I’ve had the chance to share my opinion and thoughts about marketing with fellow classmates in the marketing program. After some good conversation, I realized that maybe I’ve been too harsh on the field of marketing. As they accurately pointed out, my actual problem lies more with advertising and not marketing, two words I previously thought of as interchangeable. Indeed marketing is more than just advertising: it’s the 4 P’s (advertising being a subset of promotion), and the big “marketing strategy.”
Let’s analyze these 4 P’s through a hypothetical scenario of a young startup firm. An aspiring engineer develops a revolutionary new technology that allows gas-burning vehicles to run on gaseous fuels (such as natural gas). He starts up his firm with the help of a few lawyers, starts up operations with the help of logistics, and finances his operations with the help of banker. Now all thats left is communicating the product to the consumer.
Product: Marketers like to put “product” under their umbrella and say “we created this product to fill this need.” This is one of my biggest pet peeves of the field. Marketers do not come up with the product. The hardworking engineer who took on the time, education, risk and energy to explore this new technology created the product. The marketer doesn’t decide whether this product has a “need” to fill or not, the entrepreneurial spirit of the engineer and his in-depth knowledge uncovered that need. I could go as far as to say basic logic and foresight could uncover a “need,” and then a little hard-work and education can take the rest. You don’t need a marketing department suggest new products.
I’m sure people will shout “But marketers are there to evolve and adapt to changing consumer preferences and thus recommend new products, therefore they are a part of the product development team!” That’s a weak argument in my opinion as anyone in a stakeholder position of a firm (or anyone with basic logic) can realize when their product needs to change, evolve, or expand. They are essentially trying to be a part of a process that is already being done – by people who learned it naturally to begin with. For example, its like saying “Winters coming in 6 months, lets expand our coats line!” Great job genious, but anyone who tries can do that. Take Mark Zuckerberg for example – expert programmer, impeccable intelligence, but no marketing background. Early in the day, Zuckerberg evolved and adapted Facebook to be the success it is today without using marketing principles or majors. Evolving, adapting, and expanding a company is just intuitive to a guy like Zuckerberg.
Price: Marketers believe that they are in charge of pricing a product, or at least determining how it is to be price; “Value-based,” “competition-based,” “cost-based,” etc. They’ll perform a menial calculation known as “break even” and maybe do a little more research, and then BAM! – $3000/engine. They’ll proudly announce it’ll take 3000 units to break even, and 5000 to earn an IRR of 12% on initial investment – pretty impressive analysis and proof.
Now what could go wrong with assigning a department to price your golden eggs that has no idea of the accounting implications, finance implications, or constraint maximization know-how of accountants, financiers, or logisticians? What if costing the engine at $3000 may be in line with demand elasticity and break even analysis, but theirs glaring oversights in linear-constraints, estimates, growth potential, effects on stock price, etc. Their NPV analysis of the firm or project could miss glaring implications that determine whether to take on the project with current infrastructure, or to adopt new infrastructure. All this really translates into lost profits – all based on a simple break even analysis (which is more accounting anyways).
Now some people would be quick to shout “Break-even is not all they do, they probably do more in-depth analysis, much like a financing and logistics department.” Well thats not a saving grace for marketing – its the equivalent of saying “My kinetics degree helped me fix my car,” when you actually learned how to fix a car from a different discipline. If marketers use more finance oriented or logistics oriented models to price their product, then it is actually finance and T-log that should get the credit.
Place: This is similar to product – it should just be intuitive and logical to anyone in the business. Determining distributional efficiency takes logic, and little bit of number crunching on the logistics side – not marketing. What can a marketer possibly add to the distribution chain? “We are going to go through a wholesaler, contractor, and retailer for maximum efficiency – job done, can I get paid?” Anyone can pull out prices, and find the line of least costs and assess the strengths and risks of it. Next.
Promotion: Aha! Now we are talking. My finance degree, my friends accounting degree and my other friends logistic degree can’t promote our product. Promoting a product needs artsy and creative person who can communicate our value proposition in a way that makes people feel warm and fuzzy; enter marketing. They know how to design ads, how to make it funny, how to add sex, how to make it shocking, how to push buttons, etc. Basically, they know how to elicit a response (AIDA if you will). So in our hypothetical example, all that marketing would be good for would be to determine how to communicate our product to our consumers.
This is why I use marketing and advertising interchangeably, and why I always will.