“a collection of functions involved in the movement of goods from producer to consumer” – Webster’s Dictionary, definition of “marketing”
“Giving property to another for money or some other valuable consideration”
Webster’s Dictionary, Definition of “sell”
Many new entrepreneurs don’t understand the difference between sales and marketing. In established companies, sales and marketing departments are often in competition with each other. The marketing department creates advertising, promotional, sales collateral, display, and branding strategies applicable to a product. The sales team is tasked with leveraging the tools created by the marketing department and implementing the sales generation strategy.
When marketing strategy and tools are effective, the marketing department often takes responsibility for campaign success. Conversely, when the strategy fails, the sales group blames the poor results on the marketing’s flawed plan. This is a natural and actually a healthy by-product of the murderous war that goes on within organizations. This competition for power, budgets, and creative control, when managed properly, can often lead to a more innovative, entrepreneurial company.
Few entrepreneurs face the inevitable cross-departmental sales/marketing collisions that are common in mature companies. They must be able to address, create, and execute sales and marketing programs themselves, unless they can engage professional consultants to assist in bringing their products and services to market. It is critical that the new business owner understands the relationship and importance of a successful marketing plan and the sales execution of that plan.
Marketing, which is “a collection of functions” as described in Webster, includes all promotional and branding elements used to increase consumer awareness and desire to buy a particular product. Advertising (in its many forms: print, electronic, media, billboard, web, etc.) is the most obvious and successful strategy, employed when the budget allows. Direct mail is another. Yet another is discount coupons. Many items are advertised with samples. Extra portion offers (“33% more!”) are popular with bulk packs. “Buy one, get one free” (and dozens of variations thereof) and “buy now, pay later” (popular for capital goods, furniture, appliances) are industry-specific examples of marketing promotion techniques that have proven successful.
Additionally, successful marketers create branding engines around their product and business. The famous Nike “Swoosh” and the brand name “Just do it” have become absolute hallmarks of Nike products, the company and Nike’s superstar endorsers. The Geico Geko is another popular, memorable branding tool. Intel’s ubiquitous single-note chime and the phrase “Intel Inside” reinforce the chipmaker’s story in a subtle, reassuring way.
The task of creating a marketing strategy for a brand new company is not always easy. But it is always essential and eminently attainable. For entrepreneurs, the process seems complicated by not having the money for traditional, high-impact advertising campaigns. Neither did MicroSoft, WalMart, Coca-Cola, or Wendy’s when they were small startup companies. They weren’t always giants.
The lack of a large media budget should be seen as an opportunity, not a handicap. This forces the entrepreneur to rely on emphasizing product features and especially utility. This makes a product successful not only on the first sale, but also on the second purchase when a customer buys again because the first contact was pleasant, value for money was maintained and product benefits were delivered as promised.
Word of mouth and customer recommendation is the best form of sales promotion. How many times have you bought a new product because a friend raved about their experience with a new gadget, salad dressing, or tool? Advertising costs for a referral purchase are nothing.
Selling is the execution of the marketing strategy that typically occurs when the product is physically presented to a customer. The marketing tools (discounts, samples, banners, promotions, etc.) are created to influence the buyer to make the right decision to buy your product and not the competitions. The seller presents the product in a group of promotional tools designed to maximize market acceptance and ultimate sell-through.
Selling is a form of contact sport. Marketing is rather esoteric. Marketing is a set of theorems with corresponding assumptions regarding the potential market acceptance of the validity of the overall strategy. Selling or executing marketing strategy is almost never linear as marketers assume. The marketplace is frenetic. The best marketing plans are regularly revised, often at the point of sale. I’ve mostly been asked for a new item or some other selling tool to get a buyer to sign a purchase order. If I didn’t have the vehicle I wanted, I had to improvise on the spot.
This requires the entrepreneur to be fully immersed in every last aspect of their business. If you get too involved, you will suffer losses that sometimes paralyze a new venture. If you decide to hold off, a great opportunity could be missed. In my own startup companies, I went to a presentation with a well-vetted marketing plan and held up a percentage of the purchase amount that I knew I could cover if needed. If not necessary then great, I had kept my margins. However, if the buyer wasn’t inclined to buy with my offer on the table: I had the flexibility to improve one area or another and close a deal.
This is both art and science. Numbers are tough in any business. You need to know the costs of running your business and your margins, and not jeopardize your business with “business acquisitions”. You won’t catch up later.
First-time entrepreneurs can be overwhelmed by the dual requirements of putting together a marketing plan and actually executing the strategy by selling the product. Each requires their own skills. The most important thing to remember is to keep going, don’t stop: don’t give in to fear. You are selling/marketing a product that you are passionate about: that you have researched, know the market needs and provide important benefits to the end user.
The more you market and sell, the easier it becomes. However, you cannot learn these skills by simply reading. You have to get out there and give presentations. Learn from your mistakes. If you’re declined, ask the buyer a favor: “What could I have done better to make you decide differently about my item”? You’ll be surprised how often this advice makes a positive difference in your next presentation.
buying on margin definition
