Marketing Is Set Of Management Activity

Published Date: 02 Nov 2017

Piercy (2009) contends that marketing is a set of management activities that define value, create value and deliver value for customers. Explore and critically evaluate this contention. Make recommendations to management from the conclusions arising from that evaluation.

Abstract

The article hereby is a hypothesis stating that marketing is a set of management activity that would be unaccomplished without ascertaining value, constructing value, and transmitting value to the customer. The article focuses to evaluate that for any organization to have a successful marketing strategy value creation and delivery to the customer are the most important aspects. The method for creating and delivering this value are discussed to support the contention.

Introduction

The article hereby is based upon the confrontation about marketing as a set of management activities, further describing and stating these activities that in relation define value towards the customer. Satisfying people's demand and creating a profit along the way is what marketing aims at. However, people's needs vary and therefore satisfying them may require different approaches. Recognition of differences among groups and identifying needs of customers is at the heart of marketing.

According to Piercy (2009) focusing on the impact of approaching to market as a set of value-defining, value-creating and value-delivering activities is more beneficial and sensible then talking about marketing departments and traditional marketing department do, then going to market is what companies do". Marketing may be in possesion to market experts, but going to the market is a process owned by everyone in the organization. The gist of market-led plan of action is to focus on the process of approaching the market and how it is designed and managed. The American marketing association to an extend agreeing to Piercy's statment offers the following definition: "Marketing is an organizational function and a set of process for creating, communicating and delivering value to the customer and for managing customer relationship in ways that benefit the organization and its stake holders". (American Market Association 2004). The definition give us the understanding that marketing is not only about, promotions, advertising or product placement. Marketing emphasises more towards needs and satisfaction of a customer that relates to business.

Whereas according to (Kotler, 2009) Market Management is the art and science of selecting appropriate target markets and attaining, accumulating and amplifying customers through creating, delivering and communicating superior customer value. Thus overall all the above definition and contention emphasise on creating and delivering value that fulfils the needs and requirement of the customer.

What is Value to a customer?

Value is a central marketing concept. Marketing can be seen as the identification, creation, communication, delivering and monitoring of customer value. Satisfaction reflects a person's comparative judgement of a products perceived performance in relation to expectations. If product performance falls short of expectations, the customer is dissatisfied and disappointed. If it matches expectations, the customer is satisfied and is it exceeds expectations, the customer is delighted. (Kotler 2009)

Porter defines value as "the amount buyers are willing to pay for what a firm provides them". By differentiating every step along the value chain; Value can be created, though via actions resulting in services and products that lower buyers' costs or raise buyers' performance. The product differentiation drivers are the likely sources of value creation, such as policy choices (what activities to perform and how), location, association (within the value chain or with suppliers and channels), sharing of activities between business units, timing (of activities), acquiring knowledge, integration, scale and institutional factors (see Porter, 1985: 124-127).

Kodak claimed that it sells 'Value' to the customer and no longer sells products; Kodak took a different approach by altering it perception to marketing by focusing on five key concepts linked to value: the value offer (the whole body of experiences and the price offered to customers); value delivery; segmentation of value delivery; a value-delivery system (within the firm); and a value-delivery chain (including the totality of supplier-customer relationships). (Gale, 1994; Ravald and Gronroos, 1996; Slater, 1997; Woodruff, 1997).

Customer Perception is what counts

The truth is that value is not created in the factory or the back office, customer values exists only on customer's terms and reflects the customer's priorities and preferences. Knowing what means value to our customer is rather important, but value exists only when the customer decides it does. (Piercy2009).

Royal mail was plagued by customers demanding that it it cut the length of queues in post offices. So it did just that. The trouble was that its customers believed the (actually shorter) queues were longer than ever. Managers found the quickest way to cut customer perception of queuing time was to repaint the post offices. Customers in clean, redecorated post offices reported that they had queued for a shorter time, even though it was not true (Summers, Diane, 'Letters chiefs aim to deliver quality', Financial Times, March 6 1995).

If we do not know what the value drivers are for the customer, we are likely to do wrong things for right reasons for example one company believed speed of service was key to customer value, so trained telephone staff to be quicker, but lost market share because in fact customers wanted time to chat and resented being hassled. (Heller, Robert, 'The art of delighting the customers', Financial mail, August 6 1995)

The principal aim of any business body is 'Creating Value' for the customer; that in turn helps sell products and services. Value creation in most of the organizations today is to a great extend represented in the intangible drivers such as brand, people, innovation, and ideas. Most of the experts would recommend making value creation the top most priority for all employees and taking major company decisions.

There are some common myths when it comes to Value Creation they are as follows: (Rana 2008)

• Providing the customer with more is often considered value an example for this is the buy one get one free schemes where customer feels that he might be paying 100% more for the products and perceives that very product as costly once the scheme is withdrawn.


• Having lower price means providing value an example for this is the car market lower price cars end up as second best compared to higher priced cars as higher price cars offer higher satisfaction is what customers perception


• More features and add-ons create value an example for this is the mobile phone companies may offer plenty of features but if the customer service enquires are not addressed properly the customer is dissatisfied and quits the service.

Total Quality Management (TQM) can be used as one of the model to create value by an organization, thereby improving or focusing on providing better quality to the customer. TQM can be defined as a "systemic and a global approach to business management that is based on the logic of management by processes and has the objective of continuous improvement in the firm's performances through enhanced human resources in order to satisfy explicit or implicit expectations of customers and other stakeholders" (Dean and Bowen, 1994; Mele and Colurcio, 2006). An example of TQM that demonstrates importance of marketing activities towards the organizational success is that of Dell Computers. Dell Computers provides an innovative service that created a unique value for the customers; Dell can create a computer that fits according to the needs of the consumer's while the client is on the phone. Then, the computer can be shipped to the consumer in nearly no time at all (Business week, 2005).

Once value is been created it is further followed up by the most important aspect of marketing that is 'Delivering value' to the customer Walters and Lancaster (1999a and 1999b) determine value as the adequate blend of benefits delivered to the customer minus the entire costs of achieving the delivered benefits which then is a preferred mix of benefits compared with receiving cost.

According to Bower and Garda (1985) delivering value consists of the following phases: (Mele 2004)

• Choose the value,


• Provide the value,


• Communicate the value.

Vargo and Lusch (2004a, 2006) extended these conceptions of the value-delivery sequence by involving the customer as a co-creator of value, with the role of firm being reduced to that of a "value proposition maker".

Customer Relationship Management (CRM) is a function that ideally creates value and delivers value to the customer. CRM is a broad strategy and mechanism of achieving, absorbing, and partnering with selective customers to build greater value for the company and the customer. To achieve greater efficiencies and effectiveness in delivering customer value it integrates marketing, sales, customer service, and the supply chain activity of the organization. (Atul Parvatiyar & Jagdish N. Sheth). According to kotler (2009) it is the process of carefully managing detailed information about individual customers and all customers 'touch points' to maximize customer loyalty. Touch point is any occasion on which a customer encounters the brand and product - from actual experience to personal or mass communication to casual observation. (kotler 2009)

Peppers and Rogers (1999) suggest a four step framework can be adapted to CRM marketing.

• Identify your prospects and customers: Not every customer is important carefully build, maintain and detect a rich customer database.


• Differentiate customers: Customer lifetime value to the company and their needs must be determined, efforts to differentiate the most valuable customers.


• Interact and build strong relationship: Develop knowledge about individual customer need to have a relationship.


• Customize needs: Formulate product, services and messages that can be communicated in a personalized way.

In the USA, H.J.Heinz announced that its EZ Squirt ketchup would be available in Blastin green as well as tomato colour, in a cone-shaped bottle to encourage children to draw pictures on their food with ketchup. It was shortly followed by a funky purple version. The idea to make meal time interesting for the foul 6 - 12 year old may sound weird but stuck the market to achieve its annual sales target in 90 days. Here making boring food fun adds to value creation thus by building a relationship with the customer. (Edgecliffe-Jhonson, Andrew, 'Children learn to love their greens', Financial times December 10 2000)

Case study

This case study intends on showing how Toyota Motors created and delivered value to its customer there by creating a relationship with the customers. Toyota recently announced the recall of vehicles in the US, Europe and China over concerns about accelerator pedals getting stuck on floor mats on 29th January 2010. On the 1st of February they announced the mechanical fix to the problem; the company call centre team was boosted with extra members so that customer queries were answered correctly. On 5th February within a time span of 48 hours it quickly generated full list of customers who had the specific model that was creating problem. Further they launched a facility for vehicle identification/registration against the recall which was followed by shipping the repair part to central distribution points. On 9th February a team of qualified technicians were trained on how to fit the part, simultaneously the parts were shipped to the dealers overnight. Finally on 10th February work begins to fix the accelerated pedal, the service centres were working for extended hours with a combined capacity to repair 6000 vehicles per day and the first phase of cars with the problem being solved hit the roads.

Referencing:

Scott D. M. (2004, April). Buying and Selling. But what about marketing? Econtent, 27(4) 48. retrieved October 6, 2009 from: http://www.apollolibrary.com/Library/ERR/ElectronicReserveReadings.aspx

Hoovers. (2008). McDonald's Corporation. Retrieved on February 11, 2008 from http://www.hoovers.com/mcdonald's/--ID__10974--/free-co-factsheet.xhtml

Atul Parvatiyar & Jagdish N. Sheth Customer Relationship Management:Emerging Practice, Process, and Discipline Journal of Economic and Social Research 3(2) 2001, 1-34