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What type of businesses need marketing? – Sprout StartUp


What type of businesses need marketing?

4 views September 1, 2016 September 1, 2016 Dominic de Bourg 0

All businesses need marketing.

However, not all businesses need advertising. Advertising is a subset of marketing. There is no ‘one-size-fits-all’ template for this question. There are some patterns you can observe though.

Low involvement purchases usually have a wider advertising reach than high involvement purchases. Examples of low involvement purchases are soft drink and potato chips. They usually cost a very small amount, and if you don’t like them, you can discard them and not feel too badly about wasting them.

High involvement purchases however have a narrow advertising reach as they are typically very expensive, and only a select subset of society can afford them. Examples of high involvement purchases are cars and houses. Very few people can afford to buy a house or car upfront, so banks have set up their loan systems to take advantage of this fact. Through the bank or any financial institution that offers this service, the paperwork is intensive and takes a large amount of effort and energy. This is a form high involvement. Lastly, if you find after time that you don’t like your high involvement purchase, you can’t get rid of it as easily as a low involvement purchase.

The points above address product based businesses. The other type of business to think about is service based businesses. Hiring someone to wrap presents for you is significantly cheaper than hiring a surgeon to perform open heart surgery on you. Another example is the exorbitant fees associated with hiring a super star entertainer.

In the case of the gift wrapper, it is a convenience. In the case of the surgeon, it is a necessity. In the case of the entertainer, it is usually an investment into a concert. All three of these need marketing, but only the gift wrapper and the entertainer need advertising. In the case of the surgeon, a hospital will recommend the best candidate for the job, effectively eliminating the need for the surgeon to do any sort of outbound advertising to attract new clients. (Side note: medical and legal professionals are generally prohibited from advertising their practices in the typical sense of advertising. This is to ensure proper ethics and morality, and ultimately to allow for the best choice to be made based on skill and aptitude rather than a fancy ad campaign. There are many people however who don’t abide by this rule.)

In the case of the gift wrapper, they may put a sign in a gift store, advertising the service. In the case of the entertainer, they usually have heavy ad campaigns that revolve around videos, tours, product endorsements, etc. A music video for example is actually a form of advertising for an artiste. While it may be free for us to watch on YouTube, it acts as a way to boost the image and the popularity of the artiste, which in turn allows them to command higher fees for concerts and shows.

The surgeon is definitely a high involvement purchase, as it can mean life or death. In other words, high involvement purchases have very high consequences. The gift wrapper is a low involvement purchase, as the consequences of a poorly wrapped gift in no way compare to the consequences of a poorly done surgery.

These are all rough examples, and are used simply to illustrate a point.

To summarise:
The higher the demand for the product or service, the lower the need for active marketing. Word of mouth usually is enough. The average person usually does not have enough knowledge of medicine to be able to compare the methods of two surgeons. All they have for comparison sake is other people’s opinions. If they trust the person’s opinion, then they will trust the surgeon. This is how medical referrals work.

The lower the demand, or the availability of suitable alternatives for a product or service, the higher the need for active marketing. You need to convince people why your offering is better than your competitor’s offering for the exact same price. Features? Convenience? Free shipping? Which aspects make you better? If you have no competition, and your product or service is a low involvement purchase, then why should someone purchase at all? That is the message that marketing tries to deliver.


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