In any accounting role, it is important to understand that accounts are not independent of other aspects of business.
Especially for management accountants, an accounting role might involve using financial information to make strategic decisions. This requires a top level understanding of how businesses run and, in this article, we’ll take a look at marketing.
Kotler et al established the idea of the marketing mix and, as an accountant, you’ll need to be aware of the 4 Ps of marketing.
As an accountant, this is the element of the marketing mix you will most frequently come into contact with. Rather than keeping your relationship with price at a purely practical level, though, it can be beneficial to grasp the thinking behind it.
Price is where the perceived value of the product is established. For some companies, the price of the product is the key, and they are willing to reduce the price to compete against competitors and gain market share. For example, the success of 99p Stores was largely due to its ability to undercut Poundland by 1p.
As an accountant, part of your role might be to look at ways of reducing costs by making processes more efficient, allowing competitive price cuts to be made.
The promotion of a brand or product can encompass a broad range of activities.
A contemporary example is using social media networks to spread a message. Recently, a single dress generated a great deal of controversy and interest on Twitter.
In only one week, #thedress received more than 500,000 mentions on Twitter, and had appeared on hugely popular TV programmes like the Ellen Degeneres Show. Social shares got people talking, and raised awareness about the product, which in turn had a massive impact on sales.
Accounting is closely linked with promotion, as any promotional activities have to be financially justified. Before promotional strategies can be put into place, marketing departments need to know that the cost of making a sale will be less than the sales value of the product.
This is where the product can be sold, or where customers look to buy your product. For some companies this is a physical place, such as a shop. However, companies like Amazon have revolutionised the location of selling, popularising internet shopping. Due to this, global is quickly overtaking local selling for many businesses.
Finance and marketing teams often work together to track, measure, and identify the location of the most lucrative markets.
This means looking at your customers’ needs and addressing exactly what they want. Product covers everything from the size to the branding of the product. It will also cover the service that customers require during and after the buying process.
Product design has a large impact on the perceived value of the product. For example, some people are willing to pay more for a Dyson branded vacuum cleaner. Dyson have thought about what the customer needs from a vacuum cleaner, and have therefore revolutionised what it looks like and how it performs.
Accountants can be closely involved in the product costing that heavily influences the finished product.
If you would like your accounting role to encompass broader business considerations, take a look at studying for the CIMA qualification. You can begin at Certificate level with no previous qualifications, or the Professional level if you have previous accounting experience.