Marketing: the unappreciated workhorse

Philip Kotler
Kellogg School of Management, Northwestern University

The venerable Peter Drucker was an early fan of the new field of marketing. He struggled to explain it as a customer-centred discipline involving value creation. He wanted so much to disengage it from its confusion with selling that he penned the challenging statement: 'The aim of marketing is to make selling unnecessary.'

Yet Peter Drucker's view of the role and importance of marketing still needs to penetrate the thinking of companies and the public at large. We need to seriously address the following questions:

How is marketing seen by various publics?
What is marketing's real role?
What can marketing do to gain a better public understanding, image and influence?

HOW IS MARKETING SEEN BY VARIOUS PUBLICS?

Every profession has its critics. Physicians and educators are not immune from criticism even though most people see them as strong contributors to others and to the public good. As for lawyers, their critics are too numerous to count. And sales and marketing people receive a continuous barrage of criticism.

Let's examine how marketing and marketers are typically viewed by the following five key parties:

• sales force
• chief financial officers (CFOs)
• chief manufacturing officers (CMOs)
• chief executive officers (CEOs)
• the public.
  

Sales Force View
It may seem odd to state that the sales force itself has major misgivings about marketing. We thought that marketing and the sales force work as allies to help garner as many orders as possible. But sales people are among the first to criticise marketers.

• Marketers spend too much money on advertising that we could use better to strengthen our sales force.
• Marketer's ads don't impress us, nor do many of their brochures and collateral material.
• Marketers set prices too high, making it harder for us to sell.
• Marketers don't understand customers like we do.
• Marketers don't add product features and services that will help us clinch orders.
  

Three of us took up the challenge and co-authored a Harvard Business Review article, 'Ending the war between sales and marketing'1, where we examined the causes and the cures of this problematic relationship.


Chief Financial Officer (CFO)
A company's chief financial officer typically views marketing budgets with scepticism. The CFO sees marketing as asking for a lot of money but rarely accounting for its ROI. The CFO expects ROI estimates from other departments such as when manufacturing wants to buy a new piece of capital equipment or when the purchasing department decides on new materials. But marketing acts as if it is exempt from this responsibility.
Yet marketing is not alone: R&D and human resource departments don't provide ROI estimates for their proposals. Why should marketing be singled out? But it is true that marketing needs to start doing a better job of estimating and documenting the financial impact of its campaigns.

Chief Manufacturing Officer (CMO)
The manufacturing group has a lot of complaints about marketing. Marketers want to put too many 'bells and whistles' on products that only add to manufacturing expense. Marketing runs frequent promotions that require adding another production shift to prepare a larger volume, only to be followed by a subsequent cut in production. Marketers push for special short production runs to customise some of their offerings. All this increases the costs of manufacture.

Chief Executive Officer (CEO)
Many CEOs see marketing as largely a cost instead of an investment and a profit contributor. They see marketing as spending a lot of money with little short-run return. They read research reports filled with words and numbers that convey little customer insight or original thinking. They approve large expenditures on advertising campaigns and yet their acquaintances don't remember seeing the ads or remembering the message. CEOs want harder marketing evidence that marketing has increased sales, and yet all they get are measures of increased consumer awareness and knowledge. No wonder companies often replace the chief marketing officer every two years or cut the marketing budget as soon as the economy shows signs of slowing down. Rarely are marketing vice presidents active participants in senior management strategy decisions.

The Public
The public has an uneasy feeling about marketing. People remember the Vance Packard diatribe against marketing in his The Hidden Persuaders. There is a widespread feeling that marketers manipulate us into buying products that we don't need or even initially want. Marketers are seen as planning product obsolescence so that we get dissatisfied with yesterday's computer or camera and have to buy a newer model. Marketers keep interrupting us with unwanted and irrelevant commercials everywhere we turn. Marketers don't care if the product is good or bad for us, only if it is sold. The society ends up with overconsumption, high credit debt, material waste and a deteriorating environment.

WHAT IS MARKETING'S REAL ROLE?
All these critics have a love/hate relationship with marketing. They have a vague understanding that marketing is somehow necessary, somehow inevitable, somehow bad and somehow good.
I will describe four positive roles that marketing plays in society.

First, marketing has helped give birth to and gain acceptance of new products, many of which have eased or enriched people's lives. The housewife no longer has to work for hours in the kitchen preparing food and afterwards washing dishes by hand. She has a modern refrigerator, stove, dishwasher, washing machine and dryer; few homemakers would accept being without them. These appliances have emancipated women. And today's students have a computer, printer, scanner, camera, iPod, a PDA and a cell phone, none of which they would give up. Some of these new products were resisted at first, but thanks to marketing and sales efforts, they soon gained broad acceptance and use by the public, without any regrets.
Second, marketing is a powerful force for improving existing products. Products draw competition. Marketers have to fight clones by differentiating and improving their offerings. A company's marketers constantly search for ways to make the company's offerings different and better so they will be preferred in the marketplace. The pressure to compete through differentiation leads to continuous improvements of product and service offerings.
Third, marketing helps create and sustain jobs. We are not talking about marketing jobs, although they are also created. We are talking about all jobs. Jobs exist to create goods and services. When the public doesn't buy these goods or services, these jobs vanish. When marketers successfully push the sale of products and services, they are sustaining employment. The intense marketing of credit and goods and services plays a key role in creating a dynamic and growing economy.
Fourth, marketing, or effective marketing, improves the bottom line for most companies. In spite of the difficulty of measuring many types of marketing investments, we have to assume that most CEOs acknowledge that marketing contributes to their profits. If they felt otherwise, they would reduce or eliminate the marketing department and budget. There is no reason to sustain marketing in so many companies if it doesn't contribute to the top line and the bottom line.

CHANGING THE UNFLATTERING PERCEPTION OF MARKETING
Marketing can improve its image in different groups by taking four steps.
First, marketers need to improve their metrics and measurement of the financial impact of their marketing activities and campaigns. Senior management is losing patience with marketing over the lack of marketing results measurement.
The good news is that several people in academia and business are working on this problem and proposing new tools and solutions.
Second, marketing may need to prepare an educational campaign to inform the public about what marketing is, why it does what it does, and how this contributes to the lives of individuals and to the body politic. Too many people see only the tip of the marketing iceberg, namely TV and other ads, and wrongly identify it with the whole of marketing. They don't know anything about the research, product development, distribution planning, and other marketing activities that go into creating, communicating and distributing attractive products and services. I can imagine one page ads carrying the headline 'What is Marketing? Does it Contribute?' with text answering a set of brief questions about marketing. Beyond this, I would like to see a course in marketing or market economics introduced in high schools. This has already been proposed in Holland.
Third, marketers must build better working relations with their colleagues in the other departments of the company. Marketers must explain their role and how their actions support the other departments and the company's overall performance.
Fourth, marketers must publicize their work in social marketing and place marketing. Persons should become aware that many highly regarded social causes (anti-smoking, say no to drugs, exercise regularly, eat healthier foods) are helped considerably by social marketing research and messages. And many places that lack enough tourists and businesses are helped by place marketing campaigns using the latest marketing thinking and practice.

Clearly these are only first steps in a sustained campaign to bring members of the public and businesses to understand and recognize the contributions that marketing makes to individuals, communities, and the economy as a whole.

REFERENCES
1. Kotler, P., Rackham, N. and Krishnaswami, S. (2006) 'Ending the war between sales and marketing', Harvard Business Review, July.