Marketing and Marketing Management
Marketing and Marketing Management
Marketing management is the management of the marketing activities in an organization and includes management of the processes of planning, organizing, directing, motivating, coordinating, and controlling. It is the process of satisfying the needs and wants of the customers of the organization. Marketing management is an important function of the organization since it brings the organization closer to its customers and consists of establishing a marketing orientated organization with the emphasis on the customer. It is a core component in the organization’s success.
Marketing is a process by which an organization obtains what it needs and wants through creating and exchanging products and value with its customers. In simple words it is the delivery of customer satisfaction at a profit. It satisfies the needs of customers better than the competition. It focuses on the use of all the controllable influences to satisfy the customer. One of the shortest de?nition of marketing is ‘meeting needs pro?tably’. As a managerial definition, marketing has often been described as ‘the art of selling products’.
Peter Drucker has defined marketing as ‘Marketing is so basic that it cannot be considered as separate function. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view’. He has further said that ‘the aim of marketing is to make selling super?uous. The aim of marketing is to know and understand the customer so well that the product or service ?ts him and sells itself. Ideally, marketing should result in a customer who is ready to buy’.
Marketing management is a business discipline which focuses on the practical application of marketing techniques and the management of an organization’s marketing resources and activities.
Philip Kotler defines marketing as ‘Marketing management is the analysis, planning, implementation and control of programmes designed to bring about the desired exchanges with target audiences for the purpose of personal and mutual gain. It relies heavily on adoption and coordination of the product, price, promotion and place for achieving response’.
The American Marketing Association defines marketing management as ‘Marketing (management) is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals’.
Perceptions and viewpoints about marketing
There are varying perceptions and viewpoints on the meaning and content of marketing. Some of important perceptions and viewpoints are given below.
- Marketing is a social and managerial process by which customers obtain what they need and want through creating, offering and exchanging products of value with others.
- Marketing is the process by which an organization interacts creatively, productively and profitably to the market place.
- Marketing is the art of creating and satisfying customers at a profit.
- Marketing consists of getting the right products and services to the right customers at the right places at the right time at the right price with the right communication and promotion.
- Marketing is also concerned with the problem of profitably disposing what is produced.
- Marketing is the phenomenon that is brought about by the pressures of mass production and increased spending power.
- Marketing is the performance of business activities that direct the flow of products and services from the producer to the customer.
- Marketing is the economic process by which products and services are exchanged between the producer and the customer and their values determined in terms of prices.
- Marketing is designed to bring about desired exchanges with target customers for the purpose of mutual gain.
- Marketing activities are concerned with the demand stimulating and demand fulfilling efforts of the organization.
- Marketing is the function that adjusts an organization’s offering to the changing needs of the market place.
- Marketing is a total system of interacting business activities designed to plan, promote, and distribute need satisfying products and services to existing and potential customers.
- Marketing originates with the recognition of a need of the customer and terminates with the satisfaction of this need by the delivery of a usable product at the right time, at the right place, and at an acceptable price. The customer is present both at the beginning and at the end of the marketing process.
- Marketing is a view point, which looks at the entire business process as a highly integrated effort to discovery, arouse and satisfy customer needs.
The marketing concept
The marketing concept consists of achievement of organizational goals by determining the needs and wants of customers and delivering the desired benefits more effectively and efficiently than competitors. Peter Drucker has stated that ‘there is only one valid definition of business purpose: to create a customer’. As per Lou Gerstner, CEO of IBM, ‘Everything starts with the customer’. Michael Tracy and Fred Wiersema have stated the purpose of marketing which is ‘Creating shareholder wealth is not the purpose of the business. It is the reward for creating customer value’.
Organizations vary in their perceptions about business, and their orientations to the market place. This has led to the emergence of many different concepts of marketing. Marketing activities are normally performed under some well thought out philosophy of efficient, effective, and responsible marketing. There are six competing concepts under which organizations conduct their marketing activity.
- Exchange concept – This concept of marketing holds that the exchange of a product between the seller and the buyer is the central idea of marketing. Though the exchange forms a significant part of marketing, yet to view marketing as mere exchange results will mean into missing out the essence of marketing. Marketing is much broader than exchange. Exchange covers the distribution aspect and the price mechanism. Many other important aspects of marketing, for example, concern for the customer, generation of value satisfactions, creative selling and integrated action for serving customer, are not included in the exchange concept.
- Production concept – It is one of the oldest concept which guides sellers. The production concept holds that customers favour those products that are widely available and low in cost. Production oriented organizations concentrate on achieving high production efficiency and wide distribution coverage. This concept holds in at least two types of situations. The first is where the demand for a product exceeds supply. Here consumers are more interested in obtaining the product than in its fine points. The suppliers will concentrate on finding ways to increase production. The second situation is where the product’s cost is high and has to be brought down through increased productivity to expand the market.
- Product concept – This concept holds that customers favour those products that offer quality or performance. Product oriented organizations focus their energy on making good products and improving them over time. In this concept it is assumed that buyers admire well made product and can appraise product quality and performance. These organizations are caught up in an appreciation of their product and fail to appreciate that the market may be less ‘turned on’ and may be even moving in different direction. The product concept leads to ‘marketing myopia’, an undue concentration on the product rather than the need.
- Selling concept – This concept assumes that customers, if left alone, will not buy enough of the organization’s products. The organization must therefore carry out an aggressive selling and promotion effort. The concept assumes that customers show buying inertia or resistance and have to be coaxed into buying more, and that the organization has available a whole battery of effective selling and promotion tools to stimulate more buying. The selling concept is practiced most aggressively with ‘sought products’, those products that buyers normally do not think of buying. Under this concept organization perfects various sales techniques to locate prospective customers and hard sell them on the benefits of their product. Most organizations practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what they can sell. Thus selling, to be effective, must be preceded by several marketing activities such as needs assessment, marketing research, product development, pricing, and distribution. If the organization does a good job of identifying customer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these products will sell very easily. Indeed, marketing based on hard selling carries high risks. It assumes that customers who are coaxed into buying the product will like it; and if they don’t, they won’t bad-mouth it to friends or complain to other customers and they will possibly forget their disappointment and buy it again. These are indefensible assumptions to make about buyers. One study showed that disappointed customers bad mouth the product to eleven acquaintances, while satisfied customers may good mouth the product to only three.
- Marketing concept – This concept holds that the key for the achievement of the organizational goals. It consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. Selling focuses on the needs of the seller while marketing focuses on the needs of the customer. Selling is preoccupied with the seller’s need to convert his product into cash while marketing believes with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it. Hence market focus is important. No organization can operate in every market and satisfy every need. Nor can it even do a good job within one broad market. An organization can do best when it defines its target markets carefully. It can do best when it prepares a tailored marketing program for each target market.
- Customer orientation – An organization can define its market carefully and still fail at customer-oriented thinking. Customer oriented thinking requires the organization to define customer needs from the customer point of view and not from organizations own view point. Every product involves tradeoffs, and management cannot know what these are without talking to and researching customers. Many a time all of the product qualities cannot be combined in one product, the organization must make hard choices not on what pleases it but rather on what customers prefer or expect. The aim must be to make a sale through meeting the customer’s needs. Further it is extremely important to satisfy the customer. It is because an organization’s sales usually come from two groups namely customers and repeat customers. It always costs more to attract new customers than to retain current customers. Therefore customer retention is more critical than customer attraction.
- Coordinated marketing – Usually all the employees in an organization are not trained or motivated to pull together for the customer. Coordinated marketing means two things. First, the various marketing functions such as sales personnel, advertising, product management, marketing research, and so on must coordinate among themselves. Various marketing functions must be coordinated from the customer point of view. Second, marketing must be well coordinated with the other departments. Marketing does not work when it is merely a department. It works only when all the employees appreciate the effect they have on customer satisfaction.
- Profitability – The purpose of the marketing of the products is to help the organization to achieve its goals. The key to marketing is not to aim for profits as such but to achieve them as a byproduct of doing a good job. This is not to say that marketing personnel are not concerned with profits. Quite the contrary, they are highly involved in analyzing the profit potential of different marketing opportunities. While sales personnel focus on achieving sales volume goals, marketing personnel focus on identifying profit making opportunities.
- Societal marketing concept – In recent years, some stakeholders question whether the marketing concept is appropriate organizational philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services. The question is whether organizations does an excellent job of sensing, serving, and satisfying individual customer wants are necessarily acting in the best long run interests of customers and society. The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the customer’s and the society’s well-being. The societal marketing concept calls upon organization to balance three considerations in setting their marketing policies, namely, company profits, customers want satisfaction, and society interest. Originally, organizations based their marketing decisions largely on immediate profit calculations. Then they began to recognize the long run importance of satisfying customer wants, and this introduced the marketing concept. Now they are beginning to factor in society’s interests in their decision making. The societal marketing concept calls for balancing all three considerations. Organizations can achieve notable sales and profit gains through adopting and practicing the societal marketing concept.
Functions of marketing management
Various functions of marketing management in an organization are described below.
- Marketing objectives – Marketing management determines the marketing objectives. The marketing objectives may be short term or long term and need a clear approach. They have to be in coherence with the aims and objectives of the organization.
- Planning – After formulation of the marketing objectives, the important function of the marketing management is to plan how to achieve these objectives. This includes sales forecast, marketing programmes formulation, marketing strategies.
- Organization – A plan once formulated needs implementation. Organizing functions of marketing management involves the collection and coordination of required means to implement a plan and to achieve the predetermined objectives. The organization involves structure of marketing organization, duties, responsibilities and powers of various members of the marketing organization.
- Coordination – Coordination refers to harmonious adjustment of the activities of the marketing organization. It involves coordination among various activities such as sales forecasting, product planning, product development, production, transportation, and warehousing etc.
- Direction – Direction in marketing management refers to development of new markets, leadership of employees, motivation, inspiration, guiding and supervision of the employees.
- Control – Control refers to the effectiveness with which a marketing plan is implemented. It involves the determination of standards, evaluation of actual performance, and adoption of corrective measures etc.
- Staffing – Employment of right and able employees is very crucial to success of a market plan. Organization must have marketing personnel with desired capabilities.
- Analysis and evaluation -The marketing management involves the analysis and evaluation of the target marketing regions as well as the productivity and performance of employees carrying out the marketing activities..
Factors affecting the marketing strategy
Factors which affect marketing strategy of an organization are as follows
- Target customers
- Four Ps (product, place, promotion, and price)
- Marketing information, planning, organization, implementation, and control systems
- Marketing intermediaries, publics, competitors, and suppliers
- Demographic and economic environment, technological and physical environment, social and cultural environment, and political and legal environment.
These factors affecting the marketing strategy is given in Fig 1
Fig 1 Factors affecting the marketing strategy of an organization