The fundamental role of marketing in business
Real Estate

The fundamental role of marketing in business

One of the things that I think most people in the marketing world take for granted is that everyone understands the critical role of marketing in business. However, through my daily interactions with other business owners over the past few years, I have been struck by the relative lack of understanding about the importance of marketing. Most of the time, marketing is a backseat tertiary thought that comes after your product/service and day-to-day operations, if it is such a high priority.

One of the phrases that my business partner, James Orr, has coined in real estate investing is that “it all starts with motivated sellers.” Without motivated sellers, there are no properties to buy, rents to put up tenants, uppers to fix, or wholesale deals. This is such an important aspect of real estate investing that it’s almost a mantra for the way James and many other successful real estate investors run their businesses. The key to contacting motivated sellers is marketing.

I guess a good place to start this discussion is to define what marketing is. Google defines tells us that marketing is “the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to satisfy customers”. There really is more to marketing than most people think it does. Marketing is more than just the activities that drive sales. Rather, marketing encompasses all activities that seek to identify what consumers want and how to promote and deliver those goods and services.

Before an individual or business makes a decision to produce a particular product or service, they must first spend time determining if there is a market for that offering. If there is a demand, they must figure out how to get that offer to consumers who want it, how to tell consumers that it is available, and how to price it so that there is money left over for a profit. This is all part of the marketing process, and really should happen before the product itself is produced.

In the most common usage of the term, “marketing” is often thought of only as the promotional aspect of a product or service that is already available. This part of marketing consists of making the consumer aware of what you are offering and convincing them to buy it. There is a tendency in corporate environments to separate marketing and sales functions into disparate departments, which is often a mistake. The purpose of the promotional element of marketing is to drive sales and therefore the two functions are intimately connected. A good example of the disconnect between these two departments is when companies that sell capital goods have many more people in their marketing departments than they do in their field sales force. Another example is when marketing and product development people ignore input from field sales people. This input often stems from actual customer contact, which most employees in large organizations do not experience.

The main goal of one of my blogs is to test marketing promotions using a wide range of messages, mediums, and markets, which are often referred to as the three M’s of marketing. Before running a test, we first do some background research to determine if there is a market for what we are considering selling, and look at whether we can at least break even in the marketing test using some realistic assumptions about sales. proportions. The pricing strategy is also something we discuss a lot before launching a new test. The actual development of sales copy, writing and placing ads, setting up measurement systems, etc. comes later in the process. The next thing is to do sales and tracking metrics, and then adjust marketing.

Unfortunately, many business owners do not understand the importance of marketing. Because of this, they fail to plan for difficult times in the business cycle, such as slow seasons, economic downturns, and other events. As the cliché goes, “failing to plan is planning to fail.” Every business should have a marketing plan of some sort, and it should be in writing. Businesses that don’t “do” marketing will invariably fail.

In short, without marketing there are no sales. And without sales, there is no income. And without income, any business will quickly succumb to statistics showing that almost 2/3 of all businesses fail within the first 4 years.

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