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MARKETING MANAGEMENT
UNIT I
INTRODUCTION
Marketing – Definitions - Conceptual frame work – Marketing environment: Internal and
External -Marketing interface with other functional areas – Production, Finance, Human
Relations Management, Information System. Marketing in global environment – Prospects and
Challenges.
Table of Contents
1.1 Introduction to marketing .................................................................................................................... 2
1.1.1Definition of marketing.................................................................................................................. 2
1.1.2 Nature of Marketing .................................................................................................................. 2
1.2 Functions of Marketing ........................................................................................................................ 6
1.3 Marketing versus selling ...................................................................................................................... 7
1.4 Meaning and definition of Marketing management ............................................................................. 8
1.5 Marketing Environment ....................................................................................................................... 8
1.5.1 Types of Marketing Environment ................................................................................................. 8
1.5.2 Internal Marketing Environment: Controllable Factors ............................................................ 9
1.6 Marketing's Relationship with other Functions ................................................................................. 11
1.6.1 Research and development.......................................................................................................... 11
1.6.2 Production/operations/logistics ................................................................................................... 12
1.6.3 Human resources ......................................................................................................................... 12
1.6.4 IT (websites, intranets and extranets) ......................................................................................... 13
1.6.5 Finance department ..................................................................................................................... 13
1.7 Global Marketing ............................................................................................................................... 14
1.8 Marketing Challenges ........................................................................................................................ 14
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1.1 Introduction to marketing
Marketing is understood to mean the sale and purchase of goods and services but it is
too narrowing viewable to understand it so. The term 'marketing' is much wider in nature and
scope. It is not limited only to needs, sale and purchase of goods and services. It means the entire
process of satisfying the needs of consumers. It starts with the discovery of needs and Wants of
the consumers, and it continues 'till the wants are satisfied.
Marketing is the process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, and services to create exchanges that will satisfy individual and
organizational objectives. Marketing is not only about providing products or services but also
about providing changing benefits to the changing needs and demands of the customer.
Marketing is thus the sum total of all the activities and processes including creating,
communicating, delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.
1.1.1Definition of marketing
According to William J. Stanton, "Marketing is a total system of interacting business
activities designed to plan, price, Promote and distribute want-satisfying products and services to
the present and potential customers".
According to Prof. Malcolm McNair, "Marketing is the creation and delivery of
standard of living to the society".
According to Theodore Levitt, "Marketing is getting and keeping the customer".
According to Cundiff and Still, "Marketing is the business process by which products
are matched to the market and through which the transfers of ownership are affected".
.
According to American Marketing Association (new definition), "Marketing is an
organizational function and a set of processes for creating, communicating and delivering value
to customers and for managing customer relationships in ways that benefit the organisation and
its stakeholders".
1.1.2 Nature of Marketing
The nature of marketing is as follows:
1.Specialised Business Function: In the early days, the selling function did not call for any
specialised skills as the sales could have been effected on the production - basis. The
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management of a firm, therefore, has to develop a particular organization with a view to
absorbing new ideas, new approaches and new market demands.
2.Socially Desirable Function: It requires constant interaction with the various strata of society.
It manipulating the factors of production, distribution, promotion and price, and also in
influencing Consumption and consumer attitudes.
3.Integrative Function: It integrates and combines the other business functions like production,
finance, Etc., with a view to accomplishing the organizational objectives.
4.Reflects the Business Mission: Marketing reflects the business mission of a firm before the
public and society.
5.Adaptation to Environment Variables: It is said that change is the only basic law of
economics. The art of distributing the products and services among the various claimants, has
one basic law, i.e., change
6.Universal Function: It has a universality in the sense that it can be applied to both profitmotive and organisations. A profit-seeking business unit is dependent on marketing. The
institutions like hospital, Or political association also practice marketing in popularizing the
services offered by them.
7.Management Function: Marketing is a management function like management of other
functions such as Finance, personnel, etc. The business policies, strategies and programmes
related to marketing are mass Functions. These are needed to be planned,organised, directed,
coordinated, and controlled so as Marketing objectives.
8.Consumer orientation: In marketing each and every thing is related to consumer needs
organization develop the product according to consumer needs.
1.1.3 Scope of Marketing
Marketing is typically seen as the task of creating, promoting, and delivering businesses. In fact,
marketing people are involved in ten types of entities in marketing. The scope of marketing is as
follows:
1)Goods: Physical goods constitute the bulk of most countries' production and marketing effort.
In developing nations, goods - particularly food, commodities, clothing, and housing - are the
mainstay of the economy.
2)Services: As economies advance, growing proportions of their activities focused on the
production of services. Services include the work of airlines, hotel, car rental firms, barbers and
beauticians, maintenance and repair people, dog kennels and dog therapists, as well as
professionals Working within or for companies, such as accountants, lawyers, engineers,
doctors, software programmers, and management consultants. Many market offerings consist of
a varied mix of goods and services.
3)Experiences: By orchestrating several services and goods, one can create, stage, and market
experiences.
4)Events: Marketers promote time-based events, such as the Olympics, company anniversaries,
major trade events, and artistic performances. There is a whole profession of meeting planners
who work out the details and stage it to come off perfectly.
5)Persons: Celebrity marketing has become a major business, Years ago, someone seeking fame
would hire a to plant stories in newspapers and magazines. Today every major film star has an
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agent, a personal manager, public relations agency. Artists, musicians, CEOs, physicians, highprofile lawyers and financiers, professionals are drawing help from celebrity marketers.
6)Places: Places - cities, states, regions, and whole nations. Compete actively to attract tourists,
factory headquarters, and new residents. Place marketers include economic development
specialists, real estate commercial banks, local business associations, and advertising and public
relation agencies.
7)Properties: Properties are tangible rights of ownership of either real property (real estate) or
financial property (stock and bonds) Properties are bought and sold, and this occasion a
marketing effort. Real estate agents work for owners or seekers to sell or buy residential or
commercial real estate.
8)Organization: Organisations actively works to build a strong, favorable image in the mind of
their publics. It can be seen that corporate identity ads by companies seeking more public
recognition.
9)Information: Information can be produced and marketed as a product. This is essentially what
schools and universities produce and distribute at a price to parents, students, and communities.
10)Ideas : Every market offering includes a basic idea at its core. Products and services are
platforms for delivering some idea or benefit. Marketers search hard for the core need they are
trying to satisfy. For example, a church must decide whether to market itself as a place of
worship or a community center; the design of the church will be different depending on the
choice.
1.1.4 Core Concepts of Marketing
Marketing thinking starts with the customer's needs. Today the customer is in the
driver's seat. It is also because often change in the demand supply equation. The marketing has
the core basic concepts (also known as customer and market place concepts) as its elements
given below:
1. Needs, Wants and Demands: Consumers are motivated by their desire to satisfy complex
needs, and these should have the starting point for all marketing activity.
Need refers to something that is deep-rooted in an individual's personality.
Wants are desires for specific satisfied of these deeper needs.
For example, for satisfying the hunger need the person may want a Chinese food, South Indian
food etc. Although people's needs are few, their wants are many. Human want are continually
shaped and reshaped by social forces and institutions. Wants are the form taken by human needs
as they are reshaped by culture and individual personality.
Demands are wants for specific products that are backed by an ability qualification and
willingness to buy them. Wants become demands when supported by purchasing' power. The
marketer must not only be interested in knowing how people may want their product but also
how many actually have the purchasing power to purchase.
2. Product: Product is a bundle of attributes. For example, take a T-Shirt, it can give warmth, it
can protect from the sun's rays, or it can make a statement about the wearer's attitude. It can be a
gift or a 'status symbol'.
3. Utility: Utility is a concept within economics that is related to marketing. Utility is a measure
of the relative satisfaction from, or desirability of, consumption of various goods and services.
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Given this measure, one may speak meaningfully of increasing or decreasing utility, and thereby
explain economic behavior in terms of attempts to increase one's utility.
Richard Buskirk has presented an idea that marketing is an activity that creates following
utilities:
i) Form Utility: The usefulness of a product that results from its form; converting raw materials
into finished products. Product planning and development activities create form utility.
ii) Time Utility: Making a product available when consumers want to purchase it. After
production goods are stored by the manufacturer, wholesalers, retailers, etc., until such time, the
demand of the product is created and such goods are made available to the customer at the time
when they are needed or demanded.
iii) Place Utility: Making a product available in a location convenient for customers, the flow of
goods through different distribution channels from producer to consumer from the place of
abundant to the place or where they are Needed creates place utility.
iv) Ownership Utility: It refers to the orderly transfer of legal title to the product and/or
service/s from the seller to the buyer via a sales transaction. Goods may be lying in a reliable
state with the producer or the manufacturer or their agent until some other person needs them.
4. Value: Value may be best defined from the customer's perspective as a trade-off between the
benefits received versus the price paid. Value is created when the product and user come
together within a particular use situation.
5. Cost and Satisfaction: Customer satisfaction is the attitude-like feeling of a customer towards
a product or service and it has been used. It is generally described as the full meeting of one's
expectations a dissatisfied customer is very likely to switch brands.
Cost is the consumer's estimate of the product's overall capacity to satisfy his or her needs as
determined according to the lowest possible cost of acquisition, ownership and use.
Customer satisfaction depends on a product's perceived performance in delivering value relative
to a buyer’s expectations. If performance exceeds expectations, the buyer is delighted
1) Smart companies aim to delight customers by promising only what they can deliver, then
delivering more than Promise.
2)The aim of successful companies today is total customer satisfaction.
3)Customer delight creates an emotional affinity for a product or service, not just a rational
preference, and this create high customer loyalty.
4)Quality has a direct impact on product or service performance. Quality is defined in terms of
customer satisfaction.
6. Exchange and Transaction: The essence of marketing is a transaction a-exchange-intended
to satisfy human need and wants. Marketing emerges when people decide to satisfy needs and
wants through exchange Five conditions should be satisfied for exchanger take place:
Two or more parties should participate (buyer and seller).
ii) Each party must have something of value that the other party desires.
iii) Each party should be capable of communication and delivery.
iv) Each party should be free to accept or reject the offer.
v) Each party should believe that it is appropriate or desirable to deal with the other party.
7)Relationship and Networks: Relationship marketing is an integrated effort to identify,
maintain, and build a network with individual customers and to continually strengthen the
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network for the benefit of both the sides, through interactive, individualized, and value added
contacts over a long period of time.
8)Markets: The term 'market' has traditionally been used to describe a place where buyers and
sellers gather to exchange Goods and services, e.g., a fruit and vegetable market or a stock
market.
According to Philip Kotler, "A market consists of all the potential customers sharing a particular
need or wants who might be willing and able to engage in exchange to satisfy that need or want".
9)Marketers: Marketers are the persons whose duties include the identification of the goods and
services desired by a set of Consumers, as well as the marketing of those goods and services on
behalf of a company.
The person that sells goods or services in or to a market especially, the one that markets a
specified commodity is called a marketer.
1.2 Functions of Marketing
1) Functions of Exchange: The process of the passing of goods into the customer's hands is
called the functions of exchange. This process can be divided into buying, assembling and
selling.
i)Buying: It is the first step in the process of marketing, A manufacturer has to buy raw
materials for production wholesaler has to buy goods to sell them to the retailer; a retailer has to
buy goods to be sold to the consumer.Buying involves transfer of ownership of goods from seller
to buyer.
ii) Assembling: Assembling means the creation and maintenance of the stock of goods,
purchased from different sources.
iii) Selling: Selling and buying are complementary to each other. Marketing efforts evolve
around the buying
selling functions. In business, the selling function is very important. The
primary objective of marketing is to sell products at a profit.
By selling, the ownership is transferred to the buyer.
2)Functions of Physical Supply: The second group of marketing process is the physical supply.
These are the functions that are related with creation of place and time utilities. Physical transfer
of goods from the manufacturer to consumer takes place by means of the following functions:
i)Transportation: Marketing system requires an economical and effective transportation
system. system transportation increases the value of goods by the creation of place utility.
ii) Storage and Warehousing: When production is seasonal but consumption is permanent or
when production continuous but consumption is seasonal, storage becomes necessary. Storage
involves holding and preserving goods between the time of their production and the time of their
consumption. It facilitates steady flow commodities in the market. Warehouses can be
maintained in central places from where the distribution can be according to the needs of the
consumers.
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iii) Choosing and Motivating Channels of Distribution: A channel of distribution is a group
of individual organizations that direct the flow of products from producers to customers.
Channels of distribution should products available at the right time, in the right place, and in the
right quantity..
3)Facilitating Functions: These functions make the marketing process easy and include
financing, pricing, risk-bearing standardisation and market information, etc.
i)Financing: It is very difficult to carry on marketing activities smoothly without the
availability of adequate and cheap finance. Commercial Banks, Cooperative Credit Societies,
and Government Agencies arrange for short term, medium term, and long term finance to
facilitate marketing. Trade credit is also one of the important sources of finance.
ii) Pricing: Pricing is also an important function which is closely related to selling. Price
policy of the concern directly affects the profit element and therefore, its successful
functioning.
iii)Risk-Bearing: In marketing, there arise numerous risks - damages to goods, physical loss,
changes in economic values of goods, mismanagement, credit losses, etc. These are more or
less inherent in the marketing process.
iv) Standardization: standardization is related to the division of commodities into distinct
groups. The standard is used in providing certain basic qualities of the goods for their use.
Standard is a specification. Standards are fixed on physical characteristics of products. The
standardised products possess uniform characteristics. For example, shape, weight, size, etc.
v)Market Information: The desired success of marketing depends on correct and timely
decision. These decisions are based on market information or market intelligence. Modern
marketing must have information of size, location, characteristics of markets, etc.
vi) Managing Products: The marketing function is responsible for forecasting and managing
the rate of supply and distribution of the firm's existing products. Of equal importance will be
its ability to determine what new products should be developed by the firm.
1.3 Marketing versus selling
Marketing is simply the act of 'bringing the product to market'. Selling on the other
hand is the final step which leads to close a sale, convert a prospective buyer into a customer, or
making a conversion. Selling is inward-looking. Marketing is outward looking.
Basis
Difference
Emphasis
of Selling
Marketing
Emphasis on product.
Emphasis on consumer needs and wants.
Company first determines customers
Company manufactures the product
Approach
need and wants and then decides on how
first and then decides to sell it
to deliver a product.
In marketing, customers satisfaction and
Primary
and In selling the primary motive is sales
delight is the primary objectives and
secondary
and secondary motives is to satisfy
secondary motive is meeting the buyers
motives
companies need
expected needs and wants.
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Orientation
Management is sales orientation.
Management is profit- oriented
Planning is short term orientation in Planning is long-term oriented, in terms
Planning
terms of today product and markets.
of new products,tomorrow’s markets, and
future growth.
Need priority Streeses needs of a seller.
Stresses need and want of buyers
Views business as a good producing Views business as a consumer satisfying
Philosophy
process.
process.
Emphasis on staying with existing Emphasis on innovation in every sphere,
technology and reducing cost.
on providing better value to the
Technology
customers by adopting a superior
technology.
Different departments work as highly All department of a business operate in
Work
separate watertight compartments.
an integrated manner, the sole purpose
Delegation
being
generation
of
consumer
satisfaction.
Price
Cost determines price.
Consumer determines price, price
Determination
determines cost.
Selling views customers as the last link Marketing views the customers as the
Customers
in business.
very beginning.
Scope
Narrow in scope
Wider in scope
1.4 Meaning and definition of Marketing management
According to Cundiff and Still, "Marketing management as a branch of broad area of
management. Marketing management is concerned with the direction of purposeful activities
towards the attainment of marketing goals". There are three kinds of goals:
1)Satisfaction of customer's needs,
2)Increase in sales volume, and
3)Increase in organisational profits.
All these goals are interrelated.
1.5 Marketing Environment
Marketing Environment is Dynamic: The marketing environment is constantly
changing in nature. Due to the many and varied influences operating; there is dynamism in the
environment causing it to continuously change its shape and Character.
Marketing Environment is Multi-Faceted: What shape and character an marketing environment
assumes
1.5.1 Types of Marketing Environment
There are certainly various factors that have both positive as well negative impacts over
marketing function
These environmental factors can be broadly grouped into two parts as:
1)Internal environment/ Controllable elements, and
2)External environment/Uncontrollable elements.
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1.5.2 Internal Marketing Environment: Controllable Factors
Internal environment refers to factors existing within a marketing firm. The internal
factors are generally regarded controllable factors or elements because the company has control
over these factors; it can alter or modify such factors its personnel, physical facilities,
organization and functional means, such as marketing mix, to suit the environment. Controllable
elements are eligible to controlling the operation of an organization.
1.
Top management: The organizational structure, the composition of board of director,
extent of professionalization of management etc. Factors like the amount of support the top
management enjoys from different levels of employees, shareholders and
Board of Directors has an important influence on the marketing decisions and their
implementation.
2.
Finance and Accounting: Finance is concerned with funding and using funds to carry
out the marketing plan. Financial Factors like financial policies, financial position and capital
structure - important internal environment affecting business performances, strategies and
decisions. Accounting has to measure revenues and costs to help marketing archive-objective.
3.
Research and Development: The R&D department focuses on designing safe and
attractive products. R & D and technological capabilities, determine a company's ability to
innovate and compete.
4.
Manufacturing: Manufacturing is responsible for producing the desired quality and
quantity of products. Physical assets and facilities like the production capacity, technology and
efficiency of the productive apparatus, distribution logistics etc., are among the factors which
influence the competitiveness of a firm.
5.
Purchasing: Purchasing worries about getting supplies and materials. Purchasing
means the procurement of goods and services from external agencies.
6.
Company Image and Brand Equity: The image of the company matters while raising
finance,. Forming joint ventures or other alliances, soliciting marketing intermediaries, entering
purchase or sale contracts, launching new products etc. Brand equity is also relevant in several
of these cases.
1.5.3 External Marketing Environment: Uncontrollable Factors
The external marketing environment refers to the factors existing outside the marketing
firm. The external or environmental factors such as the economic factors, socio- cultural factors,
government and legal factors, demographic factors, socio-culture factors, government and legal
factors, demographic factors, geo-physical factors etc., are, therefore, generally regarded as
uncontrollable factors or elements.
The external marketing environment
1.
Micro environment
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2.
Macro environment
1.5.4 Micro-environment
It refers to the company's immediate environment i.e., those environmental factors that are in
its proximity. These factors influence the 'Company's non-capability to produce and serve the
market. These are also the groups of people who affect the company's prospects directly. These
factors are:
1. Suppliers : the supplier to a firm can also alter its competitive position and marketing
capabilities.
2. Market intermediaries : every producer / manufactures has to appoint a number of
intermediaries in assisting him in promoting, selling and distributing the goods and services to
ultimate consumers. Intermediary nay be a business firm or individual.
3. Customers: The customers of a company may be of five kinds:
i) Ultimate Consumers: They may be individuals and householders who buys products for the
final consumption's
ii) Industrial Consumers: Industrial consumers are organizations which buy goods and services
for producing other goods and services for the purpose of other earning profits or fulfilling other
objectives.
iii) Resellers: These are intermediaries who purchase goods ~with a view to resell them at a
profit.
iv)Government and Other Non-Profit Customers: These customers purchase goods and
services to those for who they are produced, for their consumption in most of the cases.
v)International Customers: These are individuals and organizations of other countries who buy
goods and service either for consumption or for industrial use. Such buyers may be consumers,
producers, resellers and governments.
vi) Internal customers: They may be employees and workers of the any organization who they
support for organizations growth.
4. Competitors: competitors are those who sell the goods and service of the same and similar
description, in the same market. Competitors are to be identified and closely monitored.
5. Public: It is the duty of the company to satisfy the people. A public is defined as “any group
that has an actual or potential interest in or impact on a company’s ability to achieve its
objectives.”
1.5.5 Macro Environment
Macro environment refers to those factors, which are not concerned for the immediate
environment. These factors are external to the company and are quite uncontrollable.
The following are the macro environmental factors that affect the company's marketing
decisions:
1)Demographic Environment: The first macro-environmental force that marketer monitor is
population because people make up the markets. Marketers are keenly interested in the size and
growth rate of population in different cities, regions, and nations; age distribution and ethnic
mix; educational levels; household patterns; and regional characteristics and movements.
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2)Physical Environment: Components of physical forces are earth's natural renewal and nonrenewal resources. Natural renewal forces are forests, food products from agriculture or sea etc.
Non-renewable natural resources are finite such as oil, coal, minerals etc. For example, India
does not have enough petroleum reserves and imports petrol and other products.
3)Economic Environment: The economic environment consists of macro-level factors related
to the means of production and distribution of wealth that have an impact on the business of an
organization. Economic factors affect the spending power of people. Further economic
development and growth affects the product choice of customers. For example, recently with a
drop in interest rates the banking industry is finding it hard to mobilize small savings and stock
markets are fast emerging as a better investment option for investors.
4)Technological Environment: The technological environment consists of those factors related
to knowledge applied, the materials and machines used in the production of goods and services
that have an impact on the business organization. For example electronic manual typewriter was
replaced by electronic typewriter and later by computer.
5)Social and cultural environment: social responsibility concept has crept into marketing
literature as an alternative to the marketing concept. There are some core- cultural values, which
are found in our society deep rooted and stable and hence change very little.
6)International environment: international environment is particularly important for industries
directly depending on imports or exports and import – competing industries.Eg. Recession in
foreign market.
1.6 Marketing's Relationship with other Functions
Functions within an organization
The marketing function within any organization does not exist in isolation. Therefore
it's important to see how marketing connects with and permeates other functions within the
organization. This is considered how marketing interacts with research and development,
production/operations/logistics, human resources, IT and customer service. Obviously all
functions within organization should point towards the customer i.e. they are customer oriented
from the warehouseman that packs the order to the customer service team member who answers
any queries might have. These other functions and their relationship with marketing.
1.6.1 Research and development
Research and development are the engine within an organization which generates new
ideas, innovations and creating new products and services. For example, cell phone/mobile
phone manufacturers are in an industry that is ever changing and developing, and in order to
survive manufacturers need to continually research and develop new software and hardware to
compete in a very busy marketplace. Think about cell phones that were around three or four
years ago which are now completely obsolete. The research and development process delivers
new products and is continually innovating.
Innovative products and services usually result from a conscious and purposeful search for
innovation opportunities which are found only within a few situations. Peter Drucker
(1999)Research and development should be driven by the marketing concept. The needs of
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consumers or potential consumers should be central to any new research and development in
order to deliver products that satisfy customer needs (or service of course). The practical
research and development is undertaken in central research facilities belonging to companies,
universities and sometimes to countries. Marketers would liaise with researchers and engineers
in order to make sure that customer needs are represented. Manufacturing processes themselves
could also be researched and developed based upon some aspects of the marketing mix. For
example logistics (place/distribution/channel) could be researched in order to deliver products
more efficiently and effectively to customers.
1.6.2 Production/operations/logistics
As with research and development, the operations, production and logistics functions
within business need to work in cooperation with the marketing department.Operations include
many other activities such as warehousing, packaging and distribution. To an extent, operations
also include production and manufacturing, as well as logistics. Production is where goods and
services are generated and made. For example an aircraft is manufactured in a factory which is
in effect how it is produced i.e. production. Logistics is concerned with getting the product from
production or warehousing, to retail or the consumer in the most effective and efficient way.
Today logistics would include warehousing, trains, planes and lorries as well as the technology
used for real-time tracking. Obviously marketers need to sell products and services that are
currently in stock or can be made within a reasonable time limit. An unworkable scenario for a
business is where marketers are attempting to increase sales of a product whereby the product
cannot be supplied. Perhaps there is a warehouse full of other products that our marketing
campaign is ignoring.
1.6.3 Human resources
Human Resource Management (HRM) is the function within organization which
overlooks recruitment and selection, training, and the professional development of employees.
Other related functional responsibilities include well-being, employee motivation, health and
safety, performance management, and of course the function holds knowledge regarding the
legal aspects of human resources.
HR manager would help with scoping out the job, a person's profile, a job description,
and advertising the job. HR would help to score and assess application forms, and will organize
the interviews. They may offer to assist at interview and will support to make job offer. May
also use HR to organize an induction for new employee. Of course there is the other side of the
coin, where HR sometimes has to get tough with underperforming employees. These are the
operational roles of HR.
The human resources Department also has a strategic role. Moving away from
traditional personnel management, human resources sees people as a valuable asset to
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organization. Say they will assist with a global approach to managing people and help to develop
a workplace culture and environment which focuses on mission and values.
They also have an important communications role, and this is one aspect of their function which
is most closely related to marketing. For example the HR department may run a staff
development programme which needs a newsletter or a presence on intranet. This is part of
internal marketing effort.
1.6.4 IT (websites, intranets and extranets)
To define it need to consider elements such as computer software, information systems,
computer hardware, and programming languages. For our part is marketers we are concerned
with how technology is used to treat information i.e. how we get information, how we process it,
how we store the information, and then how we disseminate it again by voice, image or graphics.
Obviously this is a huge field but for our part we need to recognise the importance of websites,
intranets and extranets to the marketer.
A website is an electronic object which is placed onto the Internet. Often websites are
used by businesses for a number of reasons such as to provide information to customers. So
customers can interact with the product, customers can buy a product, more importantly
customers begin to build a long-term relationship with the marketing company. Information
Technology underpins and supports the basis of Customer Relationship Management (CRM), a
term which is investigated in later lessons.
An intranet is an internal website. An intranet is an IT supported process which supplies
up-to-date information to employees of the business and other key stakeholders. For example
European train operators use an intranet to give up-to-date information about trains to people on
the ground supporting customers.
An extranet is an internal website which is extended outside the organization, but it is
not a public website. An extranet takes one stage further and provides information directly to
customers/distributors/clients. Customers are able to check availability of stock and could check
purchase prices for a particular product. For example a car supermarket could check availability
of cars from a wholesaler.
1.6.5 Finance department
The marketing department will need to work closely with the finance department to
ensure that: There is an adequate budget to meet the needs for research, promotion and
distribution. The finance department has a whole organization brief to ensure that all the
business operates within its financial capabilities. They will want all departments to work within
their allocated budgets. Like all departments, marketing may wish to overspend if profitable
marketing opportunities emerge over the year. The marketing department is likely to concentrate
on sales volume and building market share, while the finance department may be more focused
on cash flow, covering the costs and paying back investment as quickly as possible.
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1.7 Global Marketing
Denotes the use of advertising and marketing on a global basis. Marketing is at the threshold of a
new and exciting era: e-business, e-commerce and e-marketing.Business has two basic
functions: marketing and innovation (Drucker) More stakeholders (customers, employees,
media).
Companies need a new set of guidelines, values and insightMarketing is too important
to be left to the Marketing Department. (David Packard)
Lower marketing and advertising costs in planning and control. Lower advertising
production costs.
Exploiting best ideas on a worldwide basis.
Global Marketing
Deciding How to Enter a Market
Indirect Export-Through export and through others.
Direct Export-Handle own exports.
Licensing-License a foreign company to use trademark, manufacturing processes, trade secret, or
other item for a fee or royalty.
Direct Investment- Direct ownership.
Joint Ventures-- Join with local investors to create venture. Coca-Cola and Nestle joined forces
in “ready to drink” coffee and tea.
Whirlpool formed a venture with Dutch electronic group Philip’s on white-goods business to
leapfrog into European market.
Direct Investment--Ultimate form is direct ownership of foreign-based assembly or
manufacturing facilities.
Can buy part or full interest in a local company.
Global Marketing-An endless process or principle:
Customer attraction
Customer satisfaction
Customer retention.
The CEO is also the Chief Marketing Officer.
1.8 Marketing Challenges
Technological advances, rapid globalization, and continuing social and economic shifts are
causing marketplace changes. Major marketing developments can be grouped under the theme of
Connecting.
1. Via Technology:
- Advances in computers, telecommunications, video-conferencing, etc. are major forces.
Databases allow for customization of products, messages and analysis of needs.
- The Internet
Facilitates anytime, anywhere connections
Facilitates CRM
Creates marketplaces
2. With customers
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- Selective relationship management is key.
- Customer profitability analysis separates winners from losers.
- Growing “share of customer”
- Cross-selling and up-selling is helpful.
- Direct sales to buyers are growing.
3. With marketing partners
- Partner relationship management involves:
- Connecting inside the company
- Connecting with outside partners
- Supply chain management
- Strategic alliances
4. With the world
- Globalization
- Competition
- New opportunities
- Greater concern for environmental and social responsibility
- Increased marketing by nonprofit and public-sector entities
- Social marketing campaigns
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