Marketing is increasingly strategic

In the twentieth Century, marketing was generally regarded as a strategic investment. As it is very important for companies to succeed, it is not meaningful to measure it. It is difficult to measure the effects of marketing, except direct marketing (with catalogues and letters). Now, companies are collecting more data than ever before, and they can measure everything more accurately. Only a few marketing activities cannot be separately measured to see if they really make money. This does not necessarily mean companies need no marketing strategies! Although activities can be measured under the guidance of the marketing policy, they have to be more strategic than they were if the marketing team desires to improve the performance indicators. It is rare to hear "advertising must be worked, because our revenues have risen" now. More likely, we would hear something like "27% sales leads at our website have been turned into paying customers".

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Commercialization promotes investment in marketing

People are increasingly aware of the four stages undergone by product categories, and each stage requires different levels of investment in marketing:

1. Entry: Sales representatives play an important role in this stage by explaining the concept to buyers, making them feel excited, follow and gaining customers. In contrast, marketing plays a supporting role.

2. Consultation: Once a product category is established, sales representatives keep developing new customers, while marketing personnel help sales representatives identify new sales leads. Marketing team supports the sales team, which takes the lead in the stage.

3. Service: When several providers offer basically the same products, customers decide which provider they buy the products based on their specific needs, delivery requirements, convenience in payment, etc. At this stage, marketing and sale are equally important.

4. Commercialization: Once a product becomes a commodity, sales goes to the background (or disappear), and marketing comes to the front, identifies potential customers and builds up an execution channel without a sales team’s daily expenses.

Along with enterprises attain better understanding of this inevitable process of commercialization, they can allocate marketing budgets by stage for product categories, rather than predefining appropriate investment. Instead of saying “Let’s invest more in the product marketing budget, because this product is our future”, we are more likely to hear “it is time to shift the responsibility for the product from the sales department to the marketing department”.

The ales team and marketing team stop arguing with each other

This trend is reflected in two points, but you need to have some background knowledge if you want to truly understand the trend. Historically, the sales team and marketing team are often shirking responsibilities rather than working together. Their disagreements were like the following:

Sales team: “the marketing team gave us bad sales leads, so we did not achieve the goal because of their fault”.

Marketing team: “the sales team failed to track the sales leads we gave them, so we did not achieve the goal because of their fault”.

or:

Sales team: “we need better sales materials and sales tools”.

Marketing team: “last year we spent a lot of money in these areas, but you don't have their best use”.

Better measurement of marketing and better understanding of product category stage help reduce the possibilities of such differences. Better measurement helps the sales team and marketing team determine what effective sales leads should include, and require the sales team and marketing team to reach agreement on the prospects. Tracking how many prospects would be converted to paying users, reducing differences, and better understand of product categories facilitate the shift of responsibility for products from the sales team (entry) to marketing (commercialization).

Marketing is increasingly passive rather than being active

Due to increasingly commercialized marketing and sale, the three trends mentioned above have become gradually conspicuous in the past 20 years. The fourth trend is relatively new and emerged about ten years ago. Traditionally, marketing is regarded as “active” activities, which are intended to “create” brands and demand. Now the situation begins to be completely reversed, as people feel that the customers play a more significant role in branding. For example, a website on which buyers release reviews now is more powerful than any other single market activity in definition of brand images. With social media, a company can obtain assistance from customers and prospects in all activities from definition of product requirements to design of advertising programs.

While Mad Men and a large number of advertisements are regarded models of old-fashioned marketing, brand promotion is considered to require marketing talent. Today, effective marketing is more likely to be generated when people read the posts on Weibo.

This is a profound change, which becomes more conspicuous when companies and their executives are deciding where and when to make investment.