Role of Marketing

Role of Marketing

1.1 Strategic Role of Marketing Goods and Services

• Definition of Marketing: Marketing is defined as a total system of interacting activities designed to plan, promote, and distribute products to present and potential customers.

• Importance of Planning:

  • Strategic planning is essential for long-term business success.

  • It encourages businesses to set goals and devise strategies to achieve those goals.

  • A marketing plan serves as a document that lists activities aimed at achieving these marketing outcomes, acting as a template for future action.

• Strategic Goals of Marketing:

  • Profit Maximisation: This occurs when there is a maximum difference between total revenue coming into the business and total costs being paid out.

  • Customer Orientation: This emphasizes placing customer satisfaction at the core of the business decisions to ensure the business meets customer needs and wants.

• Focus of Marketing Plans:

  • Marketing plans should be the focus of both short- and long-term planning for three reasons:

  1. Outline Strategies: Marketing plans outline the strategies that bring the buyer and seller together.

  2. Customer Satisfaction Costs: The cost of marketing is tied to satisfying existing customer wants, leading to repeat sales.

  3. Revenue Generation: Marketing is the only revenue-generating activity of any business.

• Case Study - Qantas:

  • Success of Qantas' Marketing Plan:

  • It has allowed Qantas to achieve its business goals.

  • The plan is comprehensive.

  • Encourages new product and service development.

  • Strong emphasis on market research.

1.2 Interdependence with Other Key Business Functions

• Finance:

  • Adequate funds are required to promote products, conduct market research, and design goods and services.

  • The end result of marketing is sales, which are managed by finance.

  • Finance ensures marketing has adequate financial restrictions and ensures that the advertised price is profitable.

• Operations:

  • The production needs to fulfill the designs created by the marketing function.

  • Product designs must align with customer needs outlined in market research.

  • Marketing ensures products are advertised correctly and that pricing adheres to the business's operational costs.

• Human Resources:

  • Marketing requires skilled employees to conduct marketing functions.

  • Human resources focus on the recruitment, training, and development of employees.

  • Motivated and skilled staff are necessary to cater to customer needs identified by market research.

• Case Study - Qantas:

  • Qantas' finance department relies on marketing to generate funds.

  • Marketing strategies (e.g., new lounges, check-in facilities) require strict budgets and monitoring against financial criteria such as sales, market share, and profitability.

  • Skilled human resources are essential for ensuring customer satisfaction, impacting job descriptions and training programs.

  • Operational constraints, including scheduling flights and introducing new facilities, can impact the marketing department.

  • Promotional strategies like sales promotions help boost sales during non-peak times to smooth fluctuations in demand.

1.3 Production, Selling, and Marketing Approaches

1.3.1 Production Approach

• Definition:

  • The production approach allows businesses to focus on the production of goods and services.

• Historical Context:

  • Originating during the Industrial Revolution, demand for goods exceeded the production capabilities of businesses that focused solely on production.

  • Businesses were product-oriented, focusing on improving quality and quantity of manufactured products.

1.3.2 Selling Approach

• Definition:

  • The selling approach emphasizes selling due to increased competition in the marketplace.

• Post-WWI Context:

  • Following WWI, production efficiency improved, increasing market competition.

  • Businesses began delivering high-quality, mass-produced products.

  • High spending on advertising and high-pressure sales tactics were used to stimulate demand, often producing without researching what customers wanted.

1.3.3 Marketing Approach

• Definition:

  • The marketing approach focuses on discovering what customers want through market research.

• Post-WWII Context:

  • In the post-WWII economic boom, Australian families gained sufficient discretionary income, shifting the emphasis to the development of a marketing concept based on four principles:

  1. Customer Orientation

  2. Integrated Marketing Strategies

  3. Satisfying Customers

  4. Integrated Business Plans to Achieve Goals

  • Businesses now integrate customer orientation, relationship marketing, and corporate social responsibility into their business models to satisfy customers' needs and wants.

1.4 Types of Markets

• Resource Market:

  • Groups involved in primary production, including sectors like mining, agriculture, forestry, and fishing.

• Industrial Market:

  • Businesses that purchase products to use in the production of other goods or in daily operations.

  • Example: A bakery uses flour to produce bread.

• Intermediate Market:

  • Consists of wholesalers and retailers who purchase finished products and resell them to make a profit.

  • Also referred to as business-to-business engagement (B2B).

• Consumer Market:

  • Consists of individual members of a household who plan to use or consume the products they buy.

  • This is also known as business-to-consumer engagement (B2C).

• Mass Market:

  • Sellers mass produce, distribute, and promote one product.

  • In mass markets, businesses do not target a specific group but assume that all customers have homogeneous or similar needs.

• Niche Market:

  • A narrowly selected target market (also known as a concentrated or micro market).

  • The mass market is divided into smaller segments of buyers with specific lifestyles, assuming consumers have heterogeneous or different needs.