In this post, I will talk about why is marketing function so important in growing the business? What are the different roles it plays, how does it help in different stages of the product lifecycle and how to effectively make use of marketing?
First, I will talk about the Importance of marketing function and its different roles:
Define & manage the brand identity: The marketing function is central to building a company’s unique identity by defining and managing the brand. This involves determining who you are as a company, what you stand for, what you say about yourself, what you do and how the company acts. This, in turn, defines the experience you want your customers and partners to have when they interact with you. For example, a technology company like Lenovo which stands for providing ‘smarter technology for all’, now the products, services & solutions it offers to the customers, should be able to provide the same value to the users that the company communicates, and that’s where Marketing function’s role becomes important in synchronizing company’s actions and words. So, the marketing function communicates this brand value and promise through press releases, corporate events, media reviews and other public relations activities. It establishes the goodwill of the company and the social contributions that the company makes. In today’s world, where your company’s culture matters more than ever since consumers want authenticity, marketing functions always find ways to showcase the company’s culture which is the values and beliefs of the organization.
Drive growth for business: When it comes to driving growth for business it helps generates demand for the company’s products and services. To achieve this, the marketing function conducts research into understanding what motivates customers to buy certain products and where they get their messages regarding products and services- which means which route of communication channel do they get the message. Basis the research, marketing functions decide what message needs to be communicated and where it is to be communicated. Communication Channels can be print, broadcast (TV), internet, outdoor or mobile advertising. It includes public relations campaigns, loyalty programs, coupons, discounts, sales promotions, social media channels, blogs, direct mail, and catalogues. The important thing to note here is only after the Product, Price and Place functions of the Four Ps are complete do marketing teams look at promoting products.
Market Research: Another important role of the marketing function is to act as the Voice of the Customer. Marketing teams use surveys, focus groups, retailer data and other research to learn what consumers want and then feed this data to the product design, development, and the R&D team. This helps gets ideas for product enhancement or a new product launch.
Marketing Communication: Marketing proactively identifies the products and services to focus on over the course of the sales cycle, and then produces materials and communications that get the word out.
Hence it is the Marketing function’s job to reach out to prospects, customers, investors, and the community while creating an overarching image that represents the company in a positive light.
How marketing function helps in business growth?
Now that we have looked at the important role which marketing plays, let’s talk about how marketing function helps in a business’s growth at different stages of a product’s lifecycle.
- During the introduction stage of a product or service, where the objective is to onboard new customers, the marketing team helps to drive customer acquisitions by offering discounts, coupons or getting new customers through brand partnerships. Take the example of online ordering apps, you may get discounts for ordering groceries from APPs like ‘big basket’, ‘Flipkart’, ‘Swiggy Instamart’ or you will get 25% off on ordering medicine from TATA 1mg or Pharmeasy. Even so, you may get a discount on buying insurance from apps like ACKO, Digit or Ditto Insurance. The primary goal here is to create brand awareness and induce trials/ app downloads. The discount given here is the cost which the company incurs in acquiring the customer.
- Growth Phase -> In the growth phase, the marketing function tries to grow the customer base through a referral program (since the cost of acquiring a new customer is low here). It starts to do promotion in the mainstream media like digital, social, print, and TV (where the cost per user would be lower than the Introduction Phase). This phase also involves cross-selling products to the existing customers to grow revenue from them.
- Maturity -> During the maturity phase, the marketing team’s entire campaign and the program will shift towards the retention of the customer and Premiumization (which is selling higher-value products to customers. Upselling a better product than the customer was buying earlier. In this phase, the company understands that it’s time to find different avenues for growth due to market saturation or slow growth of the category, hence it starts to introduce different products or business lines. For eg: Lenovo is a world leader in providing smart devices like PCs, servers, tablets, smartphones & more. The company a few years ago pivoted itself & started building expertise & capabilities into creating a service-led technology solutions company much ahead of the maturity phase of PCs to enable different avenues of growth & also to become a brand of choice for all technology solutions to customers.
Now depending upon the product and the phase it is in the marketing objective changes.
Let me share some examples of a few products, their stage, and the marketing communications. Mutual funds as an investment instrument still have low penetration in India, hence, to drive growth, the job of the marketing function is to change the user behaviour towards equity investment and encourage people to save for the future. Likewise, if you see Cars, which is again a growth market in India, the marketers have the job of communicating its features, and benefits, evoking emotions – luxury feeling, ownership of having a call, the thrill of riding an SUV and so on. Only a few times, a product’s organic demand may be able to drive the business growth that too in the initial days, but as companies would look for more growth, the marketing function role becomes important in getting more customers to buy that product or service.
On the other hand, products like selling a mobile SIM Card or a DTH Satellite Cable connection, which is in its decline phase there the telecom companies start to pivot and start offering other product lines like the internet broadband connection, subscriptions for OTT apps and channels. Here the objective is to retain the existing customer by offering them add-on services or products rather than losing the customer.
How to effectively make use of marketing?
As a business owner, category or business manager, before you ask the marketing function to help you grow the business, it is important to lay down what objective you want to achieve. Whether you want to create brand awareness because your brand or product is new or want their help to generate demand because you want to grow the business, or if you are a leader or a strong player and you want to protect your market share. In each of these, the marketing activities would be different – it could be driving trials to create awareness, offering promotions to grow the business, or communicating the unique features and value proposition to protect switching customers to another brand.
Many times, category managers miss this important point and ask to do too many things which may not give the desired result. Hence having a clear objective is important.
Now when you have launched a product and are looking for customers to join, your marketing pitch can be based on discounts, coupons, or lower prices than others; but as you grow forward into the growth phase differentiating product features from the competition takes centre stage than discounts; communicating clearly what additional benefits is that feature bringing to user’s life becomes important. Beyond that what is the higher objective that the brand is trying to achieve is what convinces customers to stick with the brand in the maturity phase of the product and when the company launches any new product. Like Nike as a brand which stands for extreme athleticism, its mission is to bring inspiration and innovation to every athlete in the world and communicate their story through different products hence at each different stage of a product, the customer sees this common objective and gets convinced with what the brand is communicating and thus sticks with the brand.
Thoughts on Product Management 