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Part One
Introduction
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Introduction
This first section of the book sets the scene by answering two questions which are central to the whole book, namely:
Chapter 1 What is marketing?
Chapter 2 What is leisure?
We will look at the marketing concept and examine some current trends and key issues in the theory and practice of marketing.
In this section of the book, the authors will also seek to offer a definition of leisure. They will examine the interrelationship between the different sectors of leisure, and suggest that the distinctions between them are becoming increasingly blurred.
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1
What is marketing?
Key concepts
The main concepts covered in the chapter are:
The scope and nature of marketing
Definitions of the marketing concept
The application of marketing principles to profit-making and nonprofit making organisations
The differences between strategic and tactical marketing
Service product marketing in comparison to the marketing of manufactured products.
This chapter introduces the marketing concept. It looks at the historical development of marketing and discusses the application of marketing to different kinds of organisation. The chapter also looks at the marketing function within the context of other management functions. Differences between product marketing and service marketing will be discussed. The chapter will review the reasons why marketing has become a highly fashionable influential subject in all aspects of the economy and society, and review some of the current contemporary marketing issues.
The main points covered in the chapter are as follows:
• introduction to the marketing concept;
• definitions of marketing;
• the historical development of the marketing concept;
• the application of the marketing concept to different kinds of organisation;
• different approaches to the running of business organisations;
• the consequences of an organisation adopting a marketing approach;
• the differences between strategic and tactical marketing;
• marketing and other business functions;
• a review of the differences between product marketing and service marketing;
• contemporary marketing issues.
Introduction to the marketing concept
What does marketing mean? For most people, marketing constitutes selling and promotion. Marketing does involve selling and promotion. If the products, however, have been designed to suit customer wants, selling and promotion will just be the icing on the cake.
The marketing concept is something of an enigma. It is a well-recognised business function in many organisations, but the underlying concept of the marketing philosophy is rarely discussed. The introduction of a marketing department to many organisations involves the appointment of one or a number of personnel who organise promotional materials and nothing more. This, it must be stressed, does not constitute the marketing.
Marketing is concerned with the relationship between buyer and seller, and the transactions involved in bringing this to a satisfactory conclusion. It could be argued that, unlike economics which concentrates on the relationship between supply and demand, marketing relies on the idea that the customer forms the central focus for all people working in the organisation. The application of the marketing concept to an organisation involves putting the customer at the centre of all decision-making processes in the business.
The marketing concept suggests that the overriding inclination of the organisation will be to serve the final customer needs and wants as the main priority. The organisation will seek constantly to find out what the customer want both today and in the future and work tirelessly to produce the products and services that are requested. This may mean that the organisation has to make major shifts in their product and service ranges, and may even involve the organisation moving into new markets and changing fixed asset bases.
These are fundamental problems with the organisation adopting a consumer-led approach. It is often difficult for many people in organisations to see the final customer as being central to their individual roles. Many people in organisations are divorced from the final customers and it is difficult for them to see the logic of introducing the marketing approach.
Some organisations even have difficulty in recognising who the customers are, particularly if the product or service is offered free of charge, or if the organisation supplying it is the sole supplier. This can be particularly prevalent if the organisation has been faced with a buoyant market position where demand outstrips supply. The logic here is that there have always been more customers demanding the products and services on offer, so why bother with any expensive marketing effort? Organisations in this type of market position tend to look to marketing when market conditions become more difficult and customer demand starts to reduce.
The second reason for organisations having difficulty with putting the customer at the centre of the business is the fact that the implication of changing consumer demand on the organisation may be too difficult to cope with. This is particularly apparent if the organisation has long-term investments in fixed assets. The hotel chain with major investments in a group of prestigious hotels, or a theme park owner, faced with changing consumer demands would find it very difficult in the short term to change. The idea of total customer sovereignty, in a business which relies on substantial fixed capital asset, is impossible to implement in the short term.
Organisations often consider their customer wants and needs, but also rely on persuading their customers to buy their existing products and services. The idea of persuasion rather than meeting customer needs and wants represents a totally different approach to the marketing concept. It is this idea of customer persuasion or at the most extreme customer manipulation which large numbers of the population interpret marketing to be. Marketing is often viewed by the man or woman in the street as aggressive hard selling by unscrupulous persons eager to make themselves vast profits.
The idea that organisations use customer sovereignty or customer manipulation in the extreme is wrong. It is more likely that the marketing approach can be expressed in terms of a continuum model.
Figure 1.1 The marketing continuum model
Organisations will tend to fall somewhere in the middle of the continuum, using some market research to find out about customer wants but using some manipulation techniques to increase sales.
Packard (1957) in his book The Hidden Persuaders, portrayed a frightening manipulative view of the marketing function. The idea that consumers, including children, could be manipulated by marketing activity to buy products and services was seen by many as a horrifying vision of the marketing profession.
Definitions of marketing
The definitions of marketing demonstrate the different approaches which academics have taken to the marketing philosophy. Marketing has been defined in many different ways, emphasising different points. This is perhaps a reflection of the immature stage of development of the marketing discipline.
Kotler (2003), the American marketing academic, defined marketing as follows:
A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others.
Levitt (1986) discussed the role of marketing as follows:
a truly marketing minded firm tries to create value satisfying goods and services that consumers will want to buy.
This definition is useful because it identifies the importance of customer needs and wants as being central to the marketing function. Once the needs and wants have been identified, they must be met by producing goods and services which satisfy them and produce a successful deal for both producer and consumer.
Other academics suggest that the marketing concept can only work if it is embedded in the whole culture of the organisation. The management guru Drucker (1969), for example, considered this view in his definition:
Marketing is not only much broader than selling, it is not a specialised activity at all. It encompasses the entire business. It is the whole business seen from the point of view of its final result, that is from the customer's point of view. Concerns and responsibilities for marketing must therefore permeate all areas of the enterprise.
This definition suggests that everybody in an organisation involved in the marketing function should ultimately consider the final customer as being central to their activities at work. This suggests that marketing involves an encompassing philosophy which often means that an organisation has to change their internal business culture to accommodate this new form of approach.
Peters and Waterman (1982) were at the forefront of suggesting styles of management for organisations to adopt if they want to become ‘excellent’, and manage effectively during periods of chaotic change. Kantner (1984) suggested that organisations have to empower individuals to stimulate entrepreneurial spirit and become market leaders. The underlying culture of the organisation needs to facilitate the exchange of goods and services for money or benefits by satisfying the target customers.
The Chartered Institute of Marketing, the professional body for practising marketers in the UK defines marketing as:
Identifying, anticipating and satisfying customer requirements profitably.
This definition explains how the marketing philosophy is to put the customer as the central focus for business decision-making. The definition has been criticised because of the word ‘profitably’. It has been argued that many nonprofit making organisations can use the marketing philosophy to become more effective rather than simply more profitable.
The definition is useful in that it identifies the role of marketing as being identifying the needs and wants of consumers both now and in the future, and then meeting them.
Academics from other European countries also define marketing as the methods which an organisation can employ to result in successful t...
