marketing department: Legendary Peter Drucker called the pope management during one of the discussions on the role of marketing in the enterprise voice had the following thought: There is no doubt that if marketing activity were conducted ideally, sales the literal sense of the word would be redundant.
This observation, seemingly controversial, contains a profound truth both about the essence of marketing activities and the proper placement of marketing in the organization.
Drucker’s words reminded me of several debates and conferences in which I had the opportunity and pleasure to participate recently. The topics revolved around the current condition of marketing and the marketing-sales relationship. It turns out that marketing is not an easy life today. There are several reasons. Certainly, one of the main ones is the creeping economic crisis, the consequence of which are optimizations, e.g., in the form of cost reduction. Many companies are asking themselves louder and louder questions such as:
- Do we need such extensive marketing structures?
- Can certain marketing department activities not be simply located outside at a lower cost?
- Is the amount of our marketing expenses, such as advertising, justified in the current situation?
- Do we really need so many brands and such a large team to manage them? Etc., etc.
What do we expect from marketing?
Subsequent attempts to calculate the return on money spent on marketing (the so-called Return On Marketing Investment – ROMI) very often end in failure. First of all, there is always the problem of which costs should actually be classified as marketing (e.g., in many companies, the finance department often has a different opinion on this from the marketing department ). Secondly, the sum of the value of all the benefits that the enterprise achieves thanks to marketing (including, for example, those resulting from the possession of strong brands – the relationship: brand equity versus customer loyalty or the amount of margin) can be sensibly tangible only in the analysis of a more extended period. If the costs are incurred here and now, a natural expectation arises that soon there will be tangible effects, e.g., in the form of significantly increased sales or higher profitability.
Another type of doubt is related to appropriate and specific marketing activities. Many companies unknowingly (or intentionally) separate marketing activities from sales, distribution, product development, customer service, or research, leaving only the so-called soft issues – i.e., advertising and branding.
The marketing department in such an organization is reduced to the role of the supervisor of an advertising agency and media house, having virtually no influence on the core business activity.
Misunderstanding of Marketing?
Another problem is the question of terminology. Marketing is most often understood as a specific set of activities carried out by the people assigned to them (linking the function with the structure), which includes thinking about it as one of the functions necessary to implement its strategy.
Such an understanding of marketing, even if theoretically correct, impoverishes its true essence, and it also leads to a lot of misunderstandings. Preaching this statement refers to the most common the fact that the structure of the company, there are rectangles with assigned positions marketers (or these fields they are tiny). During further discussion, however, it turns out that, for example, all tools of the so-called marketing mix – product concepts, pricing strategies, communication, and distribution are used reliably and are constantly being improved and refined.
Marketing as opposed to selling
The fact is that the recently deceased Wojciech Inglot was successfully creating an international brand without a marketing department, which does not mean, however, that he did not use marketing. His entire company was and is excellent marketing. And this is also how marketing should be understood – not as a specific department, positions, performed activities, but as a concept, specific orientation, and attitude. Marketing, in this sense, is a philosophy of operating on the market. This statement will seem a truism to many, but I think that this basic truth should still be remembered.
In this case, marketing is wholly opposed to selling. These are entirely different approaches and orientations. While sales start with the product and look for ways to reach customers with it to make an offer and close the transaction, marketing always starts with recognizing the customer’s needs. The customer (or consumer) is always at the center of marketing – his needs, expectations, habits, reactions, or way of thinking. In a company that understands marketing in this way, all efforts – from creating a product through distinguishing it, delivering, handling, and after-sales service – are directed and focused on the customer.
Make marketing a central place in your company’s structure.
Why marketing makes sense to other activities
An organization that breathes marketing, and is permeated with its idea, also shapes an entirely different culture; it communicates differently not only with the client but also inside. Employees of such a company – regardless of their duties – are aware of their place and role in the value generated for the client. In an enterprise, activities of this type traditionally assigned to the marketing department may well be performed in other departments, or the department itself may be much smaller, which does not interfere with their proper implementation.
Marketing as a philosophy of operation also repositioned sales. A customer who is fascinated by an innovative product that perfectly meets his needs, intrigued by the price-value ratio, will reach him faster, actively look for information, and share his positive experiences with others. Customer satisfaction often becomes a better sales technique than incentive programs or price promotions. Drucker was absolutely right in that sense: the sale is then redundant.
Enterprises with a marketing orientation also shape their structures differently. Vertical structures synchronized from above to maintain the functions’ complementarity are always at risk of losing valuable energy. The mere formalization of communication between vertically organized departments requires a lot of effort (which, in addition, is often directed in the wrong direction, e.g., CMO Council research shows that 40% of large companies do not have formal processes or procedures for communication and cooperation between the marketing and sales departments). Then there is a large margin of what can be called unused efficiency potential.
Marketing, very philosophy
However, if marketing is primarily a concept and market attitude understood by the organization (and not only a department or division ), such procedures and structural relationships naturally arise.
A company based on the philosophy of marketing also has a different approach to measuring its effectiveness – it can look at this problem as a whole and in the long term. Efficiency is assessed through the prism of the implemented vision, with the awareness that what is traditionally referred to as marketing is highly dispersed here. Since the costs of marketing efforts are hidden in many areas, and “work” towards more general goals, effectiveness evaluation is made from a more general perspective of business outcomes.
Understanding marketing as a philosophy of action, concept, orientation, or attitude can therefore bring many tangible benefits to the company. And even the sale will be pleased.