Traditionally, marketing policy was to raise and cultivate a brand image to make it recognizable to customers. However, a modern and streamlined business environment calls for marketing to be more– to exceed its traditional boundaries. Pressure is now being put upon marketing to show how it can expand the ‘pipeline’ of profit and revenue within a business. How can simple marketing, thought of as purely creative, have anything to do with revenue expansion? Upon research, it can be shown that the answer to this is a, surprisingly, a lot. It can be shown that revenue enhancement is inherent in historic marketing, but research into the role is now at a peak. Marketing influences both sides of the balance sheet, as shall be discussed in the next 2 blog posts, with costs being lowered by creating production efficiencies and sales income being transformed by successful brand management– which shall be discussed first.
Marketing to Enhance Sales
Marketing has traditionally carved out a role for itself by using branding to promote a product and accumulate sales– leading to enhanced revenue. Indeed, this traditional role continues in the modern environment but is now bound up as part of a far more complex system. With multi channel access points, the creation of a brand image and the process of selling it to the public can prove just one of the crucial roles marketing has. Not only does the creation of a brand help to generate interest from new customers, but it also works to reaffirm a customer base who assimilate with the brand values. In our modern image-conscious world, the creation of a way of life that a customer can ‘buy into’ through purchasing a product is a greatly important form of sales. Therefore, by successfully managing a brand in a way that espouses a way of life– selling more than the mere product– marketing can show its true colours for revenue creation.
One of the most successful examples of such a form of brand management would be the renowned technology firm, Apple. As one of the largest companies (and most successful brands) in the world, Apple’s success is fit for scrutiny. How has Apple become so successful? Marketing is one of the key areas that it uses to increase profit levels. Essentially, Apple is merely selling (rather expensive) computers, telephones and MP3 players. However, reading that sentence, you most probably expected the list to read: ‘Macs, iPhones and iPods’. This is because almost all consumers hugely assimilate the Apple brand with the product. With this assimilation comes a huge following of people who espouse the lifestyle of Apple. This lifestyle has been cleverly marketed to aspire to a collection mentality. Owning the whole set of Apple products is key– having an iPhone is great, but if you had a Mac as well then they would share content effortlessly, which would be so much better, right? How does Apple achieve this? It is almost unique in its following (you never get overnight queues to buy the brand new Toshiba laptop!) but is far from unique in what it is selling. However, by using language that the general customer understands and through cleverly marketing an idyllic lifestyle related to the product, customers understand what they are buying into. Apple has used brand management to create a high-end product which can be positioned in the computing market with a price tag to suit, thus increasing profit levels. This is quantified by the fact that in 2007, Apple had only a third of the revenue of Dell, but was able to achieve half of the profits. Thus showing that profit margins were higher, directly enhanced by the trailblazing marketing of the Apple brand.
As the central role for a company is profit expansion, exploring the boundaries of markets becomes crucial. In the past, the consumer market which a product could be sold in was restrained by borders and the expense of travel across oceans. However, with modern technology, cheap shipping costs and a basic handle on Google Translate, theoretically, the boundaries pale into insignificance. This means that a company should be able to sell its product to anyone, anywhere. However, in the real world, things are more complex. If a company was to simply start exporting its product to a different country, it would undoubtedly encounter real problems. This is because it would be ignoring the differences in people and culture across the globe. The role of marketing, at an international scale, is to tailor the process of sales towards the market that is being infiltrated. Therefore, without the skill of tailored marketing, the potential of brand power would be unfulfilled.
A prime example of using marketing knowledge to unlock the international market would be the success of Red Bull. In the US and similarly-cultured markets, the brand colouring is generally a mix of blue, silver and red. These colours signal activity and sell the brightly coloured, sugar-induced performance of an energy drink. However, when marketed for the Chinese audience, the can is almost exclusively gold, with a red logo. The reason for this is that these colours are auspicious in Chinese culture, espousing both wealth and good luck, leading to far higher demand. This, again, reaffirms the role of marketing in the creation of a new source of demand and international success.