Discuss and critically assess the assertion that the role of marketing, via-a-vis strategic planning, has diminished as a general management orientation, and that marketing has taken on a very functional, narrow specialist role, rather than the conceptual philosophy predicted by marketers?
Introduction
Perspectives emerged during the 1990s over the declining role of marketing in business strategy. This came about because of the major changes happening in business operations and in the management of various marketing activities. Due to these changes, views of the death of marketing as a business concept also emerged in the mid-1990s. Concurrently, strategic planning emerged in importance seemingly taking the place of marketing as a conceptual philosophy. However, marketing remains an important concept in modern business contexts but with the recognition of its flaws that resulted to its demise. One flaw is the divergent opinions over the conceptualisation of marketing that in turn increased the difficulty of evaluating marketing performance and supporting resource allocation for marketing activities, especially when the focus is only the short-term when marketing problems require long-term solutions. Another flaw is the dispersion of marketing into widespread tasks and responsibilities performed at the frontline level with the effect of diminishing its role in strategy. Nevertheless, despite these flaws, marketing also retained importance in the corporate strategy of some business firms, especially in strategic decision-making. As such, the role of marketing has become ambiguous resulting to the need to clarify what marketing has become relative to strategy in the contemporary business setting. The discussion commences with the description of the changing role of marketing followed by the evolving role of strategic planning, then by the points of reconciliation of marketing and strategic planning, before concluding on the clarification of the position of marketing.
Changing Role of Marketing
As a concept, marketing emerged when Drucker (1954) explained marketing as a unique business function and a business perspective from the view of customers so that marketing should apply across various areas of business operations and management decision-making. This description of marketing established the key role of marketing. The concept evolved with Keith (1960) introducing marketing orientation of business firms, Levitt (1960) introduced the term marketing myopia, which meant a two-way focus of marketing, which could be narrow or broad. The narrow focus of marketing finds expression in the early definition by the American Marketing Association of marketing as the process of performing business activities covering the flow of commodities from the producer or supplier to the end consumer (Alexander 1960). Kotler and Levy (1969) built-on the existing understanding of marketing and broadened the scope of marketing going back to the original concept of marketing as encompassing all areas of business. In line with the broad perspective of marketing, new definitions of marketing emerged. According to Pride and Ferrel (1980), marketing consist of the aggregate of activities at the individual and organisational level targeting the facilitation and advancement of exchanges within the influence of changing environmental forces. The definition is broad and context-based. A further improvement of this definition came from Agbonifoh et al. (1998) by explaining marketing at consisting of activities occurring at the individual and organisational level developed to address the needs of consumers and facilitate changes in the business operation to align the common goal of the business organisation and its individual members to serve consumer interests. Another definition is marketing as the process of delivering expectations of standard of living to communities by bridging the space between suppliers and customers. Still another definition of marketing is the identification, anticipation and satisfaction of customer needs in a profitable manner. (Adeyoyin 2004) As such, the broad concept of marketing applies in the contemporary business setting.
Now, the marketing concept revolves around three pillars. One is consumer orientation, which is the original vision for marketing. Another is profit orientation because earning profit is the ultimate objective of business firms so that focusing on meeting consumer demands is the means of earning profit. Last is the anticipation or assumption of changes so that marketing should function alongside the developments in society. (Adeyoyin 2004)
Kotler (1972) first pointed to the issue of applicability of marketing as the issue at the core of the concept of marketing. Adhering to a narrower perspective of marketing means likely applicability but this would be at the cost of limiting the role of marketing. Targeting the broader scope of marketing enables encompassing of various business areas but at the risk of achieving applicability. Even during the development of marketing as a concept, there was already an emerging debate over its role in business strategy since strategic management involves a broader role of marketing but applicability is a challenge. As Hackley (2001) pointed out, marketing has an expansive and broadening scope by encompassing every aspect of commerce and organisational processes but by embracing various aspects of human exchange, the concept of marketing became a universal concept akin to organized human exchange, which is far from its original customer-focused concept.
Even if the role of marketing persisted despite differences in perspective over its definition, another issue is its helpfulness to business practitioners. Hackley (2001) explained that although there appears to be indifference in the business world over the issue of the concept of marketing, the academic world is set on questioning the significance of marketing to practice. Even so, academic efforts at identifying and measuring the constructs of marketing also failed to clarify the role of marketing in business. The difficulty in identifying and explaining all marketing constructs is the vitality of this field because of the continuous flow of cross-disciplinary feedback.
Although marketing discourse have not resulted to the clarification of the concept of marketing and its role in strategy, this does not imply ignoring previous discourses but that there is need to re-examine or possibly reinvent the rhetoric of marketing to advance understanding and clarify the role of marketing in business strategy. As Piercy (1997) conjectured, marketing as a concept linked to strategy has not died or moving towards this direction and instead it is experiencing a mid-life crisis. Layton (1998) further explained that marketing has matured and thus is experiencing a decline because of a crisis in representation making its current position unrealistic. This implies the need to reconsider the concept of marketing in the contemporary context and rediscover its role in business strategy as well as its application in the daily business affairs given the changing competitive environment.
Marketing constitutes an important business activity because of its direct impact on sales and profit. In large business firms, an entire department even focus on marketing and in smaller firms, marketing finds expression in its product development, pricing, promotional activities, and distribution channels so that even if these do not have a separate department for marketing, the concept of marketing finds application in various areas of operation. While marketing finds expression in various activities, which is the reason for the claims of marketing as comprised of narrow functions, there is understand albeit implicit or tacit, that these activities are impossible to carry out in isolation from the other business areas. As such, even marketing departments need to work with the other departments such as operations, finance, human resource, and research and development (R&D) to collaborate plans since the implementation of marketing activities require linkage with operations particularly the supply chain, with finance for resource allocation and auditing, with human resource for the deployment of labour, and with research and development for products and services serving customer requirements. Concurrently, the other department also require links with the marketing department. Operations determine production processes based on marketing plans. The finance department base its forecasts and reports on trends in sales and performance of the business units. The human resource department develop human development strategies based on the marketing direction of the firm. The research and development department determines its focus or priority depending on marketing direction.
As such, marketing continues to be an important aspect of business despite variances in the understanding of marketing by managers and business firms. There is need to clarify and determine the position of marketing in business strategy given contemporary business settings. The reason for the claims that marketing has a very functional and narrow specialist role instead of a conceptual philosophy, which diminishes its role in business strategy, is its flaws and complex applicability. The continuous consideration of marketing concept by many business firms supports the important role of marketing in modern business firms, albeit this role could be evolving.
In addition, the role of marketing needs consideration relative to business strategy, especially with the evolving role of strategic planning, which overlaps with marketing.
Evolving Role of Strategic Planning
Strategic planning, a concept with close links but independent from the concept of strategy, also has many definitions based on the perspective of the business organisations applying it. Cook (2000) explained strategic planning as necessarily considered as “the method by which a community continuously creates artifactual systems to serve extraordinary purposes” (p. 111) if this concept were to stick to its original intent or purpose. This definition implies a number of things. First, strategic planning constitutes a method as a means to an end so that its relevance depends on its ability to facilitate the achievement of results. In this sense, both strategic planning and marketing are methods intended to achieve targeted outcomes. Second, strategic planning is operating at the level of the community because its affects permeates different levels of relations. Again, this is similar to the broad scope of marketing encompassing relationships, although marketing commonly referred to the supply and demand relationships and the relationships emerging within the organisation to meet to address shifts in the supply and demand function. Third, strategic planning is continuous because it operates in constant anticipation of changes in the business content. These changes in turn point to the areas requiring adjustments or improvements. This has similarities to the concept of marketing, which also operate flexibly against changes in the business environment requiring changes in the supply and demand function. Fourth, strategic planning is a tool for creation since it allows the business firm to derive new systems in response or a means of preventing emerging situations. Creations are characterised as artifactual since the longevity of systems depend on its persistent utility. Fifth, strategic planning serves an extraordinary purpose because it revolves around the process of discovering the extraordinary capabilities of the business firm. Marketing has a similar transformative aspect because of its consideration of change and context, necessitating improvements and changes.
Strategic planning is inevitable in organisations because all aspects of business operations involve strategic planning so that even business firms operating without a plan are technically implementing a plan not to engage in the formal process of planning. Moreover, strategic planning reflects the bold statute of business firms because the application of this concept means the recognition of the business firm and it managers that it has to give up some aspects or the entirety of its existing system in exchange for a better extraordinary new system. (Cook 2000)
To detail the strategic planning as a concept, the process has five aspects. Bradford, Duncan and Tarcy (2000) explained the need of business firms to develop prowess in strategic planning in the contemporary business context. Engaging in strategic planning involves the activities of clarifying and defining the goals and objectives of the firm, assessing the entirety of internal and external environmental factors and conditions, formulating plans proactive and responsive plans, implementing these plans, and evaluating and adjusting plan implementation whenever redirection becomes necessary. The goal is to development plans capable of actualisation resulting to the achievement of the pre-identified objectives as the intended outcome. The figure below reflects strategic planning as a process.
Mission and objectives pertain to business goals and objectives, values guiding operation, and perspective of the firm’s future. Since the direction of business firms is towards the development of competitive advantage, the firm’s mission and objectives encompass the means of improving its competitive position and market share. This constitutes a common focus and link with marketing since both concepts are concerned with building competitive advantages requiring focus on the development of core competencies in serving market requirements.
Environmental scanning encompasses the activities of assessing and analysing the internal structures, systems and process within the business firm together with the analysis of the firm’s external environment including the industry, market and broader economic situation. These apply environmental scanning tools such as the internal strengths and weaknesses together with the external opportunities and threats (SWOT) and analysis of the political, economic, social and technological (PEST) situation affecting the business firm. (Bradford, Duncan & Tarcy 2000) Although strategic planning constitutes a more organised system of understanding the business environment to address broader issues, marketing shares the purpose of understanding consumers as a prerequisite to addressing changing demand effectively. This implies that strategic planning has a more encompassing reach but shares similar expected outcomes with marketing.
Strategy formulation refers to the design of the means for the managers to build the internal strengths and external opportunities of the business firm and develop solutions to internal weaknesses and external threats (Bradford, Duncan & Tarcy 2000). Porter (1998) describes three examples of three generic strategies in building competitive advantage, which are cost leadership, differentiation, and niche marketing. These strategies optimise particular strengths or take advantage of available opportunities and/or address weaknesses and allay the potential impact of threats to the business firm. This has ties with marketing since the selection of a particular strategy depends on marketing conditions, such as the extent of market saturation. Again, this points to the greater organisation of strategic planning as a process relative to application of marketing. However, the link between strategic planning and marketing contributes to the improvement of the flaws of marketing.
Strategy implementation pertains to the shift and integration of competencies and resources in the process of actualising the developed strategies by means of budgets, standards and systems as application tools. During this phase, communication of the strategic plan and the selected tools to the different departments or throughout the levels of the organisational structure is crucial. Communication is necessary to develop coordination for consistency and accurate outcomes. (Bradford, Duncan & Tarcy 2000) The same is true for marketing because of the realisation that the completion of marketing activities happens only through coordination, making communication a key tool.
The last phase involving evaluation and control covers five steps: which are 1) definition of parameters for measurement; 2) definition of target values coinciding with these parameters; 3) performance of measurements or evaluations; 4) comparison of results relative to the pre-defined parameters; and 5) implementation of any necessary readjustments. (Bradford, Duncan & Tarcy 2000) Marketing also involves indicators and measures such as in the determination of price measured through the extent that this reflects all costs involved in the production of commodities plus a mark-up for profit.
Reconciling the Relative Roles of Marketing and Strategic Planning
Strategic planning provides a tool addressing the flaws of marketing and marketing supports the process of strategic planning (Pheng 1998). This means that marketing has not waned in importance in relation to business strategy, it just took on a different direction because of its alignment with strategic planning. This alignment allows marketing to operate as a broad conceptual philosophy but at the same time experience applicability.
On one hand, prior to the implementation of marketing activities, it is important to determine the mission of the business in order to determine the level of competency of the business and its ability to address the changing market demand. The identified performance or outcome objectives pertain to the particular marketing activities. These are strategic planning considerations linked to marketing activities. (Pheng 1998) An example is the case of shopping malls providing venues for retail trade. Shopping malls likely target to gain lease contracts with a variety of retailers as well as draw patronage from the market as marketing activities reflecting the mission of becoming the on-stop shopping venue in the community. Specific objectives would be to achieve full occupancy and comprehensive retailers providing all kinds of products and services that they could possibly need and developing a positive reputation with the community to ensure continuous visits to the shopping mall. Apart from this, management would also consider its operations relative to its closest competitors. This example shows that marketing as a broad concept and operating singly would not achieve an effectively level of applicability without alignment with strategic planning. This means that addressing the flaws of marketing to re-establish its importance as a conceptual philosophy that is at the same time applicable in actual business settings is through integration with strategic planning.
On the other hand, strategic planning serves to provide a blueprint for various contexts such as marketing. While strategic planning is a broader concept, it achieves purpose by operating in different business contexts including the performance of marketing activities such as successfully launching a product, developing a new market or niche, expanding venues of distribution, and communicating value offering of new products and services or brands to the consuming public. (Pheng 1998) In the example of the shopping mall, strategic planning would apply to the problem of slow revenue generation, which would involve linkage with marketing when the problem is due to the low customer traffic. The problem is the failure to link marketing activities with customer demand, which is a niche of marketing but addressed through strategic planning.
Conclusion
The importance of marketing has not waned in relation of strategic planning and business strategy. In just evolved into an integrative concept to support a broad perspective but ensuring applicability in the actual business setting. In fact, the term strategic marketing planning, evolved to represent this integration, encompasses the management processes and operations needed in creating and sustaining effective marketing activities. Specific activities include evaluating opportunities and developing a positioning strategy.
References
Adeyoyin, S.O. (2005), “Strategic planning for marketing library services”, Library Management Vol. 26, No. 8/9, pp. 494-507.
Agbonifoh, B.A. et al. (1998), Marketing in Nigeria: Concepts, Principles and Decisions, Afritowers, Aba.
Alexander, R.S. (1960), Committee on Marketing Definitions: A Glossary of Marketing Terms, AMA, Chicago, IL.
Bradford, R.W., Duncan, P.J. & Tarcy, B. (2000), Simplified Strategic Planning: A No nonsense Guide for Busy People who want Results Fast!, Chandler House Press, Worcester, MA.
Cook, W.J. (2000), Strategics: The Art and Science of Holistic Strategy, Quorum Books, Westport, CT.
Drucker, P.F. (1954), The Practice of Management, Butterworth-Heinemann, Oxford.
Hackley, C. (2001), Marketing and Social Construction: Exploring the Rhetorics of Managed Consumption, Routledge, London.
Keith, R.J. (1960), “The marketing revolution”, Journal of Marketing, Vol. 24, January, pp. 35-8.
Kotler, P. (1972), “A generic concept of marketing”, Journal of Marketing, Vol. 36, April, pp. 46-54.
Kotler, P. & Levy, S.J. (1969), “A new form of marketing myopia: rejoinder to Professor Luck”, Journal of Marketing, Vol. 33 July, pp. 55-7.
Layton, R.A. (1998), “Marketing in the future: back to basics?”, Australasian Marketing Journal, Vol. 6 No. 1, pp. 30-4.
Levitt, T. (1960), “Marketing myopia”, Harvard Business Review, Vol. 38, July-August, pp. 45-56.
Pheng, L.S. (1998) “Applying the Thirty-six Chinese Classical Strategies
of War to retail marketing and planning”, Marketing Intelligence & Planning,
Vol. 16, No. 2, pp. 124–135.
Piercy, N. (2002), Market-Led Strategic Change, 3rd edn, Butterworth Heinemann, London.
Pride, W.M. & Ferrel, O.C. (1980), Marketing: Basic Concepts and Decisions, 2nd ed., Houghton-Mifflin, Boston, MA.
Porter, M.E. (1998b), Competitive advantage: Creating and sustaining superior performance, Free Press, New York.
0 comments:
Post a Comment