Marketing

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There are many definitions of marketing, some of the more lofty ones include:

“Marketing is the management process for identifying, anticipating and satisfying customer Requirements profitably.” Chartered Institute of Marketing (CIM).

"Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals." American Marketing Association (AMA).

“Marketing is the core business philosophy which directs the processes of identifying and fulfilling the needs of individuals and organizations through exchanges which create superior value for all parties.” World Marketing Association (WMA). There are two main problems with these types of broad definitions:

By trying to cover all the bases they become almost irrelevant outside of a lecture room. They try to cover off both what is marketing and also the process of how it is done.

Contents

An Entrepreneur's Definition of Marketing

Perhaps more useful definitions for entrepreneurs of 'what is marketing' include:

"Marketing is about ensuring we provide fit for purpose products and services, to our target customers, at a profit, better than the competition." (Harry Hellyer Associates)

"Marketing means solving customers' problems profitably." (Randall G. Chapman)

Both of these definitions are built around the same core principles:

  1. Customer selection is central to the business - customers need segmenting into Market Segments and then targeting to ensure that targeted customers can be offered, sold and delivered products and services that meet their needs.
  2. Products and services offered to a customer group must have a Unique Selling Point (USP) or competitive differentiator that makes them stand out against the competition.
  3. In order to survive and grow the business needs to focus on making a profit - either in the short or longer term, from selling to a customer.

The Marketing Process

So now we have a workable view of what marketing is, we can start to look at what areas and activities we need to cover off to ensure that our marketing efforts are fit for purpose for our business.

Marketing and Business Strategy

The first area to look at is how marketing should support the overall business objectives and strategy of the company.

An effective business strategy is the key to business success and in essence answers three key questions:

  • Where is the business now? - Which requires an understanding the business environment and our company's place in it.
  • Where do we want it to be? - What are the business goals and objectives that we are trying to achieve for the business.
  • How do we plan to it get there? - What strategies should we adopt in order to achieve our objectives for the business.

Question 1 (Where is the business now?) is a core marketing question as it is concerned with how is the business performing in its marketplace. To answer this question one of the primary activities of the marketing function in a business is to undertake an audit of the market for the business.

Once this question has been answered then the business can address its other strategy Questions 2 and 3. (Find more information on Strategy).

Image:bus_strat_plan.jpeg

Fig. The Market Audit, Marketing Strategy and Marketing Tactics

Marketing has four main areas: Marcomms or Marketing Communications, Product Management, Product Marketing, Channel Marketing

Marcomms is the side of marketing most people are familiar with. Marcomms busies itself with the softer side of the Marketing Mix - Promotion, PR, Advertising, Events, Corporate Image, Branding etc. Product Management is a Marketing function that decides which products get built and the functionality that goes into those products. Please note that engineers do not decide this. Engineers build the product, Marketing defines what the product has to do. Product Marketing is the function that decides what the messages are that will be taken to market, and how the products or services will be positioned to make it as simple as possible for customers/consumers to buy the product or service. Channel Marketing is the function that builds the programmes to make it easy for third parties to sell the product.

Often the latter three roles are completely missing or overlooked in companies or worse, are subsumed within other functions. it's not unusual for Product Management and Marketing to be part of the Engineering or Product Development organisation, or the Channel Marketing piece to be lumped into Marcomms or to be missing altogether.

Don't make these mistakes, by building these roles into your Marketing function you will: a) Build products and services for markets b) Build products and services that lots of customers will buy c) Build products and services that third parties will sell for you

Market Analysis

This market analysis of where the business is now in its market is imaginatively called "The Market Audit" and covers: the external business environment and its target markets; the company and its products; its customers; its competition and its distribution channels. Once you have conducted your market analysis you will need to work on classifying your information

The Market Plan

An essential part of any consistently successful business - large or small - is a good marketing plan. The key objective of the marketing plan - which can be a one page document for a small business, or several hundred for a large corporate. Is to outline answers to the same questions asked for the business as a whole, i.e.: Where are we? Where do we want to be? And how are we going to get there? - But from a marketing perspective.

Marketing Objectives

Marketing objectives come from the Strategic objectives of the business. E.g. a business objective may be to Generate £200K of additional revenue. A marketing objective to achieve this may be: generate 200 new sales at £1000 each by entering a new market or launching a new product.

Marketing Strategies

Marketing strategies outline the general approaches by which the marketing objectives will be achieved. They involve deciding upon which general approaches should be undertaken in order to achieve our marketing objectives. There are many different types of market strategies that have been developed; some for different types of market - e.g. business or consumer markets; some for different sizes of company e.g. SME versus corporate, some regarding competitive position or differentiation within the market - e.g. general versus niche players; some regarding level of innovation undertaken - e.g. innovation leaders versus followers, some regarding company growth rates - e.g. fast or slow growth, etc.

Marketing Tactics

Marketing tactics are concerned with defining a set of activities that will actually be undertaken during the coming period.

Once overall marketing strategies have been set out for each market/product then tactics for how these can be achieved can also be outlined. Marketing tactics are the nuts and bolts activities that will be undertaken by the business to achieve its Sales and Marketing aims. They are generally broken down into programmes which include a timescale, budget and success metrics.

Marketing Mix

One popular approach to marketing is the "Marketing Mix" approach where the various elements (or Variables) of potential marketing strategies are chosen and blended together in a way that explicitly understands and then matches the needs of potential customers. Whilst also taking into account the company's capabilities and restraints - such as resources so that it also achieves its objectives (sounds obvious really but lots of businesses don’t do it!).

There are many models of what Variables should be included in a marketing mix, but perhaps a good place to start for an entrepreneurial business is the extended 4Pmodel. Where the basic four P's include:

  • Product (both basic product and surround - for either a physical product or a service)
  • Price
  • Place (distribution)
  • Promotion ( including; PR, Advertising, Literature, Direct Mail, Events, etc)

Other variables that could be included as markets and marketing have developed include:

  • Positioning (Value Add and Brand)
  • People (the core of all businesses)
  • Process (to include service elements)
  • Packaging (for physical products and services)

Tips

Marketing is finding and using the best marketing techniques that produces the highest ROI (Return On Investment), i.e. the most sales from cost incurred. Finding the best technique usually involves trial and error, the essential element is tracking all your marketing. You must use analytics software:

Free Software

Paid Software

For most companies marketing is about creating the ultimate marketing mix: the best combination of marketing techniques that complement each other and produce best ROI.

What marketing method produces highest ROI?

  • Viral marketing: Can produce the highest ROI (-> how Youtube, Hotmail, mySpace, etc. became so popular); the trouble is 99.99% of times it does not work.
  • Search engine marketing: Is the most accountable marketing method that can produce high ROI in certain industry sectors.
  • PR: PR can produce a very high ROI but it takes times, companies have to see your name 6 times before the recognise your name and it is essential to hire the right PR company and to have news worth stories.
  • Market Analysis
  • The Market Plan
  • Marketing Objectives
  • Marketing Strategies
  • Marketing Tactics
  • Marketing Online (anything 'on' computer: i.e. SEO, emails, banners etc.)
  • Marketing Offline

Further Reading

  • Elon Musk (SpaceX, PayPal): "Viral Marketing" in Stanford Entrepreneurial Thought Leaders Lecture (video)
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