When preparing to market your product, service or idea, it can be a challenge to understand the difference between advertising and marketing. You may be surprised to learn that it isn’t so much about how they differ, but rather how one is a subset of the other. So what is the difference between marketing and advertising?
Advertising is a subset of all that marketing entails. Advertising is what consumers recognize right away, and includes the overt ads we see and hear all the time. On the other hand, Marketing covers a greater scope of activities less explicit to consumers, but so much more important. Marketing includes the product, where it is sold, how much it sells for, and how the company will promote it.
We know advertising as the easily identifiable aspect of marketing. To understand the difference between marketing and advertising, you must understand the full scope of what marketing actually entails.
What is marketing
There are several technical definitions of marketing. They tend to sound very legalistic. For example, here is how the American Marketing Association defines marketing:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
American Marketing Association
Dr. Philip Kotler is recognized as the father of modern-day marketing. He is a Professor Emeritus of Marketing at Northwestern University’s Kellogg School of Management. He defines marketing as:
The science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.
Dr. Philip Kotler
Marketing is a set of activities that identifies the who, what, when, where, why, how and how much relating to a business and it’s products. Answering these questions begin long before we see an ad or product, and continue for the life of the business. Admittedly, this is a simplistic approach to defining marketing, but that is my goal. For those wanting a greater understanding, I’ll explain in greater technical detail below.
All of the activities a business undertakes in marketing are known as the marketing mix. Remember, I said marketing entails a much greater scope than just advertising. The idea of a marketing mix was introduced by Neil Borden of Harvard University in 1949. Over the years, instructing on the marketing mix has been popularized via alliteration starting in 1960 with E. Jerome McCarthy and his 4 Ps. These P’s, known as elements, have been championed by Dr. Philip Kotler as he has advanced them into their current understanding.
The 4 P’s of Marketing:
- Product
- Price
- Place
- Promotion
This list provides a birds-eye view into the complexity of marketing in comparison to advertising. Each P has its own depth. Advertising is a component of Promotion. As we review these elements you will see how advertising fits in the grand scheme of marketing, and uncover the difference between marketing and advertising.
Product
Product is the physical item, service, or idea the business is selling. Product includes the decisions that lead to creating it, the attributes of the product itself, and the support of the product after the sale. This is what’s known as Product Management. The product element of the 4 P’s include but are not limited to the following:
Market analysis:
- What is the benefit of the product, if so, what is that benefit?
- Is there a market for the product, and if so, how viable is that market?
- Are there competing products in the market, and if so, what is the customer’s perception of them?
- How will our product differentiate from the competition?
Product design:
- What are the features of the product?
- What technology is utilized or offered with the product?
- What is the quality of the product?
- How is it packaged?
- Are there any accessories for the product?
Product branding:
- What is the intended customer perception of the product
- Are there product warranties, post-sale service, and support
Price
Price analyzes the segment prices of the product, service, or idea. In the early days of marketing, price + markup was the prevailing thought. However, Price has evolved and taken on characteristics of its own. The price element of the 4 P’s include but are not limited to the following:
Market Analysis:
- What is your cost structure?
- How do consumers value the product
- What is your competition doing in the market?
- What is the market share?
Price Strategy:
- What is the product’s identity?
- Is the product prestigious, or would the company like to differentiate the offering with the perception of a premium value?
- Does it warrant a premium price?
- Is the product intended to be economical? Is it designed and intended for a lower price?
- What is your customer’s perception of the product?
- What is the company’s market share in the segment? What is the company’s goal?
- Is the company looking to penetrate the market or acquire market share?
- What are the economics of the area the product is serving?
- What does consumer research indicate as a fair price to be?
Pricing Policy:
- What is the list price? What discounts, if any, are agreeable or allowable?
- What terms of credit, payment plans, financing, or lease options do the company make available?
- What are the terms of delivery?
Place
Place is where the product is sold or distributed. It’s where the customer meets the salesperson, including business to business, as well as business to consumer. The place element of the 4 P’s include but are not limited to the following:
Market Analysis:
- How are consumers accustomed to purchasing similar products?
- What channels of distribution currently exist? What are their locations? What is their market coverage?
- Is the product seasonal? Does the consumer expect the product to be available at certain times of the year or even particular times of the day?
- What transportation, storage, inventory requirements are there?
- Are advocates needed at the point of sale
Product Identity:
- Are branded storefronts part of the product’s differentiation?
- Are direct sales required or expected?
- Are online sales agreeable?
- Is wholesaling agreeable and beneficial to the company’s goals?
Product Delivery:
- How is the product, service or idea delivered?
- Does the company have retail locations or storefronts?
- Can the product be delivered to the customer home?
- Does the product require installation?
- Can the product be downloaded?
- Where will the product be consumed? Does the location, aesthetic, ambiance, and staff deliver on the customer’s product expectations?
Promotion
Promotion is how you tell prospective customers about your product. Promotion includes the methods the company employs to inform, persuade, and remind consumers of the benefits of their products. The promotion element of the 4 P’s include but are not limited to the following:
Market Analysis:
- How are consumers accustomed to learning about products?
- What avenues of promotion are available to the company and the consumer?
- What methods of promotion align with the products identity?
- How much is the company’s promotion budget?
Advertising:
- What message is the company communicating about the product?
- How is the product’s value conveyed?
- How will you incite consumers to buy the product?
- What avenues of media does the company plan to utilize to promote the product?
- Television
- Direct Mail
- Social media
- Billboards
- Radio
- Digital Content
- In-store Signage
- Kiosks
Publicity & Public Relations:
- How do you communicate the company’s compassion or interests?
- Do event sponsorships make sense?
- Are product ambassadors available?
- How should personal selling be employed?
Product Support:
- Is customer support adequate?
- How is customer sentiment managed?
- Are product reviews encouraged?
In understanding the difference between marketing and advertising, we’ve reviewed the marketing mix. Now, let’s discuss advertising.
What is Advertising
Now that we have examined what marketing entails, let’s define what marketing is within the greater scope of marketing.
Any paid form of nonpersonal presentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor.
Dr. Philip Kotler
As noted within the Promotion element, advertising is by definition a very visible component of the overall marketing mix. It is the component that most consumers identify.
What’s the difference between marketing and advertising
The prevalence of advertising compared to the other elements and components is what leads many to confuse advertising as marketing.
The difference between advertising and marketing isn’t so much about a difference between the two, but rather how one fits within the other. Advertising is a component of an overall marketing mix.
Dajuan Jones
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Sources:
- Dr. Philip Kotler – Marketing Essentials / Northwestern University. Prentice-Hall, Inc., 1984
- American Marketing Association – What is Marketing