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Despite the prominence of marketing within firm strategy, few companies truly understand what it entails. In conversations with entrepreneurs, business owners, executives and recruiters, not many outside the field (and arguably not many even within the field) possess a comprehensive understanding of what marketing can do when it is effectively planned and executed.

Individual interpretation of the marketing function appears to be driven by (and rather unfortunately limited to) the realm of the interpreter’s experience. When I am not pitching a client, I frequently hear casual conversations where marketing is confused with sales, advertising, design or other niche function.

A Better Definition of Marketing

The American Marketing Association defines marketing as “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.” Many other firms and organizations have similar definitions. But what does this mean for a small business?

Peter Drucker, management guru, defines it quite succinctly when he said “The aim of marketing is to make selling superfluous.” The idea is that marketing can help a company to understand its customer so well that its product or service effectively sells itself.

To achieve this, we require a number of distinct but inter-related competencies. Having worked with large-cap and start-up clients across multiple industries around the globe, I have found that marketing needs generally fall into the following categories:

• Business planning: developing the idea behind a business, assessing market demand and evaluating the feasibility of the revenue model (Market research and business case development)
• Marketing strategy: building a marketing plan to enter a new market or grow your market share (Segmentation-Targeting-Positioning (STP), pricing, growth strategy and competitive strategy)
• Brand strategy: identifying key differentiators for your company and using them to build mindshare (Corporate identity, logo design, co-branding and product or service branding)
• New business development: building your pipeline and attracting and retaining clients (Sales management and client relationship management)
• Strategic communications: Aligning all internal/external communications to speak to the market with one voice (Integrated marketing communications, direct marketing campaigns and marketing collateral development)
• Media relations: determining how you respond to or interact with all journalists and multimedia channels (Public relations and crisis management)
• Event management: project management and logistics to bring an event to fruition (Event planning and sponsorship management)
• Digital marketing: developing your web presence and taking your marketing initiatives online (Website development, search engine optimization (SEO), pay-per-click advertising (PPC) and affiliate marketing)
• Advertising: sponsored advertisements through multimedia channels (Advertising campaign development and media planning)
• Marketing analytics: measuring and benchmarking the performance of your marketing campaigns (Marketing ROI and decision analysis)

By developing a better understanding of the marketing function and what it can contribute, this will enable your small business to set a more robust marketing strategy. It can aid you in integrating your marketing function and developing synergies that strengthen the effectiveness and coordination of your campaigns. You could use this as a framework to build mutually-supportive marketing objectives, enabling diverse teams to retain a focus on the same endgame. It also enables you to boost your talent development by identifying functional strengths and weaknesses of individual marketing team members. Last, but not least, it helps you to build internal support by helping company insiders appreciate the complexity of the marketing function. Whereas your corporate strategy sets the vision for your company, marketing develops new ways to get you closer to your customer, generate additional sales and build your strategy for future growth.

Towards an Integrated Marketing Function

Given the scope of marketing needs and expectations, how can an entrepreneur or small business owner profit from this information?

1. Structure your company with the Marketing lead reporting directly to your CEO (or at least one of the officers in the C-suite).
2. Make marketing the job of your entire company. Your marketing will be more effective if you keep everyone focused on the client and take suggestions on how to improve.
3. Raise the bar and develop higher expectations of your marketing function.
4. Understand that you don’t need to engage in all these activities. As with anything else, you don’t have to do everything on your own. Decide on what to focus on but understand the trade-offs and make an informed choice.
5. Based on your decision, decide which marketing activities to perform in-house and which to outsource (if necessary).

The marketing functions discussed are by no means comprehensive. Instead, they should serve as a springboard for further exploration. The key takeaway is that marketing is more than just sales or advertising. In fact, marketing is more than just the sum of its parts. With a truly effective marketing function, you can keep your customers happy, outperform your competitors and find new ways to grow.

Gerard Escaler is Managing Director of Catalyst Innovation Group, a venture marketing boutique that partners with small businesses to craft socially-responsible and results-driven marketing strategies. A Chief Marketing Officer with a fourteen-year track record, his experience includes marketing investment, growth strategy, competitive strategy, brand strategy, media relations, integrated marketing communications, client relationship management, advertising, event and sponsorship planning and marketing research development. Gerard serves as a non-executive director for TrendsFormation Capital, a Hong Kong-based investment company. For more information, kindly visit: www.catalyst.hk.

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If you were to visit your local bookseller, or browse through an online bookstore, to peruse their selection of marketing titles, it would be quite easy to become confused and overwhelmed. The volume of information on how to improve your company’s marketing strategy increases exponentially every week. As an entrepreneur or small business owner, how do you cut through the noise to determine how to effectively bolster your marketing efforts?

What Constitutes Effective Marketing?

In developing your marketing strategy, you could focus on any number of functional areas. Does effective marketing mean concentrating on raising brand awareness? Perhaps, but branding is a long-term play that requires attention on an ongoing basis. Moreover, focusing only on brand awareness does not help you convert brand recognition into actual sales.

What about concentrating on increasing market share? Building market share is also a longer-term strategy, but allocation of marketing investment and opportunity costs need to be considered. It is conceivable that you may need to sacrifice profitability in order to gain the market share you are seeking.

Is a strong competitive strategy equivalent to a sound marketing strategy? Maybe. You should generally be aware of what your competitors are doing. However, it would be difficult to remain on the leading edge of innovation or to grow effectively if you are constantly looking over your shoulder at what your competitors are doing. An excessive focus on competitive strategy could also have the unintended consequence of your products and services losing differentiation within your key markets and looking fairly similar to the products and services of your competitors.

Certainly, market education would be important and teaching key decision makers the benefits of using our products or services? Not to the degree that some companies practice this. An exclusive focus on market education should make you question whether your company is focusing on a profitable market segment. Traditional wisdom recommends that you address an existing need, rather than trying to persuade the market to purchase your product or service. Should you choose to adopt this approach, you should be prepared to invest a significant amount of time and resources to achieve this objective.

What about improving internal marketing coordination? This should simply be considered part of your day-to-day operations, rather than a strategy to incorporate into your marketing plan. This also happens to be arguably one of the significant shortcomings of professional services marketing. Firms that focus too much on coordinating marketing programs instead of addressing actual market needs tend to lead a company’s focus away from its clients. Why waste your time and resources on marketing programs that do not directly support your clients or end up benefitting your company over the long-term?

What matters most in marketing is your company's ability to continually generate revenue. Everything else should be aligned with this superordinate goal. This may appear to some to be stating the obvious but we cannot emphasize this strongly enough. It is a strategic imperative for small businesses to find the right balance between creating marketing programs designed to achieve both long-term and short-term benefits. Ultimately, it does not matter how clever your marketing programs are. If you do not find ways to attract new clients or bring in the cash, you are sabotaging your business's viability.

When Marketing Fails

Successful companies with strong marketing strategies abound. However, to drive home the risks of mismanaging your marketing program, we have selected an anti-case study - an example meant to illustrate the perils of ignoring marketing fundamentals.

Two of our team members spent a significant amount of time working with a company that provided business-to-business advisory services in Asia. We will refer to them as ACME Risk Solutions Limited[1]. This company made a number of elementary mistakes that severely impacted their ability to deliver value to their equity holders.

• ACME Risk Solutions' Head of Business Development failed to coach or lead its marketing team. Led by an executive with no marketing or business development experience, the team was blind to the needs of the market. Most of the team members lacked expertise in setting firm strategy. Instead, the department head had them focus on tangential functions, such as research, public relations, events, and publications. He also failed to providing education or support in their development. As a result, the department head and the team failed to capitalize on opportunities for increasing revenue.
• The team’s myopia was evidenced by the unsuccessful launch of marketing strategies that made numerous promises, but which failed to deliver and ultimately disappointed their clients, as well as senior executives in other departments.
• Marketing programs were rolled over from one fiscal year to the next, even though they were not meeting performance measures and not contributing to the bottom line. Aside from a modest budget, there was no profit and loss accountability or expectations for the marketing team to support sales or clients service.
• Because of a combined lack of leadership and marketing experience, the team overlooked traditional marketing tactics that would have demonstrated a return on investment (ROI) in implementing their programs. This caused the programs to quickly lose focus and momentum.
• Having lost credibility, the marketing team ignored clear financial data indicating declining profitability for ACME Risk Solutions.

While we found ways to support revenue generation, these tactics are slightly beyond the scope of this article. The core message behind this anti-case study is that, without proper focus and coordination, it is easy for marketing initiatives to lose their efficacy and to miss the objectives set by your company.

Evaluating Your Marketing Campaign

Building an effective marketing strategy or campaign does not require rocket science. We have laid out below a set of five diagnostic questions for you to use as a starting point in keeping your marketing initiatives on track:

1. Do you have the right team? Do you have an accountable leader? Does the team include experienced marketing professionals?
2. Is the initiative truly client-focused? Are you responding to market needs or internal pressures?
3. Does the initiative directly increase revenues? Does your marketing program help you to actually earn money for your company within a specified time period?
4. Are you able to track marketing ROI? Have you set the appropriate performance measures that show how you are allocating your marketing spend and the returns you are generating?
5. Are you capitalizing on changes in market trends? Are you aware of the current changes in the market? Are you close to your clients? Have you sensed any opportunities from changing trends? Are you being honest with your evaluation?

Crafting your marketing campaign does not have to be complicated but you do need to ask yourself hard questions. How are we generating revenue? How effective are we at generating revenue? Who are the clients that contribute the most to our bottom line? What can we do to deliver more value to them in a way that also helps us to become more profitable as well? Simplify where possible. With a dedicated focus and the right team, you can ensure a continual path to profitability for your small business.

[1] DISCLAIMER: “ACME Risk Solutions Limited” is a fictitious reference used to disguise an actual company. Any resemblance of this reference to any existing entities is unintended and purely coincidental.

Gerard Escaler is Managing Director of Catalyst Innovation Group, a venture marketing boutique that partners with small businesses to craft socially-responsible and results-driven marketing strategies. A Chief Marketing Officer with a fourteen-year track record, his experience includes marketing investment, growth strategy, competitive strategy, brand strategy, media relations, integrated marketing communications, client relationship management, advertising, event and sponsorship planning and marketing research development. Gerard serves as a non-executive director for TrendsFormation Capital, a Hong Kong-based investment company. For more information, kindly visit: www.catalyst.hk.