What is marketing?
"Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return." — Philip Kotler
It's not advertising. Advertising is one channel. Marketing is the function that decides who to serve, what to make for them, what to charge, where to sell it, and how to tell them about it.
The 4 Ps · McCarthy 1960
PRODUCT
What you sell. Features, design, packaging, quality, warranty, returns. The good or service that solves the customer's problem.
PRICE
What you charge. Cost-plus, value-based, dynamic, freemium, penetration, skimming. The number on the label.
PLACE
Where it lives. Direct, retail, marketplace, wholesale, e-comm. The distribution path between maker and buyer.
PROMOTION
How they hear. Advertising, PR, content, sales, sponsorships, partnerships, SEO, social. The shouting layer.
Modern additions (Booms & Bitner, services marketing): People · Process · Physical Evidence — the 7 Ps.
STP · Segment, Target, Position
Wendell Smith's 1956 framing, popularized by Kotler. The most fundamental sequence in modern marketing.
SEGMENT
Slice the market. Demographic (age, income), geographic, psychographic (values, lifestyle), behavioral (usage, loyalty).
TARGET
Pick which segments to serve. Mass, differentiated, concentrated (niche), or micromarketing. You cannot be everything to everyone.
POSITION
Plant a flag in the customer's mind. Trout & Ries: "Positioning is not what you do to a product. It's what you do to the mind of the prospect."
The BCG matrix
Bruce Henderson, 1970. Plot every product in the portfolio on growth × market share. Four corners, four playbooks.
★ STAR
iPhone in 2008. Invest. Defend. They become the cash cows of tomorrow.
? QUESTION MARK
Apple Vision Pro. Big market, weak position. Double down or divest.
$ CASH COW
Coca-Cola Classic. Milk profits to fund stars and question marks.
✗ DOG
Most legacy printer divisions. Harvest, divest, or shut down.
The marketing funnel
From Elias St. Elmo Lewis's 1898 AIDA framework to modern flywheels — the customer journey, mapped.
The numbers: 0.1% top-to-bottom is normal in cold paid media. 5–10% is healthy in warm channels (SEO, referral). The whole game of growth marketing is widening any conversion step you can.
Brand equity
Aaker's five components
- 1. Brand awareness
- 2. Brand loyalty
- 3. Perceived quality
- 4. Brand associations
- 5. Other proprietary assets (patents, trademarks)
Interbrand 2024 top 5 most valuable: Apple ($516B), Microsoft ($340B), Amazon ($308B), Google ($333B), Samsung ($91B).
"A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well." — Jeff Bezos
Channels & where they fit
| Channel | Strength | Weakness | Best for |
|---|---|---|---|
| SEO / Content | Compounding, owned | Slow, 6–18 month lag | Long sales cycles, high-intent search |
| Paid search (Google) | Captures intent | Expensive in competitive verticals | Direct response, e-commerce |
| Paid social (Meta, TikTok) | Massive reach, targeting | Iceberg attribution, ad fatigue | Brand-building, impulse purchases |
| Owned, ROI 36:1 (DMA) | Deliverability, list decay | Retention, lifecycle marketing | |
| Influencer | Trust transfer | Hard to measure, fraud risk | Lifestyle, beauty, gaming, DTC |
| Affiliate | Pay for performance | Brand control limited | E-comm, finance, software |
| Direct mail | Underused = stands out | Slow, expensive per unit | High-LTV niches, real estate, luxury |
| Out-of-home (billboards) | Brand prestige, broad | Hard to attribute | Awareness phase, IPO season |
| Podcast ads | Host-read trust | Limited inventory | SaaS, DTC, finance |
| Referral | Cheapest CAC | Requires PMF | Marketplaces, fintech, social |
Attribution — the hardest problem
You spent $100K on Facebook, $80K on Google, $40K on a podcast, and ran a billboard. A customer signed up. Whom do you thank?
FIRST-TOUCH
100% credit to first interaction. Overrates discovery channels. Useful for awareness, blind to closing.
LAST-TOUCH
100% to last click. Overrates branded search. The default in Google Analytics. Hides the work.
LINEAR
Equal credit to every touchpoint. Naive but neutral. Good baseline.
POSITION-BASED (U-shape)
40% first, 40% last, 20% middle. The default in many B2B tools.
MARKOV CHAIN
Probability that removing a channel breaks the journey. Statistically grounded; harder to explain.
INCREMENTALITY
Holdout tests, geo-experiments. The gold standard. What does this channel actually cause?
iOS 14.5 (April 2021) killed deterministic attribution by requiring opt-in to ad tracking (~25% opt-in rate). Marketing has been re-learning to measure ever since.
Case study: Nike's "Just Do It"
1988. Nike is at $877M revenue, behind Reebok ($1.7B). Wieden+Kennedy is asked for a tagline that unifies decades of fragmented campaigns.
Dan Wieden recalls that morning: "I was thinking about Gary Gilmore." The killer's last words before execution: "Let's do it." Wieden softened it.
Three words. Used continuously since. By 1998 Nike's revenue was $9.6B — a 10x in a decade. Most awarded ad slogan of the 20th century.
Lesson: a great brand line isn't about the product. It's a posture toward life that the product can serve.
Case study: Dollar Shave Club
2012. Michael Dubin spends ~$4,500 producing a 90-second YouTube ad: "Our blades are f***ing great." It goes viral. 12,000 orders in 48 hours; the site crashes.
Insight
Razors are commodities sold under a Gillette monopoly with absurd markups. Subscription delivery + comedy positioning = unfair fight.
Distribution
YouTube + earned media. No retail. No big TV buys. Direct relationship → margin → reinvestment.
Outcome
Sold to Unilever in 2016 for $1B cash. Five years from launch.
Pricing: the most leveraged P
McKinsey study: a 1% improvement in price improves operating profit by ~11%. Same study, 1% volume improvement = 3.3%. Pricing is the highest-ROI marketing decision.
Cost-plus
Cost × (1+margin). Easy. Leaves money on the table when value >> cost.
Value-based
What is it worth to the buyer? Software pricing's promised land. Hard to discover.
Penetration
Underprice to grab share. Uber rides at $5. Risky if you can't raise later.
Skimming
High launch price, lower over time. iPhone pattern. Captures price-insensitive first.
Freemium
Free tier as acquisition. Conversion 2–5% typical. Spotify, Dropbox, Notion.
Dynamic
Price changes with demand. Airlines, Uber, ticketing. Can backfire (Wendy's surge plan, 2024).
The seven sins of marketing
- 1. Targeting "everyone." If anyone is your customer, no one is.
- 2. Falling in love with features instead of jobs to be done.
- 3. Confusing brand with logo. The logo is the smallest part of brand.
- 4. Optimizing the funnel without checking if the funnel exists.
- 5. Reporting MQLs that never become revenue.
- 6. Cutting brand spend when growth slows. The Ehrenberg-Bass evidence: brand pays years later.
- 7. Believing your own ads. Nothing replaces customer interviews.
The creative brief
The single document every great campaign starts from. Variants exist (Saatchi, Ogilvy, BBH) but the bones are the same.
| Field | The question it answers |
|---|---|
| Why are we advertising? | Business goal. Awareness vs. consideration vs. sales lift. |
| Who are we talking to? | The single most receptive customer, in vivid detail. |
| What do they currently think/do? | The starting point. Pre-existing beliefs and behaviors. |
| What do we want them to think/do? | The shift the work must cause. |
| What's the single thought? | The proposition. One sentence. No "ands." |
| Why should they believe us? | Reasons to believe. Proof points. Credibility anchors. |
| Tone of voice / mandatories | Brand voice, legal disclaimers, format constraints. |
The numbers a CMO watches
CAC
Cost to acquire a customer. Track by channel. Track by cohort.
LTV : CAC
Healthy SaaS: ≥ 3:1. Strong DTC: ≥ 4:1.
PAYBACK
How many months to recoup CAC. <12 = healthy. >24 = peril.
ROAS
Return on Ad Spend. Revenue ÷ ad cost. Not the same as profit ROI.
NPS
Net Promoter Score. Probability customers refer you. -100 to +100.
BRAND LIFT
Survey-based unaided awareness. The slow-moving truth.
Reading & watching
Books
- · Kotler — Principles of Marketing
- · Ogilvy — Ogilvy on Advertising
- · Trout & Ries — Positioning
- · Sharp — How Brands Grow
- · Sutherland — Alchemy
- · Heath — Made to Stick
YouTube
- · CNBC — Brand documentaries (Coca-Cola, Nike)
- · Stanford GSB — View From The Top with CMOs
- · Y Combinator — "How to Growth Hack"
- · Marketing Examined — case-study breakdowns
- · Rory Sutherland — TED, Nudgestock talks