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Marketing Management
Marketing management is a business function concerned mostly with acquiring customers at scale. Marketing managers grow the profits of a firm primarily by increasing the quantity of products sold, but also by adjusting the price at which those products are sold:
Profit = (Price-Cost)*Quantity
In theory, marketing managers could grow profits by getting existing customers to buy more. Research, however, has shown that loyalty programs are not generally as feasible or as profitable as acquiring new customers. This goes against the conventional wisdom that it is cheaper to keep a customer than to acquire a new one.
Why is it called management?
- The "management" in "marketing management" does not necessarily refer to managing employees. Management is a broad term referring to the organization of people, money, time, and resources in general. Someone can hold the title "Marketing Manager" without managing anyone directly.
Key aspects of marketing management
- Brand management
- Product marketing
- Marketing research
- Marketing strategy
- Partnership marketing
- Marketing communications (advertising, content marketing, copywriting, direct mail, email marketing, digital marketing, etc.)
Marketing strategy
Marketing strategy is determining how value gets created in target markets. It has two key components:
- Target market which includes customers, competitors, collaborators or partners, your company, and the environmental context. Note that the target market is much broader than the conventional view that it refers just to customers. Focusing too narrowly on customers often distracts marketing managers from larger opportunities with partners (such as retailers) and environmental trends that could elevate a brand from obscurity.
- Value propositions which include customer value proposition, collaborator or partner value proposition, and company value proposition (how you create value for your company).
Marketing tactics
Traditionally, marketing tactics were summarized by the "4Ps" of product, price, promotion, and place. This model, however, is limited in many ways. It does not, for example, distinguish between a product and a brand. Moreover, the 4Ps were just an oversimplified version of an older "marketing mix" model that consisted of many more elements.
A more useful marketing management framework is the seven tactics (reference: Dr. Chernev):
- Communication
- Product
- Service
- Brand
- Incentives
- Price
- Distribution
Marketing budgets
A marketing manager's critical budgeting decision is how much to allocate to short-term vs long-term marketing.
- Short-term marketing: This type of marketing focuses on current shoppers ("in-market" buyers). Examples include running ads on Amazon, cardboard displays in grocery stores, and Google pay-per-click ads for keywords that suggest purchase intent.
- Long-term marketing: The effect of many marketing activities aren't realized until years in the future when audiences enter a buying situation. Examples include a lot of brand-building activities such as creative video advertising and publicity that build memory for a brand that may not needed until far in the future.
Small companies often focus primarily on short-term marketing as they must generate cash to pay bills and cannot always afford to invest in the future.
A more elaborate budget could allocate budget to the six audience groups, defined by their level of awareness/persuasion:
- Brand Unaware
- Problem Unaware
- Product Category Unaware
- Product Unaware
- Free Offer Unaware
- Paid Offer Unaware
How marketing management differs from sales and business development
Sales and marketing departments focus primarily on the "demand chain" by acquiring customers and growing revenue. Marketing management differs in being more macroscopic, focusing less on individual customers and more on the broader and long-term acquisition of customers. Building a brand, for example, is not something a sales person prioritizes even though it makes customer acquisition a lot easier long-term.
Business and corporate development help companies grow through strategic relationships. Marketing management differs in that it's more concerned with the large group of target customers than with a select few business relationships.
How marketing management differs from agency marketing
Marketing jobs are generally split into two categories:
- Agency-side (providing marketing services to 0ther businesses)
- Client-side (doing marketing for the company that hired you)
Marketing management generally refers to "client-side" marketing.
Marketing management is generally broader and higher-level than marketing at agencies. Agencies may be hired for specific tasks--most often advertising or other forms of marketing communication such as social media marketing. Due to their deep specialization, agency marketers typically have deeper knowledge of specific tactics such as programmatic or pay-per-click advertising. Marketing managers usually have a broader perspective on how well a product or brand is performing in the market. They are more concerned with strategic considerations such as positioning in product marketing management or figuring out how to appeal to younger target customers through rebranding.
Marketing managers generally have access to more sensitive information, such as details in a CRM (customer relationship management) system and access to the confidential financials of the company.
Dekker Fraser
Dekker Fraser has an MBA in Marketing from Philip Kotler's Kellogg School of Management at Northwestern University. He taught college level marketing and has about one million enrollments in his online marketing courses on Udemy. Dekker was a Global Brand Manager for Sony PlayStation and a Vice President of Marketing for a Google accelerator startup.