This is Marketing
“Marketing” often gets conflated with “advertising” yet marketing is much more expansive and strategic. It encompasses everything from understanding the market and consumer needs, to creating value propositions and building strong brands.
Upstream marketing is a useful way to differentiate the broader strategic aspects of marketing from more tactical efforts like advertising, which can then be dubbed as part of “downstream marketing”.
We understand Marketing as Seth Godin does. Godin emphasizes that marketing is not just about selling products or running ads, but about creating value, fostering relationships, and making a difference.
It is about the questions of
- Whom do I want to serve.
- Understanding and meeting customer needs.
- Providing value by solving jobs that need to be done.
Marketing is about a strategic and value-creating process in a market, rather than just ads and promotions to get your sh*t sold. It is a buying journey not a selling show.
Upstream marketing focuses on the overall strategy, brand creation, and value proposition. Upstream Marketing refers to the strategic process of identifying and fulfilling consumer needs, including market research, segmentation, targeting, and positioning. It's about understanding the customer, market trends, demographics, behaviors, and needs and then aligning products or services to meet those needs.
Key Concepts and Strategies in Marketing
These strategic activities in upstream marketing help in creating products or services that not only meet customer needs but also create a unique and sustainable competitive advantage. These strategies take a more long-term, forward-thinking approach compared to downstream marketing, which tends to be more focused on short-term tactics like advertising and promotions.
Market Research involves conducting research to understand the market trends, competitors, customer needs, and preferences. It's about gathering and analyzing data to get insights about the market landscape.
Segmenting the market involves dividing the market into distinct manageable groups of consumers who have similar needs, preferences, or characteristics. The purpose is to identify and understand target customers to tailor marketing strategies effectively.
After segmentation, businesses need to determine which segments to target. This involves assessing the attractiveness of each segment and deciding which ones to focus resources on. Whom do you want to serve? Who are your Ideal Customers?
Positioning involves creating a distinctive image or identity for a product or brand in the minds of the customers. It's about differentiating the product or brand from competitors and aligning it with the consumers' perceptions, values, and needs.
Value Proposition Development
Upstream marketing is also about creating a strong value proposition. A value proposition communicates the unique benefits that a product or service offers to customers compared to competitors: With this solution you can do this kind of job. It helps businesses to attract and retain customers by fulfilling their needs better than competitive solutions (of whichnon-consumption is one, too!).
Upstream marketing involves the creation and management of a brand strategy. This includes the development of the brand identity, values, and promise that distinguishes the company from its competitors and fosters a strong relationship with customers. Or, like Seth Godin like to say, “People like us buy things like these.”
These are several key concepts and strategies of that marketing represent upstream marketing. So what is happening then downwards the stream?
Upstream vs Downstream Marketing
We have found “Upstream Marketing” to be an extremely useful terminology to understand the concepts and strategies marketing provides in regard to the concepts of understanding market needs, targeting, positioning, and creating value and in contrast to the rather more tactical areas like advertising, promotions, and public relations, which are often associated with “Downstream Marketing”.
Demand and Pull, instead of Push and Distribution
The concept of "demand-side" in marketing is related to upstream marketing.
Demand-side strategies focus on the users or buyers of a product or service, their needs, preferences, behaviors, and the factors influencing their purchasing decisions. This is in contrast to supply-sidestrategies, which are more focused on the production and delivery of products or services.
The strategies and concepts represented by upstream marketing, including market research, segmentation, targeting, and positioning, are essentially demand-side strategies. They all involve understanding the customer, their needs and wants, and then aligning your products, services, and overall value proposition to meet those needs and wants.
In the context of upstream marketing, demand-side strategies inform the development of the product, service, or brand before it hits the market. They help in creating a product or service that has a strong demand in the market because it fulfills the needs and expectations of the ideal customers.
Therefore, demand-side marketing is a key part of upstream marketing. Both focus on understanding the consumer and shaping the product or service to fit their needs.
So, effectively managing the demand side can lead to
more successful upstream marketing strategies and
ultimately more effective downstream marketing activities.
A.k.a. “Value-Driven Marketing”
You can find the same concepts of upstream Marketing in “strategic marketing” or “marketing strategy”, which broadly cover the same areas of focus and activities. Another term sometimes used is "Value-driven Marketing",which emphasizes the importance of creating value for customers as the central goal of marketing strategies. Something we care a lot about when creating sustainable growth.
The Relevance to Sustainable and Enduring Growth
Overall, the strategic nature of upstream marketing helps businesses to build a strong foundation for their marketing efforts and approach to a market (Got-to-Market), ensuring that they are providing value to their customers and formulating themselves towards those they want to serve. This solid foundation is crucial for sustainable, enduring growth.
Understanding Customer Needs
Upstream marketing ensures that businesses truly understand their customer needs and preferences, enabling them to develop products and services that meet these needs. This alignment between customer needs and business offerings increases customer satisfaction, loyalty, and ultimately leads to sustainable growth.
Building Strong Brands
The strategies in upstream marketing help to create strong brands. A strong brand can command customer loyalty and attract new customers, both of which contribute to long-term, sustainable growth.
Creating Value Propositions
Upstream marketing involves creating compelling value propositions that distinguish a business from its competitors. A strong value proposition can attract and retain customers, providing a business with a competitive edge and fostering enduring growth.
Market Segmentation and Targeting
By effectively segmenting the market and targeting specific customer groups, businesses can use their resources more efficiently and create products or services that appeal to specific customer needs. This efficiency and specificity can lead to sustainable growth.
Anticipating Market Changes
Upstream marketing involves continuous market research and analysis. This allows businesses to stay ahead of market trends and shifts, anticipate changes, and adapt their strategies accordingly. This proactive approach can lead to more stable, enduring growth as businesses are better prepared to handle changes in the market or customer behavior.
Anticipating Customer Needs
Upstream marketing involves continuous customer research and analysis. This allows businesses to stay wired into their customers heads and adapt their product strategies and offers accordingly. This proactive approach can lead to more stable, enduring growth as businesses can make products and services that provide more value to their customers on an ongoing basis.
Upstream marketing, with its focus on demand-side strategies and understanding the consumer, is highly relevant to sustainable, enduring growth. Many of these just enumerated reasons directly lead to a better bottom-lineoutcome.
Does it Increase my Bottom Line? The Impact my Mission Seeks to Have?
The strategies and concepts associated with upstream marketing can greatly contribute to revenue growth.
A thorough understanding of the market, including your potential customers and competitors, can help identify new business opportunities or areas where your business can improve its offerings. These insights can lead to the creation of products and services that more effectively meet customer needs, potentially increasing sales and revenue.
Segmentation, Targeting, and Positioning
By effectively segmenting your audience, targeting the mostpromising segments, and positioning your offerings to appeal to these segments, you can attract more customers, increase sales, and ultimately boost your revenue.
Creating Strong Value Propositions
A compelling value proposition can attract more customers to your product or service over those of your competitors. This increase in customers can translate to an increase in sales and revenue.
Building a strong brand can lead to customer loyalty and higher brand equity. Loyal customers are more likely to repeat purchases and recommend your products or services to others, leading to an increase in revenue. Additionally, brands with high equity can often command higher prices for their products or services, directly contributing to revenue growth.
Innovation and New Product Development
Upstream marketing can also guide the development of innovative products or services that open up new revenue streams. By identifying gaps in the market and evolving consumer needs, businesses can create and launch new offerings that drive revenue growth.
Understanding and meeting customer needs leads to higher customer satisfaction, which can increase customer retention. It's generally cheaper to retain existing customers than to acquire new ones, and repeat customers often spend more. Thus, customer retention can significantly contribute to revenue growth.
In summary, upstream marketing helps in creating a robust and effective marketing strategy that not only meets customer needs but also drives customer acquisition, retention, and loyalty, all of which are crucial for revenue growth and impact maximization.