European

Journal of Marketing: Concept and

Marketing
23,3
Function
by
Leslie Bernard Trustrum
48 Staffordshire Polytechnic

Many attempts have been made to define marketing, some of which have
heen listed by Crosier [1]. The difficulty in doing so is compotmded by
the evolution of marketing, which has seen it progress from adopting
a purely managerial approach through systems, environmental, social
and societal approaches [2]. Further complications in defining the
nature and scope of marketing stem from the legitimately varied
perceptions of the many contributors to the dehate (for example, Kotier
smd Levy, [3,4], Kotier [5] and Luck [6]). Thus there are many varied
perceptions of what marketing is and is not.

The approach adopted here is that marketing is a combination of the marketing

concept, marketing functions and the operational implementation of these functions
in the context of the concept. Figure 1 illustrates this. Thus to be truly marketing
orientated, it is necessary for an organisation to adopt the marketing concept and
to plan and implement marketing functions.
Implementation of one, or indeed all, of tiie marketing functions without adoption
of the marketing concept is not marketing. However, having adopted the marketing
concept, it is not necessary to implement all of the functions, merely those that
are appropriate to prevailing circumstances. Thus, before tiie operationalisation
of marketing functions can be considered, it is necessary to examine the marketing
concept and the implications of its adoption for the marketing functions.
The marketing concept can be most simply explained as a belief that the
organisation can function in the best interests of its customer and its self where
a balance is achieved between the needs of both of these parties.
That is to say the organisation should not adopt an approach in which it is
concerned only witii its own capabilities and values. This is usually termed product
orientation. Here the organisation provides the product it is best at producing
and judges its quality by its own perception of quality rather than that of the
customer. Where there is a coincidence of perception between supplier and
customer or where demand exceeds supply, this approach may prove satisfactory.
However, such an approach is likely to be short term as the demand/supply situation
which prevails will encourage market entrants who are likely to attempt to satisfy
customer demand more directiy.
Thus over-emphasising the organisation's side of the equation is likely to prove
inefficient. Having realised this, many companies then proceed to overstate the
customer side of the balance. This is done either by using aggressive advertising
 Marketing:
Concept and
Function
Marketing as a concept: Balance
between — organisational objectives
— organisational resources
— market segment demands 49

/'^
\
Marketing functions:- Product planning
'^ and/or Price planning
0) >

(B and/or Place planning

O5
C
and/or Promotive planning
'*-t
and Marketing research

o
1
Implementation of marketing functions

\ V 1 Figure 1.
Marketing

and selling to persuade customers that the goods/services offered do satisfy their
requirements (and believing that by the adoption of marketing functions they are
now marketing orientated) or by providing the customer with all his/her
requirements. This latter approach is likely to lead to a wide product range with
' 'something for everyone'', high inventory of raw materials, work in progress and
finished goods, increases in production down-time and idle-time, and dissipation
of management and selling resources.
Thus, in their varying ways, both product and sales orientations are an inefficient
use of the resources of the organisation. The marketing-orientated orgamsation
is concerned to identify its capabilities and resources, as well as to identify
customers and their requirements. However, there is a recognition that the market
is not homogeneous and can be subdivided into many segments where there is
a variation in demand and in the characteristics of tiie customer.
Having segmented tiie market, the marketing task is to match organisational
capabilities to the demands of a particular market segment(s) to achieve the overall
objectives of tiie organisation.
European
Journal of -• Task procedure
Marketing -•• Feedback
23,3 Task Task Marketing Operations
Number Description Procedure Feedback
1 Describe

50 t Set forth in words.

characterise either
Description of
marketing status.
Further detail in
description based
qualitatively or environment. on subsequent
1 quantitatively
1 problem i.e. activity
marketing audit
1
t 1
2 Diagnose
Infer presence of
• from symptons;
Diagnosis of
problem(s) revealed
Further insight into
the problem
formal statement of in position audit following
this, ascertainment subsequent activity
of cause of fault
1
1
1
3 /J nalyse

A Examine in detail. Analysis conducted Further depth in

ascertain elements quantitatively analysis stemming
or structure wherever possible. from comparison of
1 detailed actual with
1 identification of prognosis
structure of
1
1 problem/prevailing
1 circumstances
1 1
4 Produce prognosis
k Forecast, predict or Production of Comparison of
/ give advance quantitative forecast with
/ indication demand/sales/ actual as aid to
' market share management by
1 forecast plus long- exception
term qualitative
I
. forecasts of the
demand/sales
scenario

5 Prescribe
Lay down or Recommend to Change prescription
impose, advise use management. in detailed areas
of provide detailed based on
support for detailed management by
proposals in exception
appropriate form

6. Inrlplementa ion
Put into effect. Implement detailed Carry out
perform marketing functions marketing research
1 of product, price. and surveillance of
place and results of
promotion implementation

Figure 2.
Marketing Tasks and
Operations
 An organisation with widespread resources and laige capabilities can thus Marketing:
efficiently compete in many segments (e.g. a motor manufacturer such as Ford), Concept and
whilst a smaller organisation with fewer resources will compete in a few, or even Function
only one, market segment (e.g. motor manufacturers such as Morgan, TVR and
Lotus). Strategically, organisations may select market segments for subsequent
planned entry. This approach also allows marketing resources, such as advertising
expenditure, new product designs, salesmen, etc, to be used more efficiently,
as they can be targeted on the known characteristics of specified market segments. 51
This marketing-orientated approach naturally requires efficient marketing
research. This, however, is not merely concerned with the identification of markets
and their characteristics, though this is essential, but also with research into the
effectiveness of marketing functions, such as advertising, pricing, etc. Equally
important, however, is the research into organisational resources and capabilities,
and the position of the organisation in comparison with competitors. Thus the
organisation must conduct an audit of its own resources and identify its market
position. Where deficiencies are evident in comparison with the needs of available
market segments, improvements in the organisation are clearly necessary to benefit
fully from a marketing orientation.
The marketing approach of adopting the marketing concept as explained above
is not confined to traditional goods and services. The terms "product" and
' 'organisation'' have been used so fer, and these are intended to include any market
offering (whether industrial or consumer, good or service) and any organisation
whether it be established for profit or non-profit motives. Kotler [7,8] sees marketing
as applying to any exchange process.
The view adopted here is that the marketing concept can be applied to any
organisation, provided it is recognised that varying organisations have different
objectives — some profit, some non-profit. Marketing is the business approach
which is the most successful in balancing the organisation's resources with market
requirements to achieve any defined objective.
The issue that must now be addressed is what tasks a marketing-orientated
person or organisation must undertake. Figure 2 identifies six main tasks. Firstly,
it is necessary to describe the situation. This involves conducting a marketing
audit which comprises an audit of resources, market and position.
The resource audit is concerned with identifying the available resources either
quantitatively or qualitatively. The market audit examines the peformance of the
market and the characteristics of customers in the market. Following the completion
of a resource and market audit, a position audit can be undertaken. This seeks
to identify the organisation's position in the environment, particularly as compared
with competitors. Figure 3 identifies the typical factors that should be considered
in these, but this is not a complete list as the items vary from one situation to
another.
Once the current situation has been described, it is necessary to diagnose the
problems revealed in the marketing audit. This should show the areas of
organisational activity and market sectors which require detailed analysis. Analysis
of these areas and sectors should be quantitative wherever possible and based
on ascertaining the structure of the problem. That is to say, for example, why.
European The following items are indicative of those to be considered:
Journal of
Marketing (1) Resource Audit
23,3 Manpower
Management capability
Production capacity/mix/utilisation/potential
Corporate image
52 Finance, availability, cost, flows, etc
Product/service offered; new product development prospects, design
capability
Synergy potential for development
(2) Market Audit
Historical market demand
Forecast market demand
Market variables that will affect demand
Economic, political, social and technological environment
Legal/moral/ethical constraints
Geographic, demographic and psychographic profile of customers
New uses/market segment opportunities
Competitor status/activity/prospects
Distribution network characteristics
Current marketing methods in the market
(3) Position Audit
Company sales performance, volume/value, past/forecast
Market share
Financial performance vis-^-vis competitors
Sales performance vis-i-vis competitors
Brand and corporate image vis-^-vis competitors
Distribution strength
Sales/profit sensitivity (to economic and seasonal fluctuations as well
as to changes in level and mix of marketing functions)
Figure 3. Contribution to national and/or social profitability
The Marketing Audit

if sales have fallen, have they done so? What factors cotild have caused it? What
explanations are possible for each factor?
Based on this analysis, a prognosis of future developments for the organisation
and its environment can be produced. This should include demand and sales
forecasts and shotild lead to the development of appropriate strategies.
The appropriate strategies may be prescribed that will involve not only
identification of detailed tactics, but also resotirces to be employed, time scale,
limiting factors, risks and costs to achieve defined objectives.
In the case of professional services such as advertising and market research
agencies, the tasks may conclude at this stage with implementation being
undertaken by the client's management. However, where the prescription is
provided within the executing organisation, the implementation of the marketing
functions of product, price, place and promotion should follow. This should be
accompanied by continuous marketing research and surveillance of results to enable Marketing:
corrective action to be taken. The comparison of actual results with the previous Concept and
prognosis will allow the operation of management by exception. Further feedback Function
to earlier stages in the task chain will allow further refinement and detail of the
description, diagnosis and analysis tasks.

53
Task Task Description Procedure Activity

Describe Identify the Select appropriate

characteristics of the segmentation variables.
market: geographic quantify and group to
and psychographic establish homogeneous
dimensions segments

egmentat ion
Diagnose Examine the Identify customer w
behavioural response buying behaviour.
characteristics segment by benefit.
usage rate, loyalty, etc.
and link to description y
of market

Ana yse Identify competitive Identify competitive

market position and products' ^
relate to available characteristics and
company resources performance and
perceived place in
1
market. If own product O)
not on market, identify c
Produce Identify alternative alternative strategies 'c
o
siti

prognosis competitive and relate to available

1 strategies available resources. If own o
f)
product on market. T3
C
relate position to
1 resources. Check
(D

t
Prescribe Select and alternative strategies
O)
c
(D
recommend against existing O)
appropriate target strategy/position. 1—
and positioning Relate strategies to
strategies objectives and choose
most effective strategy
given known resources
to best achieve y
objectives. Figure 4.
Market Segmentation
and Positioning Tasks
European Thus the marketing-oriented company strives not only to satisfy the customer,
Journal of but to achieve an appropriate match between market requirements and
Marketing organisational capabilities. The key to this lies in the recognition that what
23,3 customers seek is the delivery of benefits. These may be fulfilled in a variety
of ways and may be perceived differently by varying customer segments. For this
reason, the process of segmenting markets and consciously positioning products
54 into specific sectors or niches is a crucial part of the marketing concept. The overall
tasks of marketing as shown in Figure 2 can be applied to the activities of
segmentation and positioning; Figure 4 illustrates this. This shows that the
application of a logical step-by-step approach to the implementation of marketing
can improve the way in which the marketing functions are managed in the interest
of both the organisation and its customers.
In recent years, Japanese companies have been particularly adept at achieving
this as Kotler has shown [9]. Moreover, as Lorenz [10] has demonstrated, the
most successful companies are those which recognise that marketing "should
pervade the corporate culture and transcend any functional department or title".
Thus, whilst the marketing functions are important, it is the adoption of the
marketing concept that is a prerequisite to their successful implementation. The
marketing concept can be adopted not only by people in marketing functions, but
also by others in other specialisms, for example, accountants, production staff,
designers, etc. However, it is astonishing that given the enormous debate and
publicity surrounding the marketing concept, and despite formal contributions dating
back to 1945 [11] and before, as well as since [12-36] so few companies have fully
embraced the concept.
Lorenz [10] says: ".. for most of the last quarter century it has only been in
package goods . . .that marketing has been practised in anything near the breadth
and depth that Levitt advocated". He goes on to argue that elsewhere, unlike
the Japanese, Western manufactures have adopted a production/sales mentality,
"They may think they are practising marketing but they have confused the tools
with the concept". Lorenz enlists the support of Peters and Waterman [37] who
say "lip service" is given to market orientation and Kotler [38]: "We've been
talking about marketing for 25 years but few companies really do it".
Lorenz suggests that one of the major reasons for this is the confusion between
sales and marketing which, he believes, arises because the concept of marketing
is harder to understand than its various tools. A second major reason he gives
is the confusion with market research and domination by it.
This is undoubtedly true, but if the role of the concept as espoused here, and
its relationship to the logical operational implementation of marketing functions,
were more clearly communicated, these problems might disappear. The fear that
pedantic concern for spurious market research might stifle creativity would similarly
disappear if it were appreciated that research must be directed at identifying the
benefits or values customers seek.
If marketing is to make more progress in the next 25 years than Kotler believes
it to have done in the last 25, its dual components of concept and functions and
their interrelationship must be clarified. Furthermore, the logical approach to
problems and their solution must be developed, whilst at the same time not reducing Marketing:
the need for creativity in the development of ways of delivering the benefits Concept and
customers require. Function
However, care must be taken not to overstate the needs of customers. The
customer is not king, as, whilst his needs are important, the objective of the
marketing concept is to balance these with organisational capabilities to achieve
stated objectives. Functional efforts to satisfy all the needs of all the customers,
rather than those of specified segments which can be effectively serviced, leads 55
to sales rather than marketing orientation. Adoption of the marketing concept is
more important than any individual marketing function in the effective management
of an organisation.

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