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Virtually every organization engages in marketing. This is the functional area of a business that is responsible for understanding customer needs, creating awareness, and presenting products and services to the target audience.
The marketing team may look very different from one business to the next. In a small business, marketing may be handled by just a few people. Larger businesses often have large teams that may be divided into different subgroups such as public relations, social media, corporate communications, marketing analytics, etc.
Regardless of the size or structure of your marketing team, it is responsible for seven important functions. It’s important to understand each of these to connect the outputs of your marketing team with your organization.
Additionally, you need this baseline understanding to ensure that future changes to your organizational strategy are successful.
Interactive Functionly Organization Template: Functionly includes a function chart containing typical functions within a business which can be assigned to roles as well as customised to suit your business.
7 Functions of Marketing
The marketing department executes seven key functions. These are:
- Promotion
- Product and service management
- Pricing
- Distribution
- Sales
- Marketing data management
- Financing
Here’s a deeper dive into each of these seven functions:
1. Promotion
When the subject of marketing is brought up, promotion is generally what people think of, whether that’s social media marketing or something else. Promotion is what creates brand awareness, educates customers about your products, and strengthens your company’s reputation.
Your organization’s promotional strategies may combine different activities and business areas. For example, members of your advertising and PR team likely have responsibilities that relate to promoting your business. Activities including email marketing, influencer marketing, and content marketing are all used to promote your company.
When they are done correctly, promotional activities improve your inbound marketing efforts and allow you to generate better leads.
2. Product and Service Management
This is a function of marketing that may intersect with research and development or product design. Those are the teams that are responsible for creating the products and services that customers want. However, it’s the marketing team that determines who the customers are and does the research required to fully identify their needs.
There are several activities that the marketing team conducts to uncover these growth opportunities. These fall under the category of market research and include:
- Analyzing competitors
- Gathering data from prospective customers
- Mining customer support data for information to be used in marketing
All of this data can then be used to drive product development strategies.
3. Pricing
Your marketing team may also conduct research that helps to determine how you should price your products or services.
Pricing is a more complex task than many people realize. It’s important to find a balance between needing to be competitive, covering the costs related to creating and delivering the product, and giving customers the right perception of value.
Skilled marketing professionals have a keen understanding of brand perception. They know how that impacts your ability to price your products or services.
For example, consider a luxury hotel brand vs. one that is more budget-friendly. The luxury brand may charge more than $1,000 per night for a suite while the budget brand charges less than $300. That price discrepancy isn’t about associated costs — people are paying for the brand.
By conducting market research, your team understands exactly where your reputation lies and how your target audience sees you. This knowledge, along with industry research and competitive analysis, will help your pricing strategy.
4. Distribution
At first, it may be difficult to relate marketing with distribution. That seems like a logistics and supply chain issue, doesn’t it?
That’s true when it comes to the physical movement of products, but the marketing team is in the best position to identify the optimal places to sell your products. They also understand customer preferences for delivery methods.
The process of identifying the right distribution channels for your products is about understanding your audience and where they want to find your brand. All of this knowledge is going to be found within your marketing team.
A large distribution centre for a fashion retailer with a brick-and-mortar store distribution model.
How much does it matter? You won’t find Calvin Klein merchandise for sale at Walmart, right? That’s not the audience demographic for that product. It just doesn’t fit.
Once again, this is an area of intersection to consider when creating your organizational maps. Marketing and operations must work in cooperation when there is a new product or marketing campaign.
While marketing understands where products should go and why, the supply chain employees understand the logistics of making that happen. In many ways, marketing teams create the demand and distribution teams meet it.
If these two areas aren’t in alignment, things turn out badly.
Every year, there are one or two big-ticket toys or gadgets that kind of define the holiday season. Every child wants one. That demand means that a marketing team somewhere did its job. They created awareness using various digital channels and stirred up all sorts of excitement and anticipation.
Usually, that means a great profit for a couple of lucky companies.
At least it does if everything works out. Sometimes, that doesn’t happen. There are shortages and products don’t arrive. People wait in lines for items they never had a chance of receiving. Employees deal with angry customers. Instead of turning a profit, the manufacturer and retailer are both left with a PR crisis.
That scenario is exactly why marketing teams must communicate with supply chain management about their campaigns and the responses they receive. Otherwise, demand and excitement turn into frustration and disappointment.
5. Sales
Experienced marketers know that content that is pushy and uses hard-sell tactics isn’t very well received. Audiences know when they are being sold to under the guise of entertaining or informative content. When that happens, it becomes clear you are simply trying to sell something rather than providing help or building relationships.
With that being said, you wouldn’t engage in marketing at all if your ultimate goal wasn’t selling products. The key is using a bit of restraint. Think of it as a slow, purposeful walk toward your final objective, which is selling more products. This begins with creating awareness, earning leads, and taking prospects through the marketing funnel.
When this is done correctly, those leads are ready to go when you pass them along to your sales team. This process is done by shifting the talking points in your content as the customer journey evolves.
As the customer gets closer to the end of the funnel, marketers focus more on product-specific information, and content becomes more promotional.
6. Marketing Data Management
Modern marketing strategy uses data extensively. The more data you have, the more successful your campaigns will be. Marketing teams collect and store data on industry trends, competitors, and customers.
That’s a lot of valuable information. Unfortunately, information silos created in many organizations can mean that nobody else benefits from it. One of the most important functions of the marketing team is to analyze this data and extract insights and recommendations to share with other functional areas.
For example, the sales team can use data on customer preferences and concerns to create better pitches. Product development teams can use these insights to better understand the features customers care about.
7. Financing
Marketing teams need financing to create and run effective campaigns. In turn, their activities help generate revenue that the company can use to fund operations and growth. In that sense, it’s easy to see the connection between marketing and finance.
But that’s only part of the picture. Your organization’s marketing plan is extremely important to its ability to receive funding from investors, lenders, and other sources.
Anyone who has ever delivered a pitch to investors knows they had better include their plan for marketing their product if they want to receive funding. Even the standard business plan that you might submit to the SBA includes plenty of space to discuss your marketing strategy.
Other Functions of the Marketing Department
Marketing isn’t just a singular, functional area that pairs with sales. Instead, it’s responsible for a complex set of tasks and integrates with nearly every other functional team.
It’s important to understand exactly how marketing works within your organization to harness opportunities to improve strategies and get the most out of your company’s capabilities.
