What is Marketing? How is Marketing different from Advertising? (An introduction to Marketing)
Some transcript from the show… but really… just watch the video. =D
What is Marketing.
How Does marketing differ from advertising?
An introduction into marketing.
To really understand something you should know the history behind it
However, marketing as we know it today is one of those concepts that is a chicken or the egg paradigm. And thus to understand what marketing is, we’ll turn to Peter F. Drucker. Born in 1909, Drucker’s teaching became the foundation of modern business activities still in use today. Known for his famous quotes and simplistic intellect… Drucker states the following on marketing,
“There is only one valid definition of business purpose: to create a customer… Therefore, any business enterprise has two – and only these two – basic functions: marketing and innovation. They are the entrepreneurial functions. Marketing is the distinguishing, the unique function of the business.”
Marketing is the retaining and attracting of customers according to Drucker.
Alvin J. Silk, author of “What is marketing” and Profesor of Busienss administration at Harvard expands on Druckers idea further.
“Marketing refers to what an organization must to do create and exchange value with customers…
…marketing has a major role in setting a firm’s strategic direction.
Successful marketing requires both a deep knowledge of customers, competitors, and collaborators and a great skill in deploying an organizations capabilities…”
Now this may seem like a large MIX or responsibilities, and you’d be right… in fact the words used to describe all the function of marketing are called “The Marketing Mix.”
And in traditional marketing practices there are four items to consider when building when setting a firm’s strategic marketing direction.
First, is the Product itself. It can be a service provided, like fixing ailing computer, or a physical product like a brand new type of drone that delivers medical supplies. You want to define the product or service as much as humanly possible and the value your product provides to the consumer of it.
Second, is the Price. This is strategy employed to put a price tag on the product itself. It may be normal to look at how much it costs to make your product, then add a percentage to cover SG&A expenses that allows you to still turn a profit. OR another example is premium pricing, you may be making a new type of organic food that only costs you $.10 to produce, but the market will pay you .50 for it. The perceived is higher. There are many pricing strategies to consider.
And what about “Place”. Place is not only where you sale your product (whether it be retail, directly to businesses, or the internet), but how you get it there, called distribution of the product. It’s essential to know your consumers in and out and that includes when, where, and under what conditions they’ll purchase your product or service.
And once you’ve defined the Product, it’s price, and where you’ll sell it, it’s time to determine how you are going to promote it. Promotion is the strategy and tactics behind letting your consumers know you have a product and the value it provides to them.
These four pillars are affectionately nicknamed “The four P’s”
At the most basic level, this is what marketing is… successfully creating a marketing mix that maximizes consumer’s interaction with your product or service.
Now over the last 10 years or so the 4 P’s have turned into the FIVE, SIX, and SEVEN P’s
The fifth, and most accepted new P is People. This is just as it sounds, the people involved in making your product great. This is the planning to maximize employee happiness, productivity, and management. It’s the culture created by the company and focus on creating value through customer service for the end consumer.
The sixth P is Process. This is simply the organizational structure, workflow, and management techniques to optimize providing the product or service. It’s have a service level agreement in place for the service you provide, or providing an optimized and efficient assembly line during product construction. This is a favorite P of Marcus lemonis of CNBC’s The Profit.
And finally is the newest P to join the mix. Described as physical evidence or physical environment, this is the logistics, service delivery, facilities, and infrastructure arm of marketing. Many of these functions used to fall under Product, as in necessary in providing the product. However as the product management discipline continues to flourish… it’s necessary in some organizations to segregate this function.
Whether you remember the 4 core Ps, or subscribe to 5, 6, or 7, this is all done in an effort to identify a company’s target market and ultimately the target consumer whom will find the most value from your product or service
…This is marketing…
In the future we’ll dive into how to create a marketing plan using these principles and bring your product or service to market.
How is marketing different from advertising?
Well, whether you’re partial to 4 or 7 P’s… Advertising deals with just one of them… Promotion.
You see, usually a company will delegate a yearly budget for marketing activities. Out of that budget Marketing managers will determine how much of that to use for the promotional activities.
Remember that the Promo P is all about letting the target consumer know about yoru product or service. This might be a commercial during the superbowl, or a paid advertising on a website.
Advertising is the promotional arm of the marketing mix whose sole purpose is to “advertise” to the consumer the product or service value proposition.
We’ll cover more on advertising and the value proposition in later episodes.
But now it’s time to introduce the Bruce Show Book club. In an effort to make us all better marketers, advertisers or just plain better business people, weekly we’ll introduce a new book that I suggest you should read. The very first book
Books I’ve read and will re-read throughout the week with you and on Friday we’ll discuss the gold nuggets we were able to pull out of it.