Understanding markets and customers
A market is all the people or firms who may buy a product. Customers are different, so we segment them into groups: by age, place, income, interests or habits. Then we choose a target market and a customer persona: a short picture of a typical buyer (for example, 'Riya, 16, loves gaming, uses a phone, small budget').
Good marketing asks: What problem does the customer have? Where do they spend time online? What makes them trust a brand? Data from surveys, reviews and website visits helps answer these.
Digital marketing basics
Digital marketing means promoting products using the internet and digital devices. It follows the funnel: awareness → interest → purchase → loyalty.
Main tools
- Website or app: the shop window where people learn and buy.
- SEO (search engine optimisation): making your page appear high in free search results.
- Paid search and display ads: you pay per click or per view.
- Email and messaging: newsletters, offers, reminders to people who agreed to receive them.
- Content marketing: useful blogs, videos and guides that attract people.
Why firms like it
Low cost to start, exact targeting, two-way talk with customers, and results that can be measured. Risks: too many ads annoy people, privacy rules must be followed, and bad reviews spread fast.
Online and social media marketing
Social media marketing uses platforms where people share photos, videos and posts. A firm can post its own content (organic), pay to show ads to a chosen group (paid), or work with influencers who have many followers.
- Engagement = likes, comments, shares. It shows interest, not sales.
- User-generated content: customers post about the product themselves.
- Viral marketing: content that people share so fast it spreads like a virus.
Measuring results
- Click-through rate (CTR) = clicks ÷ impressions (views) × 100.
- Conversion rate = buyers (or sign-ups) ÷ visitors × 100.
- Cost per click (CPC) = ad spend ÷ clicks.
- Cost per acquisition (CPA) = ad spend ÷ buyers.
Services marketing
A service is an activity you buy, not a thing you keep: a haircut, a bus ride, a coaching class, a bank account. Services have four features:
- Intangible: you cannot touch or test it before buying, so reviews and trust matter.
- Inseparable: it is made and used at the same time, often with the customer present.
- Variable: quality depends on who gives it and when.
- Perishable: an empty cinema seat tonight cannot be sold tomorrow.
So services use an extended marketing mix of 7Ps: product, price, place, promotion + people (trained staff), process (smooth steps) and physical evidence (clean room, uniform, website). Online booking, reviews and reminders are strong digital tools for services.
New business models
A business model is how a firm creates value and earns money. The internet made new ones possible:
- Subscription: pay every month for music, video, software or meals.
- Freemium: the basic version is free; extra features cost money.
- Marketplace: one site joins many sellers and buyers and takes a commission.
- Sharing / platform economy: people rent out rides, rooms or skills through an app.
- Advertising-funded: free for users; advertisers pay to reach them.
- D2C (direct to consumer): brands sell online without shops in between.
Try it
Pick a product you use. Write its target customer in one line. Then, in the 3D free play, set the ad budget to ₹5,000 and note the buyers. Now keep the budget and raise conversion from 5% to 10%. Which change gives more buyers for the same money?
Key formulas and definitions
- CTR (%) = clicks ÷ impressions × 100
- Conversion rate (%) = buyers ÷ visitors (clicks) × 100
- Cost per click = ad spend ÷ clicks
- Cost per acquisition = ad spend ÷ buyers
- Funnel: awareness → interest → purchase → loyalty
- Services: intangible, inseparable, variable, perishable
- 7Ps = 4Ps + people, process, physical evidence
Worked examples
1. An ad is seen 20,000 times and gets 500 clicks. Find the CTR.
CTR = 500 ÷ 20,000 × 100 = 2.5%.
2. A page gets 800 visitors and 24 of them buy. Find the conversion rate.
Conversion rate = 24 ÷ 800 × 100 = 3%.
3. A shop spends ₹6,000 on ads and gets 1,200 clicks and 40 buyers. Find the CPC and CPA.
CPC = 6,000 ÷ 1,200 = ₹5 per click. CPA = 6,000 ÷ 40 = ₹150 per buyer.
4. A music app gives free songs with ads, and an ad-free plan for ₹99 a month. Name its business model.
Freemium (free basic version, paid extras) combined with subscription for the paid plan, plus advertising for free users.
5. A gym has 30 empty slots at 6 a.m. every day. Which feature of services does this show, and how can digital marketing help?
Perishability: empty slots cannot be stored. The gym can send app reminders or offer lower early-morning prices online to fill them.
6. Ad A: ₹10,000, 50 buyers. Ad B: ₹8,000, 32 buyers. Which is better value?
CPA A = 10,000 ÷ 50 = ₹200. CPA B = 8,000 ÷ 32 = ₹250. Ad A is better value (lower cost per buyer).
Common mistakes
- Thinking likes equal sales. Engagement shows interest; check conversion for sales.
- Dividing by the wrong number: CTR uses impressions, conversion rate uses visitors or clicks.
- Targeting 'everyone'. Without a segment and persona, money is wasted.
- Treating a service like a product. Services cannot be stored or tested first, so trust and people matter more.