In order to grow a business you need to market your product or services; but what does that actually mean? When thinking of the word marketing, most people might think of advertisements and social media campaigns, but marketing is much more than a catchy commercial.
Marketing is a large process that encompasses more than just selling a product; it includes the production, communication, and distribution of the product or service. It’s the process to get consumers excited and interested about your company’s products.
To fully explain all aspects of what marketing is, experts have narrowed down 7 important functions of marketing that act as the foundation to what professionals do. By understanding these 7 functions of marketing, you can develop strategies to help your business grow and succeed whether you have a small start-up or a multi-million dollar company.
What Are The 7 Functions of Marketing?
Each of the 7 functions of marketing highlights a step in the process of marketing a good or service. They are essential to understanding the processes, strategies, and tools that go into marketing and by knowing these functions, you can develop standardized plans for your business.
Promotion is what most people think of when they think of marketing – selling products to consumers. The act of promotion, though, is to make customers and potential customers aware of your product and/or services, as well as your company.
To promote products, companies can implement marketing strategies such as advertising, public relations, direct marketing, local online marketing, and content marketing.
Some examples of promotion include:
Email campaigns about new a new summer sale
Social media contests to win a free item by tagging others to expand knowledge of your company
Car commercial for the latest innovation
Before any promotion or campaign begins, marketers spend hours of research to determine the right strategy, target keywords, and demographics that will be most interested in the product. Promotional strategies should be flexible to hit the target audience and able to be re-evaluated with a marketing audit every few months. Otherwise investing in a bad campaign can lead to lost customers and revenue.
The second function of marketing is selling. Selling is delivering a product to your customer while building relationships and value. Communication is key when selling a product or service. Successful sales people are able to address consumers’ needs and wants while addressing concerns and questions.
Marketers and salespeople should work closely to establish successful strategies to sell products. No one wants to be told what to buy, so salespeople and marketers must be tactful when selling to a customer. Instead, marketers should focus on how the product or service will improve the end-user’s life rather than the product itself. Marketers will create the story behind the product, the why of it all, while the sales team can relay this story and promote the product.
Before you can begin to sell or promote a product or service, you need to have a product or service. Product (and service) management is the development, design, and improvement of said product and services.
The most important part of product management is making sure that the final product will meet the needs and wants of the consumer from the way it looks to the way it functions. Even if a product has already been created and has been on the market for some time, the best markers will reevaluate it as time passes and conduct market research to ensure that their product never stays in the past.
Product management is about looking for opportunities to improve on the product or service, as well as knowing when to pull back on any changes if the changes are not well-received. Adjusting and managing products is essential to making sure your company stays ahead of the curve and has the best products available so customers will continue to buy and support your business.
Pricing is one of the more difficult functions of marketing; it involves setting the price for the service or product. Setting the price of a product can be complicated as it must take into consideration factors such as the consumer’s perception of the value in mind, the production price, and competitor’s pricing, all while making a profit.
Pricing a product can also depend on your brand. If you have created a luxury brand, you are typically able to sell products at a premium compared to your competitors. For example, if you have a luxury handbag company, your purses are more than likely made from premium material with craftsmanship; not only will the materials make the price of the bag more expensive, but the craftsmanship will refer to quality which allows you to raise the price beyond just making a small profit.
This concept of brand names influencing pricing can be said of value brands as well. If you are a business that highlights lower prices and value, you must take this into consideration when figuring out the price of your product. Raising the price of a product, while it might seem as though you will make more money, might turn customers away who want to save money and in turn you will lose profit.
Market Information Management
Research is crucial for any function of marketing from pricing to promotion, and this is where market information management comes into play. Market information management is the process of gathering consumer and competitor data to improve the other marketing functions and help develop strategies for your business. Without marketing information management, the other 7 functions of marketing will not be useful.
In order to make the most successful product and campaign, you must learn what consumers are looking for not only in a product and company, but how they want to improve their lives. Products are much more than an item, but an experience.
Companies conduct market information management by gathering information about their consumers and their preferences through a variety of ways including surveys, customer feedback, and social media. Statistics and other data are taken from these to see the effectiveness of campaigns and promotions.
Research is also done about industry trends and competitors to help influence new strategies and make vital decisions such as pricing and product designs.
Financing may not be the most glamorous function of marketing, but it’s a crucial aspect.
The marketing function of financing means having the required financial means to run your business and how to spend it to get the most ROI, or return on investment.
When it comes to financing in marketing, budgeting is the top priority. Knowing how much you can spend on a campaign and where to spend it is important to avoid wasteful expenditures. For example, if you have a smaller budget, you might want to consider avenues such as social media for advertising while investing more money into market research on new products.
Marketers must make the decisions of where to spend money in order to maximize ROI and evaluate which markets could be expanded to create new revenue.
The first inclination when the word distribution comes to mind is logistics, which is getting a product to the consumer. While figuring out the logistics is up to supply chain management, the distribution of a product is decided by the marketing team.
Distribution is where and when the products will be made available to the consumer, which is dependent on several factors such as your target audience and brand. For small business owners, they may opt to open a brick and mortar store depending on the product and reach. Or, they may choose to disturb online through their own website or shopping platform.
Larger companies with more resources may look into where they will place their product; are they going to place it in a mall or a department store? If you have a luxury product, for instance, you typically wouldn’t sell at a large store like Wal-Mart, but rather a high-end boutique.
Distribution is the culmination of all the other functions of marketing from deciding what the product will look like, how it will be priced, and who it will be sold to. These factors will influence where the product will end up being sold.
How the 7 Functions of Marketing Can Help You
Whether you are a business just starting who has a one-person marketing department out or an established company with hundreds of employees, understanding the 7 functions of marketing is an important step in growing your company. Business owners can use them to formulate and implement well-thought out marketing strategies to improve ROIs and increase profits to expand their campaigns.
The 7 functions of marketing lay down a foundation to create the best products or services that your company can produce through careful research and strategy, while understanding how to engage your customers to create life-time consumers.
If you’re looking for help in your marketing process, whether that’s with the promotion, pricing, or marketing information management, Jack & Bean can help. Contact us to see how we can grow your business together.
Whether you know exactly which services your business needs, or you’re so frustrated with your marketing that you don’t know which way is up, make time to chat with us and learn how we can help you succeed.