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Guest blogger - Andrea Olson, MSC and CEO of Prag’madik
Many people consider themselves "experts" in the sphere of marketing. Yet why is this subject still so misunderstood and misapplied in many companies? It's a constant challenge to get one's mind around the abstract nature of marketing. Unlike finance, this subject is not linear, nor is it black and white. It is much more an exercise in strategy and psychology, rather than implementing the right combination of tactics.
Most organizations have an overly narrowed view on this subject, due to two main reasons. One, they too narrowly focus on selling products and services. Two, they miss the big picture of what their customers really want. In short, it's more about the company needs than the customer needs.
To get over this hurdle, organizations need to start by examining what business they are in. Many industries have this challenge at a higher level as well. Consider the railroad, oil, and film industries. They often focus on their products, rather than the real businesses they are in - i.e. transportation, energy, and entertainment. With a broader view, you can easily see the opportunity for growth, expansion, and diversification. More specifically, the opportunity to identify and serve a wider range of customers.
While many organizations believe that marketing is all about "creativity", "cool", and "messaging", the real value of marketing is it's role in identifying and understanding customer needs, both current and future, and helping align the organization to address them. To make this effective shift, it requires the recognition of two core principles:
1) Your product is not your business.
2) Your focus should be your customer needs, not your capabilities.
Let's break each of these down. First, the concept of an overly narrowed view of products. When a company focuses solely on products, it can easily create a self-fulfilling prophecy, believing that their product is what their customers need, rather than continually examining those changing needs. This leads to an over-focus on capabilities. Even though companies often spend time and effort on product improvements and new product development, it is often limited to the existing skills, processes, and knowledge that drive the company today. The inability to expand outside of the organization's existing operations hampers the opportunity to proactively address emerging customer needs and capitalize on it for revenue growth.
So even with this knowledge, what holds companies back from truly understanding the impact of marketing? There are four core misperceptions about business growth that frequently stall the understanding and leveraging of real marketing:
Misperception #1: An ever-expanding and more affluent population will guarantee growth. In short, this perception says we focus on products, not customer needs. It's like a gasoline company thinking customers need more gas, not more "fuel".
Misperception #2: There's no competitive substitute for our product. In short, this perception says we don't innovate. Many companies that are focused on a single offering fall into this trap. With our gasoline company, they might focus on extraction, rather than new types of fuel, for fear of cannibalizing existing business.
Misperception #3: We can protect our market share through mass production. In short, this perception says we focus on selling instead of marketing. Selling is fundamentally the exchange of cash for your product or service, while marketing is about satisfying the needs of customers by your product or service. You can mass produce as many telegraphs as you'd like, but it doesn't address the customer need of easier, simpler communications.
Misperception #4: We believe our technical research and product development will ensure our growth. In short, this perception says we think our products will sell themselves. This internally-focused view often creates a slow decline, where product changes and expansions are driven by internal perspectives, distancing themselves further and further from real customer needs and interests. Before you know it, organizational leaders find themselves seeing a trend of declining sales, and not truly understanding why. You can develop new ideas and products, but no amount of promotion will cause people to buy something they don't want or need.
While we all like to believe we are "marketing experts", focusing on everything from logo design to creating a new hashtag. But the reality is marketing is much bigger, broader, and more of an exercise in strategic business growth based on customer needs. The hardest part is to truly identify and understand those needs in a context outside of your organization's sphere of perception.