Business Explained by Stever

 

 What is the Difference Between Marketing and Sales? [6:30m]: Play Now | Play in Popup | Download

Q: I often hear the term “sales and marketing.” Aren’t those the same thing?

A: Not at all, though people confuse them all the time. In most businesses, marketing and sales are very different.

Sales is when you’re face-to-face with a customer, convincing a person to buy your product.

Marketing is the collection of decisions you make about the market that leads to successful sales.

Marketing is the planning part of sales. Marketing chooses the products to make, identifies who to sell to, what customers want, and who competitors are. Then, marketing figures out how to distinguish the product from the competition by choosing where the product is sold, its price, packaging, advertising messages, and where the ads run. This is called “positioning” the product.

Consider McDonalds. McDonalds sells food, or at least a food-like substance. They target families with kids, to get the whole family to come eat. They offer Happy Meals and playgrounds. Their locations are chosen for convenience. They distinguish themselves based on consistency of menu and food. You can walk into any McDonalds anywhere and know the Big Mac tastes pretty much the same (yum). They advertise using Ronald McDonald. All those decisions are marketing decisions.

Burger King competes with McDonalds and also sells food that’s the same everywhere, with locations chosen for convenience. They also target families with kids, use cartoon characters in their ads, and have a consistent menu. So other than the food, how do we tell them apart? Burger King positions themselves as different from McDonalds by letting you eat according to your individual taste. While McDonald’s says, “eat here and you always get the same thing,” Burger King says “have it your way.” That positioning is a marketing decision. Of course, the irony is that even if you have it your way, “your way” is chosen from a menu as limited as McDonalds. The difference is in the marketing message, not in the product itself.

Once the marketing decisions are made, sales people take those decisions and march into the world to sell the products and services, using the messages marketing chooses. With our fast food example, sales happens at the counter. The person taking your order might suggest a specific item. They don’t make any of the marketing decisions, but they are given a menu and they help you choose specific items. Like any good salespeople, they try to get you to buy more by asking, “would you like fries with that?”

Another example is Casio watch company. They sell watches to average consumers. Their position is selling cheap timepieces, with many different models, so you can get almost any capability you want. Rolex, on the other hand, sells to very wealthy customers. They don’t have as many models or as much capability as Casio, and their watches cost thousands of dollars. Rolex, however, doesn’t position themselves as a watch. Rolex says, “I’m a symbol of wealth, status, and taste.” Rich people buy Rolexes as a status symbol, while the rest of us buy Casios to tell time. Both watches are often sold in showrooms by salespeople. What seem to be two similar products, sold through retail stores, are positioned as very, very different products.

The one place sales and marketing may merge is in direct mail. When a company sells their product by sending junk mail or spam, the decision of what points to make during the sales process becomes the very text of the letter you so happily receive in your inbox. But even here, marketing and sales can be separate. The company can choose the product features they want to highlight to their customers, and then hire someone to write the actual sales letter that tries to persuade the buyer to buy.

Let’s consider one last example. Imagine you are GoGet’Em game company. Your big toy this year is Little Suzie’s Dollhouse of Horror. You want to sell it at ToyMart. You create a front window display for each ToyMart store to use, featuring headless dolls and a guilloitine. You hope Peter Parent will see the display and choose the Dollhouse of Horror as a birthday present for Little Tommy. You have made several marketing decisions: You decided which toy to produce, the Dollhouse of Horror. Your know a Dollhouse of Horror will appeal to little boys, and you design a window display little boys will like, hoping it will convince shoppers to buy. All of that is marketing. You are choosing a product you think your market (little boys) will prefer over competing products. You decided to distribute through toy stores, rather than direct mail. And you designed a display to influence the market at a distance. You still have selling to do, but not to Peter Parent.

Can you guess who you’re selling to?

You are selling to the buyers at ToyMart. Your salespeople visit ToyMart and must sell to ToyMart, convincing the buyers that you have done the best job at predicting what little boys will want, and they should carry the Dollhouse and use your window display. Marketing is the decisions about what, who, and how to get the product to market. Selling is persuading someone–the ToyMart buyer–to pay money for the product.

I hope you’ve appreciated this discussion of marketing and sales.