Translating an inspired idea into a robust business plan
012 Selling vs. Marketing, what is the difference?
A central aspect of any business plan is the marketing strategy. To develop a marketing strategy, the market and potential customers must be analysed. Marketing differs from selling in as much as marketing has a customer rather than product focus. This means that customer needs should be analysed with a view to segmenting the market on this basis. From this flows the targeting of particular segments with a segment-specific marketing mix. This positions products in the market, based on an understanding of buyer needs, attitudes and behaviour.
Consider a manufacturer of simple plastic bags. The bags are cheap and undifferentiated and profit can only come through volume. In contrast a handbag, such as the Hermes Birkin bag, may cost US$ 30,000 or more. Clearly Hermes does not generate profit from selling lots of them, but Hermes makes profits from its ability to charge a very high price for a product which meets the (rather exclusive) needs of the target market. The Herms Birkin bag is much more than the product. Itís desirability stems not only from the fact that this this a well made product, but it is the result of an integrated approach to marketing which aims at creating value through exclusivity. Branding, advertising, product placement, sponsorship, distribution and the high price itself are key elements of this.