Who Needs Marketing, Anyway?
By Mark Vanderkam | June 1, 1999
Marketing can be a very expensive undertaking, accounting for as much as a fifth of the total budget of some companies. Can this be justified?
Ha ha. Very funny. And in addition to being humorous, there's an element of truth in it, right?
After all, people go into business to make money, not to pour their fortunes into the coffers of suppliers. And some ad agencies are certainly guilty of drawing down colossal retainers for their services. And for what? Developing catchy slogans and writing headlines based on bad puns? Designing colorful tradeshow booths? To some people, it hardly seems worth the expense.
So what would happen if Herbert Kelleher and all the other business leaders fired all the ad agencies of the world? Would the business world notice, besides wondering about all those guys with pony-tails hanging out at the local job finding club, wearing black Giorgio Armani t-shirts, sipping tiny cuplets of expresso and nervously sucking on filtered DuMaurier cigarettes?
Hey, while you're at it, why not toast your entire in-house marketing department? Capital expenditures give you something tangible for your money. But marketing? What does it buy you? Mindshare? Awareness? Brand recognition? How do you convince your banker to accept these intangibles as collateral on your next round of financing?
Think about it. If marketing is nothing but an expense, and you need to find cash somewhere on the ledger sheet for the CEO's latest infrastructure project (you know, the one that investors have been told will undoubtedly usher in a new era of market domination), then . . .
Would anybody notice? All the engineering and sales and administration and service people come into work on Monday morning, and hey? Where did all those marketing people go? You know, the folks who used to hang around the water cooler and organize golf tournaments and go off-site to places like Banff Springs for so called "strategy" weekends. Where did they disappear to?
Besides having to scramble to find someone to organize the company softball league, would anybody suffer from the loss of the marketing department?
This kind of attitude towards marketing exists in the business world, and I believe it belies a basic lack of understanding regarding marketing's nature and purpose. Usually, this cynicism is expressed by small business people who typically complain, "Well, I took out a half page ad in a magazine and didn't get a single call," or "I got to where I am without any marketing, so why should I start now?"
Managers working with larger companies usually have a better appreciation of the function and value of marketing, but even in some of these companies, you can find people who seem to really believe the idea: "Build a better mousetrap and the world will beat a path to your door." If this is true, that business success is driven by better products, then marketing is an unnecessary line item in your Excel spreadsheet. Time to hit the delete key. Or is it?
Speaking from my personal experience, I believe in marketing because I have seen it work spectacularly. I have seen how powerful marketing strategies have helped turn product lines around, not to mention entire companies. And in the coming months that I will be contributing to this column, I hope to provide business managers and owners with some real insights into what constitutes effective marketing strategy and programming.
I plan to look at many aspects of marketing, including budgeting, research, pricing structures, distribution decisions, strategy, brand building, and marketing communications. My basic premise throughout will be that marketing is the primary tool for creating demand in the marketplace. It is easy for most business people to conceive of capital-intensive infrastructure projects such as building a cross-country railroad or broad-band fiber-optic network. And yet an effective marketing program is in very many ways the same thing, with one important difference; the infrastructure you create through marketing is built upon a mental rather than physical landscape.
To give an example of this, think of the last time you bought acetaminophen tablets. If you are like most people, you probably bought the branded form, Tylenol, even though it is the exact same molecular structure as the generic product. But the people who manage Tylenol have managed to convince the general public, through intelligent marketing, that their product is somehow different from and better than the generic tablets. As in, "I don't know about the other guy's acetaminophen, but ours is extra strength!" And so people like you and me gladly pay the extra money for their product.
Looking at this and other examples, maybe the problem with marketing is that it comes across as more of an art than a science. How do you quantify the benefits of something as nebulous as "brand position" or "top of mind awareness"? In my experience, you can quantify these things because they make a direct impression on every company's bottom line, and that's where marketing ultimately justifies itself.
So how do I answer people like Herbert Kelleher of Southwest Airlines? Well, I could be a smart-guy and bring out hard numbers and case studies that prove the effectiveness of aggressive marketing. Or I could simply ask these folks to look at their own experience as consumers and recognize that, as in the experience of everyone else in the world, marketing plays a leading role in each and every one of their purchase decisions.
Then again, maybe I should just invite these business owners and managers to read my column over the coming months and see why marketing, properly used, is the most powerful tool they have to help them differentiate and promote their brands and products in today's hyper-competitive marketplace.