Do We Really Understand Sales, Marketing & Business Development?

One trending discussion on www.linkedin.com “Business Development – The Missing Link Between Marketing & Sales” drew my attention and forced me to compose this post.

For a long time, most of the people are into the misconception that sales and business development are the same and can be applied interchangeably. Even the function of marketing is also not spared and included in the same stratum. There are instances where one is inducted as Marketing Manager, trained as Sales Manager and expected to work as Business Development Manager. How confused the organization, the person and the approach is. Organizations can’t accomplish its mission unless or until they draw a line of distinction between the three terminologies. It would not be an exaggeration to state that this approach will lead the organization nowhere but to compromise on both short and long-term goals.

Let’s find out what differentiates sales, marketing and business development.

Sales, as its primary function, sell directly to the end customer. It’s aim is to convert prospects into customers and retain existing customers. It bats in the pitch prepared by marketing and tends towards closing by use of requisite selling skills, viz. qualification, presentation, quotations, negotiations, customization of product or services offered. It is a potent source of feedback which forms the basis for realignment of various marketing and business development activities. Figure (1) depicts the typical structure of sales in an organization.

Fig-1

Marketing is all about promotion and positioning of the brand, product or service with the intent of identifying potential customers. It is also about the furtherance of corporate communication on the brand, product or service, it’s pricing and distribution. Once the brand is established or positioned or the company’s message about the product or service is disseminated to the concerned, role of the marketing function is almost over.

Business development function stresses upon identification for strategic partnerships within or outside the company or industry and always looks for cross sales, value added sales and/or channel sales opportunities. Any opportunity, once identified, moved into sales for closing. It works as a bridge to cover-up the gap between marketing and sales. Regardless of the size and nature of the organization, business development adheres to the same structure as shown in Figure (2).

Fig-2

Figure (1) and Figure (2) also depicts how sales and business development are different and can’t be dealt with similar approaches.

In the first instance, Business development activities look like what marketing does and induce people to use the terminologies interchangeably, but there is a significant difference between the two. The fact is that business development stage comes to the fore after the consolidation of several marketing efforts. Whereas, marketing is a broader term; business development is a subset of it. Some goals of business development, viz. brand positioning, business acquisition, business or market expansion, customer awareness, etc. are also the shared goals of marketing. Hence, to some extent, business development can be perceived as an extension of the marketing function, but can’t be used interchangeably.

Fig-3

Figure (3) portrays how the three distinct functions, viz. sales, marketing and business development are looped together to work in an integrated, interrelated and interdependent manner to sell company’s products or services. To keep this loop work properly, one must refrain to deduce they are similar irrespective of the size and hierarchy of the organization. Because of the wide or tall structure, for large organizations, it is easy to define and practice the three functions distinctly. In smaller organizations the confusion creep as a single person may acts upon the three functions. Even so, the distinct characteristics of the three functions must be communicated to the concerned so that he/she could deal with the situation appropriately and firmly contribute towards accomplishment of organization’s mission and goals.