MARKETING MATTERSCEO JOURNAL
of the term “marketing” so irks me. She recently introduced a colleague as the person “in charge of market- ing” at her company when, in fact, this person is in charge of promoting the business at trade shows, in social media and elsewhere. Promotion is different from marketing. I’m also a stickler for honesty, and
I burn every time ad agencies and website developers similarly misuse the term “marketing.” Teir mislead- ing word choice obscures that they’re trying to sell us something we really don’t need. But advertis- ing, like other forms of promo- tion, differs from marketing in important ways. I’m also a stickler for effec-
tiveness, and every day I teach metalcasters about how, when deployed effectively, marketing can be a powerful catalyst for profit improvement. And that’s a key distinction here—market- ing is a broad concept aimed directly at profit improvement, while advertising and other forms of promotion are narrowly designed to generate sales leads. Tis represents a huge and hugely impor- tant difference which, for many met- alcasters, identifies them as so busy selling castings they have overlooked profit and the unique importance of effective marketing. For the sake of clarity, I offer here the same mnemonic device used in the marketing textbooks as a starting point for correctly defining the term, the “Four Ps”: Product, Price, Place and Promotion. For metalcasters, Place (meaning distribution) is not especially relevant. Of the remaining three Ps, Product is by far the most important for us, Price is a close sec- ond, and Promotion is an immeasur- ably distant third. The truth is, the marketing
staff ’s most important job is to cre- ate a compatible part population;
The True Meaning of Marketing I
DAN MARCUS, TDC CONSULTING INC., AMHERST, WISCONSIN
’m a stickler for clarity and the proper use of words, which is one reason my daughter’s misuse
this is the essential meaning of the first and most important P: Prod- uct. Creating a compatible part population first means eliminat- ing excessively high scrap “loser” jobs; those jobs operations simply cannot get right, which are sucking the life (and the profits) out of the business. I am obliged to prove this point over and over again to skeptical clients, but the truth re- mains that metalcasters universally find themselves better off without these loser jobs. It turns out there isn’t enough price—or enough cost absorption—in the world to make
Te marketing staff ’s most important job is to create a compatible part population.
an excessively high scrap, loser job worth keeping. Creating a compatible part popu-
lation also means only quoting and selling castings that fit and flow well within the operations and, moreover, make use of all of the available pro- ductive assets. For example, if your company produces castings and op- erates a machine shop, too, compat- ible castings will be machined parts as opposed to cast only or machine only work. Creating a compatible part population finally means only quoting and selling to compatible accounts, those customers who want to buy precisely what your business has to sell and are willing to pay a fair price for it. Targeting these compatible accounts is, over the long term, the most important marketing job of all. I have written endlessly about
the second P, Price, in this column and elsewhere over many years. Suffice it to repeat here that profit oriented market pricing should occupy the lion’s share of the chief marketing officer’s time and, if done properly and in concert with shrinking cost structures and im- proving operational performance (both of which will occur in dra- matic fashion as the loser jobs are removed), will have a profoundly positive bottom line impact. Promotion, as one of the Four
Ps, encompasses personal selling and sales promotion via websites, print advertising, trade shows, direct mail pieces, etc. De- spite longstanding tradition and fervent ad agency sales pitches, the truth is, if your company does a good job at Product and Price, it will not need to do much, if any, Pro- motion. To be clear, effective marketing means that neither personal selling nor any other form of Promotion is nec- essary in the context of an increasingly compatible part population, targeted develop-
ment of compatible accounts, and profit-oriented market pricing. Given these conditions, which any metalcaster with savvy and courage can create, the right new business will actually come to you. I had an “Aha!” moment at a
recent conference I attended, when a speaker charged with revving up the audience with creative promo- tions and ways to boost sales found himself floundering in a sea of met- alcasters who were not understand- ing what he was talking about. Good for us, I thought, because effective marketing is not about creativity and little about promotion, but mainly about a CEO’s abiding attention to the rather mundane matters of Product and Price.
Keep the conversation going. Reach the author at
tdcmetal@wi-net.com to comment on this or any CEO Journal column or to suggest future topics.
August 2013 MODERN CASTING | 47
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