Marketing Needs to Deliver Cash Flow

As my teacher, Prof. Philip Kotler, once remarked, “There are two types of CEOs—those who know that they don’t understand marketing and those who don’t know that they don’t understand marketing.”

As he would have known quite a many CEOs, this tells me that marketing needs to explain itself better to CEOs.

One consequence of this lack of understanding results in the across-the-board cut of marketing budgets. In an effort to secure survival, CEOs cut expenses, quite correctly.


However, to cut marketing investments is like unscrewing the engine from the car, because it "weighs so much", in order to gain speed. This works until the downhill momentum stops, then the car really stops in its tracks. We do not want that to happen to our companies, do we?


Because marketing is the driving motor of the company we must not "unscrew it". Done right, marketing has two tasks, nicely defined in "Marketing Champions":

1. identifying new sources of cash flow
   
2. realizing this cash flow.
   

This quite common sensical understanding of marketing gets often lost in the everyday hassle. Marketing then is reduced to communication, advertising or sales support.

In order to be a serious driver of company success, Marketing - as a function and a team - must not get lost in the creative, "soft" advertising stuff. Quite the contrary: the role of marketing is to safeguard the one and only reason for the existence of the company: to profitably win and keep customers.

It is to hope that even CEOs will understand that. And, that they will ask their marketing managers to deliver the cash flow or to find such marketers that do.

Thus, marketing is the engine of the company.