Summary
Marketing is a fundamental part of the success of organizations since it causes a great impact on people's lives, but sometimes it is a problem because managers tend to confuse marketing as an expense and not as an investment, however it is necessary to understand that This is not the case, since if it is used properly it ensures the profitability of the company. How to know if it works or not, for this question there are tools such as ROIM or KPI's that measure the performance of a marketing plan, so companies that use marketing manage to monopolize a market that meets their needs with the product offered. generating utility to the organization.
Marketing: spending or investment?
introduction
Currently, marketing causes a great impact on the lives of people and especially in companies, as we all know they all seek to maintain profitability or achieve a space within the market, an objective that only some achieve. Most organizations worry about the expenses that marketing activities generate and if they invest a considerable amount, they remain in fear that such investment will not cause the impact that is expected.
But let us remember that consumers are carried away by what they perceive, that is, by the attributes that a good or service offers them, and without customers the business does not exist, for this reason companies have seen the need to focus their strategies towards the needs and wants of customers, and how else to attract them if not through marketing.
It is important that companies have a department specialized in marketing, and if this is not the case, they must at least know in depth the needs of potential customers, and eliminate those paradigms about marketing such as believing that sales is synonymous, or that it is a strategy that simply consumes money without creating results, it is true that an investment is always necessary, but if the marketing activities are carried out properly the investment will return quickly.
So what does marketing mean? An investment or an expense, gaining the preference of customers, or losing customers, are reasons why some organizations do not risk using marketing strategies, that is, they remain stagnant waiting for people to know the attributes of the product for themselves, or using tools so old that they do not allow development in the organization.
The question remains in the air… Marketing spending or investment?
This essay will address this issue, in order to differentiate spending and investment within marketing.
II. Background
We all think we know what marketing is, since every day we see commercials, read billboards and even hear advertising on the radio, but in reality we do not know that it implies much more than that, authors such as the so-called father of modern marketing Philip Kotler, defines this tool as a social and administrative process by which groups and individuals obtain what they need and want through generating, offering and exchanging valuable products with their peers. And he affirms that at present one can speak of marketing where there are elements focused on the product through certain levels such as investors, suppliers, distributors and employees.
It is also important to mention that marketing must go hand in hand with said technological changes, so that companies can make use of those marketing tools that are lower cost such as social networks since as we know it is the way to be in direct contact with consumers, and the best thing about this is that the investment is minimal. In other words, it is a way of reflecting that marketing is an investment that does not necessarily have to be large, but that sooner or later will give results.
It is also necessary that marketing is not seen as one more area within the company, which deals with research and promotion in the market, since if that is the way it is perceived, the objectives that will be set cannot be met. looking far beyond the numbers, caring more about satisfying the needs and desires of consumers.
So for marketing strategies to be considered an investment and not an expense, the company must be well organized, that is, the marketing department knows the functions that are proper such as market research, advertising, promotion, sales administration, as well like consumer trends and changes the market faces.
III. Development
To define whether marketing is an expense or an investment, it is important to know the difference between both, the fundamental difference between expenses and investments is that the former decrease income, while an investment can increase it.
Many companies view advertising as an expense, others view marketing as an investment from which they have to get a return.
Marketing is a fundamental area for the success of any company, be it micro, medium or large. Without marketing there will be no sales and without sales the business does not exist. Marketing is an investment, not an expense, it cannot be stopped or done when you have money, but it is done by setting objectives, goals and measuring the results so that benefits are obtained for the organization, that is, the return of the investment will help grow the business. In addition, to complete a marketing strategy it is necessary to take into account the marketing mix, price, product, place and promotion.
"Marketing is a social and administrative process through which groups and individuals obtain what they need and want through generating, offering and exchanging valuable products with their peers" (Kotler, Marketing Directorate, 2001)
Marketing activities begin before the company conceives the good or service, since it first identifies what needs a market segment has and then analyzes and chooses the most appropriate way to achieve the satisfaction of that need. Marketing is not simply creating a commercial, placing an ad in the newspaper or advertising on radio and / or television, marketing goes much further, for this reason in most organizations there is a department specialized in proposing, evaluating and put into practice marketing activities that achieve that the product captures the attention of the market to which it is directed, however, as mentioned previously, the managers of an organization fear the failure of an advertising campaign,on the contrary, many occasions the campaigns make the customer feel attracted to the product, to the extent of becoming potential consumers of it.
However, deciding how much to invest in marketing is a dilemma, between creating a campaign that achieves the objectives already planned, or investing an amount that does not affect the company in the event that the campaign does not work; although this may seem truly impossible. Managers have to understand that marketing is an area of opportunity, a strategic area and not an area that should be limited in terms of expenses or considered less important along with other departments.
Although we know that a product does not sell itself, we continue without clarifying the eternal questioning that the marketing world faces. Spending or investment? However, there are tools that allow us to measure the progress of marketing activities such as ROIM, which is based on identifying the attitudes, perceptions and certain characteristics of consumers, thus allowing us to measure the impact caused In the public. In the same way, ROI of marketing allows companies to plan or allocate resources to generate the desired results. If the ROI is positive it means that the investment or marketing campaign was good and will generate profitability for the company. But if the ROI is less than or equal to zero, it means that the investment made does not pay off.Thus, this tool is very useful to know how effective an advertising campaign is, thus in conjunction with the sale of the product, the size of the market and other factors, it can be clarified if the investment returned pleasantly.
ROI (Return Over Investment). It is an index that measures the return on an investment made. It means the percentage of money earned in relation to that invested and it is basically a method of accounting evaluation that compares, in financial terms, the net benefits of any project, against its real costs or investment. Its calculation is established as follows: ROI = (profit obtained - investment) / (investment). (Lovagnini, 2010)
In the same way, for an investment in marketing to return and not result in an expense, it is necessary to establish the objectives to be achieved, if it is not carried out in this way it is likely that the marketing activities will be a failure. An investment in marketing also implies the commitment of the personnel in charge of establishing marketing strategies and of everyone who is involved with creating or maintaining the profitability of the company, which is why choosing an amount to invest is extremely complicated. In short, if marketing is used properly, it can be said that it generates incomparable value for the organization.
For it to be used correctly and errors are fewer, organizations have to determine the needs, desires and interests of the target market and make them perceive those attributes that they want a product to contain, in such a way that the welfare of consumers is increased., benefit the profits of the company and arouse the interest of the public. It is important to clarify that marketing is not only advertising since this is only one more marketing tool, it does not mean that the sale of the product is ensured but mainly it is necessary to clarify that it is not an expense, but an investment in the short or medium term.
The most important thing is to know that marketing is not only an activity carried out by large companies but also by small and medium-sized companies, since in this way they become known with potential clients and attract more the public that seeks to satisfy a need, in addition that thanks to a good campaign you can create loyal consumers who will consume the product continuously and are likely to recommend the product or service.
Another very important point to ensure the return on investment is the choice of the means to be used, television, radio, magazines, billboards, newspapers, websites, social networks among others, adapting the tool to be used with the product or service. In addition to developing a marketing plan, where the market is analyzed, objectives are developed, the market is segmented, the objectives are adapted to the needs of the company and it is planned, that is, the duration of the plan. To later establish strategies.
Let us remember the most important elements of an organization are customers, time, money and personnel and if together they carry out the strategies they achieve the success of the organization
IV. conclusion
In conclusion, it is understood that marketing is a fundamental tool for companies, since it allows highlighting the attributes of the goods or services it offers to achieve the satisfaction of consumers or customers, as mentioned before, the question always arises if the Marketing is an expense or investment, but that is not known until we risk undertaking a marketing campaign, when our product begins to sell and begins to monopolize the market; Of course, they are factors that are not known from one day to the next, we must be patient and wait for our investment to return.
The key to effective marketing, that is to say something different, simple and attractive, to get consumers to notice us, however we cannot forget to meet the needs of our market, the key is to distinguish ourselves from the competition, take risks in order to win.
Just as some companies use marketing there are a few that do not, however, it is enough to look at large companies such as Coca-Cola, Nike or McDonald's that thanks to their marketing campaigns attract the public in an impressive way, then With this example we can ensure that marketing is an investment.
"In the world of marketing, Coca-Cola is undoubtedly one of the most creative and innovative brands, from outdoor advertising to its successes on television, they demonstrate the commitment of one of the brands that invests the most money in advertising worldwide" (Puro Marketing, 2012).
In social networks such as twitter, Coca-Cola has exceeded 85 million ads during 24 hours, but without a doubt this brand generates investments due to concern for the customer, since they bet on the so-called Brand Content, that is, the generation of experiences since consumers are the protagonists of each campaign.
On the contrary to Coca-Cola, the Kodak company forgot that success lies in customer satisfaction, and began to be more interested in selling but without adapting to changes, so it managed to get competitors to get ahead.
Of these two cases, we can highlight that the success of marketing lies in the importance we give to customers, since as mentioned above, without customers there is no business, and every organization must understand that its survival depends on the consumer approval.
References
- Mirror, J. (2004). Marketing. In J. Espejo, Marketing (pp. 2,3,4,). McGraw Hill. Kotler, P. (2001). Marketing Directorate. In P. Kotler, Directorate of Marketing. Pearson education Lovagnini, A. (2010). magazine strategists. Retrieved on Tuesday February 2014, from http://www.revistaestrategas.com.ar/noticia-580.html Pure Marketing. (May 9, 2012). Retrieved on February 19, 2014, from http://www.puromarketing.com/SYLLABUS, MI (sf)..
