The RSA



What is (and isn’t) marketing?

Incensed by the multiple misuses of the term ‘marketing’ Malcolm Johnston FRSA felt compelled to set the record straight.

Marketing is like an iceberg, where a small proportion of the output from analysis and planning is visible to all and that visible bit is known to marketers as the promotional mix. Yet, maybe because this element (which includes PR, direct mail and advertising) tends to be the most expensive bit of marketing, it attracts the attention (and ire) of finance directors and ill-informed multiple pressure groups. But marketing is much bigger than promotion and as a function or philosophy within a business. But all too often, it is incorrectly, used as shorthand for ‘promotion’.

In 1906 American academics defined 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 focus on the production environment and the facilitation of exchange first gave rise to the close relationship between selling and marketing and the conflation of the two terms (most notably in financial services) where marketing is defined as selling and promoting.

The management guru Theodore Levitt juxtaposed 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 probably still correct.

In the UK, 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 organizational objectives.”

This unfortunately harks back to the American invention of the 4Ps of Product, Price, Place (channels, distribution) and Promotion and thus completely misses the key elements of identifying and anticipating needs. Given the dominance of American thought in academic journals, it is not surprising that it is this definition and the helpful but simplistic 4Ps is all that most business people know about marketing. What most commentators (even otherwise excellent journalists like Evan Davis) think marketing is, however, is just the promotional element because this is the one visible part.

Many in industrial sales and marketing despair of the emphasis amongst B2C firms on the mass advertising elements of the promotional mix as, for most business to business (B2B) marketers, their most influential ‘promotional’ tool is their Salesforce. Indeed, the Nordic School of Marketing’s Christian Gronroos emphasises that the purpose 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 critical role that sales people play has been belatedly recognised by the UK’s CIM in launching the Sales Leadership Academy. Indeed, much of the background 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.

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

However, whether we use 4Ps or seven, this alone does not acknowledge the significant amount of research and analysis that has gone on before a marketing plan using any ‘Ps’ has been crafted. This research pulls together information from within an organisation and from potential purchasers of the products or services to be brought to market. Hard data will be mixed with sensing what the market and individual consumers value so that a new product or service can be positioned properly. Only once this work has been done can an effective marketing plan start to take shape; not just within the marketing department but across the whole company.

All this may appear 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 value and analyse the best way of delivering that value?

So, let’s have no more conflation 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. And let’s start to describe advertising and its bedfellows for what it is; promotion not marketing.

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  • http://www.facebook.com/bsl123 Baljit Singh

    Thanks for the blog. It would be interesting to possibly see a part 2 to this, focused on the advent of social media and how Marketing departments can leverage it for the benefit of consumer and so consequently the shareholder.

  • Eoin McInerney

    It really is frustrating that people still don’t “get” marketing. A lot of the time I get the feeling that most people don’t want to. They want their value to be based on something they can walk away from, an artifact of some kind. Keeping it nice and simple for themselves. We produced this ad or report. Our work here is done. In the end it always seems to come down to culture. Are you here to serve your customer or yourself? Everything else stems from here.

  • http://twitter.com/digitalpete Pete Stevens

    Baljit – just what I was thinking…roll on part two.