Upstream marketing refers to the strategic process of identifying and fulfilling customer needs. Upstream marketing takes place at a much earlier stage by developing a clear market segmentation map and then identifying and precisely defining which customer segments to focus on. It analyzes how the end-user uses the product or service and what competitive advantage will be required to win the customer and at what price point. It is done very early in the product or service development cycle and is one of the missing links for generating revenue growth at many companies.
Downstream marketing, by comparison, is what most people visualize as marketing, and involves advertising, promotion, brand building and communicating with customers through public relations, trade shows, and in-store displays. While these activities are extremely important — they are primarily downstream in nature — that is, they enhance the acceptance of a product or service that already exists. Further, companies spend an inordinate amount of money on downstream marketing activities and ignore critical upstream marketing activities.