Sunday, December 09, 2007

Marketing makes sales superfluous?

"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."

“…the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself..”

Both these quotes are from Peter Drucker.

The best example of a category which has achieved this very successfully is the luxury fashion industry. Brands like Mont Blanc, Chanel, Prada don’t need to do much direct selling – they invest a great deal on building a unique aura for the brand and keeping their products fresh and high-quality. They make their products so desirable that potential customers are drawn to their products and shops.

But chances are you work with hundreds of salespeople. And your organization is likely to have many more salespeople than marketers. Why? Is it that marketing and innovation are no longer the key roles of business? Or that we have stopped building the product or service that sells itself? Neither.

As the products got more complicated and the organization got bigger, the marketing function got more specialized. Marketing used to be the custodian of the customer’s view point and of the market landscape, but this function was now performed by the business planning department. Marketing traditionally owned the customer, but customer satisfaction surveys were now performed by the Quality department. And because the customers are often far away from the producers, marketing needs feet-on-street to customize the solutions for individual buyers – and this was now done by Sales. So while the organization continues to effectively perform the marketing function as defined by Drucker, not all of the elements reside in the department of the same name.

With industrialization, location-independence and complexity this fragmentation was a logical progression. But now, with the emergence of Web 2.0 there is a chance that marketing can pin itself back together again. Using collaboration tools it is now possible to understand your customer even from a remote location. With new technology like telepresence the need for feet-on-street will diminish as a good customer solution can be presented from anywhere in the world. And importantly with new media like Facebook and Second Life marketers can communicate one-on-one with customers anywhere in the world. In many ways this is like a return to the pre-industrial age, when marketers and producers were often the same people and sold to their friends and neighbours.

So I see a return to a more traditional form of marketing enabled by the latest in technology. What do you think? Is this likely to happen? Or will we continue to see specialization (and fragmentation) of the marketing function in organizations? And is that good or bad for marketers?

1 comment:

U said...

Neither marketing nor sales can make an impact unless they understand the 'insights' of the customers. Customer is the centre stage of the business and who understands this better will make a difference. But I go with the Marketing because most of the great brands are built by true marketing than sales!