[Resource of the Day] – Make Marketing a Core Business Strategy

Marketing is much more than just sales and advertising — it’s a vital part of any business strategy. Today’s article gets into the “why” of marketing, and my notes add some of my own thoughts on this vital business process.

As I’ve written my business plan for Army Ant Publishing, I’ve done extensive research on the world of publishing. Here is an article I found useful:

Make Marketing a Core Business Strategy by Chip Conley and Eric Friedenwald-Fishman via PMA.

There’s an awful lot of ignorance in the world of business about what marketing is all about. There are two reasons for this. First of all, marketing professionals have done a terrible job of defining their field, and have allowed hucksters and gurus to appropriate the word as a snazzy synonym for “sales.” Second, marketing is an umbrella term that encompasses many different activities that are only really related in the regard that they end with the customer. Thus someone who works in marketing might work in sales or advertising, but they might also work in product development, or marketing research, or public relations, or another similar field.

Thus when many small publishers hear the word “marketing,” they immediately begin to fear the costs and scope associated with some elements of marketing (such as advertising and promotions) and put off developing a marketing strategy for their products. Sadly, their misunderstanding of the word prevents them from laying an important foundation in their business.

Today’s article does a great job of explaining things.

Many people use the word marketing to refer to a broad set of promotional and outreach activities aimed at communicating a business proposition to customers and other important audiences. These activities often include advertising, media relations, direct mail, promotional offers, online promotions, sales materials, and various tactics. While all these are important, we are focusing here on marketing strategy.

Strategic marketing involves acquiring a deep understanding of the needs and desires of your existing and potential customers, and designing your business (products, services, delivery mechanisms, customer experience, branding, outreach, and more) to meet or exceed their needs and desires. At its core, good strategic marketing can be deeply aligned with building a socially responsible business because it demands a constant focus on the customer’s needs, drives development of quality products and services, and often encourages alignment with customer values.

Thus, marketing is a core business strategy. Think about it as a baseline of business development and ensure that marketing-based questions and analyses are present and utilized in all business planning processes. Instead of mapping out the product concept, price point, and manufacturing and distribution plan, and then asking, “How will we sell it?” ask, “How do we design the product concept, set the price, and so on to best meet the needs of the market?”

As I’ve said in my “Marketing 101″ articles, marketing is often thought of as being divided into four fields: price, promotion, product and distribution. There’s an awful lot of talk about target markets, secondary markets, and other stuff like that. But really, the whole thing can be summed up in three words: understand the customer.

So a practical marketing strategy is just a simple document that explains who the customer is, what the company is doing to meet the customer’s needs, and how the company plans to make the customer aware of its product. In publishing, this can be an easy thing to do if you begin with a customer-oriented product, like a how-to manual or a cookbook. But it can be an extremely difficult thing to do if you’re starting with a creator-oriented product, like a line of novels or a book of poems. It’s hard to classify the customers as having a need beyond “entertainment” with these products, and really, the reason they’re developed in the first place is because the author is interested in telling a story, not because anyone is demanding to hear it.

Different products require different types of strategies, but the article is quick to point out that there is a difference between marketing tasks and marketing tactics. The former are part of product development, while the latter are “tricks” geared at selling more products. Marketing tasks make an excellent foundation for a product line and will guarantee better sales in the long run; marketing tactics are intended to boost sales regardless of quality and are often put into use when a publisher needs to move its books quickly to cover the costs of a print run. If you’ve worked for a company that has a failing product, you’ve probably heard this line of thinking before — “Product X isn’t selling. We need to figure out a way to move it.”

But no matter how much time a publisher invests into these tactics, the company is more often than not wasting its time and money without a well-developed strategy. There are companies that know how to consistently generate great sales because they are in tune with their customers. And then there are companies that seem to “win the lottery” from time to time and lose money on everything else. This is because they are focused on their products, not their customers.

Many marketers do not maximize and leverage resources because they invest in marketing tactics before establishing a marketing strategy. Focusing on an ad, media release, brochure, Web site, or other promotional tactic before identifying your priority audience and your core value proposition creates waste, inefficiency, and missed opportunities, just as would purchasing Sheetrock, pipes, and windows prior to developing a design concept and blueprint for your home.

I recommend reading the rest of this article; it’s loaded with plenty of good ideas and principles. In the meantime, let me close with an analogy that publishers will hopefully be able to relate to.

Joe owns a factory that makes ladies’ straw hats designed to keep the sun off a woman’s neck and shoulders while she’s outside. Larry is his competitor, with a similar factory that makes similar products. Both companies sell their hats to a chain of touristy stores along the beach. Joe wants to corner the market to keep Larry from expanding, so he makes several attempts to one-up his rival.

• First, Joe tries to improve the quality of his hats, but he can’t really do that without making his costs go up, which will raise the price of his hats and put him out of business. So he abandons that line of thinking.
• Next, Joe looks for a way to lower the retail price of the hats, but he’ll only be able to lower them by about a dollar per hat, which will cut heavily into his profits without making a big difference in his sales. Plus, Larry will continue selling hats for slightly more, which means he’ll make more money. So Joe abandons that line of thinking.
• Next, Joe looks into setting up a hat stand on the beach where he can sell hats directly to tourists for a larger profit that he’s getting through the retail stores. But the stand will cost a lot to set up and staff, and besides, people walking along the beach don’t carry a lot of money with them. The stand will be lucky to break even. So Joe abandons that line of thinking.
• Finally, Joe decides to ask some customers what they would like to see in a straw hat, and he is surprised to find that they want hats that won’t blow off their heads when the wind gusts across the beach. The problem can be solved with a simple strap that only costs a few pennies to add in.

Joe listens to the customers and adds the strap. Within a month, his hat sales begin to double, and Joe soon finds out that Larry is scrambling to figure out why his own sales are dropping. Joe has scored a marketing victory.

But the straps are uncomfortable and not very stylish, so Joe decides to take advantage of the situation by introducing a new product — a smaller, more stylish hat that is designed to stay on a woman’s head without needing to be anchored to her chin. The hats are well-designed, and they look nice. But no matter what Joe tries, they simply will not sell. He finally asks some customers why and finds out that they don’t want hats that are small or stylish — they want hats that will keep the sun off their neck and shoulders. Thus in his zeal to improve the product, Joe has forgotten about the customer, and he has lost the ground he gained.

I’ve noticed many companies going through this sort of cycle. What’s sad is that they never seem to learn their lesson — that the basic rule of marketing is to always, always understand the customer. And so they gain ground with their successes, and lose ground with their failures, and always because they listen to the customer out of desperation… not out of habit.

1 Comment

• 

  By Jogos, January 22, 2008 @ 4:24 pm

  this is so true, and yet more businesses just don’t get it.

Other Links to this Post

RSS feed for comments on this post. TrackBack URI

Leave a comment