Monday, July 21, 2008

Is there a differnce between Marketing & Sales?

There were a few requests during my previous post to explain the differences between Marketing & Sales.
To understand the difference between marketing & sales, one has to first understand what is marketing & what is Sales, which I am afraid, is not something that can be talked about in such a limited space and time. Therefore, I am trying to give below an outline of what constitutes marketing – its old and new concepts, and what constitutes sales.

According to Prof. Philip Kotler (the unquestionable Guru of Marketing until recently when he was dethroned by new age experts like CK Prahalad, Jagadish Seth, Nirmalya Kumar, W. Chan Kim, Jerry Wind and likes), Sales is something you do to push whatever you have produced to the customers; while marketing is a pull strategy where you attract customers to come and buy from you by creating a product which actually satisfy their needs (understanding the customer need and creating a product to meet that need). Marketing is, therefore, a Pull Strategy while sales is always a Push Strategy.

According to traditional concept of Marketing as propagated by Kotler, it consists of 4Ps:
1. Product – the actual offering
2. Price – at what price it is offered
3. Place – where it will be available and how (distribution, etc)
4. Promotion – advertisement, PR, etc
Though this 4P concept has formed the beginning of marketing as an art and science in modern world, the new breed of marketing gurus and expert has, quite rightly, asked a few difficult questions about this definition. Of these, the most important ones are;
1. Where is the “customer” in the definition?
2. How can one talk about price without understanding cost?
3. Is not competition important for all marketing decisions?
4. What about competencies that one has picked up over the period of time?

Faced by such challenges, Kotler created a new framework - holistic marketing – focusing on “whole consumption chain, the life-space of the customer and the surrounding competitive environment.” He, therefore, converted his 4Ps into 4Cs:
1. Customer Value
2. Customer Costs
3. Customer Convenience
4. Customer communication

If you notice carefully, in all these definitions of marketing, the emphasis is always on “Product” and not on “Services”. In fact, Services Marketing was considered a completely new discipline until CK Prahalad along with Venkat Ramaswamy, proved in their classic “The Future of Competition” that the product and service definitions are a passé. They said that Marketing lies in competitive advantage through meaningful customer experience. That means companies should innovate a process that enables every customer to create the product or service experience she wants (customer co-creation). Think of I-Pod.

Prof. Jadish Seth has a completely different view on what marketing should be in the present day’s context. He advises the marketing departments to do away with their old wisdom, and instead expand its role. So far companies’ marketing departments have focused on only one stakeholder – the customer; but now they should focus on 6 more. Here are the 7 new stakeholders of marketing as per Prof. Seth
1. Customers
2. Employees
3. Investors
4. The community within which the company exists
5. The suppliers
6. The media
7. The government

The ultimate result that a marketer looks for at the end of her marketing exercise is how excited she could make her customers about her offerings (product and/or services) and how she could convert that excitement to actual money terms. The moment a customer has taken her wallet out and handed over her cash or credit card, the sales take place.

If you keenly notice this whole cycle you will understand that marketing and sales should be discussed together and not as silos, though one concept of marketing is that it should make sales redundant.

2 comments:

rameshmenon said...

Hi,

Reasonably well articluated thoughts.

Regards,
Ramesh Menon

Atrijit Dasgupta said...

Imagine - apart from everything else, now with the impending launch of your site you would probably be expected to contribute more regularly to this blog as well.