Business Insights

Business Insights

What Is (And Isn't) Marketing?

The term 'marketing' is so commonly misused that Malcolm Johnston, one of our Marketing Directors in the UK, felt strongly to get everybody on the same page.

Marketing can be looked at as an iceberg, where a small part of the outcome from analysis and planning is what we can see and that visible bit is known to marketers as the promotional mix. Yet, due to this element (which includes PR, direct mail and advertising) can be the most expensive bit of marketing, it catches the attention (and ire) of finance directors and ill-informed multiple pressure groups. Marketing is a lot more complex than promotion and is, both a function and philosophy within a business.

In 1906 American academics interpreted marketing as; “those commercial processes which are concerned with the distribution of raw materials of production and the finished output of the factory… Their function is to give additional value to these commodities through exchange.” This emphasis on the production environment and the assistance of exchange, first saw the existence to the close relationship between selling and marketing and the conflation of the two terms (most prominently in financial services) where marketing is defined as selling and promoting.

Management expert Theodore Levitt compared selling and marketing: “Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.” In the world of basic product sales and business to consumer (B2C) sales, Levitt’s definition is still relevant.

The Chartered Institute of Marketing’s (CIM) defines marketing as: “…the management process for identifying, anticipating, and satisfying customer requirements profitably”. Its US counterpart, the American Marketing Association (AMA) definition meanwhile is a bit of mouthful: “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives.”

This unfortunately looks back to the American invention of the 4Ps of Product, Price, Place (channels, distribution) and Promotion and thus completely misses the main elements of establishing and anticipating needs. Given the dominance of American thought in academic journals, it comes to no surprise that the 4Ps, simple yet helpful is what most business people understand as marketing. Even excellent journalists like Evan Davis think marketing is just the promotional element because this is the one visible part.

Many in industrial sales and marketing anguish of the emphasis between B2C firms on the mass advertising elements of the promotional mix as, for most business to business (B2B) marketers, their most powerful ‘promotional’ tool is their sales force. Indeed, the Nordic School of Marketing’s Christian Gronroos emphasises that the objective of marketing is “…to identify and establish, maintain and enhance relationships with customers and other stakeholders, at a profit, so that the objectives of the partners involved are met; and this is achieved by a mutual exchange and fulfilment of promises.”

It seems that the important and analytical role that sales people play has been belatedly acknowledged by the UK’s CIM in launching the Sales Leadership Academy. Indeed, much of the origin drive for greater understanding of the role of ‘sales’ has come not from the US, where selling is still very much price and feature driven, but from the UK’s only Professor of Account Management, Lynette Ryals at Cranfield University.

The role of customer service has become more significant for all businesses in trying to create competitive advantage, the ‘services marketing mix’ has found components in product marketing. I am a believer of the ‘7Ps’ – product, place, people, processes, physical evidence, promotion and price – which provides a more complex framework for thinking about the marketing mix as a whole.

However, whether we use 4Ps or 7, this alone does not include the significant amount of research and analysis that has happened before a marketing plan can be created. This research puts together information from within an organisation and from prospective buyers of the products or services to be brought to market. Hard data will be mixed with observation of what the market and individual consumers value, in order to see that a new product or service will be positioned properly. Only once this work has been completed then can a effective marketing plan start to take shape; not just within the marketing department but across the entire organisation.

All this may come across to be semantic but, in a time when the word marketing is often linked with ’trick’ or ’gimmick‘ and consumer trust in big business is low, surely it is time that businesses realised that before they start promoting and selling a product or service, they need to actually ask consumers what they desire and find the best way to deliver that desire?

So, let’s have no more mixing of the terms marketing, selling and promotion. Let us properly and proudly describe buyer/provider relationships as selling; selling that meets the needs of both parties. Let’s start to describe advertising and its bedfellows for what it is; promotion not marketing.

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