Marketing for a Start-up Vs Marketing for an Established Company
A start-up’s initial business need is to only survive in the market through brand visiblity and brand recognition. At the same time, its scarcity of finances due to lack of regular revenue stream is also a blatant fact. These two factors guide both the choice of its marketing activities and the allocation of its scarce resources towards their planning and execution.
An established company has more mature and ambitious business needs such as leveraging its brand equity to venture into new markets, make brand extensions and even raise more capital to expand further. At the same time, unlike a start-up, the “money factor”, in a financially self-sufficient and established company is a small factor in deciding particular marketing activity to be undertaken.
Start-ups, do everything to get noticed. They use both passive marketing – building the basic infrastructure such as website, logo, letter head, social media presence, etc. and waiting for the customers to find them and active marketing – making a proactive effort to build relationships by defining their target market, going out and trying to look for potential prospects. This includes business networking, and attending start-up meetings and conferences (Premeau, 2011).
An established company mostly uses active marketing to capitalize on its years old brand equity to grow ambitiously. However, it also uses passive marketing in the form of tools like Google Analytics to track the daily traffic being pulled by the company’s website or even frequently visiting the company’s Facebook Fan Page to see the number of “likes”, and then trying to prospect them through cold-calling or sending mailers.
Budgetary constraints refrain a start-up from planning a full-blown marketing campaign. It usually relies on small-scale marketing activities like personal selling, cold calling, or using social media to get personal with its prospects like joining particular discussion forums or online start-up groups/communities related to its industry.
Established companies like Apple, Google etc. don’t think much when it comes to planning large-scale marketing campaigns, as evident from huge chunks of advertising and promotional budgets kept aside for the same. These activities usually take the form of mass electronic and print media advertising, sponsorships, franchising etc.
Finally, since a start-up has only a handful people ‘driving the show’ initially, therefore, regardless of his/her work profile, everyone is expected to be a “personal brand ambassador” for the company by indulging in marketing activities at his/her own level, thereby, making both a hard-core marketing person and an accountant equally responsible for creating brand visibility for the company. An accountant can also propogate his company’s brand name amongst his network of friends, family members and acquaintances in gatherings, parties or other occasions of face-to-face interaction.
Established companies, unlike a start-up have all the resources, products, processes, policies, people and technologies to take care of their on-going and contingent marketing needs. They not only have dedicatedly separate specialized departmental teams comprising of marketing managers, sales managers & brand managers for performing product-wise marketing and sales functions, and providing “after sales” service for the same.
Further, as mentioned earlier, proactive marketing initiatives for a start-up firm are the shared responsibilities of both a designated marketer or a business development hire, and the entire team, NOT BARRING the senior lot of Founders, & Investor-Partners, on each of whom lies the onus of acting as a “personal brand ambassador” for the company and helping it graduate to the next level, in their own individual capacities. But, unfortunately, anecdotal evidence suggests that the top brass in almost 90% of the start-ups doesn’t feel the need to make such proactive marketing efforts. They, instead leave it to the fresh marketing/business development recruits, who, among other things, are faced with a challenging task of adapting themselves to the newly precarious startup environment. The reason for this much needed change in the attitude of the senior management, apart from the fact, that there is no better way to utilize
their well-connected status, than to financially bail out the start-up firm they have decided to nurture and grow, is that by being associated with a start-up, they have donned a leadership role, making the current employees of the company, to count on their experience and skills for help and guidance, in the wake of the basic ambiguity, disorganization, shakiness, fear of survival and sustainability surrounding their work environment and haunting them constantly. Given such a scenario, it becomes the personal responsibility of the founders & investors to instill confidence in their employees, with respect to the company’s potential to succeed in the future and also frequently assuring them that it is currently moving in the right direction. This also involves making them feel that the entire responsibility of “sweating it out” is equally shared by both the parties who are striving towards a common goal of seeing the current baby-start-up, grow into a strong MNC. For this they must lead by example and instead of just talking the walk i.e. preaching what to practice on the whiteboard and spending time in air-conditioned cabins using facebook and twitter, should try walking the talk i.e. practice what they preach on the whiteboard. In the absence of such a constructive behavior-modelling platform, the most obviously detrimental impact would be a dent on the employees’ motivation and performance levels, which will act like a two-edged sword by making the company suffer from high attrition rates, and spreading a negative word of mouth about it in the market, as a least preferred employer.
Another reason why this is a wake-up call for the senior management is because there are no free lunches in this world. A senior management of a start-up firm that adopts laxity with respect to undertaking seriously passionate marketing efforts to drive the company’s growth, not only tends to make the company fall short of the market expectations (Ellis, 2009), but also falls
short of the expectations of its fellow co-founders and early investors (Ellis, 2009), who continuously assess each other to not only sincerely protect the newly born start-up from a non-performance culture created by underperformers, but also to fulfill their own personal greedy ambitions to quickly climb up the ranks in the shortest possible time. This commotion would lead to their consensual replacement by the “next-level marketing leader”(Ellis, 2009), thereby, starting, a vicious circle of hiring and firing that will make achievement of a sustainable and robust growth for the poor start-up venture a far-fetched dream.
References
Premeau E., 2011. Passive Vs. Active Marketing: Are You Relying on the Wrong Type of Marketing? [Online] Available at: http://emarketingstrategist.com/2011/01/passive-vs-active-marketing.html [Accessed 24 March 2012].
Ellis, S., 2009. Founders Make the Best Startup Marketing Leaders. [Online] Available at: http://startup-marketing.com/founders-make-the-best-startup-marketing-leaders/ [Accessed 24 March 2012].
