Marketing management is a business discipline, which is focused on the practical application of
marketing techniques and the management of a firm's marketing resources and
activities. Globalization has led firms to market beyond the borders of
their home countries, making international marketing highly significant and
an integral part of a firm's marketing strategy. Marketing managers are
often responsible for influencing the level, timing, and composition of
customer demand accepted definition of the term. In part, this is because
the role of a marketing manager can vary significantly based on a business's
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. To create an effective,
cost-efficient marketing management strategy, 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.
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.
A brand audit is a thorough
examination of a brand’s current position in an industry compared to its
competitors and the examination of its effectiveness. When it comes to brand
auditing, five questions should be carefully examined and assessed. These
five questions are how well the business’ current brand strategy is working,
what are the company’s established resource strengths and weaknesses, what
are its external opportunities and threats, how competitive are the
business’ prices and costs, how strong is the business’ competitive position
in comparison to its competitors, and what strategic issues are facing the
business.
Generally, when a business is
conducting a brand audit, the main goal is to uncover business’ resource
strengths, deficiencies, best market opportunities, outside threats, future
profitability, and its competitive standing in comparison to existing
competitors. A brand audit establishes the strategic elements needed to
improve brand position and competitive capabilities within the industry.
Once a brand is audited, any business that ends up with a strong financial
performance and market position is more likely than not to have a properly
conceived and effectively executed brand strategy.
A brand audit examines whether a
business’ share of the market is increasing, decreasing, or stable. It
determines if the company’s margin of profit is improving, decreasing, and
how much it is in comparison to the profit margin of established
competitors. Additionally, a brand audit investigates trends in a business’
net profits, the return on existing investments, and its established
economic value. It determines whether or not the business’ entire financial
strength and credit rating is improving or getting worse. This kind of audit
also assesses a business’ image and reputation with its customers.
Furthermore, a brand audit seeks to determine whether or not a business is
perceived as an industry leader in technology, offering product or service
innovations, along with exceptional customer service, among other relevant
issues that customers use to decide on a brand of preference.
A brand audit usually focuses on a
business’ strengths and resource capabilities because these are the elements
that enhance its competitiveness. A business’ competitive strengths can
exist in several forms. Some of these forms include skilled or pertinent
expertise, valuable physical assets, valuable human assets, valuable
organizational assets, valuable intangible assets, competitive capabilities,
achievements and attributes that position the business into a competitive
advantage, and alliances or cooperative ventures.
The basic concept of a brand audit is to determine
whether a business’ resource strengths are competitive assets or competitive
liabilities. This type of audit seeks to ensure that a business maintains a
distinctive competence that allows it to build and reinforce its competitive
advantage. What’s more, a successful brand audit seeks to establish what a
business capitalizes on best, its level of expertise, resource strengths,
and strongest competitive capabilities, while aiming to identify a business’
position and future performance.
Marketing strategy
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 is large, growing, makes frequent purchases, is not price
sensitive (i.e. 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. In fact, a commonly cited definition of marketing is simply
"meeting needs profitably."
The implication of selecting
target segments is that the business will subsequently allocate more
resources to acquire and retain customers in the target segment(s) than it
will for other, non-targeted customers. In some cases, the firm may go so
far as to turn away customers who are not in its target segment. The doorman
at a swanky nightclub, for example, may deny entry to unfashionably dressed
individuals because the business has made a strategic decision to target the
"high fashion" segment of nightclub patrons.
In conjunction with targeting
decisions, marketing managers will identify the desired positioning they
want the company, product, or brand to occupy in the target customer's mind.
This positioning is often an encapsulation of a key benefit the company's
product or service offers that is differentiated and superior to the
benefits offered by competitive products. 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 will
drive the purchasing behavior of target customers. To sum up,the marketing
branch of a company is to deal with the selling and popularity of its
products among people and its customers,as the central and eventual goal of
a company is customer satisfaction and the return of revenue.
If 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 their own 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.
After the firm's strategic
objectives have been identified, the target market selected, and the desired
positioning for the company, product or brand has been determined, marketing
managers focus on how to best implement the chosen strategy. Traditionally,
this has involved implementation planning across the "4 Ps" of marketing:
product management, pricing (at what price slot does a producer position a
product, e.g. low, medium or high price), place (the place or area where the
products are going to be sold, which could be local, regional, countrywide
or international) (i.e. sales and distribution channels), and Promotion. Now
a new P has been added making it a total of five P's. The fifth P is
politics, which affects marketing in a significant way.
Taken together, the company's
implementation choices across the 4(5) Ps are often described as the
marketing mix, meaning the mix of elements the business will employ to "go
to market" and execute the marketing strategy. The overall goal for the
marketing mix is to consistently deliver a compelling value proposition that
reinforces the firm's chosen positioning, builds customer loyalty and brand
equity among target customers, and achieves the firm's marketing and
financial objectives.
In many cases, marketing
management will develop a marketing plan to specify how the company will
execute the chosen strategy and achieve the business' objectives. The
content of marketing plans varies from firm to firm, but commonly includes:
Project, process, and vendor management
More broadly, marketing managers
work to design and improve the effectiveness of core marketing processes,
such as new product development, brand management, marketing communications,
and pricing. Marketers may employ the tools of business process
reengineering to ensure these processes are properly designed, and use a
variety of process management techniques to keep them operating smoothly.
Effective execution may require
management of both internal resources and a variety of external vendors and
service providers, such as the firm's advertising agency. Marketers may
therefore coordinate with the company's Purchasing department on the
procurement of these services. Under the area of marketing agency management
(i.e. working with external marketing agencies and suppliers) are techniques
such as agency performance evaluation, scope of work, incentive
compensation, RFx's and storage of agency information in a supplier
database.
Reporting, measurement, feedback and control systems
Marketing management employs a
variety of metrics to measure progress against objectives. It is the
responsibility of marketing managers – in the marketing department or
elsewhere – to ensure that the execution of marketing programs achieves the
desired objectives and does so in a cost-efficient manner.
Marketing management therefore
often makes use of various organizational control systems, such as sales
forecasts, sales force and reseller incentive programs, sales force
management systems, and customer relationship management tools (CRM).
Recently, some software vendors have begun using the term "marketing
operations management" or "marketing resource management" to describe
systems that facilitate an integrated approach for controlling marketing
resources. In some cases, these efforts may be linked to various supply
chain management systems, such as enterprise resource planning (ERP),
material requirements planning (MRP), efficient consumer response (ECR), and
inventory management systems.
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