Saturday, September 24, 2011

ARE SELLING AND MARKETING THE SAME THING?


Selling and marketing are terms that are too often inter-changed. People who are really selling will frequently say they are in marketing. Outsiders often assume if someone says they are in marketing, they are really in sales. Selling doesn't sound as prestigious as marketing, but at the same time people in marketing sometime feel they are really just selling.

There are people at the margins for both occupations performing both functions. The big question is "Are marketing and selling separate disciplines? or "How are Selling and Marketing related?"

Hub Foley, a publisher I worked under at Metroland explained it best. Selling is necessary when someone (a manufacturer, wholesaler, retailer, individual) is "stuck" with some goods and need to find someone to buy the goods so a livable profit can be extracted. They most likely made a conscious decision to get or make these goods, but now they have the problem of how to get rid of them. They may hire slick talking, rejection immune individuals to "sell." Good selling goes beyond slick talking and persistence and to be good requires skills that are natural to some and can be learned by others but are difficult for many people to master.

Hub explained marketing starts before any "thing" is made. It is more basic involving decisions of what to sell and to whom and how and for how much.

If we go back to the conscious decisions that ended with the manufacturers, wholesalers, retailers or individuals obtaining some goods we get a little closer to marketing. Ideally marketing really goes back to original decisions. What can be made (actual goods) or implemented (service that either is the good or supporting goods) that someone would be willing to pay for in enough quantity that we can have a profit left over after all the costs. This can require a lot of research and a lot of heavy thinking.

That is the essence of marketing and may require a lot of money, effort, expertise and skill. It boils down to decisions on which path to pursue. You could continue doing what you have been doing, making stuff or offering services. In modern times that decision could mean declining sales as consumers identify stuff and services offered by competitors that more closely match their needs and wants and is perceived to be more affordable . Eventually many products and services become obsolete or more commonly at an earlier stage become unprofitable.

Thinking ahead marketing asks the most basic questions. What can you make or do that consumers would be willing to pay enough to make a profit? Research and brain storming can identify opportunities. The actual cost of producing a good or a service has to be determined, but also an estimate of how quantity will affect final costs. After the product is available there will be other costs that need to be allowed for as you will soon appreciate.

On the long road to making a profit are other concerns. What price should you offer it for. You need to make a profit, but if you overprice your product or service not enough people will buy. On the other hand if you underprice (but still make a profit) some people will assume it is not worth their time and you are of course not optimizing your profit. Underpricing can be useful if it is a loss leader or boosts cash flow or you are unloading goods that are taking up valuable space and time.

Pricing is complicated by another marketing concern. What channels of distribution make the most sense. You could knock on every door or mail to every mail box, but that is expensive and for most products and services most of your effort will be wasted. You could knock on fewer doors by concentrating your effort on retailers who already have customers looking for something like what you are selling/marketing. Of course you have to share your profits with the retailers, but balancing that is less waste. Many manufacturers distribute through wholesalers who have connections with retailers. The offset here is that again you have to share your profits with the wholesaler and you are still sharing some of your profits with the retailer. You are cutting waste even further (promotional, transportation and even clerical). Increasingly goods are also distributed on-line. This can be very efficient, but can be in conflict with other efforts and requires its own set of skills and expenses.

This leads to still another complication. Your product just sitting on a store shelf or worse a warehouse shelf might just gather dust, if suitable prospects are unaware and unmotivated to buy. How best to present your product to those people your research indicated would be most interested? How can you reach these people? Do they watch television and do they have any preferences? Do they listen to radio and when and what do they listen to? What newspapers or magazines do they read? Are they tuning out these traditional channels and where might they be more likely to pick up your messages. A lot more research. How best to present your product or service so that your targeted audience will be more likely to buy?

If marketing is totally successful all that is needed at the actual buying end are order takers. These are people who take the customer's cash or credit card in exchange for your product. Services can be almost as automatic where customers for example wanting lawn-care don't even have to make the call and don't even have to write a cheque as the payment is an automatic bank withdrawal. Most products are complicated and have competition so some sort of selling effort is required. If the complications and competition are relatively low the sales cost can be relatively low, but if with the complications or competition is at a higher level you might have to pay a higher percentage of the sale price.

I have adopted a price focus in explaining marketing, but actually it relates directly to all the other decisions. How you decide to distribute your product, how you decide to promote it can help determine the price as much as the price dictates how you distribute the product and how you promote it.

The photo of the two whales is by my brother Marshall Davidson and symbolizes that, yes marketing and selling are different disciplines, but they are related.

I intended to write about how sales people and those lower in the chain can integrate marketing strategies to help them sell better, but this already too long. See you next time.

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