I am gonna have a start-up, it is essentially a website, rather like this website. So, there is nothing to build for the site other than code, and renting servers.
I don't know what to call the work that you do for the company in the "real world" (not on internet, not on computers), so I am calling the "real world work".
So, for a start-up entirely based on internet, do I need to do promotion, marketing etc. in the "real world" as well. I read in a book that for their internet only start-up, they had their office setup with cups and mugs printed with the company logo etc. They had banners hanging around their workplace... is this all necessary for some stuff that I am missing right now?
The decision whether to do promotions in "real world" depends upon the nature of work you are starting and your target audience. If your startup is dealing with people who are habitual of getting things done from brick-and-mortar places, then going for a real world promotion and marketing strategies are definitely gonna help. I'm myself part of an internet based startup, but we found multiple benefits to physical presence:
It was necessary in my area for registering a company,
It makes our customers feel that we are reachable physically
It provides us a place to meet our business contacts, (we are not exactly restaurant/club people)
You may find more and more reasons. The thing you mentioned about marketing, it's a great tool for attracting local customers, as they will respond more quickly to a large banner hanging around your office rather than a paid Google/Facebook ad. These things also create a layer of gloss around your brand name which is very essential for a startup. However, they are totally related for attracting local customers, if you are going global from your very first step, then I don't think they are gonna matter much, (assuming you are not planning to decorate every damn airport with your brochures.)
The stuff you mention is not required. However, even though you are an internet based site, at some point you will have to pay real world taxes on any money you make. So, it is important to keep track of the money you spend on your business so that you can record it in tax filings. It may also be a good idea to find an accountant or some accounting software that will help you make sure you are doing everything correctly. From what I have heard from friends, bookkeeping is the largest portion of real world work that they spend their time on.
Marketing can also be important through. It is incredibly important to build a strong brand, which most likely requires meeting with a designer to get a professional logo designed as well as the user interface for your site and a marketing strategy (whether the marketing gets done online or in real life).
Marketing is never required.
The way you market is entirely based on the way that your product resonates with your customers: if you feel that you need to market to a certain group of people, then do it.
Reaching your target audience is about trying new things and expanding your influence.
Depending on your product, you may have to market to people in the "real world," or you may not. If your product is based on the Internet for Internet users, your main marketing strategy will likely be through online ads. If your product interfaces with the "real world," you may need to market to people there to make them aware that your product exists.