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Conceptual Framework of Marketing
Roy Philip
Roy Philip is an Associate Professor of Marketing at Trevecca Nazarene University in Nashville,
Tennessee.
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A Conceptual Framework for Marketing
The essence of marketing is not about goods and services. It isn’t about selling, or
beating the competition. Boone & Kurtz (2004) state, “[Marketing] is about developing a
relationship with customers so that they will grow loyal to a company’s goods and services” (p.
3). Today’s marketing environment is burdened with numerous challenges as marketers endeavor
to attract or retain customers. Today customers are looking for greater value when they spend
their hard-earned dollars (Rawe, 2002).
To create and defend a conceptual framework for marketing must come subsequent to the
understanding of marketing. Kotler (2003) defines marketing as “a societal process by which
individuals and groups obtain what they need and want through creating, offering, and freely
exchanging products and services of value with others” (p. 9). And marketing also involves
analyzing consumer needs, securing information needed to design and produce goods or services
that match buyer expectations, and creating and maintaining relationship with customers and
suppliers.
The relationship between marketing philosophy, marketing strategy and marketing tactics
toward the building of a conceptual framework for marketing is vital. A conceptual framework
guides the organization toward achieving organizational objectives. Marketing philosophy needs
to come out of the core values of the organization itself. How a marketing philosophy is shaped
depends on the values of the organization.
So the first step in the conceptual framework is the “Organizational Values.” This step
consists of the following: vision, mission, motive, goals, philosophy, objectives, and culture.
Vision is where the company wants to be. The mission is the essential purpose that differentiates
one company from the other. There is much literature on what the goal of an organization should
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be. Jaworski & Kohli (1990) believe that the goal of an organization should not be profitability
and also Chang and Chen (1998) state that increased profitability is a characteristic of a firm’s
market orientation, while not necessarily the goal of a firm’s market orientation. However,
Narver & Slater (1990) state that profitability, though conceptually closely related to market
orientation is appropriately perceived as an objective of a business. The culture of an
organization is pivotal to the development of marketing philosophy. Microsoft is an organization
with a very competitive culture. This competitive culture, which became a philosophy, has given
birth to a very competitive strategy. This strategy only aims at finding ways not to share and to
capture as much of the market as possible (Levy, 2001). They have locked themselves in fierce
strategic battle with AOL to create loyal customers so much so that they have even dragged their
cases to court ((Yang, 2001).
The organizational values then help shape the next step in the conceptual framework,
“Marketing Philosophy.” This is a very important step as the marketing strategy of an
organization and its tactics come straight out of the marketing philosophy. For example, if the
marketing philosophy of company A is the production concept, then its strategy would be to
make the product affordable and available, as opposed to the product concept, which posits that a
quality product will sell. Since 1950’s we have seen the emergence of the marketing concept
(Kotler & Armstrong, 2003) which is best explained by the shift from a “seller’s market” to a
“buyer’s market.” The marketing concept can also be called “market orientation” (Jaworski &
Kohli, 1990), “consumer oriented” (Rosenbush, 2001), “market driven” (Day, 1994). Morgan
(1996) states and explains the marketing concept as a philosophy, a function and a discipline.
This step should also include both the societal marketing concept (Kotler & Armstrong, 2003)
and the relationship marketing concept, which involves long-term, value-added relationships
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developed over time with customers and suppliers.
The next step in the framework is the formulation of “Marketing strategy.” A marketing
strategic plan has a critical impact on a firm’s destiny because it provides long-term direction for
its decision makers. This step involves an analysis of the market. A first step would be to
conduct a SWOT analysis (Strength, Weakness, Opportunities, and Threats) test. This analysis is
crucial because it helps compare internal organizational strengths and weaknesses with external
opportunities and threats. This helps evaluate the organization’s fulfillment of its basic mission.
It is important to note that a company’s strengths reflect its core competencies. Rigby (1998) in
his article for Fortune states, “Core competencies are capabilities that customers value and
competitors find difficult to duplicate” (p. 162). This means an organization’s strategy should
mull over its capabilities and its competitors. Capabilities differ from assets in that they cannot
be given a monetary value, as can tangible plant and equipment, and are so deeply embedded in
the organizational routines and practices that they cannot be traded or imitated (Day, 1994).
After a SWOT analysis there should be customer analysis. This includes segmentation of the
market and also “knowing” your customer. There are other factors that come into play in this
step of the framework. An effective environmental analysis will help identify these factors. For
example, the political-legal environment is important to consider since noncompliance can scar
firm’s reputation and hurt profits. Turbulence in the market is also important to consider. Rapid
changes in industrial structure and global competition have occurred in the last two decades.
Achrol (1991) states “these changes herald the post-industrial era, producing an environment of
ambiguity and paradox at this point in time, but nevertheless causing profound impacts on our
economic and social institutions” (p. 1). Thus the marketing strategy, after analyzing the market,
should comprise of the following: competition, capabilities, segmentation, positioning,
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one-to-one marketing, market share, product life cycle, product development, and customer
service.
The marketing strategy now forms the basis for the fourth step in the framework,
“Marketing Tactics.” It is pertinent for an organization to view its products the way the
consumers view them. Is the organization selling a “product” or a “service?” If they are selling a
product, do customers look at it as a product? Or do customers look at it as a service, provided
by the product? “Customers do not buy goods or services. They actually buy offerings that
render service which create value” (Vargo & Lusch, 2004, p. 2). We then ask the question, can a
service be sold the same way as a product? Shostack (1977) states “Marketing seems to be
overwhelmingly product-oriented. However, many service-based companies are confused about
the applicability of product marketing, and more than one attempt to adopt product marketing
has failed” (p.1). So the four P’s for product marketing may not work for service marketing. In
fact, Beaven & Scotti (1990) claim that the four P’s framework is an “inappropriate conceptual
tool for guiding the formulation and implementation of an effective marketing mix for services”
(p.8). Under this framework, if the organization is selling a “good,” then they should use the four
P’s, Product, Price, Place, Promotion (Borden, 1964). But if they are selling “intangibles,” then
the SOAR principle should be used: Service scripts, Outlays, Accommodation, and
Representation. This will form the marketing plan.
After the marketing plan is implemented, the next step in the framework is “Customer
Feedback.” It is in this step the marketers monitor performance to ensure that objectives are
being achieved. Customer loyalty is a key factor here. Boone & Kurtz (2004) state, “Customer
loyalty is the watchword of 21st century marketing. Customer loyalty has always been important
to business” (p. 4). Bolton (1998) talks about maximizing customer lifetime value.
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The important point in the framework is that it cannot be linear. Sometimes strategies
need to be modified if the product’s or company’s actual performance is not in line with
expected results.
The argument raised by Bennett & Cooper does inform my model. Their view is the
“Product Value” concept, which does keep the customer first as the marketing concept, but with
significant differences. Marketing concept implies the process of finding, fulfilling, and meeting
customer needs. But Bennett & Cooper in ferreting the clear understanding of the marketing
concept bring out two important points that help inform my model. One, organizations who
follow the marketing concept and keep customer first, must not rely on customers to provide
them with the innovation. The consumer is limited in “innovative and significant new product
ideas” (p. 54). The authors educate us in understanding that the strategic focus has shifted from
the product to the customer. In the transaction between buyer and seller, it is the product’s value
that the customer pays for. “Product value” is an important concept to business. The other three
P’s are relevant but not as important as the product itself. Thus the product should be the “central
or core element in the firm’s competitive strategy” (p. 58). That means companies must not only
find, fulfill, and meet customer needs, they must actually anticipate such needs.
Two, and this is the crux of their product value concept, companies must not only
anticipate, find, fulfill, and meet customer needs, but they must do all of this better than their
competitors. This is what is missing in the marketing concept. Sure the customer is first and
everything revolves around satisfying their needs. But if a company is to be successful, then it
must follow the marketing concept better than its competitors.
In conclusion, the marketing philosophy in my framework will have the product value
concept, as elucidated by Bennett & Cooper.
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References
Achrol, R.S. (October, 1991). Evolution of the marketing organization: New frontiers for
turbulent environments. Journal of marketing, 55, p 77-94
Beaven, M.H. & Scotti, D. J. (Fall, 1990). Service-oriented thinking and its implications for the
marketing mix. Journal of services marketing, 4, p. 5-19.
Bennett, R.C. & Cooper, R.G. (1981). The misuse of American tragedy. Business Horizon, pp.
51-61.
Bolton, R.N. (1998). A Dynamic Model of the Duration of the Customer’s Relationship with a
Continuous Service Provider: The Role of Satisfaction. Marketing Science, 17, 1, 45-65.
Boone, L.E. & Kurtz, D.L. (2004). Contemporary marketing (11th edition). Southwestern: Ohio.
Chang, C et al (2001, August 13). AOL vs. Microsoft. Business Week, pp. 28-30.
Day, G. (Fall, 1994). The capabilities of market-driven organization. Journal of marketing, 58, p.
Jaworski, B. & Kohli, A.K. (1990, April) Market Orientation: The Construct, Research
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Kotler, P. & Armstrong, G. (2003). Principles of marketing (10th edition). Prentice Hall:
New Jersey.
Levy, S. (2002, February 4). The skinny: AOL’s suit. Newsweek, p. 9.
Morgan, R. (1996). Conceptual Foundations of Marketing and Marketing Theory. Management
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Narver, J.C. & Slater, S. (1990, October). The Effect of a Market Orientation on Business
Profitability. Journal of Marketing. pp 20 -35.
Rawe, J. (2002, June 6). Young and jobless. Time, pp. 36-39.
Conceptual Framework
Rigby, D. (1998, September 7). Smart managing/best practices, careers, and ideas: What’s
today’s special at the consultant’s café? Fortune, p. 162.
Rosenbush, S. (2001, February 25). Armstrong’s last stand. Business Week, pp. 88-96.
37-52
Shostack, G. L. (April, 1977). Breaking free from product marketing. Journal of marketing, 41,
p. 73-80.
Vargo, S.L. & Lusch, R.F. (Winter, 2004). Evolving to a new dominant logic for marketing.
Journal of Marketing, 68, p. 1-26.
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