Small Business Marketing - Essay Example

?Introduction:- Marketing and sales are two concepts that are often confused and used interchangeably. This is an inherent mistake on the part of observers and practitioners alike. While both the fields are closely interrelated and reliant on each other, there are significant differences in the way they are used and practiced to increase revenue and achieve the goal of maximizing shareholder equity. The distinction between the two concepts can take various forms of depth. However, it is important to understand that while both concepts are significantly different, they are aimed to facilitate each other and the existence of any one of the practices in isolation would be extremely difficult. It is for this reason that marketers and salespeople alike, focus on integration and alignment of the two functions and a greater focus on the ultimate objective, rather than departmental goals. The American Marketing Association defines marketing as “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.”(American Marketing Association 2008) Sales is largely a subset of marketing and focuses on the delivering and exchanging part of the paradigm. It also involves maintaining cordial working relationships with clients, partners and customers all across the society. Marketing is broad context that also encompasses sales and merchandizing. In context of a small business, there are stark differences between the two concepts. The core focus of the marketing process includes: Discovering the products, services or ideas to be implemented. Producing products with the ideal features and quality that cater to the target market. Correctly pricing the product. Promoting the product through several techniques to allow the message to spread to maximum people. Selling and delivering the product to willing customers. It is clear that selling is just one of the activities of the entire marketing process. It essentially involves effort to implement the plan and make the actual sale. All marketing activities support the eventual objective of magnifying sales. It must be noted that it is extremely important that marketing and sales activities are aligned in ways that complement rather than ways that contradict (Atkins & MBA 2009). Some of the key differences in the way marketing and sales are done are: A marketer looks at the decision making aspect of the spectrum. He empathizes with the customer by identifying needs, wants, deciding on the target market, positioning the brand, promoting and taking other steps that communicate to the customer that the product is designed specifically for him and that he should consider its purchase. A seller, by contrast, focuses on the execution state after the work has been done by the marketer. His main focus is on reaching targets, achieving goals and focusing on numbers. He also needs to ensure the timely availability of products for customers. Importance of Aligning Marketing and Sales: In many companies and small business, the personnel and actions of sales and marketing contradict each other significantly. Sales people accuse marketers of being unaware of the actual needs of customers or overestimating the buying power of customers resulting in overpriced or unneeded products. They argue that marketers then expect them to generate sales revenue with such redundant and overpriced products. Such decision making leads to deviation from the ultimate objective of maximizing profits and hinders growth in sales numbers. Marketers, in contrast, suggest that salesmen have a very shortsighted focus on individuals and short term sells rather than looking at the bigger picture. This alienates the firms from prospective long run profitability and stable revenue. Furthermore, the limited knowledge they have about the strategic decision making involved in coming about the final product makes them vulnerable to misinterpreting the essence of the product and its target market and other key indications. The consequence of such contradictory statements is poor coordination between the two teams which has a significant negative impact on company performance, including an increase in cost of sales, an increase in the cycle time of sales and inefficiencies. An increase in cost of sales results from an increase in the number of capital employed per sale. A hike in the cycle time is a consequence of the increasing amount of time it takes for salespeople to select and sell products to potential customers largely because they are not aware of the strategic objectives of the product set forward by marketers. Overall inefficiencies can be perennial because if the operations are not corrected before due time such mistakes will continue to be repeated leading to further damage to the relationship between marketers and sellers(Philip Kotler; Neil Rackham; Suj Krishnaswamy 2006). Identification of discrepancies is important to come about to a sustainable solution. It is important to identify whether the target market is becoming more customized or commoditized. Customization refers to behavior that demands a lot of variance and product differentiation for different customers. Commoditization, in contrast, entails a generally acceptable set of products prevailing in the market. It is also be aware of the level of competition entering in the market that can challenge a company’s standing. In such situations, it is important to align sales and marketing through frequent, different cross-functional communication and joint projects. Cross-functional communication can be achieved via decreasing the physical distance between selling and marketing teams and asking for frequent feedback on work of the corresponding department. To counter tougher competition, promotion of a culture of teamwork is essential, which can be achieved by sharing rewards and valuing contributions by each member of the team. This shall allow each team member to be connected and involved in an environment where performance is measurable and quantifiable. Quantifiable measurement techniques are often well accepted and provide a good indicative of the level of effort put in(Neely, Gregory & platts 2005). The question that whether marketing and sales are the same thing is answered, however there is debate over whether they cancel each other out, are not interconnected enough and do not contribute to the organization fully. In situations where the relative interconnectedness of marketing and sales needs to be improved, it is important to define the relationship between marketing and sales and whether organizational goals warrant more interconnectedness between marketing and sales(Cespedes 1993). Understanding sales and marketing relationship: Undefined: The relationship between sales and marketing is said to be undefined if both the functions focus have developed independently, focus on their own functions until a conflict of interest arises, and meet for conflict resolution rather than proactive collaboration(Philip Kotler; Neil Rackham; Suj Krishnaswamy 2006). Defined: Both departments are said to have a defined relationship if there are clearly underlined rules for preventing disputes between the two functions, regular meetings to clarify mutual expectations and identification of potential contentious areas. The rules shall be laid down with the consent of both teams and with consideration to the kind of expertise each team possesses. Regular meetings shall be aimed to align the objectives of the two teams together and counter any contradictory aspirations that may exist. Identification of potential contentious areas is extremely important because it will allow firms to avoid potential disasters as a result of lack of coordination(Philip Kotler; Neil Rackham; Suj Krishnaswamy 2006) Aligned: The relationship is said to be aligned if members of both functions have clear but flexible boundaries. Both salespeople and marketers understand the terminologies, objectives and limitations of the corresponding department. Both departments engage in joint planning and training. Integrated: Both the departments are said to be integrated if they completely share the systems, performance matrixes and rewards. Furthermore, all planning and implementation is done with close coordination and any consequences of poor decision making are handled by both departments equally. This is analogous to the functioning of one large department that entails both sales and marketing(Philip Kotler; Neil Rackham; Suj Krishnaswamy 2006). Developing better relationship between marketing and sales function:- The transition from an undefined relationship to a more defined relationship takes place if sales and marketing people have frequent conflicts, compete over resources and often end up duplicating tasks. The transmission towards a more defined relationship can be achieved by creating acceptable rules of procedures and acceptable policies. If the relationship between the departments is defined and the marketing is becoming more customized or commoditized, product lifecycles are shrinking and there is task duplication, there is a need to move the relationship to a more aligned one. This can be achieved by arranging regular meetings between sales and marketing people to discuss potential growth opportunities or threats, deciding who bears the burden on specific types of decisions and who should be consulted when topics of such concern come up, e.g. decisions that concern the allocation of a specific amount of capital to the project. Steps to increase the opportunities of collaboration of sales and marketing through conferences, rotational jobs or specific tasks can also help create a more aligned relationship between the two departments. If the relationship between the two departments is aligned and the entire business landscape is going through several changes and complexities, and marketing is subdivided into strategic(upstream) and tactical(downstream groups), there is a need to move towards a more integrated mode of relationship. The integrated mode shall identify roles for upstream and downstream marketers. The downstream members of the team shall overlook tasks such as developing sales tools, qualifying leads and using feedback from sales regarding success of existing products. It shall also allow the company to evaluate the performance of both teams through an established target(Philip Kotler; Neil Rackham; Suj Krishnaswamy 2006). Such steps shall facilitate the alignment of sales and marketing functions to contribute towards the organization and save the firm from contradictory actions and confusions that can hinder profitability. How it works in the real world: Alignment of marketing and sales objectives and giving equal importance to both is very important(Sirsi 2005).Mr.X is the owner of a chocolate cafe. His products are unique and demanded by a niche market that seeks to satisfy their taste buds by eating sweet chocolates. This market is trendy, hip and open to new tasteful experiences. It relies on perception and image of the brand to form judgments about the eventual satisfaction from the use of such a brand. From a marketing perspective, positioning is an important tool to cater to such an audience successfull. A confusion of sales and marketing objectives by Mr.X has led to clutter and a disorganized environment. He currently oversees both departments and his prime objective is maximum revenue. Mr.X encourages his employees to push customers into extra purchases or selling them chocolates at discount rates and does not give importance to the environment in the cafe, the attire of his employees. He has named the cafe as Chocolate cafe. The paragraph above is a perfect example of overweighing sales over marketing and using the concepts interchangeably. While Mr.X has centralized his focus on increasing sales by the push strategy he has completely overlooked the positioning of his brand of chocolate. The cafe environment, name, and overall feel form associations in minds of customers. In the current state, the associations are weak and negative and customers are likely to be pushed off after their first visit. Had he focused on the marketing aspect of positioning, his efforts to attract customers via pushing them for discounts would have been unneeded as customers would have been pulled to the cafe for its environment and relaxing ambiance. Implications for Small Businesses: Small businesses often do not possess the manpower to have separate marketing and sales departments. It is hence important that owners and managers of small business integrate the two functions to produce products that are marketable, sellable and sustainable(Goldstein 2007). The kind of business one operates is also a key determinant of the need of integrated marketing and selling. A small bakery, e.g. does not need excessive marketing for its products, however quality assurance, timely delivery and man to man sales pitches are necessary to produce results. In contrast, a restaurant, which is a service centric business, does not necessarily need extremely efficient salesmen. The key performance indicators for such a business shall be the quality of product, the amount of people it attracts and the supply chain management of the business. The amount of people a restaurant attracts depends largely upon the positioning of the brand of the restaurant(Jorgensen 2003). If customers form a positive association of quality, taste, timely delivery and acceptable ambiance when thinking of the firm, they shall be attracted to it without much effort. It is pretty obvious then, that the model of the business plays a key role in determining the amount of importance that should be given to either sales or marketing. For a model of business that relies on numbers and volumes, a sales driven strategy is more suitable. In contrast, for a model that relies on perceptions and brand image, the marketing and positioning aspects of the strategy play an essential role in defining success. It is also useful in determining whether sales and marketing relationship should be defined, aligned, integrated or undefined. Works Cited American Marketing Association 2008, The American Marketing Association releases new definiton for marketing, < HYPERLINK "http://www.marketingpower.com/AboutAMA/Documents/American%20Marketing%20Association%20Releases%20New%20Definition%20for%20Marketing.pdf" http://www.marketingpower.com/AboutAMA/Documents/American%20Marketing%20Association%20Releases%20New%20Definition%20for%20Marketing.pdf >. Atkins, S & MBA, SA 2009, Small Business Marketing, CreatSpace. Cespedes, FV 1993, 'Co-ordinating sales and marketing in consumer goods firms', Journal of consumer marketing. Goldstein, B 2007, The Ultimate Small Business Marketing Toolkit:, McGraw Hill Professional. Jorgensen, AS 2003, Restaurant Marketing, Atlantic Publishing company. Neely, A, Gregory, M & platts, K 2005, 'Performance measurement system design: A literature review and research agenda', International Journal of Operations & Production Management. Philip Kotler; Neil Rackham; Suj Krishnaswamy 2006, 'Ending the war between marketing and sales', Harvard Business Review. Sirsi, AK 2005, Marketing Led - Sales Driven: How Successful Businesses Use the Power of Marketing Plans And Sales Execution to Win in the Marketplace, Trafford Publishing. Read More