Businesses adopt various strategies in order to achieve success among competitors. These include actions to make their products enticing to customers as well as to expand their business scale and scope. Marketing and business development are two ways that companies use for this purpose. The key difference between marketing and business development is that 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 whereas business development is the process of pursuing strategic opportunities by developing new products, entering into new markets and forming business partnerships with other companies.
CONTENTS
1. Overview and Key Difference
2. What is Marketing
3. What is Business Development
4. Side by Side Comparison – Marketing vs Business Development
5. Summary
What is Marketing?
American Marketing Association defines marketing as “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”. The most important aspect to consider in marketing is the ‘marketing mix’. This includes the components that help the company differentiate itself from its competitors. All these components should be in synchronization with a successful marketing strategy. Marketing mix is also referred to as the ‘4 Ps’ and includes,
Product
This is the most important factor in the marketing mix. A product can be either a tangible good or an intangible service that fulfills a need or want of consumers. It is of absolute importance that the company clearly communicates the product or its most important features to the customers.
E.g. Volvo is popular for the ‘safety’ feature of their automobiles
Price
This is the monetary value at which the product will be exchanged. Price determinations will impact profit margins, supply, demand, and marketing strategy. A number of pricing strategies are available for a company which mainly depends on the nature of the product being offered.
E.g. Louis Vuitton is one of the most expensive fashion brands in the world
Promotion
Promotion includes the different ways in which relevant product information is communicated to the customers. This consists of elements such as advertising, telemarketing, social media marketing, and direct marketing. For the promotional strategy to be effective, it is important to focus on communicating the unique selling points of the products.
E.g. Body shop has constantly promoted itself as an ethical company that does not implement animal testing
Place
This refers to the distribution channels used to deliver the products to customers. A well-spread distribution channel is vital if a good reach to customers is the objective of the company. Since customers can order products online, the timely distribution of the physical product to their doorstep has become increasingly important.
E.g. Coca Cola has one of the finest distribution channels widespread in 200 countries
Figure 1: Marketing mix for Hugo Boss
What is Business Development?
Business development is the process of pursuing strategic opportunities by a company by developing new products, entering into new markets and forming business partnerships with other companies.
Product Development
Product development is a strategy in which companies develop new products or product categories and market them in existing markets, i.e. to the same customer base. This type of strategy can be implemented successfully by reputed companies that have an established brand name since customers are generally not hesitant to purchase products from well-known brands.
E.g., Unilever launched CLEAR shampoo for scalp protection from problems such as dandruff and dryness
Market Development
Market development is a growth strategy that identifies and develops new market segments for existing products. A market development strategy can be implemented mainly by entering into a new geographical market or by targeting new customers in new segments
E.g., Companies such as Nestlé and Coca-Cola have entered into African markets as a part of their growth strategy
Business Partnerships
Business partnership is any form of alliance between two companies to achieve a common objective. Such alliances can take the form of mergers, acquisitions or joint ventures. Cost savings and benefits from each other’s’ core competencies are main reasons for entering into a business partnership.
E.g., In 1984, General Motors and Toyota established a joint venture of an automobile manufacturing company named New United Motor Manufacturing, Inc. (NUMMI)
What is the difference between Marketing and Business Development?
Marketing vs Business Development |
|
| 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. | Business development is the process of pursuing strategic opportunities by a company by developing new products, entering into new markets and forming business partnerships with other companies. |
| Types | |
| Strategies enhancing product, price, promotion and place are marketing efforts. | Product development, market development and business partnerships are business development efforts. |
| Cost and Time Frame | |
| Marketing efforts are less costly and may last for relatively shorter time frame than business development efforts. | Business development is very costly and generally, span over a longer time frame. |
Summary – Marketing vs Business Development
The difference between marketing and business development mainly depends on the objective they are conducted for. Marketing is an exercise carried out to obtain customers and successfully face the competition. On the other hand, business development is a strategy to grow the business by way of product and\\or market development or through business alliance. Business development is practiced in significant scale in global companies while marketing is conducted by all types of companies. Further, the more innovative the marketing efforts are, the easier to attract customers to products and brand of the company.
Reference:
1. “Definition of Marketing.” American Marketing Association . N.p., n.d. Web. 02 May 2017. [https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx]
2. “The Marketing Mix and the 4Ps: Understanding How to Position Your Market Offering.” From MindTools.com. N.p., n.d. Web. 02 May 2017. [https://www.mindtools.com/pages/article/newSTR_94.htm]
3.Umar, Umair. “Market Development, Product Development, Market Penetration, Diversification.” Umair Umar. N.p., 20 Dec. 2012. Web. 02 May 2017.
4.”Strategic Alliance.” Investopedia. N.p., 30 Aug. 2015. Web. 02 May 2017. [http://www.investopedia.com/terms/s/strategicalliance.asp]