Mobilizing the Marketing Endeavour
This chapter covers the following topics:
- Boundary spanning
- Four views of marketing
- Delivering value
- Creating value propositions
Marketing activities take place within the wider contexts of organizations, industries, cultures, and countries. So the marketing endeavour is often viewed as a boundary-spanning role between the organization and its environment. Of course the most immediate environment for marketing is the organization in which it takes place, but marketing is considered to extend beyond the marketing department or function itself. This is because, although most organizations nowadays have a function or department labelled marketing, it is sometimes little more than a sales unit, which delivers advertising, personal selling and promotion activities. Such organizations can be described as sales oriented. In order to be fully marketing oriented however, all the activities of the organization must be centred on the customer; therefore marketing must be undertaken by all functions, not just those in the department called Marketing.
In order to provide something of value to their customers or users outside, the activities and departments involved inside the organization each must deliver their part of the process to the other units and functions. For instance, the research department must develop the new system for IT, who must integrate it into existing IT systems for manufacture, which must make the products to order for sales, and the service division must back up sales, etc. In this way, each internal activity can be viewed as having an output and thus a customer inside the organization. This is the notion of internal marketing (see Piercy, 1991) where all departments, not just that labelled marketing, are users of others' output and have customer
s in other functions. And this is why Evert Gummesson (1997) says that everybody in the organization should act as a part-time marketer.
So marketing can be regarded as the business function located at the boundary between the firm and the outside world. Its role is to manage activities inside the firm in order to focus those outwards, particularly towards customers. One complication with this view is that the distinction between the organization and its environment is not as clear-cut as this internal versus external explanation suggests. For example, many companies contract out large parts of their marketing to other firms, where functions such as market research, advertising and technical research are contracted to outside agencies. They often do this in order to avoid permanently employing lots of specialists and to allow more flexible operations, but are more likely to retain control of overall marketing and core activities like marketing strategy and planning, sales management, in-store promotions, costing and pricing. In practice, many marketing operations span the internalexternal divide, making the boundary itself between inside and outside the firm even more unclear. Nevertheless, bearing this qualification in mind it is more helpful to think about and discuss the external aspects of the organization's context separately here in order to then lead on to consider how these boundaries can best be managed by marketing.
The notion of the external environment at its basic level implies that the marketing activities of a company take place between and are crucially determined by other organizations and people in the immediate micro-environment such as suppliers, buyers, competitors, etc. The company has some control over these immediate influences through its marketing activities; for example by lowering its price it may encourage buyers to purchase more, but also may encourage competitors to reduce their price. Other factors i
n the more distant macro-environment are also powerful influences, such as technology, cultural norms, economic conditions, etc.
Forces in the macro-environment affect marketing more indirectly by influencing conditions such as the disposable income of customers, the opportunities for new products, the reach and effects of advertising, etc. The organization has little influence over the macro-environment, determined much more by the state of the general economy, social forces, technological advances, government policies, etc. One criticism of the conventional view depicted in Figure 1.1 is that it is too company-centred, not customer-centric. A truly marketing-oriented view of the environment would turn the diagram inside out, situating consumers in the middle and competing companies on the outside because according to the marketing concept the depiction of the marketing environment should be centred on the consumer, not the seller. The firm's environment should show the consumer at the centre, with sellers fighting for their custom from the outside and competing for distribution channels, retail space, advertising media, etc.
Figure 1.1 The marketing environment.
Source: Adapted from Saren, M. (2006) Marketing Graffiti: The View from the Street. Oxford: Butterworth Heinemann
The role of the external environment is not all encompassing for marketing however, but selective and partial. Companies cannot possibly affect or even engage with all of it. Most firms are not even aware of all the macro forces and trends in technology, society, economy, and public policy that may affect them. There are many examples where managers complain that an important external event occurred out of the blue. Marketers will have their own individual view about which particular external elements are important for their business and will also select a small subset of these to monitor, investigate, or
exploit. This is what is called environmental scanning, which is systematic information gathering to monitor important trends in the environment.
For example, oil and gas companies undertake regular scanning of oil prices, availability, costs, etc., and forecast future possible scenarios. Also, they constantly monitor key long-term macro-environmental factors such as government stability and national policies in selected countries where they might have or seek exploration licences. Other factors that are assessed include new technologies, regulation of automobiles, transport investments, road infrastructure capacity, and taxation of emissions. In other words, managers in companies such as these select to investigate forecast and monitor only a small part of all the possible factors that might be or become relevant to their companies' markets and their marketing. They cannot look at everything, nor can they operate and market everywhere. That part of the macro-environment that sellers choose to engage with is called the enacted environment. And the part which managers consider relevant is determined by the way they look at their business and the outside world.
In order to manage the firmenvironment boundary, marketers also need to gather regular and extensive information. Most obviously, marketers need information about consumers, their wants and needs, and what will satisfy them. Consumer information aids marketing decision-makingpricing decisions, promotion decisions, product decisions, and distribution decisions and so on should all be aimed at satisfying the consumer, so this requires data beyond the basic facts about what they buy, where they shop, their price limits, etc. Marketing also requires knowledge about consumers' fundamental needs, their future preferences, and what determines these. For example, the purpose of loyalty cards in UK retail stores is not just to encourage repeat visits by customers or even to generate lo
yalty; the aim is primarily to generate on a daily basis lots of useful information for the retailer about buyers' purchasing habits. The collection and use of this type of data about consumers' buying behaviour is not sufficient though. Lots of other types of information are needed to aid marketers' decision-making, such as costs, production, competitors, industry; indeed, information about the whole context of the market. Nor is it sufficient to possess and collect information. Marketers also need the ability to integrate and frame such information within the context of their experience, expertise, and judgement.
Whatever Way You Look at It
There are four main approaches to managing marketing's boundaries. These are:
We outline the theoretical and historical bases of these approaches first before moving on to consider how these can be implemented.
The functionalist approach studies marketing behaviour as a system and tries to establish ways of making it work better, more efficiently. It is associated with the great marketing theory pioneer Wroe Alderson, writing in the 1950s and 1960s (see Alderson, 1957). Academic study and development of marketing as a separate discipline is essentially a twentieth-century occurrence. It corresponds to the increasing distance of the producer from the final consumers, over whom manufacturers have thus lost control and influence, with distributors, agents and retailers filling the gap.