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Friday, July 18, 2008

Define and explain the concept of marketing

Define and explain the concept of marketing. Discuss the benefits and problems that an organization of your choice would encounter when practicing marketing. Provide recommendations on how your organization can improve its marketing activities

The concept of marketing

According to Philip Kotler, marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others. In boarder term, marketing is the analysis, planning, implementation, and control of carefully formulated programs designed to bring about voluntary exchanges of values with target markets for the purpose of achieving organizational objectives. It relies heavily on designing the organization’s offering in terms of the target markets’ needs and desires, and on using effective pricing, communication, and distribution to inform, motivate, and service the markets. (Philip Kotler)
The main key points of marketing are as follows:
Managerial Process involving analysis, planning and control.
Carefully formulated programs and not just random actions.
Voluntary exchange of values; no use of force or coercion. Offer benefits.
Selection of Target Markets rather than a quixotic attempt to win every market and be all things to all men.
Purpose of marketing is to achieve Organizational Objectives. For commercial sector it is profit. For non-commercial sector, the objective is different and must be specified clearly.
Marketing relies on designing the organization’s offering in terms of the target market’s needs and desires rather than in terms of seller’s personal tastes or internal dynamics. User-oriented and not seller-oriented.
Marketing utilizes and blends a set of tools called the marketing mix – product design, pricing, distribution and communication. Too often marketing is equated either with just advertising or with just personal selling.
In marketing, it is always assume that it needs some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available. (Peter Drucker). Examples: Sony’s Walkman, Nintendo’s superior video game
Marketing includes selling but should be preceded by needs assessment, marketing research, product development, pricing and distribution. Selling focuses on products, aggressive selling and sales promotion with emphasis on price variations to close the sale. Maximize profits through sales volume. Marketing focus on customer needs. Integrated marketing plan encompassing product, price, promotion and distribution, backed up by adequate environmental scanning, consumer research, and opportunity analysis with emphasis on service. Maximize profits through increased customer satisfaction and hence raise market share. The marketing concept is a consumers’ needs orientation backed by integrated marketing aimed at generating consumer satisfaction as the key to satisfying organizational goals. A human need is a state of felt deprivation of some basic satisfaction. (Food, clothing, shelter, safety, belonging, esteem etc.) Abraham Maslow noticed that some needs take precedence over others. They are physiological needs, safety and security needs, love and belonging needs and esteem needs. Human wants are desires for specific satisfiers of these deeper needs. Demands are wants for specific products that are backed by an ability and willingness to buy them. Value and satisfaction can be as follows:

The benefits and problems that an organization would encounter when practicing marketing

The organization can practicing marketing by new product development and development of marketing planning are the most important tools. The study describes the benefits and problems of new product development in the organization when practicing marketing. In second phase it describes development of marketing plan when practice marketing in a organization. There seems to be widespread belief that marketing plays or should play a significant role in the early development of products and that it is combined with other areas of expertise (e.g., industrial design) to address critical user product interaction issues. It is well established that marketing has a critical role in the product development process, particularly in the early. Even so, there is disagreement with respect to the roles of marketing and customer research as well as the importance of various inputs into the new product development process. Listening carefully to customers is among the primary reasons companies are led astray in their decision-making concerning pursuit of new product development opportunities.
Although marketing plays an important role in the development of most products, its role with respect to the design of discontinuous or radical new products still is not understood fully. Further, while there is evidence that innovation in general may involve significant inputs from marketing, evidence of the applicability of such findings to the domain of radical innovation has been mixed. Discontinuous products, which involve unprecedented performance features and creating new lines of business, often are developed in a context of extremely high market uncertainty. As a result, for these types of products it can be difficult for marketing to provide input and direction before a general product application has been established. Beyond this, questions remain concerning the role of customer input and market research in discontinuous new product development as well as the relationships between market researchers and other key disciplines (e.g., ID, R&D) involved in the development of these types of products. The development of discontinuous new products involves a process that is different from more conventional new product development particularly as it concerns the roles of marketing. For these types of products, attention to marketing and customer/user-interface issues tended to occur later in the process. Here, key aspects of discontinuous innovation, grouped according to conceptual relatedness, are shown in terms of how they relate to marketing.
There are several guidelines concerning managerial action in the development of discontinuous new products. First, in this development context marketing and industrial design importance and involvement is determined in large part by the degree of discontinuity of the product. Issues such as the uncertainty of suitable applications for the technology and the greater distance from the market in terms of time and customer familiarity with the product seem to affect the nature of the development process. The result is a shift in the timing and nature of the roles of marketing. Customer research plays in this context offers an opportunity to provide more meaningful and valid inputs into the development process for these radical new products. Activities (e.g., marketing activities) associated with the development of less radical new products are rarely possible and often are not constructive during the very early development of discontinuous new products. In this development context it is not so much that marketing and customer research techniques are inappropriate but rather that the techniques are not applied with sufficient sensitivity to the context surrounding discontinuous innovation. The challenge is to create a valid context for collecting information so as to avoid unduly discouraging innovation. One of the ways to accomplish this is to move toward adaptive co-development in which the process moves iteratively back and forth between product developers and beta test customers. Although this work suggests marketing’s role in discontinuous innovation often is focused more on testing and validation than on idea generation, this should not be taken as meaning that the marketing challenge is reduced in this context. If anything, the challenge for marketing managers may be even greater for discontinuous products since, at some point, key design assumptions must be examined and since conducting useful and valid research to do this can be quite difficult. Additionally, managers need to build links throughout the project team to ensure that the research that is carried out is conducted properly. Optimally, this would entail at least some marketing involvement with research conducted by or for a development team regardless of who conducts the study. This can help a development team to avoid unfortunate, if not disastrous, consequences. For example, in one case a project team spent a considerable amount of time and resources addressing aspects of a product that they thought based on a cursory customer study conducted by R&D team members would be of vital concern to customers.
The relevance, and indeed usefulness, of marketing theory in today’s business environment is increasingly open to question. This general skepticism has led to a progressive emphasis on how to translate marketing theory into effective marketing practice which has taken many forms, ranging from traditional management education in business and universities, to action learning programmes and to government led and sponsored local enterprise initiatives. This paper concentrate specifically on the difficulties surrounding the implementation of one of marketing’s core tools, the marketing plan as outlined by McDonald (1989). How the development of marketing planning competencies through a work-based learning programme can help a practicing manager to overcome many of the problems of its application in practice. This approach incorporates the building of marketing planning competencies in conjunction with the actual workload of the participant to construct a work based programme in which the learning is a continuous two way flow between academia and the workplace.
The recent and well-documented crisis of confidence in the marketing discipline has to a large extent centred on the lack of applicability of marketing theory to marketing practice. Marketing myths perpetuated by academics for encouraging “death-wish” marketing amongst practitioners. Basic tools and tenets of marketing management theory are being doubted and their relevance for the modern business questioned. Consumer behaviour as a theoretical black hole, calling for a new paradigm which seeks less to control consumers and more to understand them; and many believe that the marketing concept itself is essentially flawed. Moreover, this general disillusionment with the inability of marketing theory to match corporate realities has also been evidenced from within the business community. Many nonacademic voices, for example, senior business people, consultants and journalists, are listened to in preference to marketing academics. Free ling (1994) has drawn our attention to chief executives who are claiming that marketing is no longer capable of driving profitable growth and who accuse marketers of not understanding the economics of the business or of different channels of distribution. There is a large gap between the classical role of profitable marketing and how marketing is practiced by marketing departments within 100 blue chip organizations. They go as far as to describe the marketing department as “critically ill” and in need of urgent treatment, warning that the winning companies will not have “ivory tower marketers”. In seeking to redress this balance between marketing theory and marketing practice it is the marketing concept itself which has tended to receive the most attention from academics. This has been in terms of its development, extension and refinement as, for example, witnessed by the recent proliferation of relationship marketing literature. The marketing plan, which ideally should be the bridge between theory (the marketing concept) and practice (the functions of marketing), has received much less attention in terms of its basic operability in the hands of the practitioner. Yet, arguably, this is where a firm will have the most difficulty inputting theory into practice
The idea that company performance improves as a consequence of engaging in a planning process and applying well known marketing decision making techniques has not proved easy to confirm conclusively. In the United States and the United Kingdom, practitioners perceived marketing decision-making techniques to be of little value to them in helping to make key marketing planning decisions. In a review of the marketing planning literature states that the claimed benefits of better co-ordination of interrelated activities, improved environmental awareness, better communication among management and better use of resources, and so on, appear to be there for the taking and there is a strong relationship between marketing planning and commercial success.
The problems that can encounter when practicing marketing are given below:
(1) Confusion between marketing strategy and tactics.
(2) Isolation of marketing function from business operations.
(3) Confusion between marketing function and marketing concept.
(4) Prevailing organizational structures along functional lines.
(5) Lack of skills in in-depth analysis.
(6) Confusion between process and output.
(7) Lack of core marketing management knowledge and skills.
(8) Lack of a disciplined, systematic approach to marketing planning.
(9) Need to prioritize objectives.
(10) Need for a more appropriate marketing culture.
The challenge to practitioner, therefore, is to find ways to begin to close the practice gap in respect of these marketing planning barriers. It is suggested here that a competency based approach might provide a solution, although caution that any solution must go beyond the development of competencies which merely address the application of marketing techniques. Therefore, what is required is a specifically tailored approach that develops a range of core skills that enable the development of a total marketing planning competency. We outline how a work-based learning programme can effectively address this challenge.

The recommendations to improve marketing activities

The organization can improve its marketing activities by develop the key marketing planning competencies of knowledge, experience, analytical skills, leadership, vision, judgement, organizational ability, commitment and communication.
(1) Knowledge: The transfer of marketing knowledge is communicating in a jargon-free way. Emerging themes of success were used to illustrate how areas of weakness might be overcome. At the same time, introduced core marketing concepts.
(2) Experience: Experiment with the new knowledge as it accumulated in order to see what worked in improving day-to-day marketing practice.
(3) Analytical skills: Core analytical tools such as the SWOT analysis, product/market matrix
(4) Leadership: Problems of employee motivation and the team building required to bring about a company-wide integration of the marketing concept were frequently raised through regular group discussions.
(5) Vision: The maintenance of an opportunity focus is crucial for the development of marketing and is inherent in the very nature of planning. Vision is required to determine how aims and objectives will be realized through action plans and the marshalling of scarce resources.
(6) Judgement: The focus of this was to develop an ability in gathering together disparate pieces of often incomplete information and making effective choices. Judgement as a competency is acquired through there cognition of the value of experience. The review process as an integral part of marketing planning forced to assess the effect of marketing actions to date.
(7) Organizational ability: The challenge here was to develop the ability to marshal and manage resources to fully maximize the value of opportunities in the marketplace. Such resources included human, physical and financial assets. Typical examples of these are the development of action plans and time schedules, the allocation of inter-functional responsibilities, the planning and scheduling of resources and the establishment of effective control mechanisms. The emphasis throughout was to maintain the holistic perspective so essential to the workplace.
(8) Commitment: increasingly committed to the value and importance of the planning process to their individual companies.
(9) Communication: The ability to communicate effectively was integral to every aspect.
In addition, the internal and external focus of planned marketing activities served to refine communication skills, in particular through the development of their company’s promotional mix. The company should encourage formalising the communications management of industry contacts such as suppliers, customers, support agencies, distributors and so forth. There is no doubting the value of marketing planning to the effective development of any business. In spite of this, practicing managers encounter all sorts of difficulties with the marketing planning process.


Shameel Sajjad said...

that ia a pretty comprehensive post. keep up the goo work.

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