By M. Isi Eromosele

Marketing’s role has been marginalized in many companies. Instead of performing its role as the architect and driver of business strategy, marketing is at the mercy of an unwieldy mix of marketers, operations people and financial types.  

The result is a huge number of companies whose profits consistently fall below expectations. Too many are committing some common marketing mistakes, which in the end keeps them from succeeding.

Finding New Opportunities

An effective way to find new promising opportunities is to set up a system for stimulating the flow of new ideas from employees and marketing’s partners throughout the firm.  Employees, vendors and partners with new ideas would submit them to an Idea Committee.    

Companies need to make use of the alternative idea-generating process known as lateral marketing, relational thinking of a product vis-à-vis another product or service.  The lateral marketing concept has great potential to create new product categories and new markets.     

Deficient Marketing Planning Process

Three major signs indicate that your company’s marketing planning process is deficient.

First, your marketing plan format doesn’t carry the right components or logic. Namely, your marketing plan is missing clear and compelling statements of objectives, strategy and tactics.

Second, your marketing plan lack a strategy for simulating the financial implications of alternative strategies. An effective marketing plan needs to incorporate sales-response functions and cost functions that estimate the likely results of any combination of changes in product features, price, advertising, sales promotion and sales force size.

And finally, your plan lack contingency planning. Many companies do not plan for some major contingencies.  For example, if the economy suddenly dips into a recession, how would the company adapt?

Product and Service Policies Need Tightening

Large companies are recognizing that a small percentage of products usually account

for a large amount of their sales and profits. Companies continue to add products more

readily than they remove them, and then in an effort to rectify the situation, wipe out a

whole swath of products to thin their product line and increase profitability.  This usually takes plan arbitrarily.  

Additionally, too many services are given away free, when they could have produced revenue. There is also too little cross-selling since companies that sell a range of products and services tend to do a poor job of selling other items in their portfolio beyond what’s specifically requested by the customer. 

Solutions

The first solution is to establish a product tracking and evaluation system. Such a system will allow companies to see which products are making the most money. Most companies have a group of products that is called core or power brands, which hold the key to their market success. These products have great growth potential if they are marketed appropriately. 

The second solution is the establishment of a pricing structure. Companies want to avoid giving away products and services that customers are willing to pay for. They should also avoid giving away free items that customers don’t use or value. 

Both situations are a waste of money and resources. Instead, different customer segments should be identified to determine who have to pay for services and at what price level.

Third, sales processes should be improved to accommodate cross-selling. This can be achieved by segmenting the company’s products and services so the salespeople know how they inter-relate and complement each other. 

Resolving not to commit these and other marketing mistakes will help your company’s marketing department develop and implement plans that would succeed in the marketplace.

 

Marketing’s true role is that of driving business strategy, but that can’t be fully realized if your company can’t find new opportunities, your company’s marketing plan and planning process are not integrated and if the company’s product and service policies need tighter discipline.