“The business enterprise has two, and only two basic functions: marketing and innovation.” (Peter Druker)
The management of many companies don’t agree with the statement above.
I was talking recently to a friend about the company he works for: 3 locations, 300 employees, $100 million in revenue.
Profitability? Not that great.
I was surprised to learn the company had no formal Marketing department.
Marketing: Key Strategic Function or Unnecessary Expense?
Many organizations see Marketing as an expense rather than the department responsible for taking a business to the next level.
This perception is popular not only among small companies that can’t afford a Marketing department. Large organizations, like the one in the example above, don’t seem to understand how Marketing can help a business grow and be profitable.
One of the reasons is because just about everybody thinks they can do marketing, be it the company owner or the in-house sales and marketing clerk.
Instead of a specialized department, the Marketing function is bundled with other responsibilities, such as sales or administrative support.
There is also a lack of knowledge about Marketing’s role within an organization. I will take a moment to clarify it.
On the short term Marketing is responsible for generate immediate revenue (sales). Medium and long term its role is making sure the company survives, remains profitable and grow.
Many marketers are asked to focus exclusively on generating immediate sales. Hence the prevalence of promotions, price discounts, and other “limited time” deals.
While these short terms campaigns are needed to generate the revenue the business needs to operate, it is the medium and long term strategy that drives the company forward.
For a more detailed explanation of Marketing’s dual role within a business I recommend Dr. Emily Coleman’s excellent article The Mission of Marketing.
3 Things Marketing Should Focus On
The three areas under Marketing control that bring the most noticeable positive impact to the company’s bottom line are:
Building the Company’s Image
A key function of the Marketing department is to build a strong and differentiated image for the company in the eyes of the target audience.
The modern consumer does extensive research before committing to a purchase. It has been said that companies today have less control over how their brands are perceived in the marketplace.
I tend to disagree. A company has a great deal of control in building its reputation by offering a good product, combined with a well-thought differentiation strategy that is communicated clearly and consistently.
Building the right image is a long term project. There is no such thing as quick branding. Brands are built over time by consistently acting in accordance to the image they want to project.
Introducing New Products
Product life cycle has shorten considerably. Rapid adoption of latest technologies and global collaboration are contributing factors.
What looks new today becomes obsolete tomorrow. A company that is not able to update its offering regularly ends up loosing market share to new, more innovative competitors.
New product introduction is a proven method to grow sales. Sales teams love them. It gives them something new to talk about with their customers. Distributors are also looking for something new to show their end-use clients.
Marketing should be in charge of developing new products and improving existing ones. Resources should be made available to hire industrial designers, product managers, quality testers and other key personnel that can generate innovation.
Supporting the Sales Team
The sales force is the interface between the company and its customers. In a thriving business the sales team is under constant pressure to improve the bottom line.
Marketing’s role is to help the sales team be more productive and close more deals. Here are 3 ways to do it:
Brand related training. One of the most frequent questions a Sales person has to address is “Why should I buy from you and not competition?” Marketing has to provide all the training needed to make the Sales team confident in the product, and the company behind it.
New product training. Sales need to have a clear picture of how each new product fits into the overall company strategy, its functional characteristics, as well as strengths and weaknesses of competitive offerings.
Joint sales calls. Traveling with your Sales team to client presentations greatly increases the chances of closing the sale. Sales and Marketing should complement each other and provide the customer with a compelling offer that can’t be turned down.
Support in identifying new prospects. Marketing should design and implement campaigns that will identify new customers and generate their interest in what the company has to offer. Once the ground work has been finalized Sales can move it and close the deal.
Each of the strategies listed above can impact a business in significant ways. The key is to find a balance between implementing short term tactics that generate immediate revenue and long terms strategies the ensure growth.