The Marketing As A Management Function Commerce Essay

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Marketing as a management function which in its simplest term refers to the basic functions of management namely planning, organizing, leading and controlling (POLC). These four functions are necessary for the achievement of organizational goals. It is important that these activities should operate in harmony with one another since they are interrelated. For instance, according to Cole (1996), a manager cannot just do planning and ignore the other aspects. Although these four functions do not tell the whole story about what constitutes management, they are a convenient way of describing most of the key aspects of the roles of management.

Planning

Plans and decisions are essential requirements to organizational tasks and management. Business success depends significantly upon the successful planning and decision making. Hence, planning is usually listed as the first function of management as we must have a plan before we can organize. Planning can be defined as the management function which involves setting the company's goals and then determining the means to achieve these goals, in other words, deciding how best to achieve them. In simpler terms, it means deciding now, what to do in the future, given certain intended conditions.

The word now indicates present circumstances and the current state of affairs pertaining to an organisation. So, it has been observed that environmental scanning, consisting of the SWOT analysis is therefore a pre-requisite for the planning process. It includes the internal and external environment of the organisation which allows the firm to take advantage of the opportunities and minimize the impact of threats. In addition, the company will have to consider the changes and developments in the macro marketing environment which is the PEST factor (Demographic, Natural, Political/legal, economic, socio-cultural, and technological).

The second important element which is 'what to do' can also be referred to as 'what to achieve'. These are expressed in terms of a statement of objectives, goals and targets.

The third element, future, may be any time that succeed in the next second or a fraction of it. The future is basically characterised by uncertainty and uncertainty involves risk. Therefore, effective planning requires an effective and efficient process of coping with the uncertainty and the risk of the future to enable achievement of organisation's objectives.

Organizing

In order to reach the objective outlined in the planning process, structuring the work of the organization is a vital concern. Organizing is the management function which focuses on arranging and allocating work, authority and resources among an organization's members that blend together to develop one purpose, to accomplish the goals. These goals will be reached in accordance with the company's values and procedures. This function involves the setting up of an organizational structure whereby work is allocated, lines of authority and responsibility defined and a system of rules and regulations which guide the conduct of employees laid down. . Bateman, Snell (2007) pointed out that a manager must know their subordinates and what they are capable of in order to organize the most valuable resources a company has, its employees. This is achieved through management staffing the work division, setting up the training for the employees, acquiring resources, and organizing the work group into a productive team. This structure should constantly change to suit the organizational needs.

Leading

Leading involves influencing others to engage in the work behaviours necessary to reach organizational goals (Bartol 1997). The manager must communicate with his/her subordinates, explain his/her plans to them, and lead and motivate them to exert their maximum efforts to achieve the goals.

Motivation is an internal process that energizes people to engage in certain types of behaviours. Frederick Winslow Taylor's Scientific Management Movement, was one of the earliest attempts to understand and to deal with the problem of worker motivation. Some major contributors to motivation theories are Abraham Maslow for the Hierarchy of needs theory, Douglas Mc Gregor for Theory X and Theory Y, Frederick Herzberg for Motivation-Hygiene Theory.

Leadership has been defined by Dobbins and Pettman (1997) as the ability to motivate people to work towards achieving common goals, to make ordinary people display extraordinary performance. There are different theories of leadership with various stages at its development: traditional theories, contemporary theories and future of leadership. The major contributors to leadership theories are Handy (1993), Kouzes and Pasner(1993), Cacioppe (1997), R. Likert(1961), Blake and Mouton (1964), Fiedler (1967), and Hersey-Blanchard (1968).

Controlling

Controlling is the management function aimed at regulating organizational activities so that actual performance will conform to expected organizational standards and goals (Bartol 1997). Therefore, the controlling function consists of three steps:

i) Establishing a standard or target,

ii) Measuring current performance and comparing it with the standard, and

iii) Taking corrective actions if deviations are detected.

Control is essential at every managerial level since each level has its own planning and responsibility regarding the respective set of activities. However, there is a misconception that control is from top management due to the fact that responsibility increases with the level of hierarchy.

Integration of Marketing Function

Integration is a marketing catchphrase of the moment. It has risen up because of social, market and technological developments have become more salient and significant than before. The harmonizing of integrated marketing must start with the planning process, by allowing adequate feedback and flexibility to achieve increased organizational fluidity. For the delivery of good customer satisfaction, there should be coordination at three levels.

➢ Co-ordination among various marketing activities.

Nowadays companies need to use a wider range of communication tools and messages effectively by embracing Integrated Marketing Communications (IMC). IMC requires "integration and co-ordination of an organization's many communication channels, such as advertising, direct marketing, sales promotion and public relations and publicity, to deliver a clear, consistent and compelling message about the organization and its products" (Kotler, 2000). In fact, organizations have recourse to different promotion tools so that each communication option reinforces and improves the effectiveness of each other. A successful IMC plan will customize what is needed for the client based on time, budget and resources to reach target or goals

➢ Co-ordination between functional departments

According to Gittell and Weiss (2004), co-ordination should start right from the intra-organization system. In other words, marketing must be embraced by the other departments to serve customers' interest. According to David Packard of Hewlett-Packard, "marketing is far too important to be left only to the marketing department!" The different departments are still interdependent even though the employees may have conflicting views. For instance, production department is highly dependent on purchasing department to receive raw material and also dependent on sales and marketing for forecast of sales which may be used to streamline the production schedule. The knowledge of coordination and willingness to coordinate with each other may help to cut across the functional boundaries of an organization, achieve mutual goals, competitive advantage and eventually organization success. A system of intranet may be set up for the fast delivery of information between the different departments. A Marketing Information System (MkIS), must be the integrated to provide continuous relevant information. Whang (1995) clearly explains the basic idea behind the need for improvement in information flow among functions: "…as each part has limited information and action sets, it needs to communicate and coordinate its activities to achieve the global objective". Goal alignment and coordination of tasks among functions are essential for the proper functioning and performance of companies (Cheng, 1984; Galbraith, 1973). The company must carry out internal marketing to foster teamwork among all departments and to ensure that every employee embraces appropriate marketing principles. Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well. Smart marketers recognize that marketing activities within the company can be as important as, or even more so than, marketing activities directed outside the company. In fact, internal marketing must precede external marketing as it makes no sense to promise excellent service before the company's staff is ready to provide it.

➢ Co-ordination along the supply chain

A long-standing and important concept in marketing is the existence of flows in the channel of distribution. The rising competition triggered by globalization and outsourcing has forced supply chain members to work coherently with each other. According to Lambert and Cooper (2000) operating an integrated supply chain requires continuous information flows, which in turn assist to achieve the best product flows. In fact, supply chain coordination (Arshinder et al., 2006) is a new concept evolving in industries to cope up environmental uncertainties. It is an effective approach to streamline operations/processes between the dependent supply chain members (Chopra and Meindl, 2003). An organization must view its suppliers as partners with whom it can develop long-term relationships for their mutual benefit. Companies may develop extranets with suppliers and distributors for an accurate and fast way of sending and receiving information, placing orders, and making payments more efficiently. Companies can use the internet to compare sellers' prices and to improve logistics and operations for substantial cost savings.

Finally, modern marketing calls for more than developing a good product, pricing it attractively and making it accessible. Companies must also communicate with present and potential stakeholders as well as the general public. Savvy marketers know that communication goes beyond the marketing communications mix. The product's styling and price, the package's shape and color, the salesperson's manner and dress, the place's décor all communicate something to buyers. In fact, every brand contact delivers an impression that can affect a customer's view of the company. Therefore, the entire marketing mix must be integrated to deliver a consistent message and strategic positioning.

Changes in Business Environment

Nowadays competition in many industries has become worldwide in scope, and the pace of innovation in products and services has accelerated. This has been good news for consumers, since intensified competition has generally led to lower prices, higher quality, and more choices. It is necessary to have an appreciation of the ways in which organizations are transforming themselves to become more competitive. Many companies have gone through several waves of improvement programs, starting with Just-In-Time ( JIT ) and passing on to Total Quality Management (TQM), Process Reengineering, Lean Production, Six Sigma, and various other management programs-including in some companies the Theory of Constraints (TOC). When properly implemented, these improvement programs can enhance quality, reduce cost, increase output, eliminate delays in responding to customers, and ultimately increase profits.

Marketing Environment

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(Source: Marketing Teacher Ltd 2000 - 2008)

The marketing environment consists of the internal environment, comprising of the five Ms; men, money, machinery, materials and minutes, followed by the micro-environment and finally the macro-environment.

Political & Legal Environment

Marketing decisions are strongly affected by developments in the political and legal environment. This environment is composed of laws, government agencies, and pressure groups that influence and limit various organizations and individuals. Sometimes these laws also create new opportunities for business. For example, mandatory recycling laws have given the recycling industry a major boost and spurred the creation of dozens of new companies making new products from recycled materials. Political action committees (PACs) lobby government officials and pressure business executives' rights, women's rights, senior citizens' rights, and minority rights. Marketers must have a good working knowledge of the major laws protecting competition, consumers, and society.

Socio-cultural Environment

The increase in the size of consumer markets and the segmentation of markets into strata (age, ethnic) are obvious changes. Consumption patterns vary and are in constant states of change, and the manager continually searches for market information to help in making sound decisions. Values, expectations, and aspirations are continually being transformed.

Role of technological Environment

Technology has been developed that has made information preparation and dissemination inexpensive and easily accessible to anyone rapidly. With these technology developments, time, space, and other temporal constraints to information have been reduced and, in many cases, eliminated. Thus it facilitate the creation of intranet and extranet to aid the firm.

Moreover, there is often a time lag between countries in the adoption and diffusion of technologies. The developing countries generally lag behind the developed ones. Even among the developed countries the technology absorption is not simultaneous and similar. The lag has, however, been diminishing in several cases.

Technological environment of the use facilities etc. also have very important implication for business. For example, advances in the technologies of food processing packaging, and preservation, transportation etc. have facilitated product improvements and introduction and have considerably improved the marketability of products.

Effects of Changes in Technology, Competition, Globalization

The results of an increased pace of change are products that do not last as long, and competitive advantages that have shorter lives. The sense of urgency that permeates business today is overwhelming. Competitive advantage is a short-lived asset and its potential must be exploited quickly and fully. Paradoxically, the need to move quickly has reduced the time available for analysis, just when it has become more necessary than ever to have better information in order to squeeze the last penny of profit from a product or investment. As has always been true, these challenges are also opportunities. For those who can take advantage of globalization and technology, the future is bright. For those who cannot, the future is grim.

Demographic environment for International Marketing

Demographic factors such as size of the population, population growth rates, age composition, family size, nature of the family, income levels etc. have very significant implications for business. The size of the population is an important determinant of demand for many products.

Advanced countries, particularly with large population, are generally attractive markets. The major part of the international trade and foreign investment naturally take place between these nations. Because of the large potential of these markets, competition is generally strong in them.

Gaining a competitive advantage within the economy

Competition assumes new meaning within such a global business environment, where discontinuous, innovative change becomes the order of the day. Within such a context it is the creative potential of the institution that makes the difference in meetings the challenges presented by the limited time frames of window of opportunity.

The new global challengers are initiating much needed change. The trend is only beginning. Ultimately, its implications will affect every industry and market. The future course of global trade and development are being shaped now. Its final contours are being drawn out. Every aspect of organization, incentive and operating style is undergoing a transformation and the quicker they embrace the change the better will be their performance.

Globalization and Localization

Faster methods of transportation, together with instantaneous information, have allowed the world to become one giant marketplace. The world is becoming a common market place in which people no matter where they live desire the same products and lifestyle. Now consumers are looking for more quality and even more convenience. Global companies must forget the idiosyncratic difference between countries and cultures and instead concentrate on satisfying universal drives.

Marketing Challenges

The world economy is becoming fiercely competitive, turbulent and unstable. Scott Davis (2006) argues that marketers need to take a broader view of their role if they are to contribute successfully to business growth. Successful companies will be those who can adapt changes in the marketplace.

The challenge for marketing managers is to do a better job of understanding, creating and delivering customer focused strategies that grow revenues while also improving returns on marketing investment. Business success demands the identification of these challenges and finding ways how to deal with them. Some of the challenges are:

➢ Connecting with the customer

Washington Mutual's experience shows that successful marketers are the ones that fully satisfy their customers. Customers are the "true profit" centre and companies must ensure that everything start with the customer by trying to anticipate what customers want and meet their expectation more effectively than competitors. They can do it by cultivating customer relationship through customer relationship management (CRM) so as to reduce high customer churn- high customer defection. As Adam Smith (1776) observed that "the real price of anything is the toil and trouble of acquiring it." Companies must implement a total quality management (TQM) strategy to create value-added service/products which offer the highest customer-delivered value than the competitors. They must effectively and quickly handle complaints and not letting it persists.

Frederick F. Reichheld, The Loyally Effect (1996) mentioned that acquiring new customers can cost five times more than the costs involved in satisfying and retaining current customers. It requires a great deal of effort to induce satisfied customers to switch away from their current suppliers. In fact according to Philip Kotler, companies' challenge is not to produce satisfied customer, several competitors can do this, but the challenge is to turn first time customers into delighted and loyal customers, that is turning them into customers for life.

➢ Building strong brands

The American Marketing Association defines a brand as "a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors". Companies face the challenge to create a strong brand image and brand awareness to differentiate their products from competitors. A good management of brand equity and brand positioning can lead to competitive advantage.

A good handling of the product life cycle and maintenance of the life of the brand (especially in the maturing or decline stage) and its products are also essential.

➢ Identifying competitors

The company must carry out appropriate research to know, understand their competitors and predict theirs actions and try to handle them. Michael Porter (1979) has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. His model is shown below:

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Five Forces Determining Segment Structural Attractiveness

Michael E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance. (1985)

Knowing theirs competitors can help firms to know their market positioning and what strategies to implement. In fact globalization urges firms to analyse their competitors to better anticipate and counteract their strategies. Moreover, the power of buyers (and retailers such as hypermarkets) is considerably increasing and companies face the challenge to interact with them and to try to make them become their strategic business partners alongside their suppliers. But firms should neither be too competitor-centred nor customer-centred but market-driven.

➢ Providing a competitive product and service

Companies must try to live up to the expectations of customers by providing quality product and service by supplementing it with value-added facilities. Customers perceive fewer real product differences and they can obtain extensive product information from competitors, the Internet and other sources, which permit them to shop more intelligently. Buyers are today only a click away from comparing competitors' prices and product attributes. Therefore the challenge is to attract and retain profitable customers so that they don't buy from competitors. Furthermore, according to Market surveys, eight out of ten new products fail. Firms therefore face a real test in developing new products/services that will be accepted by the market, are profitable and have a good life cycle.

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Philip Kotler and Kevin Lane, Marketing management 12th edition, pp372.

The need for ethics

Ethics are standards of conduct and moral judgments differentiating right from wrong (Bartol 1997). According to Philip Kotler (2006), companies that do an excellent job in satisfying customer wants do not necessarily act in the best long-run interests of consumers and society. Unethical practices harm the interest of stakeholders and will eventually hinder the organization from achieving its goals. Today organizations are gradually recognizing the importance of ethics and corporate social responsibility. Therefore the challenge is to build social and ethical considerations into their marketing practices. They must balance and juggle the often-conflicting criteria of company profits, consumer satisfaction, and public interest.

Training

Innovation is a must in this highly competitive environment, as without continuous updating, technical proficiency will decline. Employees need to continually upgrade their skills through formal education or ongoing practice to avoid human obsolescence, to keep pace with technology and to serve customers well. It makes no sense to promise excellent goods and services before the employees are ready to provide these.

Cultural diversity

Professor Jock Collins (2002) points out that one of the challenges nowadays is to unlock the barriers to the acceptance of cultural diversity. With global competition and the fact that more companies are doing their business in other countries, marketing managers will need to be familiar with international business, distinct cultures and dealing with different people. Communication problems may crop up if cultural diversity is not managed properly.

➢ Establishing a good strategy

Marketing communication strategy is of high importance for any firms seeking success. The development of a good advertising campaign, promotion, e-marking, public relation tools and management of personal relations will greatly help the company differentiate itself from competitors.

A decent pricing strategy is also essential for the company to prosper. Managers have to make their product/service competitive by providing them at the most competitive price through pricing policies and strategies.

Moreover a strong solid vision and long term planning in this dynamic ever-changing world is decisive for the organisation to survive and to have long-term growth.

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