Marketing Has No Definition and No Rules?

Really?  Marketing has no rules and no definition. That’s from a post I recently read on AdAge. I’m not providing a link because it would embarrass both the author and AdAge, and the statement was so ignorant. The post was written by someone who should have known better- someone from Salesforce.com.

I mean, just look at the graphic below. Marketing, obviously, is a process with rules governing that process, as we’ll discuss later.

Of course, totally misunderstanding marketing is the problem when firms hire folks who don’t have a marketing background. These folks, often journalists or technical folks, struggle to rediscover the marketing principles known to folks with a marketing background, which costs their employers money on wasted marketing tactics and opportunity costs from missed tactics.

For instance, I once worked as a consultant for a Fortune 50 company (in the tech space, no less). He’d recently been promoted to the VP of Marketing and was asked to construct a business plan, something he’d never been involved with in the past (he’d been promoted from sales — as if sales and marketing are the same thing, which they aren’t). Not only was he struggling to write a marketing plan, he didn’t even know what went into one. This was the days before the Internet could answer any questions (even with a wrong answer), so he asked me to provide an outline he could use to get started! Amazing, right? If you need an outline or help in constructing a marketing plan for your business, I’ve got you covered (just click the link).

The definition of marketing

Over the years, the AMA (American Marketing Association) struggled to keep the definition of marketing current in a world where marketing evolved rapidly. The current AMA definition of marketing is:

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.
(Approved July 2013)

The 4 P’s

Of course, the hallmark of marketing, using this definition, is much more than sales or advertising. In fact, I always start my Intro to Marketing class with that statement. Marketing consists of something commonly referred to as the 4Ps or the marketing mix, which everyone who ever took marketing remembers:

• Product
• Price
• Promotion, which is where sales and advertising both fit
• Place (actually distribution)

As this graphic shows, each of the 4Ps in the marketing mix consists of elements that must work in concert and fit the needs of the target market if the firm has any hopes of success. A recent incarnation of the 4Ps is the 7Ps, which includes the original four plus:

• people
• positioning
• packaging

Unfortunately, the post author wasted years coming up with his own defining principles of marketing that weren’t even as comprehensive and actionable as the AMA definition he denied existed. His assumption that marketing has no rules is based more on his ignorance than the actual lack of rules that direct marketing actions.

This definition clearly positions marketing as much more than simply advertising and sales, which novices and outsiders think comprise marketing. If you want to learn more about how the definition of marketing impacts marketing practice, take a look at my post on the topic or my Slideshare.

Marketing has no rules

In addition, the AMA maintains an open-source repository for marketing terminology, metrics, and systems– the marketing rules of the game. OK, so maybe we call them marketing principles rather than rules, but they provide practical guidance to marketers wishing to implement successful marketing campaigns. There are too many marketing principles to address here, but I’ve included some of the most important. I’ll construct future posts with additional marketing principles.

The customer journey

Although the term “customer journey” is a product of the digital age, marketers always knew consumers went through a series of steps before buying and that marketing needed to match the needs of consumers at various stages in the buying process. As this cartoon depicting a dysfunctional customer journey demonstrates, without careful consideration of how consumers make decisions to ease the journey, the journey might not culminate in a sale.

The customer journey might reflect goal-directed behavior ending in a purchase or look more circuitous. Some decisions, like the major purchase depicted above, involve elements of rationality, considering factors such as affordability, performance, and deliverability in reaching a decision. In other purchase decisions, the choice to make a purchase and which product to purchase involves more emotion than rational reasoning. Knowing which factors motivate consumers to buy is a critical element of marketing. Marketers must manage the customer journey to make it as smooth as possible to optimize revenue.

Segmentation

Segmentation, target marketing, and positioning are related marketing activities that have a significant impact on the success of your marketing campaigns. Successful marketers understand that not everyone is a likely prospect for their products or services — some have different needs, financial resources, etc. Proctor and Gamble, for example, makes use of this fact by creating various products for different target markets using positioning to align certain products with specific target markets. They manufacture five different laundry detergents, each based on the perceived needs of a specific market. We’ll discuss products as a marketing element in the next section to help you understand why they make multiple products in the same product line.

For instance, Tide is designed for families with young children whose clothes get filthy and stained, at least based on the perceptions of that target market. Their slogans, which change slightly over the years, all emphasize Tide as a tough stain remover for clothes. Meanwhile, Cheer targets career families without small children with its emphasis on protecting your clothes and their bright colors. Other detergents target other segments of detergent consumers. P&G successfully maintains different products for different segments across several product categories, including diapers.

Understanding the market, segments within a market, and developing a deep understanding of those segments you choose (your target market(s)) requires extensive market research. We often refer to target markets as personas, and we build out stereotypical individuals representing our target market, which includes both demographics and psychographics (and maybe even geography). For an example, check out this graphic.

The concept of branding is intimately tied to positioning and requires a significant marketing effort that goes well beyond the simple logo and packaging design.

Product

As you can easily see from the forgoing discussions, product is a key element of marketing. Companies must offer products that solve problems encountered by consumers since that’s what drives purchase, not an inherent need for a product. Thus, if I face the problem of hunger, I buy food; if I face the problem of being cold, I buy a coat. Marketers don’t create these problems; they simply seek to solve them.

Marketers solve problems by first understanding the underlying cause of the problem and then developing a product that solves it better than existing options. Sometimes, a product positioning map is used to map existing products along dimensions that matter to consumers. With computers, we can map these products along multiple dimensions to identify holes that we might fill with a new product to create a competitive advantage.

In a world dominated by digital media, it’s easy to get product ideas and see how your product is perceived by your target market as consumers post on social platforms. A social listening post can help you capitalize on these posts.

Product life cycle

Almost no product remains viable forever. The product life cycle reflects changes as a product ages — from the introduction of the new product through the decline and ultimate death of the product when a firm discontinues it due to poor market performance.

Different marketing strategies are necessary at each stage in the product life cycle. For instance, in the introductory stage, marketers focus on educating potential buyers about the product. In contrast, in the maturity stage, marketing efforts shift to reminding existing customers to repurchase the brand.

In the decline stage, marketers may extend the product’s life cycle by improving on the existing product or finding new uses (or users) for the product.

New product development, adoption, and diffusion

New product development ensures the continued survival of a company. Firms unwilling to engage in the creative destruction required to bring their product mix into the future are doomed to decay and eventual death.

A good example of creative destruction is the smartphone, which effectively destroyed the market for original cell phones. Blackberry’s lag in developing a compelling smartphone put the firm in serious jeopardy, leading to its effective demise.

Cannibalization occurs frequently when a firm engages in new product development. The new product may offer a competitive advantage over the firm’s existing products, reducing or eliminating revenue from one or more existing products. So, you might ask, why spend the money and other resources needed to create a new product only to supplant sales from existing ones?

Easy.

If you don’t develop a new product when a valid need exists within your target market, someone else will capitalize on the opportunity. You’ll still lose or eliminate revenue for your existing products, but instead of transferring those sales to a new product, you transfer your revenue to a competitor. No amount of promotion can overcome the siren call of new technology.

Market testing is essential before introducing a new product. It not only aids in determining market acceptance, but it’s also helpful in developing a promotional strategy and estimating sales.

Promotion

Promotion involves various channels used to reach your target market. Depending on your market, you can choose a mixture of promotions including:

• Sales involving either professional salespeople, inside salespeople who take orders, or clerical salespeople in retail outlets
• Advertising through communication channels, including traditional channels such as:
  • TV, streaming, broadcast, and cable
  • Radio
  • Print, including newspapers and magazines
  • Direct marketing via mail or phone
  • Public relations
• Or new media such as social media, digital advertising, and websites
• Sales promotions such as coupons, discounts, rebates, and much more

A mixture of these tools works to reach your entire market, with costs and returns varying based on the tool used, as you can see below.

You can’t expect to have any impact on revenue without reaching consumers where they are. However, you also need to stay relevant in your promotional efforts. This involves terms referred to as reach and frequency. We refer to frequency as “touches,” and it reflects how many times a target consumer was exposed to your promotion. Reach refers to how much of our target market is exposed to your message. The notion is that you need to reach 100% of your target market between five and seven times for your message to be compelling, although estimates range from three to twelve. A lot of that depends on your target market, your product, and your brand image

In the days of traditional media, that meant paid advertising, but in the digital age, a company needs to focus on earned media and owned media in addition to paid media to achieve the reach and frequency required to be effective.

Marketing management

Once you really get into the principles of marketing management, you find similarities with management principles. This is especially true for service marketing, where the intimate relationship between the service provider and customer (client) requires effective management of the service providers — in marketing, we call them internal customers to reflect their importance on our market performance.

In addition, marketing management includes these activities:

• analyzing market opportunities,
• selecting target markets,
• designing marketing strategies,
• planning marketing programs,
• organizing, implementing, and controlling the marketing effort.

Retail and e-commerce

Retailing and e-commerce have their own vocabulary and set of guiding principles. In retailing, we talk about atmospherics such as lighting, crowding of people and products, music, and other factors that make shopping enjoyable or unenjoyable. Online, we often refer to these principles as User Experience.

A good user experience means navigation through the e-commerce site is intuitive, easy, and requires little effort. A good example of how important user experience is for e-commerce success is Amazon’s increased sales dramatically when they implemented their 1-click buying. Each click removed from the buying process significantly impacts profitability.

Good user experiences also feature pleasing visual elements, lots of white space, and easily accessible content.

Conclusion

I hope this discussion dispelled any notion that marketing is without definition or rules. It should be clear that marketing has both and that the more you learn about marketing, its rules, and its application of them, the more success you’ll achieve.

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