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Marketing – at its most fundamental – is a business model where the primary focus is the consumer.

I’ll start this with another question; how do you run a business?  More precisely, if you were to decide on a business model what would your  range of choices be?

3 options when choosing how to run a business.

At it’s most fundamental I see 3 choices when choosing where to focus a business model.  All business models are basically set up along one of 3 vectors.  Those vectors are 1.) product 2.) consumer and 3.) efficiency.  No company does only one to the exclusion of the other 2 but all successful companies focus primarily on only one of the 3.

There is of course a other  4th route …. not  focusing on anything, not knowing what your business model is.  This last route may well be the most common approach and illustrates why there is always an opportunity to win in any industry with a coherent view of what you are about (see strategy post).

So what does this choice represent in everyday language, in companies that we all know?

Product focus.

A product focus is a business model where the product is king.  These are typically design or engineering companies that focus their efforts on making the best product possible and assuming or hoping that someone will buy it.  When it works it’s wonderful but when it doesn’t no one cares what is made.  My best example of this type of company is Apple.  Yes I am saying that Apple is not primarily a consumer focused company (and hence not a primarily a marketing focused company … see below).  Apple epitomise this product focus as illustrated by this quote from Steve Jobs:

“We do no market research.  We just want to make great products.” – FORTUNE 17.03.08 issue

Note, again that I am not saying that Apple or any other company focuses only on product, just that product is the primary focus of their business model.

In practice this kind of approach only works if your product is significantly better than competition (e.g. Gillette) or the product driven by some sort of visionary leadership with the know-how to create products people will value (e.g. Apple again).

Consumer focus.

The next option is a consumer focus.  A consumer focused company is one where the business model is led by the consumer – they make products according to what they understand to be consumer wants and needs either existing or emerging.  The consumer is the primary driver of what they do.  Marketing is – at its most fundamental – this business model where the primary focus is the consumer.

An example of a marketing business model – as defined above – is Nike.  Nike continually identify and capitalize on consumer needs, wants and trends.  Despite being the biggest player in their industry they manage to do this even in the most niche areas, years before they become mainstream.  For example  ’natural motion’  is the current big trend in running.  Nike identified this trend almost a decade ago – having observed track athletes running barefoot on grass after training sessions in order to strengthen their feet. Nike launched their product line with one of my favourite tv ads:

 Efficiency focus.

The 3rd route is efficiency and is basically a business model where the company is run by the finance department.  This isn’t as bad as it sounds given that strategy is essentially about efficiency (as defined on the OGSM post) and finance are often best placed to be responsible for this.  For an example of this look at most well run but not wildly successful companies.

Just make a choice, any choice!

Any  of these 3 route are an acceptable way to do business, just so long as you choose one of them.  No coherent choice is a recipe for employee frustration and business disaster.  Having said this I continue to be amazed at companies who fail to make this choice and still make money.

Conclusion

Marketing is fundamentally a business model where the focus of the business is the consumer.

PS  In a job interview could you answer the question “What is marketing?”?

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