The fundamental role of marketing in business

One of the things that I think most people in the marketing world take for granted is that everyone understands the fundamental role of marketing in business. However, through my daily interactions with other business owners over the past few years, I have been struck by the relative lack of understanding of the importance of marketing. More often than not, marketing is a tertiary, back-seat thought that comes after your product/service and day-to-day operations, if it’s even that high of a priority.

One of the phrases that my business partner, James Orr, has coined in the field of real estate investing is that “it all starts with motivated sellers.” Without motivated sellers, there are no properties to buy, rentals to put tenants in, tops to fix, or wholesale deals. This is such an important aspect of real estate investing that it’s almost a mantra for the way James and many other successful real estate investors run their businesses. The key to contacting motivated sellers is marketing.

I guess a good place to start this discussion is to define what marketing is. Google defines it tells us that marketing is “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to satisfy customers.” Marketing really consists of more than most people think it does. Marketing is about more than the activities that drive sales. Rather, marketing encompasses all activities that seek to identify what consumers want and how to promote and deliver those goods and services.

Before an individual or business makes a decision to produce a particular product or service, they must first spend time determining whether there is a market for that offering. If there’s a demand, they must figure out how to get that deal to the consumers who want it, how to tell consumers it’s available, and how to price it so there’s money left over to make a profit. This is all part of the marketing process, and it really should happen before the product itself is produced.

In the most common usage of the term, “marketing” is often seen as just the promotional aspect of a product or service that is already available. This part of marketing consists of making the consumer aware of what you are offering and convincing them to buy it. There is a tendency in corporate environments to separate marketing and sales functions into disparate departments, which is often a mistake. The purpose of the promotional element of marketing is to drive sales and therefore the two functions are closely connected. A good example of the disconnect between these two departments is when companies that sell capital goods have many more people in their marketing departments than in their field sales force. Another example is when product development and marketing people ignore input from field sales people. This input often stems from actual customer contact, which most employees in large organizations do not experience.

The main goal of one of my blogs is to test marketing promotions using a wide range of messages, mediums, and markets, often referred to as the three Ms of marketing. Before running a test, we first do some background research to determine if there is a market for what we are considering selling, and see if we can at least break even on the marketing test using some realistic assumptions about sales. ratios. Pricing strategy is also something we discuss a lot before launching a new test. The actual development of the sales copy, writing and placing ads, setting up measurement systems, etc., comes later in the process. The next thing is to do sales and follow-up metrics, and then adjust the marketing.

Unfortunately, many business owners do not understand the importance of marketing. Because of this, they fail to plan for difficult times in the business cycle, such as slow seasons, economic downturns, and other events. As the cliché says, “failing to plan is planning to fail.” Every company should have a marketing plan of some kind, and it should be in writing. Businesses that don’t “do” marketing will invariably fail.

In short, without marketing there are no sales. And without sales, there is no income. And without income, any business will quickly succumb to statistics showing that almost 2/3 of all businesses fail within the first 4 years.