– MARKETING CONCEPTS TO EMPOWER TECHNICAL PEOPLE

TECHNICAL PEOPLE

Darrin C. Duber-Smith, MS, MBA
Senior Lecturer

Metropolitan State University Denver

ABSTRACT

Marketing is everywhere. Sometimes it’s a good thing, since marketing is what drives revenue for the organization. But sometimes it’s not so good. Skepticism aside, it’s important to understand that marketing is not merely advertising or selling, but the execution of a carefully planned strategy. Marketing is much more than most people think, and much more than just a great story. In today’s hypercompetitive, globalized marketplace, product development is largely a function of assessing market needs and delivering goods and services to meet those needs.

Innovation and R&D are very important, especially in the area of cosmetics and personal products. Ultimately, the marketer is the individual responsible for what will and what will not generate revenue for the organization. Thus, underlying consumer needs and the creativity of ingredient innovators, along with pricing, distribution, regulatory issues, and the promotion of products, is a phenomenon known as the marketing concept. The vast majority of new products fail, and so the marketer, at the very least, must ensure that the product looks, feels, smells, and works optimally while also generating the right combination of additional marketing-mix decisions. This chapter explores the methods to the “perceived madness” that often vexes even the most experienced product-development professional. It is intended as a guide to the reasoning behind why marketers do what they do.

We note, in passing, that it may seem odd for a technical book like this to begin with a chapter on the “marketing concept.” However, as we open the panorama of a very detailed description of the “ingredients” that lead to successful cosmetic and personal care products, we must first look at the real world where, inevitably, there’s both a marketing and technology push competing with the ever-expanding knowledgeable consumer pull for products that work.

TABLE OF CONTENTS

1.1.1 The Magic and Mythology of Marketing

1.1.2 The Marketing Concept

1.1.3 Assessing the Marketing Environment

1.1.4 The Four P’s

1.1.5 Development, Prototypes, Testing, and Commercialization

1.1.6 The Truth About Innovation

1.1.7 The Missing Links

1.1.1 THE MAGIC AND MYTHOLOGY OF MARKETING

Marketing is indeed everywhere, and depending on one’s role within a particular organization, marketing can represent different things to different people. This can become particularly problematic with regard to product development. What exactly is marketing’s role in the development of cosmetic products? The purpose of this chapter is to cut through the confusion and to clarify marketing’s role in personal care/cosmetics. First, let’s mention a few common myths.

1. “Marketing is selling and advertising.”—The first thing a student of marketing should learn is just how untrue this assertion is. Marketing is much, much more than selling and advertising, as it involves product, pricing, distribution, and promotional strategies.

2. “The marketer’s job is to sell whatever R&D develops.”—The second thing a student of marketing learns is that goods and services, in this age of hypercompetition, must be driven by assessing and meeting consumer needs. Goods and services that are not need-based seldom succeed in the marketplace.

3. “My new product has a great chance of succeeding.”—Actually, the vast majority of new products (about 90%) fail to meet expectations and are deleted from the company’s product mix within a few years.

4. “Word of mouth is a marketing activity.”—It is not a marketing activity, but rather a result of our communications efforts. When someone says that most of their marketing is word-of-mouth-based, especially in the age of Internet, be very concerned.

5. “Marketing is about telling consumers what they want to hear.”—A marketer must never mislead the consumer. If we overpromise and underdeliver we ultimately lose customers, who are very expensive to acquire. These unhappy people then tweet, blog, Yelp!, and otherwise report on the company’s malfeasance. This is not to underestimate the power that media, NGOs, government, competitors, supply-chain members, and other stakeholders have in keeping companies honest.

Indeed these are only a few of the most common misperceptions that both newbies and experienced product developers have when they think of marketing. So what is the true function of marketing?

All organizations have multiple functions within the company’s hierarchy. General management, HR, finance, accounting, production, operations, R&D, and IT are just some of these functions. Each has its own primary purpose. Finance manages cash flow and investments, accounting keeps records, HR manages personnel, R&D develops what might be the next big thing, etc. The primary function of marketing then, if we must boil it all down to one thing, is Revenue. Marketers must drive revenue or else the organization cannot exist, and to do so effectively, we must first discover what it is that consumers want and need. In some cases, a concept may be so new that consumers may not even be aware they have a need for it.

1.1.2 THE MARKETING CONCEPT

Academic professionals, in their never-ending quest for professional credibility, will often argue over things that seem silly to the rest of us. One of these arguments concerns the difference, if one actually exists, between a “want” and a “need.” For our purposes this argument is spurious. Different groups of people have different priorities, and so the idea of what someone wants versus what someone really needs can be debated until the cows come home. The point of the “Marketing Concept” is that we develop no new products unless we can prove that a large enough group of people will buy them. It’s as simple as that, but this means that product development is most often driven by marketing analysis and not by innovation, an assertion that does not traditionally sit very well with the science crowd.

The reality is that the world of marketing is not at all black and white, and that product development is really a carefully planned and effectively implemented process that involves interplay between the folks whose job it is to study consumers (marketing) and the technical folks whose job it is to make a highly effective hair or skin care product. So let us now delve into the new product-development process with a particular focus on developing a strategic marketing plan.

1.1.3 ASSESSING THE MARKETING ENVIRONMENT

New product development begins with an idea. Ideas can come from many places—customers, competitors, employees, supply chain members, universities, and of course the research and development efforts of our cosmetic chemists. In many cases, ideas come from industries that have nothing to do with cosmetics or personal care. An interesting example is the use of information from the carpet industry by hair care product developers (fibers are fibers, after all). The concept of Open Innovation, described elsewhere in this book under Sustainability and EcoResponsibility, describes this process of ideation.

Many ideas are derived from formal brainstorming sessions, usually led by a high-level marketer (i.e., a Technical Marketing Expert) and involves members of all of these groups. Ideas that are initially thought to be feasible undergo “proof of concept” testing wherein relevant parties are interviewed, answer surveys, or participate in focus groups. Here we must prove that the concept might work before we conduct further analysis; and assessing consumer needs are a huge part of this process.

The next step is to conduct an analysis of the current business environment. This consists of both internal factors, which are controllable by the organization, as well as external factors, which are out of the marketer’s control. The resulting situation analysis (sometimes called business analysis), gives us all of the information that we need to develop a SWOT summary use in decision-making and risk reduction. The analysis itself is a very objective exercise, and as such, opinions are not needed until these can all be summarized as a series of Strengths, Weaknesses, Opportunities, and Threats. The first two areas are derived from the internal factors and the latter two from the external factors.

Internal factors include a full analysis of all the functional areas within an organization that could affect marketing strategy. This includes pretty much everyone, and a good marketing plan is a cross-functional effort. Involving all relevant aspects of the organization makes for a better-quality plan, and more buy-in among key players as to how the organization is going to achieve its objectives. It all begins with the organizational mission, a statement of scope and purpose, and includes everything that is under the organization’s internal control. Finance, IT, current marketing efforts, and R&D are among these, and strengths and weaknesses are what emerges from such analysis.

External factors

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