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For this word describes skills that you need to run your business successfully. As an entrepreneur you'll already have some of these skills, but you may need some help. For this word describes a profession too - it's my profession.

The skills, the profession, the word is ...

Marketing.

But what is marketing?
In the USA it can mean both shopping and selling, and here it is most often used to describe just one of its 4 main areas of influence - Promotion.

The real definition of Marketing is ..

"identifying user needs; producing products and services to meet those needs: and pricing, distributing, and promoting those products and services to produce a profit". This is known as the 4 P's - Position, Product, Pricing and Promotion

Successful Marketing is essential to any prosperous business.

So how can it be that it's so misunderstood? and why do many businesses take marketing to mean only advertising (promotion)?

That's simple - marketing is an overused word and is usually applied to the provision of some marketing service or other. The fact is that your marketing department is more likely to be a marketing services department (in the same way that your 'accounts' department is likely to deliver some accounting services but not your Accounts). These departments usually provide a functional service but are unlikely to provide leadership. And Marketing needs leadership. 

So who does the Marketing for your company?

Well the truth is that your business probably has got half of a great marketeer already - You. You are already making sure that your products are right for your customers and that they are priced right too. You may also be on top of the sales organisation to get the products to the point of sale. However there will probably be elements of the Marketing that you haven't mastered and you will need professional help. It's not time to call marketing services yet (you'll see why below) you first of all need to speak to a Director level advisor to decide what you need to do and why. 

Why do many businesses see marketing as a bucket into which they cast some money because they think they should, rather than a solid investment? And why is marketing the first thing to be cut in tough times?

The answer is that too much marketing activity pays back little or nothing. The reason, businesses have engaged with marketing services too soon. They have leaped to action before Marketing planning.

What you should understand is that generally suppliers of 'marketing services' are not what you need - yet. They are the delivery arm when you have a fully rounded marketing plan. They are not the place to go without a plan and with money in your hand. Because if they hear that you have a new project in mind, they want to know how much you have to spend (tip: listen for "what's your budget?") and then they'll work out ways to spend it. Its not in their interest, nor is it their business, to question whether it's a good idea and if it's worth the investment. That is the business and the job of Marketing.

So before you engage with marketing services you need to ask ....

1. What are our goals from this (new) project?
   This is usually a profit figure
2. What do we need to do to deliver these results?
   Is it extra sales or cost savings. Specify all of the measurable results that will help to achieve the goals (only include incremental results)
3. Who are our audience(s) and why?
   What kind of people (in what kind of companies), where, with what needs?
4. What are our best sales channels and why?
   Where is my point of sale/service, why is it going to be successful here?
   
   

If you answer just these questions you will immediately be able to have a different conversation to your marketing services supplier or marketing department. Because you now know the profit goals, you have stated the audience and their needs, and where you need your sales impact to take effect. So the question becomes - "How can we get to this audience, and influence them, to create these results".

To answer this you'll both need to do more work. You'll need to work out if your audience exists, how to reach them, and how much it will all cost. At the end of this process you'll know as much as you need to decide whether you should invest, how much and why. And you will also have some clear measures of success.

Comments (2)

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Now that makes sense
written by Mike Newley, April 16, 2008

I was just about to spend money on marketing (advertising) and you're right the first question was 'what's your budget'.

Now I want to rethink.... what will I get it, what do I need to spend to do it, is it worth it. I guess this is what you mean.

Exactly Mike.
written by Martin Finn, April 16, 2008

Think about the effect you want to acheive. Think about the value of it to you. Look at ways to achieve that effect.

PS: In one company I ran we wanted double our profits. We were making net 8%. Not great. The company had been looking at how to double sales to meet the goal. I looked at how we could sell the same amount but raise our prices by 8% and make our net profit 16%. It was much easier to do the latter. In fact we increased our prices by 12% over the next 24 months - but that's a post for another day.

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