Profitability or Value — you decide:
Over 50% of startups fail within five years and the failure rate surpasses 70% at the 10 year mark according to Statistic Brain Analysis. Leadership teams at startups that didn’t make it were asked by Statistic Brain about where it went wrong and a lack of marketing knowledge was give as a top reason for failure. Here’s the problem with not understanding what marketing can do for your business: marketing is the most important thing you can do to attract customers, get them to buy and make sure they come back to you for more.
Here’s a little task for you: think for a second about what you believe the definition of marketing is… now hold that thought.
While you’re holding that thought, did you know there isn’t one global standard definition for marketing? The definition tends to vary a bit depending on who you’re talking to and what country they are doing business in.
Let’s look at the official definition stated by the Chartered Institute of Marketing (CIM) in the UK and the American Marketing Association (AMA). Both of these bodies are widely accepted globally as leaders in the marketing field.
Here they are:
Chartered Institute of Marketing (CIM):
“Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.”
American Marketing Association (AMA):
“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.”
You’ll notice a key difference is that they UK definition includes ‘profitablity’. There are varying opinions on its inclusion from the fact it might not be totally appropriate for a non-profit organization to be driven by thoughts of profits while the US version is sometimes criticised for not considering profits in the definition. Some marketers feel ‘value’ is a more appropriate term because it covers all stypes of businesses including non-profits and social enterprises who might not be drive by the amount of cash being banked by shareholders. What is clear is that marketing is a complex process.
Origins of Modern Marketing:
Basically, marketing is the name for interactive activities that happen between a company and its customers. The term’s origin comes from the old ‘marketplace’ where buyers and sellers would meet for mutual benefit. In Europe some mid-evil markets have a modern day presence. Below are a few examples of how it all began.
So now think back to your definition of marketing… did you come close to the AMA and CIM definitions? Many people assume marketing is just buying advertising or creating a website, and while those promotional activities are an element of marketing they are just that — one element of marketing. There’s a lot happening ‘behind the scenes’ before your customer reads about your offering in a magazine or on your website.
Marketing is more than just creative industry packaging and advertising. While it can have elements related to the creative arts, many business schools now consider marketing to be interdisciplinary encompassing social sciences, psychology, sociology, mathematics, economics, anthropology and neuroscience. It’s even being referred to as a science by some universities who award Bachelor of Science (BSc) and Master of Science (MSc) degrees in marketing.
Marketing in practice usually starts with market research, investigates marketing segmentation, business planning and execution and finishes with pre-sales and post-sales promotional activities.
When done well Marketing can help you:
* Generate meaningful leads for new sales
* Grow your business
* Hire more people
* Retain existing customers
* Fund some R&D via sales revenues
What marketing can not do is cover-up for a bad product or service. In fact if you try hard to push something substandard or a something that doesn’t have any demand, marketing activities are likely to magnify any disparity or disconnect and that could put you into a public relations crisis type of scenario. Remember that marketing is a core business management process that can help you succeed when done well or lead to the downfall of your company when either ignored or done badly.
If you’re looking to get press for your business you can read more on how to get coverage for your company in my article “7 Tips for Getting Startup Press from an Ex-Journalist”.
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Cambridge MBA | Marketing Consultant | Speaker | Writer | Ghostwriter