Do Big Companies Depend too much on Marketing, Finance, Lobbying and Tax Rules?



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Marketing > Best Practices > Do Big Companies Depend too much on Marketing, Finance, Lobbying and Tax Rules?

Do Big Companies Depend too much on Marketing, Finance, Lobbying and Tax Rules?
Jos Nieland, Teacher, Netherlands, Premium Member
In his book Antifragile, Taleb stated that the core of business is offering an honest and decent product or service that gives your customers value for money.
If this is not the case, then it's likely that we're dealing with a fragile organization, because of:
1. FINANCE (leverage, debt). If companies spend more time on financial constructions than on a decent product, probably that makes them fragile in the end; see the summary of Taleb's Black Swan Theory.
2. MARKETING / ADVERTISING. Taleb says on marketing:
- Companies mess with your cognitive biases and that's sneaky;
- Marketing is basically bragging and that's bad manners;
- A good product will sell itself. Anything one needs to market heavily is necessarily either an inferior product or an evil one;
- Marketing (beyond conveying information) should not be needed and is a sign of insecurity;
- Marketing is meant to maximally confuse the consumer. For example soft drink companies that (implicitly) promise happiness to their drinkers in advertisements.
3. LOBBYING. Lobby machines of large companies spend more and more on lobbies, because they feel fragile without them. Because they are dependent on finance (low interest rates), big companies friendly regulation and marketing.
These lobby machines of big companies are successful because they can hijack the State or Country they're in, because if they go broke it would cost a lot of people their jobs.
4. TAX RULES. Buy leveraging all kinds of complex financial products, etc.
What do you think, do big companies have products that are good enough, or do they depend too much on marketing, finance, lobbying and tax rules?

Marketing Provides Valuable Information to the Consumers
Barry Schaeffer, Consultant, United States, Member
I agree with much in this post. What I cannot agree with however is the negative view and assessment of marketing and the other persuasive arts in selling products.
The author suggests that if the product is good, it sells itself. While that may be true in a limited number of cases, it completely ignores the fact that for any product or service there are usually multiple vendors with similar or identical "good products." If we take the author's view, each of these vendors just takes a listing in the Yellow Pages and waits to see if the public selects his product. That has never worked, except for products offered by only one vendor.
Instead, each vendor has both the right and responsibility to let the public know, as well as he can, the reasons his product is a better choice than his competitors... That IS providing information, and that IS marketing. If the author is criticizing marketing that is giving false or intentionally misleading information, that is wrong and will fix itself; as the public finds out.

Where is the Good Product From?
Lei Qu, Canada, Member
In many organizations, the marketing also includes defining a product.
I agree when a good product exists, it sells itself. Over-marketing in this case is actually killing the customers' satisfaction.

The Value of Marketing
Edward Ramos, Professor, United States, Member
@Barry Schaeffer: I agree. Most of the products and/or services offered in today's markets are highly substitutable. Surely each one has it's value proposition, however human emotions/psychology cannot be denied as part of the product buying process.
Integrated marketing communications can tip the balance in that process and the law of consistency will facilitate the alignment of cognitive and emotional satisfaction when differentiation between products/services is low.
Assuming that the quality and functionality of a set of products is more or less equal, marketing serves a vital function in motivating consumers. It certainly can create and help maintain brand loyalty as well.

The Core of Business is not Marketing
Madeline Rios, Consultant, United States, Member
As a freelance translator and interpreter, my experience completely validates these principles. My "marketing" budget is less than 1% of my revenues, and is basically a website offering useful information to my customers and competition. How do I get my business? Purely by word of mouth. While I'm busy researching and improving my skills, much of my competition is busy lobbying and marketing. The result is that I have more work than I can handle because my product is better. Thanks to the author for confirming my experience.

Marketing not the Core of Business
Ted Garrison, Management Consultant, United States, Member
Again we have a half truth. The idea that if you build a better mouse trap they will come has been proven false many times. Peter Drucker says every business needs two skills - marketing and innovation. He's not talking about your brochure - he's talking about your market research to find what the client needs and then innovating a better solution.
Many companies fail, despite having a great product - the problem is the public isn't interested or they don't know about it.
In response to Ms. Rios - I disagree with your conclusion - you are doing a great job of marketing or you would not be as busy as you are. Your marketing effort starts with your performance and obviously word of mouth marketing is getting plenty of referrals (that's why word of mouth marketing is the most powerful). Obviously, good marketing can't help a bad product or service - in fact it results in a disaster faster. However, without marketing you are boat without a paddle.
At the very least marketing is a key to success.

Society Benefits from Marketing
Dominic Owusu, Analyst, Ghana, Member
You may have a good product, but how would the customer know. Through marketing customers are able to know your product offerings. Not only do they know the marketed product, you are also able to bring the consumer closer to the organization.
Bringing the consumer close to the organization will enable the company know the customer and what his/her needs are. This will help the company to come out with a product offering that satisfies the specific need of the customer. You will then be able to identify the changing needs of the customer and you will be able to deal with it.
Since you are not the only organization dealing with that customer you will try to deliver superior products than what your competitors are offering. The customer in the long run gets quality products that best satisfy his/her needs.
Marketing thus serves society with better product offering as a result of competition. The society benefits from the activities of marketing.

What do You Think Marketing is About?
Dr Brian Monger
Some folk here think that "marketing" is only about Promotion/Advertising/Selling OR it refers to a department of that name.
The primary business of any organisation is engaging with its market (the marketing exchange) Anything that does not have that focus is therefore not focusing on the primary activity.

Monger's Got it Right
Ted Garrison, Management Consultant, United States, Member
@Dr Brian Monger: absolutely - marketing is everything you do. If your product or service is no good you will get a lot of negative word of mouth marketing which will destroy your business. If your product or service is great as some people discussed then you get good word of mouth marketing.
As you stated marketing is about serving the clients needs and the only way you can really do that is talk to the client. If you just sit it in your office and decide what's important might cause you to miss the market, regardless of how great the product is. Therefore marketing is about understanding the market. When companies don't understand that they struggle, unless they just get lucky.

After Sales Service of Marketing Stages is the Most Important
SETIONO WINARDI, Business Consultant, Indonesia, Member
The after sales stage or service stage of marketing is most important, which is the way to establish good relationship and expand the business networking.
If the performance of the after sales service is poor or unsatisfactory for your customer, then the business will decrease.
You have to concern yourself with these stages of after sales service.

Marketing is to Communicate
Jun Labindao, Manager, Philippines, Member
Nothing is more important and satisfying in a service-based industries than to inform your current and prospective customers on how great the products/services are that you're offering.
Otherwise it's like Dr. Martin Cooper invented the first mobile phone and kept it to himself.

Marketing is to Create, Communicate and Deliver
srinivas, Lecturer, India, Member
If marketing is to create a product, communicate and deliver value to customers, society at large then is there anything wrong in it? If the advertisements are playing with emotions in the wrong way for making profit, or companies lobbying for favor, bending the taxing rules for gains, or for that matter spending more time on financing aspect rather than on value generation capability, then I think it is wrong. Here I think management based on consciousness has an important role to play.

Marketing is the Core of the Business
Ed Richardson, Business Consultant, South Africa, Member
The author would seem to have a very narrow view of marketing. Instead, it can be argued that marketing is the very core of successful business. One develops and packages a product around the needs or aspirations of a defined market. All functions, be they R&D manufacturing, procurement, sales, logistics, advertising, PR or accounting should be guided by the marketing intelligence. Companies and individuals who succeed are those who spend time understanding the market, delivering what will sell at the price the market is willing to pay - and telling the market what is available.

Marketing is the Soul of Any Business
Nancy Muttu, Manager, Uganda, Member
In his book Antifragile, Taleb stated that the core of business is offering an honest an decent product or service that gives your customers value for money". He later goes on to state that marketing is not needed for various reasons as listed in his argument.
Let's start from the very beginning: Product management right from market research to its development and maintenance along its life cycle (modifications, pricing, packaging, promotions, distribution et al) is the job of marketing. Any business that does this is definitely on the path to offering an honest and decent product/service to its customers and, as thus, offering value for money. Spelt out in capital letters, that's MARKETING!

Marketing as Core of Business
nasera Faruk Milky, Student (MBA), Bangladesh, Member
I do believe that a good product will sell itself but marketing also plays an important role to make the product acceptable to people. Also, it needs to be pondered that, you are in what environment? Is the environment around you is trustworthy? Do you believe most of the people in the society? In that case, how trustworthy the peoples' propaganda are?
I am just saying that, when you can not trust the people around you, you can not also trust the propaganda. So, in that case, considering the environment, the performance of the product becomes all important for the business.

What is Marketing About?
Marcel Wiedenbrugge, Consultant, Netherlands, Member
I think Taleb's view on marketing is a distorted and inconsistent. Marketing basically consists of two words: to market and to get. Marketing is necessary to help a company find the right markets and customers and do that in a efficient way. A company that has 'bad' products or services and great marketing may in the short run still earn money, but what does that say about the customers who apparently are willing to buy such products?
About marketing and messing with cognitive bias: that is what Taleb is doing as well.
About marketing and bragging. Especially in consumer markets you will find some exaggerated commercials and claims, but it is every company's good right to persuade the (potential) customer to buy from them. Ultimately, it is the customer who decides.
A good product will not sell itself just like that. A classic example is still the Video 2000 systems by Philips. Technically it used to be the best product in the market, but the marketing was poor, so the product was not successful.

Marketing is the Core of Business
jacinta wamwaki, Kenya, Member
Research on what the market requires is Marketing, informing the public what you have produced is Marketing, when you offer what you have to the market is Marketing and when you seek for feedback from the customers so as to upgrade your product is Marketing.
Therefore business cycle starts with marketing and ends with it and therefore it is the core of business and all other activities in a business are support activities to enable fulfillment of business.

Ajogbasile Olamide, Student (University), Nigeria, Member
@Ted Garrison: I strongly agree with you sir. Word of mouth could also be seen as a promotion mix, a form of personal selling. It's a way of promoting the business.

The Core of Business is not Marketing
I certainly agree with the affirmation "marketing is not the core of business". We all know the importance of the PRODUCT itself to secure the business but we also have to admit even the best product cannot guarantee success if customer are not aware of it. Here is the reason of marketing: making the goodness of a product evident.

Is Government Part of the Problem?
Alan Kennedy
This is a fascinating question. It really speaks to the role of government in the marketplace and how all levels of government can make the playing field very uneven for any newcomers to an industry. From big auto, pharma, banks, insurers, tobacco, to big "defence" companies,(to name some of the most popular "villains"), the system is indeed tilted to favor lobbying, tax, and financing rules rather than a "good and honest" product or service that delivers value.
I don't think marketing falls into the same camp though. Consumers figure stuff out in the end, no matter how big the marketing campaign. However, as Mr. Taleb points out, these companies cannot last if they depend on lobbying, tax, and finance. And consumers have 2 ways to push for change: by withholding their purchasing dollars and with their votes to change government.

Marketing isn't just Selling or Providing Truthful Information
Sonny Vicente, Coach, Philippines, Member
I agree for the most part with Mr. Nieland that a good product will sell itself but marketing isn't just selling or providing "truthful' information. It also involves setting up the capacity as well as the competency of the business such that it responds as excellently as possible to the needs of the customers.

Marketing IS Definitely the CORE of Business
Jun Labindao, Manager, Philippines, Member
Who will know about your business if you don't market it? Even casually telling your best friend that you're going to put up a business and what will be your line of products/services is already marketing. Even if your products/services are not yet physically available to the market and you begin to inform people of your products, that is already marketing.
There are "small things" that a business does that we fail to recognize as marketing because we think that marketing only refers to the "big things".
The author's argument may only come in during the next stage after marketing, which is "consumption". This is the deciding phase whether a certain product/service will sell on its own or not. In a simple point-of-view, yes it will, if the consumers were satisfied and began to spread about it, and probably will just disappear in the market if not.
However the bottom-line here is that, it all started with marketing, thus I can definitely say that MARKETING is the CORE of business.

Is Marketing the Core of Business?
Emmanuel Osafo Gyane, Manager, Ghana, Member
The pros and cons of all reactions on this subject are that marketing favors a vendor in a competitive environment, whereas it is almost of no consequence in a monopolistic environment or when offering a product/service that is non-substitutable.

The Core 0f Business is NOT Marketing
Wangari M. Ndia
I agree that the core of business is not marketing.
However, without marketing especially in a competitive business environment it will be very difficult to sell - after all business is not charity.
Part of marketing involves market research before and after launch of a product or service to determine what customers want and how best to continuously improve the quality of your product in order to have an edge in the business environment. New products and service providers keep on emerging in a competitive environment.
Excessive marketing may, however, lead to doubts about the credibility of the product or service.

The Core of Business
Ted Garrison, Management Consultant, United States, Member
Reading all the comments - there seems to be a debate back and forth about what is more important the product/service or marketing. That is the mistake - without both you will probably fail. In fact, there is the joke if your market a poor product you fail quicker because people will find out how bad it is sooner. I think everyone agrees unless you provide a product or service that provides value you will fail unless you are in the unique situation where people are forced to accept substandard for whatever reason.
The confusion is you must market so people learn about you - of course delivering a great product or service helps because you will get word of mouth marketing - not by you but by happy customers, which is the most effective. Even charity must promote themselves so people are aware. But the marketing research is critical - if you don't know what the customer needs it's hard to deliver a superior product that meets their needs. Lots of great products fail - not wanted.

The Issue is Dependence on Marketing, Lobbying, Tax Rules, and Finance
Alan Kennedy
I think the question here is whether companies have products that are good enough (the implication being that they sell themselves without any apparent marketing) or whether these companies depend too much on marketing, lobbying, finance, and tax rules and are therefore "fragile".
I see a lot of folks getting distracted by the page title: The Core of business is NOT Marketing" - which is not the same as Mr. Nieland's question and I would like to see if someone takes issue with my response, which tries to answer that question.

For the record, I view Marketing as simply 1 strategy of 8 that are common to all organizations and certainly do not believe it to be the core of business. Any one of these 8 can be an organization's dominant strategy. Dominant strategy leads the other 7 and sets the organization's culture. Therefore, the "core", for me, is the dominant strategy.

The Title of This Discussion Has Now Been Changed
Jaap de Jonge, Editor, Netherlands
@Alan Kennedy: Indeed you are right, the title of this discussion (which used to be: "Marketing is NOT the Core of Business") made members follow a side-track which was unintended by the author.
This is not a discussion about the usefulness, importance or necessity of marketing; this discussion is about the question if big companies are over-relying on marketing, finance, lobbying and tax rules, making them fragile.
I decided to take the (unusual) step to change the title of this discussion to no longer confuse people and to refocus it on the topic which Mr. Nieland wanted to discuss. But we will respect and keep the contributions that were made so far, even if some of them are now somewhat off topic.
But new reactions discussing the usefulness of marketing will be moderated and taken from the discussion. Hope everybody agrees with this procedure.

The Core of Business is Offering a Decent Product or Service
Dr Brian Monger
Since one of the major, fundamental, activities of a business is about the transaction between the business and its customers - How can companies over-rely on it?


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