You are not alone. Marketing is the greatest challenge and biggest concern for small and mid-sized businesses. Marketing is the least understood business function and the most mysterious. Money pit, black art, expense and necessary evil are common perceptions of marketing.
As times change and businesses grow, every company reaches a point where marketing becomes a critical business issue. For some, this happens when revenues stall or dip. For others, it becomes an important factor in taking the business to the next level. Either way, the questions of, "What is marketing, what do we do and how do we do it?" arise.
The American Marketing Association defines marketing as, "an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders." Huh? No wonder there is confusion.
Marketing is much more than a Web site, advertisement, tradeshow or e-mail. These are just a few of the components of marketing. These are only the tactical actions that support the high-level, strategic nature of marketing. Perhaps the reason that much of marketing fails is that the tactical actions are taken without the necessary strategic plan.
Marketing is a high-level business function that is strategic and long-term. Marketing has more in common with a company’s business plan than it does with its monthly sales goals. In fact, much of a company’s business plan is the marketing plan. Deciding what products to offer, at what price and to which market segments are functions of marketing.
You have probably heard of the four "Ps" of marketing: product, place, price and promotion. When empowered, marketing defines the products offered and the market that they will serve (product). Marketing creates the distribution channels through which products are offered (place). Marketing determines the cost to the consumer that yields the largest profit (price). Finally, marketing creates awareness and interest in the product to initiate consumer action (promotion). Above it all, marketing creates the identity of the company that serves as the umbrella under which all products fall.
Marketing is a corporate level function with great breadth in roles and responsibilities.
But you do not need to be overwhelmed by the breadth. With the exception of promotion, the small business performs all marketing functions at the executive level. In fact, since you have products (or services), a pricing structure and sales channel, you are already doing marketing.
With three of the "Ps" covered, marketing can be clarified by focusing on the fourth. For small companies, the critical business issue is successful and profitable promotion. In the context of promotion, the definition of marketing is: a business function that creates, facilitates and supports a selling environment.
Marketing creates the opportunities for selling. Marketing builds awareness and understanding of products and services. Marketing provides the tools used to move toward the close of the deal. Awareness, interest, desire and action are the goals of marketing promotion.
The final point to consider is that marketing is not sales, and sales is not marketing. While these functions are closely aligned and tightly coupled, they are quite different. Marketing is 70 percent strategic and 30 percent tactical. Sales is 70 percent tactical.
Marketing actions speak to many. Sales actions are one-on-one. Marketing’s impact is measured throughout the year. Sales performance is measured by the month. Marketing plans and actions take months to take root. Sales can achieve results with a single phone call.
Marketing is strategic. Marketing is a long-term process. Marketing is an investment in a company’s financial future. For the small business, marketing builds awareness, interest and desire to facilitate sales transactions.
The Marketing Investment
Marketing is not the quick fix for increasing sales revenues. If sales are down and cashflow is tight, you must get your sales force to work harder. Marketing will help your revenue stream six months or a year from now. It can’t and won’t give you new orders tomorrow. If you try to make this happen with a single e-mail blast or direct mail drop, you are wasting your money and time. This is why it is critical to begin your marketing efforts today.
Like any big project that is important but not time sensitive, it is easy to push marketing to the side so that you can address immediate problems and opportunities. However, you need to tackle the marketing challenges well before a dire need arises, because at that time it is too late.
Your Marketing Strategy
Before you rush off to start some marketing; stop, think, plan and strategize. If you do not, odds are that you will be throwing away hard-earned cash. Successful marketing is built upon a clearly defined target market, a strong message and an equally strong marketing communications plan.
Begin by defining the market that you serve today and the market that you want to serve in the future. Be specific, be focused and be realistic. The narrower the target, the easier it is to communicate with them in terms that motivate them to action. A poor market definition is all manufacturers of consumer products worldwide. A better target market is production managers for $100 to $250 million companies in the mid-west that sell health and beauty products.
When it comes to targeting a market, the shotgun approach will inevitably lead you to a message of being everything to everyone. This does not work. Instead, focus on a narrow sliver of industry that you can serve well. Doing so will allow you to create and communicate a powerful message that motivates your target market to action.
The next step is to define the message for your company, products and services. Combine the needs, wants, desires and concerns of the target market with the unique factors of your business. As with the target market, keep the message focused. Also, make sure the message is unique.
This is not easy work. It will take a lot of time and effort, but it is worth it. Without a unique and powerful message, your tactical marketing actions will have little impact on your market and your bottom line.
With the market and the message, you can finally begin to develop the marketing plan. As with any good plan, identify the actions, associated cost and expected return. To ensure that you do a little bit of marketing every day, define the associated action items with due dates and responsibility assignments.
A key to a successful marketing plan is repetition. Rather than spreading your limited financial resources over many actions, repeat a few actions multiple times. For example, elect to send 10 pieces of mail or run an advertisement for a year. One direct mail drop or a one-time advertisement will have little, if any, success. Repetition is the key.
After all of this hard work, you can now promote your company, products and services. It is difficult and it requires diligence, but it is worth it. Marketing works if it is done right. Make your investment today so that you can profit in the future.
In future issues, Todd Grimm will contribute information that addresses common questions about good marketing. In the meantime, he suggests marketing resources available at www.inc.com, www.entrepreneur.com and www.marketingprofs.com.