The Significance of Marketing for Business Organizations - Article Example

Introduction: Marketing is defined on the internet as: (Referred at: 18 March 2006, Website: www.eyefortransport.com/glossary/mn.shtml) “The processof organizing and directing all the company activities which relate to determining the market demand and converting the customers buying power into an effective demand for a service and bringing that service to the customer.” Marketing is total system of business activities designed to plan, price, promote, and distribute want- satisfying products to target markets in order to achieve organizational objectives. This definition has two significant implications (Neil A. Morgan, Nigel F. Piercy, 1996): Focus: That the system of business activities should be customer oriented. Customer wants must be recognised and satisfied Duration: Marketing should start with an idea about a want satisfying product and should not end until the customers’ wants are completely satisfied, which may be sometime after the exchange is made. Marketing can occur any time a person or an organization strives to exchange something of value with another person or organization (Peter J Buckley, C. L. Pass, Kate Prescott, 1990). Thus, at its core marketing is a transaction or exchange. In this broad sense, marketing consist of activities designed to generate and facilitate exchanges intended to satisfy human or organizational needs and wants. The following conditions must exist for a marketing exchange to take place (Dale Littler, 2002): Two or more people or organizations must be involved, and each must have the needs or wants to be satisfied. If you are totally self- sufficient, there is no need for an exchange The parties to the exchange must be involved voluntarily Each party must have something of value to contribute in the exchange, and each must believe that it will benefit from the exchange The parties must communicate with each other. The communication can take many forms and may even be through a third party, but without awareness and information there can be no exchange. Market-driving companies are able to match customer value opportunities with their capabilities precisely because they drive the structure of the marketplace. As previously indicated, this is achieved by a greater capacity of market-driving firms to influence the behaviours of customers and competitors. Such capacity results from an organizational culture that fosters the creation and implementation of innovations (Dawn Burton, 2005). Market-driving organizations are better able to gain a sustainable competitive advantage by changing the structure or composition of a market and/or behaviours of its players (Dawn Burton, 2005). The market-driving organization is likely to propose offerings more valued by consumers than competitors. In addition, driving markets allows organizations to exploit opportunities that competitors cannot (Robert E. Morgan, Christopher R. Turnell, 2005). Market-driving organizations may achieve greater performance than market-driven organizations by reshaping the structure of the market according to their own competencies and by exploiting the competitors’ weaknesses. Market type culture is oriented toward the accomplishment of well-defined goals as well as toward enhancing productivity and efficiency (Gordon E. Greenley, 1996). Market type cultures allow for successful communication of innovations and coordination of activities between departments. The formality of communications and inter-functional coordination facilitates the implementation of innovations, which is the key for adding value to customers (Robert E. Morgan, Christopher R. Turnell, 2003). Market type culture is oriented toward the accomplishment of well-defined goals as well as toward enhancing productivity and efficiency (Robert E. Morgan, Christopher R. Turnell, 2003). Market type cultures allow for successful communication of innovations and coordination of activities between departments. The formality of communications and inter-functional coordination facilitates the implementation of innovations, which is the key for adding value to customers (Gordon E. Greenley, 1996). Importance of marketing for firms: It would be difficult to imagine a world without marketing. But it may be equally difficult to appreciate the importance of effective marketing plays in most aspects of our lives. The importance of marketing can be divided into the following categories (Ken Starkey, Mike Wright, Steve Thompson, 1991). Globally: As we know the European Unions, the North American Free Trade Agreement, and the Asia-Pacific Economic Cooperation forum are reducing economic barriers and liberating trade between their members. This increases tremendous marketing opportunities for firms within the member countries. Firm are recognising that their profit and growth objectives are most likely to be achieved through a combination of domestic and international marketing, rather than solely from domestic marketing (Ken Starkey, Mike Wright, Steve Thompson, 1991). Domestically: Aggressive, effective marketing practices have been largely responsible for the high standards of living on the UK. The efficiency of mass marketing- extensive and rapid communication with customers through a wide variety of media and a distribution system that makes products readily available- combined with a mass production brought the cost of many products within reach of most customers. Now mass customization means even more products virtually tailored to our individual tastes. As a result average citizens of UK enjoy things that once were considered luxuries and in many countries are still available only to people earning high incomes (Ken Starkey, Mike Wright, Steve Thompson, 1991). Organizationally: Marketing consideration should be an integral part of all the short- range and long range planning in any company because: The success of any business comes from satisfying the wants of its customers, which is the social and economic basis for the existence of all organizations. Although many activities are essential to a company’s growth, marketing is the only one that produces revenue directly. Marketing is necessary for firms to: Identify Consumer Markets and buying Behaviour Identify Business markets and buying behaviour Identify Market Segmentation, targeting, and positioning Do Marketing research and market information Consumer Market: The consumer market is not only large, it is dynamic. The first challenge of the marketer is to gain an understanding of what the market looks like and how it is changing. To develop a clear understanding about the market, a marketer has to examine markets geographic distribution, consumer demographics, etc. Business Markets: The business market consists of all individuals and organizations that buy goods and services to: To make other goods and services To resell to other business users or to customers To conduct the organization’s operations. Marketing provides the firm with a complete knowledge of its business environment and helps the organization to formulate its strategies according to such environment. Market Segmentation, targeting and position: Marketing helps the firm to target a particular segment in the industry and helps the firm to gain a competitive edge over the other competitors. Marketing helps the firm to introduce its product or service in the market, and propagate the knowledge of the product or service to the customers. (Ian Clarke, 2002). Market Research and information: Marketing research is need before a product is introduces to the market, and on regular basis through out its life. Research is conducted to answer questions about market segment, consumer market behaviours and buyer market behaviour. Marketing research help the marketers formulate the marketing mix, identify markets and markets segments, identify potential competitors and identify customers’ expectations. Conclusion: In order to establish sustainable business marketing is one of the key factors that should be considered. Initially marketing was considered as an expense to the organization but with time manager realised the importance of marketing for the integrity of running business and significant efforts are made to market their products and services. The prevalence of internet has also opened new marketing techniques under the name of e-marketing. The techniques made easier for the consumer to get the know how of the products and services and gives the consumer more choices to choose from. References: Dale Littler, On Value–Based Marketing (2), Volume 13, Issue 4, Page 369-371, Dec 2002  Dawn Burton, Marketing Theory Matters, Volume 16, Issue 1, Blackwell Publisher, Page 5-18, Mar 2005  Eye for transport, Referred: 18 March 2006, Website: www.eyefortransport.com/glossary/mn.shtml Gordon E. Greenley, Market Orientation and Company Performance: Empirical Evidence From UK Companies, Volume 6, Issue 1, Page 1-13, Mar 1995  Ian Clarke, On Value–Based Marketing (1), Volume 13, Issue 4, Page 367-369, Dec 2002  Ken Starkey, Mike Wright, Steve Thompson, Flexibility, Hierarchy, Markets, Volume 2, Issue 3, Page 165-176, Sep 1991  Neil A. Morgan, Nigel F. Piercy, Competitive Advantage, Quality Strategy and the Role of Marketing, Volume 7, Issue 3, Page 231-245, Sep 1996  Peter J Buckley, C. L. Pass, Kate Prescott, The Implementation of an International Market Servicing Strategy in UK Manufacturing Firms, Volume 1, Issue 3, Page 127-136, Sep 1990  Robert E. Morgan, Christopher R. Turnell, Market-based Organizational Learning and Market Performance Gains, Volume 14, Issue 3, Page 255-274, Sep 2003 Appendix: Dawn Burton, Marketing Theory Matters, Volume 16, Issue 1, Blackwell Publisher, Page 5-18, Mar 2005  Summary: The importance of market-driving strategies as an alternative to market-driven strategies is evident in the marketing literature. However, there has been no attempt to integrate market-driving strategies into an encompassing framework. The first section of this paper presents an overview of market-orientation, market-driven, and market-driving strategies. The second section provides a framework to better understand the process involved in creating and implementing a market-driving culture. Finally, the last section examines the relationship between market-driving strategies and business performance. To build this framework, the paper relies on extant leadership, organizational culture, innovation, and the marketing strategy literatures. The process of becoming a market-driving organization starts with transformational leadership. Transformational leaders instil the shared values and norms needed for creating and implementing a market-driving culture. It is argued that the creation of a market-driving culture requires an adhocracy-type of culture, whereas the implementation phase requires a market-type culture. An adhocratic-type of culture facilitates the firm’s capacity to innovate through fostering risk taking, innovativeness, and interactive organizational learning. The ability of a firm to translate its capacity to innovate into market-driving is contingent on how well organizational change is handled through the coordination of the firm’s departments. Ultimately, market-driving allows the firm to better match customer value opportunities with its own capabilities. Neil A. Morgan, Nigel F. Piercy, Competitive Advantage, Quality Strategy and the Role of Marketing, Volume 7, Issue 3, Page 231-245, Sep 1996  Summary: This article focuses on integrating four forms of competition described in the marketing and management literatures. Competition typically is defined as among firms within an industry producing products that are substitutes for one another. Therefore, the identification and evaluation of marketplace competitors is a key element of strategic marketing and a vital element of corporate survival. Despite the relative importance of tracking and evaluating competitors, the scope and nature of competition are not well defined or operational. This may be because competition is characterized from a firm’s perspective rather than a customer’s perspective. Evaluating competition from a customer’s perspective encourages a broader view of competition because customers are not bound by the typical single-industry definition of competition. Market-oriented firms attempting to satisfy customers’ needs and wants should have an interest in understanding how their customers select products in the face of wide-ranging competition. If managers are to avoid mistakes that originate from a limited view of competition, then the alternative competitive forms must be identified and considered when developing a marketing strategy. Ken Starkey, Mike Wright, Steve Thompson, Flexibility, Hierarchy, Markets, Volume 2, Issue 3, Page 165-176, Sep 1991  Summary: This paper discusses approach to examining communication and team working. This article compares three discipline-based approaches to understand the effectiveness of organisational groups, and then show how their interrelationship may provide a single approach to understanding communication and team working in organisational groups. This article is to benefit researchers in the field of organisational team working in that utilising this single approach takes account of important conceptual interrelationships, and identify new and valuable areas of further research. It may also benefit practitioners in that they may understand better the importance and impact of communication within business networks, and its influence upon marketplace success. This approach, known as market-based approach, highlights the importance of considering networked environments and social systems in conducting marketing research. Market-based approach rests upon three main principles: (1) to understand communication and team working one must adopt a networked perspective; (2) that internal communications (those between employees) are closely linked and have an important influence upon external communications (with business partners, suppliers, and customers); and (3) that reaching convergence and a mutual understanding between network communicators is the primary function of marketing communications within and between organisational teams. Read More