What is Upstream Marketing?
The idea of going upstream to uncover marketing opportunities is a proven approach though lacks familiarity, understanding, structure and practical instruction. Dr. Ram Charan, a top management consultant, broadly defined the term, in his book Profitable Growth is Everyone’s Business (2004). In the book, he describes upstream marketing vs. downstream marketing and how they differ this way:
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.
Here’s a graphical comparison of the two streams, highlighting key differences:
Here’s another way to look at upstream marketing, by way of analogy. Have you ever gone fishing? Think of upstream marketing as everything that happens before the hook is in the water. The best anglers consider and act on a number of factors before they cast the line, to catch more fish. First, they’ll consider the type of fish, the method (fly fishing or bait casting), and tools needed – the type of rod, reel, fishing line, and so on. A few other questions: where exactly to fish, which lake or river? When and where within the lake? What’s the best bait? They then bait the hook and cast it into the water.
Embedded in this example are the essential principles of upstream marketing – thinking through then implementing strategic decisions to achieve extraordinary growth. Upstream marketing involves the who, what, where, when and how decisions before planning and integrating with downstream implementation methods.
In considering upstream vs. downstream marketing, it’s crucial to ensure the two are fully aligned, so the parts are seamlessly integrated. After all, upstream and downstream marketing are different parts of the same stream. While the earlier chart showed upstream and downstream side-by-side, ideally upstream marketing occurs first, flowing directly into downstream marketing.
Extending the stream analogy, a better visual would have upstream marketing at the top, splitting into several downstream channels. This signifies the tremendous leverage opportunities obtained from upstream work. Numerous downstream opportunities emerge from a focus on upstream principles. Start with upstream and downstream flows more smoothly with fewer impediments.