Marketing Management: Meaning, Process, Philosophies

Definition of Marketing Management

Marketing management is directly responsible for finding areas where the company’s products and services fail to fulfill consumer needs and expectations and initiating vigorously marketing programs to provide desired satisfactions explicitly demanded by consumerism.

Marketing management’s nature and objectives will have become vastly more consumer-oriented and much less product and corporation-oriented for the maximum long-range benefits of the corporation itself.

Definition of Marketing Management

Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.

Explaining the definition, you can understand that marketing management is a process that involves analysis, planning, implementation, and control of goods, services, and ideas. The marketing management process is based on the idea of exchange.

What is the goal of such a process? The simple answer is to provide satisfaction to everyone involved in the said process, including company, customers, suppliers, and channel members.

What a marketing manager does, or what roles he plays in the process involving marketing management?

His job in the process is to find prospects and to stimulate them to buy his products. But it does not truly explain the job being performed by a marketing manager.

In addition to stimulating the demand for his products, he undertakes a lot of other diversified activities. He has to influence the level, timing, and composition of demand to help his organization achieve its goals.

Most marketing experts believe that the marketing manager’s job is to manage the demand for his product. It would help if you realized that demands vary in terms of their states. In the following section, we shall try to give you an idea of different demand states and the consequent marketing tasks.

Marketing Management Philosophies

You understand that marketing managers undertake activities to achieve desired exchange outcomes with target markets for their sustenance. As a practicing or potential marketer, you should know which philosophy should guide you in performing your tasks as a marketing manager.

You should also know how to look at your own interest, the interest in your firm, customers, and the society where you work. But, you should bear in mind that there could be conflicts in the interests of the parties concerned.

For instance, I.V. fluid (intravenous fluid) manufactured by a pharmaceutical company is excellent in quality.

The type of container it uses is inconvenient as reported by the doctors and non bio­degradable, causing environmental hazards. This example clearly indicates that though this company’s IV fluid is extremely effective and popular with users, it may badly damage the environment.

In carrying out marketing activities, a marketing manager should be guided by an appropriate marketing management philosophy. The philosophy that a company selects must be an effective, efficient, socially responsible, and an appropriate one.

Now the question comes, “which philosophy is the right one for a particular company”? To answer this question, a marketing manager should first become aware of alternative philosophies.

Thereafter, he can select one based on his goal and the nature of the market that he serves.

The 5 alternative marketing management philosophies are;

  1. production concept,
  2. product concept’,
  3. selling concept
  4. marketing concept, and
  5. societal marketing concept.

Check out our full explanation of 5 marketing management philosophies.

Application of Marketing Management – Adoption of Marketing Concept in Different Sectors

This is the era of marketing orientation. Contemporary marketers adopt marketing concepts in their marketing practices. The marketing concept is now not only applied in the field of product marketing. It is rather adopted by others, such as service marketers, professionals, and nonprofit organizations.

In recent times, there has been found widespread use of marketing management. It is now a growing interest in all sizes and organizations, including business, service, professional, and nonprofit firms. Its application is limited in developed countries and found to be in use by organizations of the developing countries.

15 Marketing Management Shifts

Several important trends and forces are eliciting a newer set of beliefs and practices on business firms. Marketers are rethinking their philosophies, concepts, and tools.

Here are major shifts in marketing management that smart companies have been making in the twenty-first century.

  1. From marketing does the marketing to everyone does the marketing
  2. From using many suppliers to working with fewer suppliers in a ship
  3. From relying on old market positions to uncovering new ones
  4. From organizing by-product’ units to ‘organizing by customer’s segments
  5. Emphasizing tangible assets and intangible assets
  6. Companies choose to own brands rather than physical assets
  7. From relying on old market positions to uncovering new ones
  8. From building brands through advertising to building brands through performance and integrated communications
  9. From selling to everyone to trying to be the best firm serving a well-defined target market:
  10. From attracting customers through stores and salespeople to making products available online
  11. From a focus on gaining market share to a focus on building customer share
  12. From focusing on profitable transactions to focusing on customer value
  13. Local adaptation and global standardization
  14. From focusing on shareholders to focusing on stakeholders
  15. Focus on the financial scorecard to focusing on the marketing scorecard

From marketing does the marketing to everyone does the marketing

Companies generally establish a marketing department for creating and delivering customer value. Companies now know that marketing is not done only by marketing, sales, and customer support personnel; every employee impacts the customer and must see the customer as the source of the company’s prosperity.

Companies are beginning to emphasize interdepartmental teamwork to manage key processes. More emphasis is also being placed on the smooth management of core business processes, such as new-product realization, customer acquisition and retention, and order fulfillment.

From using many suppliers to working with fewer suppliers in a ship

Companies are reinforcing partnering arrangements with key suppliers and distributors. Such companies have shifted from thinking of intermediaries as customers to treating them as partners in delivering value to final customers.

From relying on old market positions to uncovering new ones

In highly competitive marketplaces, companies must always move forward with marketing programs, innovating products and services, and staying in touch with customer needs. Companies must always be seeking new advantages rather than just relying on their past strengths.

From organizing by-product’ units to ‘organizing by customer’s segments

Some companies are now switching from being solely product-centered with product managers and product divisions to manage them to be more customer-segment-centered.

Emphasizing tangible assets and intangible assets

From emphasizing tangible assets to emphasizing intangible assets, companies recognize that much of their market value comes from intangible assets, particularly their brands, customer base, employees, distributor and supplier relations, and intellectual capital.

Companies choose to own brands rather than physical assets

From making everything to buying more goods and services from outside, more companies choose to own brands rather than physical assets.

Companies are also increasingly subcontracting activities for outsourcing firms. They maximum outsource those activities that others can do more cheaply and better but retain core activities.

From relying on old market positions to uncovering new ones

In highly competitive marketplaces, companies must try to make them forget customers understand and appreciate that their brand is better than the complying brands. Companies must always be seeking new advantages rather than just relying on their past strengths.

From building brands through advertising to building brands through performance and integrated communications

Marketers are moving from an overreliance on communication tools such as advertising or sales force to blending several tools to deliver a consistent brand image to customers at every brand contact.

From selling to everyone to trying to be the best firm serving a well-defined target market:

Companies are also making substantial investments in information systems as the key to lowering costs and gaining a competitive edge. They assemble information about individual customers’ purchases, preferences, demographics, and profitability.

From attracting customers through stores and salespeople to making products available online

Consumers can access pictures of products, read the specs, shop from online vendors for the best prices and terms, and click to order and pay.

Business-to-business purchasing is growing fast on the Internet. Personal selling can increasingly be conducted electronically, with buyers and sellers seeing each other on their computer screens in real-time.

From a focus on gaining market share to a focus on building customer share

A bank aims to increase its share of the customer’s wallet; the supermarket aims to capture a larger share of the customer’s “stomach.” Companies build customer share by offering a larger variety of goods to existing customers. They train their employees in cross-selling and up-selling.

From focusing on profitable transactions to focusing on customer value

Companies normally aim to profit on each transaction. Now companies are focusing on their most profitable customers, products, and channels. They estimate individual customer lifetime value and design market offerings and prices to profit over the customer’s lifetime.

Companies now are placing much more emphasis on customer retention. Attracting a new customer may cost five times as much as doing a good job to retain existing customers.

Local adaptation and global standardization

From being local to being global — both global and local, firms adopt a combination of centralization and decentralization to better balance local adaptation and global standardization.

The goal is to encourage more initiative and “intrapreneurship” at the local level while preserving the necessary global guidelines and standards.

From focusing on shareholders to focusing on stakeholders

Top management respects the importance of creating co-prosperity among all business partners and customers. These managers develop policies and strategies to balance the returns to all the key stakeholders.

Focus on the financial scorecard to focusing on the marketing scorecard

Top management is going beyond sales revenue alone to examine the marketing scorecard to interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures. They know that changes in marketing indicators predict changes in financial results.

8 Marketing Management Tasks

The core concepts and others provide the input for a set of tasks that make up successful marketing management. The following are the tasks of Marketing Management:

  1. Developing marketing strategies and plans
  2. Capturing marketing insights
  3. Connecting with customers
  4. Building strong brands
  5. Shaping market offerings
  6. Delivering value
  7. Communicating value
  8. Creating long term growth

Developing marketing strategies and plans

The first task is to identify its potential long-run opportunities given its market experience and core competencies.

Capturing marketing insights

To understand what is happening inside and outside the company, it needs a reliable marketing information system as it will want to monitor its marketing environment closely.

Connecting with customers

Companies must consider how to create the best value for their chosen target markets and develop strong, profitable, long-term relationships with customers.

Building strong brands

Companies must understand the strengths and weaknesses of their brand vis-a-vis company brands in consumers’ eyes.

Shaping market offerings

At the heart of the marketing program is the product-the firm’s tangible offering to the market, which includes product quality, design, features, and packaging.

Delivering value

Companies must also determine how to deliver the value embodied by these products and services to the target market. It includes various activities that the company undertakes to make the product available to target customers.

Communicating value

Companies must also adequately communicate the value embodied by its products and services to the target market.

Marketing communications activities are how firms attempt to inform, persuade, and remind consumers about the brands they sell. Companies must develop an integrated marketing communication program that maximizes the individual and collective contribution of all communication activities.

Creating long term growth

Companies must also consider their products and brands and how their profits should be grown. Based on its product positioning, they must initiate new-product development, testing, and launching. The strategy also will have to take into account changing global opportunities and challenges.

Major Challenges Facing Marketers

Analyze the major challenges facing marketers in the new millennium. Marketers must connect faster and better with customers. The latest technologies must be used to ensure the delivery of time-based competition.

Websites and e-commerce must be fine-tuned to connect with more carefully selected customers. Many companies are connecting directly with customers to customize their mix of products and services. Partnership relationships and supply chain management must be built with strategic alliances to meet those domestic and global challenges.

  • Technological advances, rapid globalization, and continuing social and economic shifts are causing marketplace changes.
  • Major marketing developments can be grouped under the theme of Connecting.

Today’s Marketing Connections

  1. Via technology:
    1. Advances in computers, telecommunications, video-conferencing, etc., are major forces
      1. Databases allow for the customization of products,
      2. messages and
      3. analysis of needs
    2. The Internet
      1. Facilitates anytime, anywhere connections
      2. Facilitates CRM
      3. Creates marketspaces
  2. With customers:
    1. Selective relationship management is key
      1. Customer profitability analysis separates winners from losers
    2. Growing “share of customer.”
      1. Cross-selling and up-selling are helpful
    3. Direct sales to buyers are growing
  3. With marketing partners:
    1. Partner relationship management involves:
    2. Connecting inside the company
    3. Connecting with outside partners
      1. Supply chain management
      2. Strategic alliances
  4. With the world:
    1. Globalization
      1. Competition
      2. New opportunities
    2. The greater concern for environmental and social responsibility
    3. Increased marketing by nonprofit and public-sector entities
      1. Social marketing campaigns

Marketing Management in the Business Sector

Most of the companies operating in the field of business have now realized the importance of marketing management. But, they did not realize its importance simultaneously.

Different firms understood its necessity at different periods. Among the firms operating in the business sector, the consumer packaged goods companies, consumer durable good companies, and industrial equipment companies realized its importance earlier than others. They, as a result, have adopted it very quickly to excel in their competitors.

Other businesses, such as producers of steel, chemicals, and paper, realized the importance of marketing somewhat later. It is not a surprise to know that some business sector companies are yet to realize the role and importance of marketing. Among those who have adopted marketing, some still misunderstand marketing.

You can easily understand this by asking them a question like “what business are you in?”

You may note that majority will respond in the wrong way.

For example, a cosmetic manufacturer responds to your query by mentioning that he is in the cosmetic production and selling business.

But, to be truly marketing-led, he should believe that he is in the business of hope and beauty production and selling. You should note that significant changes took place over the last couple of decades about the marketing’s application.

For example, service firms, like airlines and banks, have significantly adopted marketing in their operation. This is even observed here in India among the private and multinational banks.

They are heavily focusing their activities on customers and providing state-of-the-art customer service, which indicates the marketing orientation adopted by them. Other firms in the business sector gradually realize that they should also adopt marketing philosophy, and as a result, some have already adopted it.

Examples include, among others, insurance, and stock brokerage companies, professional service providers, such as lawyers, accountants, physicians, and architects. These firms are now relying heavily on marketing activities such as advertising, pricing, and physical distribution.

Marketing Management in the Non-Profit Sector

The term nonprofit organization will refer to any private or public nonprofit institution. If the organization does not intend to earn and distribute potential profits, its activity can be called nonprofit marketing. Nonprofit organizations such as colleges, hospitals, museums, and symphonies are now also attracted to marketing.

Numerous private and public nonprofit organizations during the 1970s introduced marketing in their operations for the first time.

Nonprofit private organizations, side by side public, nonprofit organizations, ventured into the marketing field, including

  • advocates of social causes (equal rights groups, environmental groups, peace groups, and consumerism groups);
  • religious services;
  • cultural organizations (museums, theatrical groups); educational groups (private schools, colleges, and universities); and
  • philanthropic groups (foundations, charity hospitals, and private welfare groups).

They now have marketing departments (often called outreach team/department) engaged in researching and developing outstanding ads to attract customers.

Various factors were responsible for these developments, including the gradual recognition that every organization can benefit by applying effective marketing principles.

In response to declining sources of funds, other forms of support, changing needs of target markets, and increased competition, administrators in nonprofit organizations are forced to find more effective ways to serve and satisfy human needs and wants through exchange processes.

You do not ask a question like “should we use marketing?” to private and public nonprofit organizations. You rather now ask them a question like, “how can you effectively implement marketing to serve your target markets better and achieve organizational objectives?”

Marketing Management in the Global Sector

Once, marketing theory and practice were limited to certain Western countries. It is now found to take its position in other countries around the globe.

But, the question that may come to your mind is, ‘what is the reason for the adoption of marketing by companies around the world?’

One of the answers could be that marketing is now considered as a multinational phenomenon. Companies try to expand their markets beyond their national territories, and as a result, they need to be marketing led to face competition abroad.

“A small Indian soap company called Nirma bested the mighty Hindustan Lever Company of India, which has dominated the Indian soap market, by aggressively introducing a lower-priced value brand accompanied by a strong and memorable radio jingle campaign against Lever’s most established brands.”

It would help if you were amazed to know that developing countries like Indonesia, Malaysia, Egypt, and Colombia are organizing international seminars on the latest developments in marketing, once the domain of developed countries like the US, the UK, and Japan.

The developing countries are also providing advanced marketing training to their business executives to adopt marketing and cope with the advanced nations.

Socialist countries are now also following in the footsteps of both developing and advanced countries about marketing’s applications in business. The then socialist countries, now taking a keen interest in marketing and offering advanced courses on marketing through colleges and universities.

The translated version of Philip Kotler’s Marketing Management book sells very well in Poland and Russia, once treated as very closed countries. Companies around the globe now are realizing that they have to either adopt marketing or perish.