In December 2011, the Chartered Institute of Marketing put the cat amongst the pigeons of the marketing press when it published a discussion document “Marketing and Sales Fusion”.
The document proposed that the function of marketing should be merged into the sales function if it was to have a future. Unfortunately, the document ignored the CIM’s own definition of marketing, which it defines as “the management process that anticipates and satisfies customer requirements profitably”, and which therefore includes the process of selling. Does this proposal matter? In reality, no, because this has become an academic argument which has little purpose and achieves no practical result. However, the importance of , “the management process that anticipates and satisfies customer requirements profitably”, whatever it is called by academics, is fundamental to the existence of any business no matter how large or small.
Whatever the size of any business enterprise, someone will be responsible for getting and retaining necessary trade to produce sustainable income for that business, regardless of whether or not their executives are called marketing or sales managers. About 80% of all businesses are considered to be small. In small businesses, all the activities of market research, development, advertising, promotion and selling tend to be closely integrated, simply because they have fewer personnel available. It is generally in larger companies that the various disciplines that comprise the “marketing” process become separated into differently managed activity areas.
Whatever job title they have, the executives responsible for producing profitable income, must show themselves to be efficient and effective in producing sustainable profitable income for the long term future of the business. Ultimately, their contribution to their business will be measured on the amount of profitable income produced, and how much cost and investment was used to produce it
The purpose of any and every business is to make money; businesses exist for no other reason. Understanding the problems and requirements of customers, both present and future is the first requirement of every business. Using that understanding to supply answers that meet customer’s needs and to do it profitably is essential for the existence and future of every business. Contrary to what some may believe, customer satisfaction is not the main objective of business. Customer satisfaction is important, but customers can be satisfied by the provision of free goods and services. However, unless customers can be satisfied profitably the business will fail.
The most important question which should be asked of every activity in the marketing process is “how will it add to profit?” in other words, how will this activity or investment, impact on the production of sustainable profitable income for the long term? Many activities will have a direct impact on income, such as the management and direction of sales. But other important activities may contribute collectively, but not directly to the production of income. Advertising, other than direct response advertising, assists the development of sales by making the market aware of the product, but does not directly induce the customer to buy.
Similarly, product and market research help to identify customer requirements, and are therefore an important investment, but it will be the ability to provide a product or service solution to the identified requirement, and to deliver it to the customer in a profitable manner that will decide the level of future income.
Managers have to understand how to manage the various activities that collectively produce the income of the business. They must learn to manage their resources so as to maximize the volume of profitable income, while minimizing costs and the use of assets and investment.
Debates about the purpose of marketing and its integration with sales or other activities is a redundant academic argument, which has little relevance to the majority of businesses whether large or small. The most important question is how to maximize profitable income by using assets and investment efficiently and effectively.
The Oxford English Dictionary defines “Business” as, trade, buying and selling. It would seem logical therefore that companies should consider organizing all their customer related activities under a “Business Manager,” responsible for “the management process that produces sustainable profitable income by anticipating and satisfying customer requirements”, supported by a Resource manager, responsible for finance, purchasing, personnel and supplies. A debate on how more integrated management structures could maximize profitable income more efficiently, would be more beneficial than more pointless discussions on the merits of separating marketing and sales, which continue to abound.
© N.C.Watkis, Contract Marketing Service 26 Jan 12
Contract Marketing Service, (Profit Development Specialists)
