What is marketing?

Many people think of marketing as only selling and advertising. Today, marketing must be understood not in the old sense of making a sale According to management guru Peter Drucker, The aim of marketing is to make selling unnecessary. Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. (Kotler & Armstrong, 2010)

The Marketing Process

Evolution of the Marketing Concept

Product Orientation
Late 19th century: efficient production of goods allowed firms to meet strong customer demand. Mid-1920searly 1950s: weakened demand required that products would have to be sold. (personal selling, advertising, and distribution was the focus) Early 1950s2000s: adopting a customer focus means a commitment to researching and responding to customer needs.

Sales Orientation

Marketing Orientation

FIGURE 1.3

Organizations Orientation

Evolution of the role of Marketing

Evolution of the role of Marketing

Marketing is so basic that it cannot be considered a separate function on a par with others such as manufacturing or personnel. It is first a central dimension of the entire business. It is the whole business seen from the point of view of its final result, that is, from the customers point of view. (Drucker, 1973)

Defining Companys Mission

Products and technologies eventually become outdated, but basic market needs may last forever.

Mission statement is a statement of the organizations purposewhat it wants to accomplish in the larger environment. Some companies define their missions myopically in product or technology terms (We make and sell furniture or We are a chemical-processing firm). Mission statements should be market oriented and defined in terms of satisfying basic customer needs.

Strategic decisions and the nature of strategy

They are concerned with the scope of an organizations activities, and hence with the definition of an organizations boundaries. They relate to the matching of the organizations activities with the opportunities of its substantive environment. Since the environment is continually changing it is necessary for this to be accommodated via adaptive decision-making that anticipates outcomes as in playing a game of chess. They require the matching of an organizations activities with its resources. They have major resource implications for organizations such as acquiring additional capacity, disposing of capacity, or reallocating resources in a fundamental way.

Strategic decisions and the nature of strategy

They are influenced by the values and expectations of those who determine the organizations strategy. They will affect the organizations long-term direction. They are complex in nature since they tend to be non-routine and involve a large number of variables. As a result, their implications will typically extend throughout the organization.

Why do great companies fail?

Long-term success is typically based on a combination of innovation, investment, the creation of value and very importantly a strong emphasis upon strategic management. Hamel and Prahalad (1994) suggested that in many organizations there is an inherent tension between their past and their future which unless addressed ultimately leads to the organizations decline and failure. those organizations that do manage to overcome this tension have several common features

What are the common features?

A clear sense of purpose and direction Clearly articulated strategies Continuous investment A focus of resources and effort A commitment to the long term A determination to overcome roadblocks A relentless focus on making their future An emphasis on implementation. In essence, they understand competitive advantage and what it takes to win.