September 19, 2011

Biz 101: So What Is Marketing, Anyway?

by Freddy J. Nager, Professor of Marketing + Founder of Atomic Tango

Romance = Marketing

Consider it an illustrated guide to marketing techniques.

Too many entrepreneurs and CEO’s tell me that they “don’t have money for marketing” or they’re “not ready for marketing yet.” What they’re really saying is that they don’t know what “marketing” means…

Many think marketing means advertising and other promotions, which actually constitute just a small part of marketing. In reality, marketing encompasses a broad array of responsibilities and activities:

  • product design and development
  • naming
  • location selection
  • distribution
  • market segmentation
  • customer relationships
  • pricing
  • sales
  • publicity
  • competitive analysis
  • community relations
  • and more

If a company has a name, a product, a price, a business card, even just an office, it’s performed marketing. Those elements might have been performed by non-marketers — for example, the product might have been designed by an engineer, the price set by the CFO, and the office leased by the investors — but they’re still subject to the forces and whims of the marketplace. If marketing doesn’t have sole responsibility for all these activities, then it should (and often does) significantly influence them.

What It Means For Management

Even if a company’s executives decide to hire an outside marketing agency or consultant (like myself), they must understand marketing fundamentals to monitor what their agency and consultant are saying and doing.

There’s another problem: some companies have fully established marketing departments, but they’re separate from publicity, advertising, and sales. That makes no sense, since publicity, advertising and sales are all part of marketing. Such functional silos result in inconsistencies and internal conflicts. No wonder most businesses underperform!

So what is marketing?

No two marketers agree on a definition — and that’s one reason why so many managers are confused about it. Even the American Marketing Association has a terrible definition of marketing:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”
American Marketing Association, October 2007

For a profession that supposedly excels at communications, that verbal gumbo is just embarrassing.

The authoritative Philip Kotler offers a more concise definition:

“Marketing deals with identifying and meeting human and social needs.”
– Philip Kotler, Marketing Management

That’s better… but a little broad. A company’s operations or HR departments might claim that their job is to meet “human needs.” And if a company doesn’t like its logo and wants to change it, which “human need” is that meeting? A logo is certainly a human preference, but “need” sounds too strong in that case.

Here’s the definition of marketing that I like and use:

“Marketing is the art and science of managing brands and relationships.”

You could argue that that is also very broad, and I wouldn’t disagree with you. But this definition contains several key elements:

  1. Art: Marketing is the one business function where imagination and creativity are not only allowed, they’re encouraged. That’s why it attracts many creative professionals: writers, designers, photographers, musicians, filmmakers. That’s why I got into it.
  2. Science: At the same time, a truly professional marketer also relies on research, data collection, and analysis, just as any scientist would. With the rise of digital marketing, we marketers have much more valuable data than ever, which can tell us what is working and what is simply a waste of time and money.
  3. Brands: Your brand is your appearance, personality and reputation rolled into one impression. Everyone has a brand — even individuals. (We tend to just use the word “reputation” when talking about people.) And your brand determines your ultimate value in the marketplace, influencing everything from how much you can charge for your services, what caliber of employees you can attract, how readily you can attain news-media coverage, and what investors are willing to pay for a share of your company. Marketing is responsible for creating, monitoring, enhancing, enforcing and extending that brand.
  4. Relationships: Marketing supervises all communications between the company and its stakeholders — not just customers, but also employees, competitors, news media, the government and more. These communications must be strategically and sometimes creatively crafted. At the same time, the relationships must be cultivated using various tactics, from rewards programs to targeted pricing. When it comes to customers, marketing also determines which should be served and which should be divested.

Make It Personal

The definition, “Marketing is the art and science of managing brands and relationships,” applies to individuals as well as corporations. We all do marketing in our daily lives, whether we call it that or something else. If you’ve created a resume, applied for a job, or earned a college degree to enhance your credibility, that’s marketing. Even more personally, if you’ve tried to find a boyfriend or girlfriend, husband or wife, that’s marketing (with fewer quantitative analytics).

So marketing in business is merely an extension of something we already do personally. What distinguishes professional marketers is their use of creativity and strategy to do it better.

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Freddy is the Founder & Creative Strategist of Atomic Tango. He also teaches at the University of Southern California (go Trojans!), shoots pool somewhat adequately, and herds cats. Freddy received his BA from Harvard and his MBA from USC.

4 Responses

  1. Good article. Still, unlike Kotler’s prior simple definition, your final definition: “Marketing is the art and science of managing brands and relationships,” appears to lack any explicit reference to identifying or meeting a need/desire. As an engineer, I can relate to “… identifying and meeting human and social needs[/desires],” so could gladly participate in marketing so defined. Your last definition, however, would initially alienate me, unless you could help me understand how my efforts — and doing what I love — had much bearing on “managing brands and relationships.”

    Freddy’s Comment: Thanks for your thoughtful comment, Tom. You make a valid point. The way I see it, anything an engineer does with the product/service would affect the company’s brand, whether it’s the product’s functionality, design or user experience. As for “meeting needs,” I see that contained within “managing relationships.” Perhaps, to be more explicit, I should expand my definition to include “meeting needs”; however, I certainly don’t want to create a definition as long and awkward as the AMA’s.

  2. Great article Freddy- from the engineering perspective maybe thinking about “marketing is the art and science of managing brands and relationships-” (which I totally agree with) is significant to the product’s identity and how it relates to consumers, employees, suppliers, etc. helps make it relevant.

    In the case of a chainsaw compared to a Porsche Panamera you have very unique products and identities. Everything from the type of budgets allocated, tools required for design in a CAD program to final manufacture…could be quite extreme between these two products. But the engineer assigned will likely be involved in both cases with the selection of components, product design, after-market accessories, service tools, etc.

    Building relationships takes place internally and externally. Engineers play a key role in making sure product design, quality and assembly translates into end user satisfaction. Often they have to fight for what they feel is the best concept and market their ideas and strategies to colleagues to have a certain component/style chosen. Then the fight for the highest quality supplier begins – while trying to eek out enough money from the budget to make it happen- or having to redo previous work so that you can get your team to buy in…..engineers use art and science everyday to market themselves and their products/services….. who would have thought?!

  3. Great article. Agree with your perspective and definitions. Thanks for the insights.

  4. Thank you for saying all this! I’m having an ongoing “discussion” with a “sales expert” who thinks sales is more important than marketing as marketing just costs you money without getting anything in return. The whole concept of building relationships to him is just making sales.

    Freddy’s Comment: Glad to be of service! A great sales guy could presumably sweep a prospective customer off their feet and go from introduction to holy matrimony in one day. But in most cases, you need to flirt, romance, and engage before getting the customer to commit. And that’s where marketing comes in.

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