Everything about Marketing Management totally explained
Marketing management is a
business discipline focused on the practical application of
marketing techniques and the
management of a firm's marketing resources and activities. Marketing managers are often responsible for influencing the level, timing, and composition of customer
demand in a manner that will achieve the company's objectives.
Definition and scope
There is no universally accepted definition of the term. In part, this is due to the fact that the role of a marketing manager can vary significantly based on a business' size,
corporate culture, and
industry context. For example, in a large
consumer products company, the marketing manager may act as the overall
general manager of his or her assigned
product category or
brand with full profit & loss responsibility. In contrast, a small
law firm may have no marketing personnel at all, requiring the firm's partners to make marketing management decisions on a largely ad-hoc basis.
In the widely used text
Marketing Management (2006),
Philip Kotler and
Kevin Lane Keller define marketing management as "the art and science of choosing
target markets and getting, keeping and growing
customers through creating, delivering, and communicating superior
customer value."
From this perspective, the scope of marketing management is quite broad. The implication of such a definition is that any activity or resource the firm uses to acquire customers and manage the company's relationships with them is within the purview of marketing management. Additionally, the Kotler and Keller definition encompasses both the development of new products and services and their delivery to customers.
Noted marketing expert
Regis McKenna expressed a similar viewpoint in his influential 1991
Harvard Business Review article "Marketing is Everything." McKenna argued that because marketing management encompasses all factors that influence a company's ability to deliver value to customers, it must be "all-pervasive, part of everyone's job description, from the receptionists to the Board of Directors."
This view is also consistent with the perspective of management guru
Peter Drucker, who wrote: "Because the purpose of business is to create a customer, the business enterprise has two--and only these two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."
But because many businesses operate with a much more limited definition of marketing, such statements can appear controversial, or even ludicrous to some business executives. This is especially true in those companies where the marketing department is responsible for little more than developing sales
brochures and executing
advertising campaigns.
The broader, more sophisticated definitions of marketing management from Drucker, Kotler and other scholars are therefore juxtaposed against the narrower operating reality of many businesses. The source of confusion here's often that inside any given firm, the term marketing management may be interpreted to mean whatever the marketing department happens to do, rather than a term that encompasses all marketing activities -- even those marketing activities that are actually performed by other departments, such as the
sales,
finance, or
operations departments. If, for example, the finance department of a given company makes
pricing decisions (for deals, proposals, contracts, etc.), that finance department has responsibility for an important component of marketing management -- pricing.
Activities and functions
Marketing management therefore encompasses a wide variety of functions and activities, although the marketing department itself may be responsible for only a subset of these. Regardless of the organizational unit of the firm responsible for managing them, marketing management functions and activities include the following:
Marketing research and analysis
In order to make fact-based decisions regarding
marketing strategy and design effective, cost-efficient implementation programs, firms must possess a detailed, objective understanding of their own business and the
market in which they operate. In analyzing these issues, the discipline of marketing management often overlaps with the related discipline of
strategic planning.
Traditionally, marketing analysis was structured into three areas: Customer analysis, Company analysis, and
Competitor analysis (so-called "3Cs" analysis). More recently, it has become fashionable in some marketing circles to divide these further into certain five "Cs": Customer analysis, Company analysis, Collaborator analysis, Competitor analysis, and analysis of the industry Context.
The focus of customer analysis is to develop a scheme for
market segmentation, breaking down the market into various constituent groups of customers, which are called customer segments or market segments. Marketing managers work to develop detailed profiles of each segment, focusing on any number of variables that may differ among the segments:
demographic,
psychographic,
geographic,
behavioral,
needs-benefit, and other factors may all be examined. Marketers also attempt to track these segments' perceptions of the various products in the market using tools such as
perceptual mapping.
In company analysis, marketers focus on understanding the company's
cost structure and cost position relative to competitors, as well as working to identify a firm's
core competencies and other competitively distinct
company resources. Marketing managers may also work with the
accounting department to analyze the
profits the firm is generating from various
product lines and customer accounts. The company may also conduct periodic
brand audits to assess the strength of its brands and sources of
brand equity.
The firm's collaborators may also be profiled, which may include various suppliers,
distributors and other channel partners,
joint venture partners, and others. An analysis of
complementary products may also be performed if such products exist.
Marketing management employs various tools from
economics and
competitive strategy to analyze the industry context in which the firm operates. These include
Porter's five forces, analysis of
strategic groups of competitors,
value chain analysis and others. Depending on the industry, the
regulatory context may also be important to examine in detail.
In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using
SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive
positioning and
product differentiation, degree of
vertical integration, historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. As such, they often conduct
market research (alternately
marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:
Marketing managers may also design and oversee various
environmental scanning and
competitive intelligence processes to help identify trends and inform the company's marketing analysis.
Marketing strategy
Once the company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make key strategic decisions and develop a
marketing strategy designed to maximize the
revenues and
profits of the firm. The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth,
market share, long-term profitability, or other goals.
To achieve the desired objectives, marketers typically identify one or more target customer segments which they intend to pursue. Customer segments are often selected as targets because they score highly on two dimensions: 1) The segment is attractive to serve because it's large, growing, makes frequent purchases, isn't price sensitive (for example is willing to pay high prices), or other factors; and 2) The company has the resources and capabilities to compete for the segment's business, can meet their needs better than the competition, and can do so profitably. For example,
Volvo has traditionally positioned its products in the
automobile market in North America in order to be perceived as the leader in "safety", whereas
BMW has traditionally positioned its brand to be perceived as the leader in "performance."
Ideally, a firm's positioning can be maintained over a long period of time because the company possesses, or can develop, some form of
sustainable competitive advantage. The positioning should also be sufficiently relevant to the target segment such that it'll drive the purchasing behavior of target customers.
Further Information
Get more info on 'Marketing Management'.
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