Five Reasons Why All Businesses Need Marketing
So, you’re not entirely convinced of the value of marketing, eh? Maybe you’ve tried running a few ads here and there before concluding that “marketing” just wasn’t a good fit. Or perhaps, you’ve taken a look at your business and decided that it just wasn’t necessary.
In any case, there’s a good chance that it’s all just the result of not having the right mindset toward what marketing actually is and why it’s so important. It’s like any tool out there. If you don’t understand what it’s for and how to use it, it becomes easy to dismiss it as something you don’t need or doesn’t work.
But there’s a reason why the biggest brands in the world funnel so much money into marketing. From Amazon’s jaw-dropping $32.6 billion global marketing spend in 2021 to Nike’s “more modest” spend of $3.11 billion in 2022, there’s a mind-boggling amount of capital being invested into marketing every year.
The most successful companies out there understand that there’s so much more to marketing than slapping a few ads on TV or making TikToks every week. They see it as a complex yet worthwhile investment that’s necessary to take their company from 0 to 100.
Sure, some industries spend more than others — CPG brands devote nearly a quarter (24.4%) of their annual budgets to marketing while financial service brands dedicate a little over 11% — but the fact remains that some level of marketing is always needed.
A good rule of thumb is to invest around 10% of your annual revenue into marketing each year. Any less and you risk stagnating and falling behind the competition. Reach or exceed that amount and you’re on the path to growing your business. And well, isn’t that every brand’s goal?
Whether you think you’re too small, too big, or too something to invest in marketing, here are five reasons why marketing is important for any and every business.
1) Marketing Goes Beyond Just Advertising
Probably the biggest misconception that people have about marketing is that it’s synonymous with advertising. If someone’s understanding of marketing is confined to some limited idea of advertising like TV commercials or emails, it’s not hard to brush it off as an optional or even unessential part of business.
The truth is that advertising is only one piece of the puzzle. The fundamentals of marketing, or the marketing mix, cover what we call the 4Ps: Product, Price, Place, and Promotion. It’s a holistic way of thinking about what you’re selling, how much you’re selling it for, where it’s made available to customers, as well as how you communicate its value to your target market.
Recent additions to the 4Ps include People (the personalities that represent your brand), Process (how your product is made and delivered to your customers), and Physical Evidence (proof of your brand’s existence and reputation). This brings the marketing mix to a total of seven “Ps” or elements that one’s marketing department should have a hand in.
As you can guess, most people only associate one “P” — Promotion — with marketing. They see it as ad-centric efforts to communicate with customers and boost sales. Unfortunately, this kind of tunnel vision can cause promotions to fall flat, leading to the common abandonment of marketing as something that doesn’t work or is unneeded.
In reality, marketing is all about learning about the market and making knowledge-backed decisions regarding those 7Ps. Its importance lies in its role of ensuring that the different parts of the marketing mix work harmoniously together.
If we take it back to that puzzle analogy, marketing is the brain behind each piece fitting perfectly together. While it may not be responsible for the creation of every piece, marketing’s understanding of the bigger picture allows it to make sure that each puzzle piece connects well and contributes to the company’s ultimate goal.
Having all elements of the marketing mix backed by a strong understanding of the market allows for greater synergy and amplifies the desired effects of your efforts. A brand’s ability to develop that understanding, as well as effectively communicate its learnings, can make or break its success. In other words, marketing, or lack of it, can make or break your business.
Let’s dive deeper into how.
2) Effective Marketing Means Superior Products, Better Service, and Happier Customers
Having a deeper understanding of your customers, competition, and so on puts you in a better position to make decisions about the marketing mix. It informs your overall strategy, from product development to product promotion.
Understanding the market means knowing:
- Your customers. Who are they? What do they want? How much are they willing to pay? What influences their decisions? What are the best channels to reach them? What kind of service do they expect? What do they need as proof?
- Your competition. Who are they? What are their strengths & weaknesses? What makes you different? What can you offer that’ll make you stand out?
- The inner workings of your industry. How is business conducted? What distribution channels are available? What promotional channels can you leverage?
- The external factors that affect your business. What are the social, technological, economic, cultural, political, etc. changes that can impact your brand?
And these questions only scratch the surface of what you can learn about the market!
Ultimately, marketing ensures that the foundation of your business is solid — that what you’re offering is of value and aligns with what your customers want. That market expertise then allows you to build superior products, deliver service that makes a difference, and satisfy customers who see you as a cut above the competition.
So, how do you gain these all-important insights? Through essential marketing functions like market research (including interviews, focus groups, observational research, etc.), competitive analysis, testing, internal brand audits, and more.
To be fair, it’s not always easy to turn heaps of data into a top-notch marketing strategy. If you need some help making sense of the market, PH3 can help you turn overwhelming information into actionable insights for your brand.
3) Marketing Helps You Identify and Navigate Market Opportunities and Threats
Now, let’s say you did put in the work to establish an understanding of the market. Everything goes great, so you decide to scale back your marketing investments. Business is booming so there’s no need to spend on market research or promotional campaigns, right?
Wrong. Next thing you know, you’re blindsided by a new competitor that’s stealing your customers away. The market is different, your strategy needs to change, and you realize that marketing is needed again. By this point, though, it may be too late.
On the other hand, consistent marketing efforts could’ve helped you stay ahead of the threat. A dedicated team of marketers would’ve boosted your ability to identify the new development and craft an updated marketing strategy. Any of the 7Ps could have been transformed to strengthen your position against the new competitor.
A similar process can occur for new market opportunities. Maybe the creation of a new social platform or the rise of a market demographic in your area provides a chance for you to grow your business even more. Marketing helps you seize that opportunity!
By investing in your brand’s marketing, you open the doors for creative solutions and strategic pivots that keep your brand relevant and thriving.
4) Marketing is the Action Plan Behind Business Growth
Consider viewing your marketing strategy as the plan of action behind growing your business and reaching its goals. In that sense, it’s a non-negotiable for any brand looking to maintain or boost its performance.
True marketing uplifts the company as a whole because it works interconnectedly with other business roles.
Marketing collaborates with the development team to ensure the product addresses the target consumers’ needs, works with finance to figure out a price that’s both profitable and attractive, and so forth. It leverages the synergy between product, price, people, place, etc. to execute campaigns that reach customers with a message that’s consistent throughout the entire brand.
In other words, marketing isn’t isolated to one step in the action plan. It’s not just posting on social media, establishing a website, or managing online ads. It’s about how all of those work together in a structured way. That is, a marketing strategy is the action plan. It’s a lot, yes, but it’s worth it. And if you need a little extra help along the way, you can always work with us.
5) Its Overarching Purpose is to Drive Profits
The final reason that marketing is so important is that it's one of the few — if not the only — business roles whose sole purpose is to boost profits.
Despite misled claims that its ROI is hard to calculate, marketing literally exists to improve a business’s return on investment. While most other business expenses — staffing, materials, overhead, etc. — may be necessary for a company to exist, marketing is what allows it to go from barely surviving to thriving.
Ironically, this may be why it’s so tempting to cut marketing out. Doing so doesn’t seem to have the same kind of in-your-face significance as not having employees or losing access to your materials. Thus, marketing gets left on the back burner in favor of “more pressing matters.”
But now you know. Marketing isn’t just some nice to have. When you see it as more than advertising and understand it as the crafting and implementation of an action plan backed by market expertise, you understand that it’s an irreplaceable force behind business growth.
Invest in marketing and you invest in the future of your company.
An Agency That Gets It
The message here is clear: any business, no matter what stage it's in, can benefit from marketing. However, there are no shortcuts or one-size-fits-all formulas to getting it right. That’s why having a partner that understands the role that marketing plays and can apply that foundational knowledge to each unique business is so important.
With years of experience in various industries, the PH3 team understands what it takes to succeed. Custom-tailoring our efforts to each individual brand, we look at the big picture to bolster business growth on a holistic level while securing small wins that snowball together to reach your larger goals.
Ready to work with a team that gets it? Contact us today and learn more about how we can help your brand leave a lasting impression.