Here you will find concepts and methods for general marketing any type of product to any universe of prospective buyers. I’ll be taking you from overall general concepts to more specific, targeted and hopefully applicable specifics. Let’s start with a definition.
Marketing Defined: Marketing is a series of decisions and processes made relative to the product or service being offered, the universe of prospective customers, the costs and methods of gaining the attention of those customers, delivering the prospect to the portion of the cycle where they have the ability to purchase, the environment in which the sales will happen, and the relationship of marketing costs to attributable revenues.
- The Product
- The Universe Of Prospects
- Cost of Creating a Specific Prospect
- Delivering the Prospect to the Selling Environment
- The Selling Environment
- Attributable Revenues
I’ll be discussing these general marketing topics and how they interact in this part of the site. Follow the specific topic for more details.
Metrics and Ratios: In general, all of these are combined into certain metrics and ratios that determine the profitability, return on marketing investment and the relative risks associated within any combination. Typically, marketers look at these ratios and metrics within the marketing arena, separate from the overall business economic structure.
Typical businesses operate with marketing viewed as cost vs revenue, or as an optional function within a balance sheet of costs, including:
- Product/Service Development
- Product/Service Manufacturing
- Professional Costs, Legal & Accounting
- General and Administrative Costs (G&A)
- Sales & Marketing
- Product Delivery and Servicing
Many companies view Sales and Marketing as a single function, with single attributable cost and revenue budgetary line items. They view the activities as identical. I view that as a mistake that can misdirect management efforts at creating profits while deploying personnel in less than optimal ways.
Others break these out into their two functions:
- Sales, and
My own view is that when you separate the two functions, you can measure and manage the results of each area. This is prefaced by a division of labor that defines these areas as:
- Marketing: Marketing is all company activities that identify and create products and services for an identified universe of prospects and that communicate with those prospects to the point of delivering them to a “Selling Situation”.
- Sales: Sales is the ability to take prospects from the point of being within a “Selling Situation” to being a closed customer having purchased the product or service.
There are a number of rationales for separating the functions: One is attributing costs and revenues accurately. The other is to identify the success or failure of a marketing program or sales team. By separating them you can isolate home runs, superior talent and other processes that provide the maximum impact to top line revenue, profitability and growth. You can also identify poor performance whether from a product or service, communication or funnel program to move potential customers to a point of purchase, or selling situation whether web conversion page or face to face sales appointment.
- Attribute Costs
- Attribute Revenues
- Identify Successes
- Identify Failures
- Improve Specific Performance
- Improve Overall Performance
Performance Ratios can be best understood when sales and marketing are considered separately.
Combining Sales and Marketing: Many companies find it convenient to merge these two functions into one. I see no problem with looking at it that way if the particular company, product line, marketing team, sales team, marketing methods and accounting measures give an accurate picture of the relative functions.
If merged, management must have a careful eye to how they function together. I won’t go into the dangers and associated risks here. But, it is recommended that even if the company structure provides a single management area called “Sales and Marketing”, that accounting and measurement systems be in place to essentially attribute costs in the appropriate category. At least separate them for accounting purposes. In the long run, you will gather numerical evidence that may lead to viewing the two functions somewhat separately.