Strategic Marketing Management (RLE Marketing)

Gordon Foxall

• Publisher: Taylor & Francis
• Year: 2014
• eBook ISBN: 9781317646990
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book considers marketing management within the overall corporate system of business policy-making, strategic planning and the implementation and control of effective plans. The information requirements of marketing management are highlighted and the marketing information system concept is developed within the framework of managerial information systems. In the chapters which deal with the elements of the marketing 'mix', the interrelated nature of these variables is emphasized. The book illustrates how the successful marketing manager can master each 'weapon' in the marketing 'armoury' and how (s)he can integrate those weapons to achieve the right mix for each product. The accent on integrated marketing continues in the final section where differentiated marketing is presented as an integrative framework and where the systematic control of marketing operations is described.

This book is for students who will one day be managers: its emphasis is therefore on what is possible in marketing management and the most effective means by which marketing objectives can be attained.

PART ONE:

MARKETING IN ITS CORPORATE CONTEXT

1	MARKETING: CONCEPT, FUNCTION AND SYSTEM

Marketing in Two Centuries

If a man write a better book, preach a better sermon or make a better mousetrap, though he build his house in the woods, the world will make a beaten path to his door. (Ralph Waldo Emerson, 1803–82)

Marketing is the primary management function which organises and directs the aggregate of business activities involved in converting consumer purchasing power into effective demand for a specific product or service and in moving the product or service to the final consumer or user so as to achieve company set profit or other objectives. (Rodger, 1965)¹

Marketing is the way in which any organisation or individual matches its own capabilities to the wants of its customers. (Christopher, McDonald and Wills, 1980)²

The Meaning of Marketing

Effective performance of the various functions of marketing management nowadays demands the adoption of a particular business philosophy widely known as the ‘marketing concept’. The distinguishing feature of such marketing-orientated management is the way in which it strives to fulfil the requirements of those whom it serves in order to achieve its own business objectives. Marketing management may be described as the mobilisation and deployment of a company’s resources in order to meet its financial objectives through the satisfaction of buyers’ economic wants. Naturally, in order to achieve this, it is frequently necessary to specify additional non-monetary goals and to meet buyers’ social and psychological needs but these activities are never ends in themselves in corporate marketing.

Dozens of definitions of marketing management exist which attempt to translate this basic idea into operational terms that show how product concepts are originated, tested in the marketplace and screened for further development and refinement so that an article is launched on to the market. It is perhaps the impossibility of achieving so concise yet comprehensive a definition that has spawned so many attempts. Even a book of this length can only begin to provide an account of the managerial implications of adopting and implementing the marketing concept and the ramifications of these activities for the business as a whole. Before the tasks of marketing management can be discussed, it is necessary to appreciate further the nature of the marketing concept and only when both the concept and the function of marketing have been discussed can the consequences of marketing-orientated management for the business as a whole be approached.

The Marketing Concept

A clear description of the marketing concept as a managerial perspective appeared in one of the first British books concerned with the marketing of industrial products:³

The marketing concept is a philosophy, not a system of marketing or an organisational structure. It is founded on the belief that profitable sales and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires – in that order.

It is an attitude of mind which places the customer at the very centre of a business activity and automatically orients a company towards its markets rather than towards its factories. It is a philosophy which rejects the proposition that production is an end in itself, and that the products, manufactured to the satisfaction of the manufacturer merely remain to be sold.

Companies become marketing orientated, of course, not because they are benevolent organisations but in order to achieve their business objectives which are usually expressed as profit, rate of return on investment or sales targets. These objectives provide a clear test of the company’s failure or success – a quantified set of policy objectives which allows its performance not only to be assessed at the end of an accounting period but monitored during the implementation of its plans and, where necessary, controlled by corrective action which readjusts the firm’s operations towards its goals.

It also follows from this description of the concept of marketing that marketing management should begin and end with considerations of buyer behaviour. A genuinely marketing-orientated company plans, produces and distributes only those products and services which it has good reason to believe will be bought in sufficient quantities and at adequate prices to ensure that it attains its economic objectives. Marketing activity thus precedes production with the identification of human wants and the estimation of the demand for the goods which promise to satisfy them. Marketing research, test marketing and other varieties of marketing experimentation are thus vital components of the implementation of the marketing concept. All are concerned with obtaining estimates of the elasticity of demand so well-emphasised by formal economic analysis and of the overall ‘plasticity’ of demand which is determined by the social and psychological meanings attributed by buyers to economic products and services.

Buyer Behaviour

Marketing managers, as well as those executives engaged directly in marketing research, have, therefore, in companies which have adopted and begun to implement the marketing concept, become centrally concerned with analysing and interpreting the behaviour of buyers – final consumers who buy finished products and industrial purchasers of capital goods and components. The resulting emphasis on the sociology and psychology of consumer behaviour and industrial buying has enlarged the social science base of marketing investigations, reducing the extent to which marketing understanding relies on the contribution of formal economics. ‘True marketing’, writes Drucker,⁴

starts out with the customers, their demographics, related needs and values. It does not ask, ‘What do we want to sell?’ It asks, ‘What does the customer want to buy?’ It does not say, ‘This is what our product or service does’. It says, ‘These are the satisfactions the customer looks for’.

For ‘only by asking the customer, by watching him and by trying to understand his behaviour can one discover who he is, how he buys, for what purposes, what he expects and what his values are’.

Thus, buyers’ attitudes and other facets of the psychological influences on their behaviour have been studied, especially in order that the effectiveness of persuasive marketing communications might be improved; and their group affiliations, family decision-making processes and cultural norms have been examined in order to identify the complex social networks within which buyers make choices.⁵ This interest in the behaviour of buyers reflects two important recognitions on the part of contemporary marketing managers. First, the meanings which buyers attach to specific products and services often go far beyond the observable functional uses of those goods and express the perceptions and motives of consumers, individually and in groups; food, for instance, represents a physiological necessity but the marketer of products such as smoked salmon and champagne, aware of the additional social connotations of these products, would subtly stress status and prestige in promoting them, rather than their nutritional attributes. Second, there is growing recognition that a company’s business objectives are often capable of more efficient attainment if markets are subdivided (segmented) and differential marketing appeals made to each segment in lieu of a general approach to the entire market which may appeal optimally to but a small proportion of potential buyers. Advertising, price, promotional activities and distribution procedures, as well as the product, are nowadays typically differentiated in order to meet the buying requirements of specific market segments.

Far from leaving the hapless customer to beat his own path to its door, marketing-orientated management is involved in the design and production of the ‘right’ product at the ‘right’ price and its distribution to selected target markets, i.e. to the ‘right’ place at the ‘right’ time. ‘Right’ always refers to the demands of potential buyers rather than the convenience of marketing or other executives; it means seeing the business ‘from the point of view of its final product, that is from the customer’s point of view’; it means that the only purpose of the business is the ‘creation of a customer’⁶ – not by coercion or manipulation but by understanding his behaviour and responding accordingly.

Structural Requirements for Marketing Orientation

The marketing concept and the managerial approach it demands result from a particular set of economic circumstances. They are necessary concomitants of a situation in which the supply of economic goods exceeds or is capable of exceeding demand for them; in addition, the marketing concept has most readily found application in those economies where buyers are relatively affluent and are presented with a choice of brand or product alternatives by competing suppliers. The resulting competition among marketers for buyers’ discretionary income – that which remains when the necessities of life have been purchased and which the buyer may allocated as he wishes among a variety of products and services – involves the individual company in rivalry with others in the same industry and with firms in other industries which attract discretionary income. Only the first of these structural features of production and marketing, the excess of supply over demand, is a necessary and sufficient condition for marketing orientation to be forced upon marketing management but the added presence of the other factors intensifies the need for managers to take a marketing- and consumer-orientated perspective.

Two observations deserve mention as a result of this discussion. First, there is no implication that managers in marketing-orientated firms ought now to give all of their attention to demand, ignoring supply factors simply because supply is in surplus. The purpose of modern marketing, the creation of a customer, requires that supply can be skilfully and appropriately matched to demand: each element of the ‘marketing mix’ – the product, price, promotion and distribution which have already been mentioned – must be responsively equated with elements of buyers’ requirements. Second, although the competitive, industrial economies of...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Table of Contents
• Dedication
• List of Tables
• List of Figures
• Preface
• Part One: Marketing in its Corporate Context
• Part Two: Marketing Mix Management
• Part Three: Integrated Marketing
• Index