Lambin (2000)states that "marketing is a business philosophy and an action orientated process which is valid for every organisation in contact with it’s constituency of users."
He makes the distinction between marketing as a ’system of thought’ (or strategic marketing) and as an ‘active process’ (or operational marketing).
With reference to academic literature and to an organisation(s) of your choice, critically evaluate lambin’s proposition that marketing is both a management orientation and a management function, applicable in all organisational contexts.
1.0: Introduction:
Marketing in the twenty-first century has become an integral part of every business organization irrespective of the nature of its business. This is apparently due to the stiff competition and the increase in globalisation as well as the continuous innovation in the process of marketing itself through deploying latest IT based tools and infrastructure. The fact that any business operates mainly around its customers and only when the business is functioning with the customer as the primary element; it can achieve competitive advantage in the market. This essay is focused on the argument by Jean-Jacques Lambin (2000) that, marketing is a business philosophy and an action orientated process which is valid for every organisation in contact with its constituency of users. The essay aims to justify that marketing in the current business environment should not only be perceived as an operational factor of the organization and that the organization must strategically deploy the concept of marketing on an organization wide basis in order to be successful in the business.
The essay provides an overview of the operational marketing and compares it with the benefits of strategic marketing with an organizational perspective. The report then presents a critical analysis on the strategic marketing with examples from various organizations within and outside UK so as to develop a profound understanding on the topic under debate.
2.0: Operational Marketing
The process of marketing in the operational perspective as argued by Philip Kotler (1988) focuses mainly on gaining the attention of the target customers and effectively completing a sale in order to generate revenue. The marketing process so perceived is mainly restricted to the operational level (i.e.) the marketing department of the company operates as a separate entity using the funds allocated for marketing in the budget without the close operation with the management or the production department of the company. Apparently, the knowledge gained about the products and services offered by the organization as well as uninterrupted communication are lost in this case.
During the initial stages of marketing when it originated as a simple advert on the television during the 1970s, it was perceived that marketing is just a method to communicate the products of the company as opposed to enhancing the entire business and developing new markets. This perception was the main reason for the operational way of marketing as argued by Frances Brassington and Stephen Pettit (2003) who say that marketing in the early years was primarily concerned to just convey the message about new products to the customers and was treated as yet another operational department within the organization. The major disadvantage of considering the marketing management as an operational process is the fact that marketing requires first hand information about the company’s current production and level of pricing in order to decide on any promotion plans and above all to identify new target market segments which is impossible without the apt information about the entire business itself. Alongside, it is clear that the competition in the markets is continuously increasing with the growing level of globalisation in every sphere of business. Hence, mere communication about the product details is no longer successful as a marketing strategy and the need to deploy marketing at the managerial level in par with the top level management is essential in order to clearly define the goals and strategies of the marketing mix (i.e.) the plan to effectively reach the target customers with the information about the products and services.
Apart from the fact of communication, a business can perform effectively only when it considers the customer as the topmost element of the business process itself as identified by Philip Kotler (1988). This is essential in order to not only identify new customers but mainly to retain the existing customers itself. When marketing is considered as an operational process, the company fails to put the customer as the key for business and thus lacks effectiveness in the communication, which is the heart of marketing. This makes it clear that it is high time for any organization to consider marketing as a strategic element of the business rather than treating it as an operational part. JSainsbury Plc, which is a popular supermarket chain in the UK, faced continuous loss in the past few years. An insight into the company’s marketing activities proves that the company failed to consider the demand from the customers for low priced products without compromising quality, which was mainly because of the growth of Asda Plc the low priced supermarket chain in the UK. Alongside, it is also clear that JSainsbury was spending heavily on marketing but just failed to make it effective due to the lack of strategic insight into the target market. The consumers oversaw the fact that the company is focused on providing high quality products to its customers when the products were not priced and communicated effectively (i.e.) the advertising of the company was not effectively communicating the policies of the company on quality. Further analysis on the JSainsbury Plc and the strategic marketing is presented to the reader in the next section.
Also, Ray Wright (2004) says that marketing in the current Business-to-Consumer market can be effective only when it is considered as a strategic plan encompassing the company’s mission and policies as opposed to the operational perspective. The poor performance of the Procter and Gamble in the Asian market during the year 2003 was essentially because of the fact that the company failed to identify the customer needs and tailor its products based on the needs of the customers. The lack of the strategic thinking in product customisation and understanding of the demography has proved fatal for even the FMCG (Fast Moving Consumer Goods) conglomerate.
From the above arguments it is clear that the deployment of marketing as an operational element of business is no longer successful in the increasingly competitive environment. The next section on strategic market provides insight on applying the marketing concept in a strategic perspective and discusses the advantages with examples.
3.0: Strategic Marketing
The concept of strategic marketing revolves around the primary idea of organizational involvement and planning. Hence a brief analysis on these areas is presented before proceeding to analyse the advantages of strategic marketing in business environments.
3.1: Management orientation
Philip Kotler (1988) argument argues that marketing must involved the entire organization in order to identify the critical issues faced by the business and the ways of addressing it as a whole organization rather than just a single department. This argument of Kotler (1988) is in par with that of Lambin (2000) who insists that marketing must involve the entire organization in order to achieve competitive advantage. It was established that marketing could be effective only through uninterrupted communication within different levels and sections of the organization. This level of free communication within the organisation can be achieved only through the co-operation and involvement between the different elements of the organization itself. Considering the example of JSainsbury cited in the previous section, it is clear that the pricing of the products was conducted without the involvement or proper communication with the marketing department of the organization. Alongside, the lack of communication between the departments and the top-level management, which is evident from the above statement, was the primary reason for JSainsbury in failing to identify the key strategy of low price and competitive quality products in the shop floor.
On a global perspective, when the management orientation is considered, the major issue that needs to be addressed is the demography of the target market and the potential of the market (i.e.) affordability and other related issues. This when considered in the Procter and Gamble example cited above can be seen that the company failed to identify the demand and the nature of the target customers in the India market where it initially introduced the Pantene range of hair care products and failed in achieving market share. This was essentially because of the lack of the company’s local knowledge about the target market, which was due to the lack of communication with the management in India before launching the product itself. The fact that the consumer market in India is not economically rich when compared to the west hindered the sales of the hair care products even though they were of exceptional quality. The strategy of the company to sell small packets of the same shampoo composition along with the bottled packages boosted the sales tremendously in the year 2003 thus proving that the local knowledge is essential for the success of the business and can be achieve by the total orientation of the organization itself so as to enable effective and uninterrupted communication between various levels of the organization.
The aforementioned examples are father justified by the argument of Frances Brassington and Stephen Pettit (2003) that communication is the critical element for a successful marketing plan for which the orientation of the whole organization is inevitable. Furthermore, the statement of Tsai-Lung Liu (2005) that, The nature and contents of strategic marketing include the organizational marketing resources of choices, commitment and actions. Makes it clear that effective communication and total involvement of the entire organization is essential for a successful business venture and effective marketing plan.
3.2: Planning and Marketing
It is clear that planning is the life-blood for any business process and especially a new venture. Philip Kotler (1988) argues that the actual business plan should embrace the marketing plan at the strategic level in order to reflect upon the company policies and strategies, which is essential for a successful marketing plan. From the above discussion it is clear that effective communication between various levels of organization is essential for the strategic marketing. The communication so achieved must reflect upon the mission and the future vision of the company, which is the key ingredient for designing, the marketing plan itself. Alongside, the marketing plan should reflect upon the product pricing strategies and the pricing of the products must be done with close consideration of the existing market trends as well as the company’s core strategic principle and policies. The revival of Marks and Spencer during 2003 by the then chairman Luc Vandelvede was primarily through his focus on the marketing plan that reflects the core principles of quality and service of Marks and Spencer.
The argument of Tsai-Lung Liu, (2005) that marketing plan should embrace the resource based view of the company in order to effectively design the message to reach the customers further justifies that the marketing plan must be drafted in par with the strategic plan of the organization itself. It is interesting to note that through the strategic deployment of the marketing plan embraces not only the organizational strategies but also the issues related with the production and market trends with season makes it clear that marketing can be effectively deployed to achieve competitive advantage only through strategic deployment of the marketing plan. The partnering of Procter and Gamble with Hilton group of hotels for the use of Flash range of cleaning products in the hotel premises has apparently created a strong Brand image for both the hotel as well as the FMCG conglomerate in the UK as well as across those nations where the Hilton group is active. This concept of co-branding which is increasingly being deployed by the hospitality industry to gain market share and competitive advantage is a classical example for the strategic deployment for marketing management through the orientation of the entire organization itself. The aforementioned argument on co-branding is obviously through the involvement of both the organizations’ management in partnering to effectively increase their market share as well as generate revenue. In the above example Procter and Gamble has obviously achieved in increasing the sales of its Flash range of cleaning products whilst establishing its brand image and on the other hand Hilton group of hotels has obviously created a positive impression among its customers about the hotel’s commitment to quality and hygiene. This achievement is possible only through the strategic deployment of marketing which apparently involves the entire organization in deriving on the marketing plan. From the above mentioned example it is also clear that Procter and Gamble has increased the sale of Flash range of cleaning products not only in the Business-to-Business segment but also efficiently communicated the quality and performance of the product to the consumers in the Business-to-Customer segment of business as well. Such a combined advantage is achievable only through the strategic deployment of the marketing management concept.
3.3: Marketing in management orientation and management function
From the aforementioned discussions it is clear that the strategic implementation of the marketing only would provide successful results. But one should understand the fact that the marketing plan strategically derived must be executed effectively where the management function comes into the scene. The management function in the perspective of Lambin (2000) is essentially the operational elements of marketing (i.e.) the various methods like direct marketing, promotions etc deployed by the marketing plan. This apparently reveals that the marketing plan derived through the management orientation can be successful only through the effective management function. Alongside, the involvement of the entire organization in the process of marketing is highlighted in management function. This can be achieved through a committed workforce that functions’ in par with the organizational strategy only when the management orientation is realised.
JSainsbury Plc has achieved a considerable increase in its sales in the year 2004. This was essentially due to the company’s redefinition of its pricing strategy and introduction of the economy lines in its products, which is highly competitive in price. This initiative is apparently due to the strategic planning and effective pricing method in order to create a strong marketing plan. Alongside, the advertising of the products focusing on the high quality and price is apparently the management function where the advertising strategy was efficiently realised in the form of highly informative advertisements. Also the direct marketing strategy through the circulation of the leaflets on the latest products and prices door-to-door has further justified that the actual function of marketing must also be efficient in line with the management orientation so as to achieve sustainable growth in the market.
4.0: Conclusion
The analysis in sections 2 and 3 has proved that the marketing management must be given a strategic perspective as opposed to being treated as an operational element of the business. Alongside, it is also clear that the strategic marketing plan so derived through the management orientation can effectively reach the customers only when it is deployed with the same level of efficiency with which it was initially planned. Apparently, the operational element of the marketing is critical for the effective communication of the information to the target customers thus justifying marketing is also a management function. Thus it is clear that marketing can secure sustainable growth in the business and gain competitive advantage only when it is treated as both a management orientation and management function (i.e.) management operation.
References:
Books:
- Frances Brassington and Stephen Pettitt, (2003), Principles of Marketing, third edition, UK: Prentice Hall Financial Times.
- Jean-Jacques Lambin, (2000), Market-driven management strategic and operational marketing, Basingstoke: Macmillan Business
- Philip Kotler, (1988), Marketing Management Analysis, Planning, Implementation and Control, New Jersey: Prentice Hall Inc.
- Ray Wright, (2004), Business-to-Business marketing A step-by-Step Guide, UK: Pearson Education.
Journals and Market Reports
- Annual Report, (2004) Annual Report and Financial Statements, UK: JSainsbury Plc
- Market Report, (2003), Market Report Plus: FMCG, UK: Keynote Ltd
- Tsai-Lung Liu, (2005), Impacts on Improvement of Organizational Synthetic Value Caused by Social Network Relationship, Journal of American Academy of Business, Cambridge; Mar2005, Vol. 6 Issue 1, p102, 8p