the marketing process. For example, Smith and Vardiabasis (2010, p. 195) emphasises the importance of digital marketing strategies as an effective way that new businesses can use to gain a competitive advantage in any industry. Specifically, it is argued that new and small businesses benefit a lot when they use social media marketing strategies (Smith & Vardiabasis 2010, p. 196). Although the advantages that new businesses get when they rely on social media marketing are many, it is observed that the potential of leveraging on the low costs associated with social media marketing strategies and the potential to reach a global audience are some of the most attractive features of social media marketing (Deeb 2013, p. 39). In the same vein, Narkiniemi (2013, p. 12) points out that new businesses increasingly use digital marketing as the primary approach to their marketing activities. It is stated that new companies repeatedly attempt to use social media platforms and other new forms of marketing activities related to the concept of digital marketing, to gain a competitive advantage when they are entering new markets. Therefore, it is clear that start-ups, driven by the need to keep their costs down and achieve commercial success, rely on highly efficient marketing strategies such as social media marketing, to create a competitive advantage. Other studies examine the specific marketing strategies that start-ups use. In one study, it is stated that new business ventures rely on less conventional marketing strategies as compared to those that are used by established business organisations (D’Avino, De Simone, Iannucci & Schiraldi 2014, p. 7). It is argued that many new businesses face capital constraints and that this forces them to use non-conventional or highly creative strategies to market their products and services (D’Avino, De Simone, Iannucci & Schiraldi 2014, p. 9). One of the non-conventional marketing strategies strongly associated with start-ups is buzz marketing. Peltovouri and Westrin (2014, p. 17) define buzz marketing as an approach to marketing that focuses on using less costly channels such as word of mouth and social media platforms (D’Avino, De Simone, Iannucci & Schiraldi 2014, p. 9). It is further stated that new businesses increasingly rely on buzz marketing in their bid to establish their presence in the market (Feinleib 2012, p. 76). The idea that buzz marketing helps businesses reach a relatively big audience without using a lot of financial resources makes it one of the most attractive strategies for start-ups. It appears that there is a consensus about the need for start-ups to use viral forms of marketing. On the one hand, new companies are driven by the need to achieve high levels of growth within very limited time frames (Davilla & Epstein 2014, p. 22). On the other hand, new companies have to compete with established products and players in the industry (Mares & Weinberg 2014, p. 51). Hence, viral marketing, which requires that individuals recommend a particular product to their circles of acquaintances, provides an effective strategy that new companies use to market their new products and services (Croll & Yoskovitz 2013, p. 230 & Remondino 2011, p. 98). Additionally, some studies examine how new businesses use customer relationship management as part of their marketing strategies. It has been stated that customer relationship management helps businesses to achieve two main objectives: increase the level of customer satisfaction and reduce their overall level of marketing costs (Nijssen 2014, p. 135). It appears that these two primary objectives of customer relationship management augur well with the primary needs of new business organisations, which are the need to grow a customer base fast and at relatively low costs. According to Hill (2015, p. 196), many start-ups prefer using customer relationship management as a means of helping them to build a strong base of highly loyal customers. It is stated that in a bid to have loyal customers, new businesses attempt to analyse the manner in which their customers feel about the new products and services (Hill 2015, p. 197). The new businesses then use the findings of the analysis to determine specific areas in their service offering that clients are not pleased with. Using this kind of knowledge, new businesses are able to address particular weaknesses in their service offering and also improve the areas which the customers may not have necessarily complained about. It should be noted that this approach is necessary because of the underlying assumptions of the strategy of customer relationship management. Tinnsten (2014, p. 4) observes that as a strategy, process and philosophy, customer relationship management have various underlying assumptions, the basic ones being that customers vary in their preferences and that the relative level of importance of customers to any business varies at any given time. Therefore, it can be seen that new business ventures depend on these aspects of customer relationship management to create and implement specific marketing programs for their new products and services. Catalan-Matamoros (2012, p. 3) notes that the manner in which new businesses use customer relationship management in their approach to marketing depends on their specific products and services that the new companies are offering. On the one hand, companies may have to personalise their products and services as a way of addressing the needs of their customers. On the other hand, businesses may only have to gain a deep understanding of the needs and expectations of their clients and use the knowledge to create standard products and services that address the needs. Either way, the extent to which new business ventures use customer relationship management as part of their marketing strategies depends on whether or not the specific products of the businesses can be personalised. Analysis and Discussion Several conclusions can be drawn from the preceding discussion on the foundation of start-up marketing. First, it can be seen that the relationship with customers is an important thing for new businesses. From an examination of literature, it is clear that many new businesses are not only interested in building the number of their customers, but also keen on establishing a strong base of highly loyal customers. For new businesses to build and maintain strong bases of fiercely loyal customers, they have to engage in a two-way form of communication with their customers (Buttle 2014, p. 301). Under this approach, businesses attempt to not only send out messages to their customers in the form of their promotional activities but also try to understand what the needs, desires and aspirations of the customers are. Thus, organisations use feedback from their clients as the main source of critical information that shapes their approach to marketing activities. Furthermore, while attempting to build loyal bases of customers using customer relationship management, new businesses focus on the behaviour that the clients show when interacting with the products and services of the businesses (Buttle 2014, p. 301). It is by analysing the manner in which customers interact with products and services that businesses can successfully monitor the lifecycle of a product, identify areas that need attention and establish a form of interaction with the clients. Thus customer relationship management practices help new businesses leverage on their ability to identify the particular needs of their clients, establish highly effective communication channels with their clients and continuously improve their products and services. Another important finding from the review of literature relates to the importance of customers to new businesses. New businesses base their new products or service offering on the needs of the customers (Gehrich 2012, p. 65). It is when new businesses successfully identify the specific needs of clients and design particular products or service offerings that address the identified needs in better ways that the businesses can achieve commercial success. It follows that all the marketing activities of start-ups are based on making their new product or service offering a better alternative to what already exists on the market. It is also clear that new businesses, while demonstrating their commitment to identifying and addressing the particular needs of their customers, seek to use highly effective methods of doing so. For example using the feedback loop is one of the most common methods that start-ups use to stay abreast regarding the needs of their customers. The feedback loop helps new companies to measure the performance of new products and services in the form of the level of to which the customers are satisfied with the products (Ravi & Sun 2016, p. 16). Using the results of the process, companies are able to identify particular areas that need to be changed. Thus, businesses use feedback from the customers to learn any new things that they need to carry out. They then use the information to constantly improve their service offering by learning of any new changes that they need to implement. Thus by using the feedback loop, start-ups are able to remain relevant by constantly improving their service offering, based on the results of the measuring process. Therefore, it can be seen that start-ups base their marketing activities on the needs of customers in the market. It is also clear that new businesses constantly attempt to understand the changes in demand and adapt their products and services to those changes. By using the customer feedback loop, new businesses can accurately stay in touch with the changing needs of their clients by measuring trends in the first place and adopting their service offering to the new expectations of their clients. Apart from the importance of customers, another important finding about the foundation of start-up marketing that can be drawn from the preceding analysis of literature relates to the marketing channels that new businesses use. From the review of the literature, it is clear that new businesses favour the use of alternative marketing strategies and activities. Some of the alternative marketing activities and communication channels that new businesses regularly use include digital marketing, social media marketing and viral forms of marketing communication. There are various reasons as to why new companies prefer alternative marketing strategies to the conventional ones. However, the main reason relates to the need of new businesses to minimise their operational costs on one hand and maximise the outcome of their marketing efforts on the other. In practice, start-ups often have limited resources (Mansour 2015, p. 18). The companies have to balance their limited resources to the competing needs of getting established in the market. Therefore, in a bid to balance the manner in which they utilise their limited resources, new ventures have to create tradeoffs. One of the most effective ways in which start-ups efficiently allocate their resources lies in the manner in which they opt for alternative marketing strategies such as the use of social media networks as opposed to using conventional marketing communication strategies which may be more costly. The attractive of alternative marketing strategies to start-ups lie in the fact that it is relatively cheap for new companies to successfully plan for and manage alternative marketing strategies campaigns (Smith & Vardiabasis 2010, p. 197). For example, for new companies, the costs associated with building social media pages and maintaining the pages over the course of time are quite manageable (Isaksson 2015, p. 11). Besides, using social media marketing as well as digital marketing strategies gives new businesses the power to harness the global reach of these media (Smith & Vardiabasis 2010, p. 197). As a result, start-ups are able to reach global audiences are relatively low costs by taking advantage of the viral effect of marketing their products on social media platforms. The last important conclusion about foundation of start-up marketing that can be drawn from the preceding review of literature relates to how new companies use marketing to develop their identity and achieve a competitive advantage. It has been seen that brand identity is an important aspect for new companies (Davis & Olson 2008, p. 214). In most cases, new companies have to battle with brands that have been operating in the market for long periods (Davis & Olson 2008, p. 214). For new brands to take on established ones, they need to be highly creative in their approach towards marketing. It has been seen that new companies use marketing as the primary means of establishing their identity in the industry in which they operate and differentiating their brand from those of other established brands in the market. For new companies, the need to establish very lean brands with minimal brand ingredients augurs well with the ultimate goal of all start-ups which is to use their limited resources very efficiently (Busche 2015, p. 5). Thus, new companies rely on effective marketing strategies as a means of defining their brands (Drakoulis & Lipovsek 2015, p. 17). The companies also rely on effective and novel marketing strategies to create awareness about their new brands in often crowded and highly competitive industries. Conclusion In conclusion, studies indicate that start-ups rely on marketing to define their new products and services in the industries in which they operate. Also, new ventures rely on marketing activities to attain a competitive advantage over their established rivals. However, new companies have to compete with other well-established companies. For new companies to effectively compete, they rely on innovative marketing strategies. To this end, new companies increasingly use digital marketing, social media marketing and viral marketing strategies to make the best of their limited resources. Moreover, new companies base their marketing activities on the changing needs of their customers. Thus, start-ups are concerned with creating and maintaining relationships with their clients as a way of building a base of loyal customers for their products and services. Also, new ventures rely on alternative marketing methods such as the use of social media because such methods are less costly than conventional marketing methods. Therefore, the use of nonconventional marketing strategies, reliance on customer relationship management and the use of marketing activities to achieve a competitive advantage are some of the most important aspects that define the foundation of the marketing activities of start-ups. 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