What is Marketing: Part 1 - Introduction

What is Marketing?

Many people believe - and my previous posts on this blog may serve to reinforce the belief - that "marketing" is synonymous with "advertising."  However, advertising is just one component of what marketing does.

Marketers would say that "marketing" is a broad field that includes all aspects of serving a need.

Activities conducted by the marketing department include:

1. determine the marketing mix (product, price, positioning)
2. make the product available to the consumer through appropriate channels
3. inform the consumer that the product is available (that's the advertising bit)
4. Finally, evaluate the success or failure of past marketing efforts.   

Trying to sum up the entire field of marketing got a bit unwieldy for a single blog post, so I’ll tackle this topic in a “What is Marketing” miniseries.

Next up: the Marketing Mix.

What is Marketing: Part 2 - The Marketing Mix

The Marketing Mix

Part 2 in the “What is Marketing” series.

Determine the marketing mix

The "marketing mix" is the balance of three components:

1. Product 
2. Price
3. Positioning

The marketing mix should be developed in response to a recognized need on the part of the target market.  Therefore, all marketing begins with targeting; and when marketing efforts get rocky, targeting is what you return to.

Targeting

Targeting is the art of figuring out who your customers are, and then orienting your entire business strategy so that it aligns with those customers' wants and needs.  The understanding of who your customers are and what it is that they need is the information that drives your business decisions.  The best way to begin a marketing campaign is to contact your customers, or a representative sample of them, and ask them to tell you what they would like.  Primary information such as survey data is invaluable in assisting you to understand how to proceed with your brand development strategy.

Product design

Once you know what your customers want, you can set about trying to design it.  Obviously, the particular need you choose to address will be related to your firm's core competency.

Returning to the example I used in previous posts on this blog: imagine that you have been sewing a line of handmade clothing and selling your clothes at a local street fair.  You've been doing it for a while and you're ready to expand.

Your core competency is not the ability to stitch a hem: there's a machine in China that's better at that than you are.  Your core competency is your creative ability to conceptualize a unique design and to put it together with secondhand materials and found objects to create trendy clothes.

Based on your past sales data and informal interviews with customers, you know that most of your customers are young (in their 20's) female city dwellers with a college education.  They like your clothing for the uniqueness of the pieces and the flashy styles you create.

So, as you look to expand, should you try to develop a less flashy line, in an attempt to reach the masses who are not yet buying your products?  No!  You already know that your existing customers value you for your flashy styles.  Go with it.  As you look to expand, maintain consistency in the products sold under your brand, so that regardless of where they encounter it, customers will recognize it for the unique identity that it offers.  Find more customers who are just like your existing customers: they are your niche, your target market.

Price

The cost of the product should reflect the value of the product to the customer.  The cost of raw materials is only a small factor when calculating the total cost...  unless the cost of raw materials is substantial, in which you may wish to reconsider your inputs.  You can engage in Process Costing to meet your targets; although that's more Operations Management and Accounting than it is marketing specifically, but it's all tied together.  Once all the factors are properly weighted, the price should be "right" for the time of sale, accounting for convenience, market conditions (competition), the uniqueness of the product, and the consumer's own budgetary constraints.  When the price is "right," a transaction is conducted, and both the buyer and the seller obtain value.

Positioning

Positioning is the brand personality.  Positioning incorporates yes the physical location (position) of any outlet but also the reputation of the company, the exclusivity or ubiquity of the brand, and any statements made by the brand about the consumer.

Price is a component of positioning.  Selection of channel partners is also a key component of positioning.  That brings us to making the product available.

Next time: sales channels.

What is Marketing: Part 3 - Channel Management

Sales Channels

Part 3 in the “What is marketing” series.

Channel management 

At this phase of your marketing plan, you are ready to make the product available to the consumer.
Now that you’ve identified a customer group and developed a product for them, it’s time to reach those customers through appropriate channels.  You want to preserve your brand’s positioning while expanding your business.  Your stall at the street fair is a direct channel, but it reaches a limited slice of your total potential customer segment.  You want to find more channels to your customers, and in the interest of taking your offering to where your customers are, you determine to sell your products through channel partners.

Adding channel partners

Should you immediately try to strike a deal with a volume distribution channel, like a store down at the mall?  No!  You produce one-of-a-kind fashion pieces; they don’t go on the rack with mass-produced t-shirts.  Of course, major retail outlets wouldn’t touch you at this point, because you don’t have the business infrastructure to sell through them; but you don’t want those guys anyway.  You need a high-touch sales channel; someplace that’s going to give your customers the attention they want.  You need to sell your products through a small fashion boutique or similar upscale business.  Talking to the owners and finding someone who’s willing to make a deal could require some work, but you are dedicated.

Your online sales channel

But now you’re concerned that you need a low-touch sales channel, to reach members of your target demographic who may not exhibit the behavior characteristics of patronizing trendy downtown boutiques.  To reach this segment, you will probably start by setting up accounts with Etsy and eBay.  Eventually you may decide that you want more control over the customer experience of your online sales channel than you can get when selling through Etsy or eBay; and when you reach that point, you will want to get a website of your own.  There are ways to get a website on the cheap; but you are likely to end up with a cheap-looking website.  I admit a professional bias in this regard, but my recommendation is to work with a local marketing design professional to come up with a package project to meet your business needs at a budget that you can view as a worthwhile investment in growing your business.

Next time: Inform the target market that the product is available with advertising.

What is Marketing: Part 4 - Advertising and Branding

Advertising and Branding

Part 4 in the “What is Marketing” series

Inform the consumer that the product is available

As long as your business was limited to a stall at a street fair, the only advertising you needed was maybe a sign, and a tall hanger to show off your wares to the passing foot traffic.  Now you’re selling it in shops that may not give you window space.  At this point you become concerned, first with notifying people that your products are available through these channels, and secondly with trying to increase the odds that consumers who visit these channels will ask for your product by name.  Suddenly you are concerned with branding.

Brand development

If you’re investing in marketing activities (and in this context, I do mean “advertising” primarily) then you want to maximize the return you get on that investment.  If you advertise and convince prospects to visit your channel partners, then you want them to be able to ask for your products by name when they walk in the door; and for that, you need a brand name.  A brand also helps you to improve repeat customer retention – the tendency of previous customers to come back and buy from you again in the future.  The more familiar they are with your product, the more likely they are to associate it with a friendly sense of recognition.  If you have a name and mark that you implement consistently across your customer touchpoints, then your customers will be more likely to remember you from one contact to another.

Choosing a brand name and logo

Ideally, when selecting a brand name, you want something memorable, short, and descriptive; a name that will represent your company’s quirky personality and tie that in to the quirky self-image of your best customers.  In this case, your product line already has a brand name: if you hope to retain your existing name recognition and customer base, then you will probably continue to use the name from your old street fair stall sign.  You can probably safely have your logo professionally redesigned, though, unless you are happy with the one you have.  Try to be sure you work with a professional who is comfortable producing a logo that will work in a variety of media: not just something that would look flashy on a web page; but something you could have embroidered onto your clothing items, when you get bigger and start producing your products in large quantities.

Brand awareness

Now you are ready to introduce your brand to the world.  This is the expensive undertaking we all know and love from the continuous advertisements we are subjected to everywhere we go and doing everything we do.  But you don’t want to blanket every available media channel with your marketing message: you want to target your customers specifically.  Not only that, but you want to target consumers by the channel they are likely to utilize: trendy downtown pedestrians through the trendy local weeklies; internet shoppers through Google ads.  I talked about advertising a bit in a previous post, and I’ll probably come back to it again in a future post, if I manage to stay motivated.  I guess for now suffice to say that advertising is a crucial component of any marketing strategy.

This is an ongoing process.  You’ll notice that many large, successful brands never stop advertising, especially consumer brands in competitive markets with minimal differentiation.  There’s a reason for this.  Pursue your chosen strategy for a time, and then it will be time to evaluate your progress.

Next time: evaluate the results of marketing activities.

What is Marketing: Part 5 - Evaluate Marketing Efforts

Part 5 of the “What is Marketing” series.

Evaluate marketing efforts

Finally, at the end of any marketing cycle, it is essential to evaluate the success or failure of the marketing efforts.  Did the marketing activities generate the expected return?  Sales data will inform judgments of success.  If the marketing effort was successful, that success may be replicated or built on.
On the other hand, if the marketing effort was not successful (e.g. if the sales targets were not met) then the marketing department must assess what errors were made, and determine the best potential repositioning strategy going forward.  Customer surveys and interviews with other channel partners and stakeholders such as customer service representatives may help the company to understand why a marketing campaign did not resonate with customers.

Conclusion

This miniseries has discussed the components of marketing, and how they relate to the development of a micro-enterprise with big dreams.  In short, to sum up, the entire marketing process should always be centered on the customer: understanding the customer’s perspective; relating to the customer in product design and communications efforts; designing a product and a sales strategy that will deliver the right product at the right price and all the rest.  It begins with determining who you’re selling your products to; and it is continuously improved by actually asking them what they would like best.  Future posts may discuss survey techniques and choice-based conjoint; but I think this is enough for today.

Resources

The “What is Branding” series was informed by the following resources.

Coughlan, A., Anderson, E., Stern, L., and El-Ansary, A.  (2006).  Marketing channels (Seventh edition).  Upper Saddle River, NJ: Pearson Prentice Hall.

Keller, K.  (2008).  Strategic brand management: building, measuring, and managing brand equity (3rd ed).  Upper Saddle River, NJ: Pearson Prentice Hall.

Kotler, P. and Keller, K.  (2009).  Marketing Management, Thirteenth Edition.  Upper Saddle River, NJ: Pearson Prentice Hall.

Ries, A., and Ries, L. (2002).  The 22 immutable laws of branding: How to build a product or service into a world-class brand.  New York, NY: Collins Business.