MKT 420 Contemporary Issues in Marketing Chapter 1

MKT 420 Contemporary Issues in Marketing Chapter 1 Marketing in the Contemporary Organization

Objective Review current debates about the nature of the marketing role in contemporary organizations ¢ Provide a background context for the specific topics that will be discussed in future chapters. ¢ List topics that currently impact the way marketing is researched and practiced ¢ 2

Definitions of Marketing: Critique/Analysis ¢ ¢ Marketing as a phenomenon has changed significantly over the last several years. New fields of study have emerged such as relationship marketing, services marketing and the network perspective on business-to-business marketing. Attempts have been made to redefine both the terminology and the environment of marketing. Scholars are concerned about the direction in which marketing conceptualizations are moving (Wilkie, 2005; Gronroos, 2006). 3

Definitions of Marketing: Critique/Analysis Continued…………. ¢ Several issues raised for the definition of Marketing by AMA (2004): “Marketing is an organizational function and a set of business processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. ” 4

Definitions of Marketing: Critique/Analysis Continued…………. ¢ ¢ ¢ Major concerns were related to its conception of the role of marketing within the organization, the role of consumers within the marketing relation and the wider societal role of marketing. Definition was considered to view marketing as one function amongst others, and that such a conception of marketing is ill equipped to deal with new forms of relationships with customers. (Gronroos, 2006) Consumers are defined to have value delivered to them although this is becomes a social problem as all marketers simply propose too much consumption for each consumer. (Wilkie, 2005, p. 8). 5

Definitions of Marketing: Critique/Analysis Continued…………. ¢ ¢ Marketing system is structured as if finance is not important for the consumer. Delivery of value to customers also ignores their role in actively producing value (Vargo and Lusch, 2004). Value is considered to emerge both in interactions between the consumer and supplier, and also through a series of subsequent consumption practices by consumers. AMA (2004) definition only captures the role of the marketing manager, and ignores the wider role of marketing within society. The definition of marketing that embraces a macromarketing perspective where marketers engage with the ‘big issues’ in society. 6

Definitions of Marketing: Critique/Analysis Continued…………. ¢ Due to debate generated by earlier 2004 definition of marketing, the AMA produced a second updated version in 2007, as below: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. " 7

Future of Marketing’s role in the Organization ¢ ¢ In a survey of 30 large US companies more than 30 per cent indicated that they spend less than 10 per cent of their time discussing marketing or customer related issues at board level. (Mc. Govern et al. , 2004) Following the closure of corporate marketing departments, companies have plugged the gap by creating the position of Chief Marketing Officer (CMO). 8

Future of Marketing’s role in the Organization Continued……. ¢ ¢ ¢ Concerns about the high turnover of these positions because: Position is often ill-defined, little formal authority, corporate expectations are frequently unrealistic Tension between CMOs and other board members due to the creative approach taken by successful marketers, which is at odds with the more structured and disciplined approach required in other parts of the organization. The difficulties in measuring marketing outcomes mean that marketers struggle to demonstrate returns on organizational investments in marketing programs. 9

Future of Marketing’s role in the Organization Continued……. ¢ Key marketing functions are dispersed throughout the organization. Today, marketing in many large companies is less of a department and more a diaspora of skills and capabilities spread across and even outside the organization. 10

What do Consumers think of Marketing? ¢ ¢ ¢ Main purpose of marketing is to serve customers, so their views about marketing need attention. Survey by Yankelovich (cited in Sheth and Sisodia, 2006) says that 60% respondents had negative views about advertising and marketing activities. Gaski and Etzel (2005) observed that out of four marketing activities, product quality carries more importance in influencing customers, followed by price, retail service and advertising. 11

What do Consumers think of Marketing? Continued……. ¢ ¢ ¢ Customers are positive about creativity, fun, humorous advertising and attractive people On the negative side consumers feel marketers are lying, deception, deceitful, annoying, manipulating, gimmicking, exaggerating, invading, intruding and brainwashing. In terms of marketing practices telemarketing, online pop-up advertisements and junk mail were viewed most negatively. 12

Doing Marketing in a Different Way… 1. 2. Fill the Scholarship-Practitioner gap in marketing: Scholars should broaden their conception of practitioner audience, to embrace not only marketing but Strategic Management, Operations, Supply Chain, HR, Finance etc. The concept of ‘customer focus’ and ‘competing through service’ should be adapted by all business functions. Fruitful partnership between academics and business leaders: Business leaders should reflect on the role of marketing in their organizations. They can give insights of challenges they face, and ways in which marketing is affecting their businesses. 13

Doing Marketing in a different way? Continued……. ¢ Create systems to bring the customer closer: Systems to create mutual value, rather than directing the creation of value by consumer alone. Internet has resulted in ‘do it yourself’ form of marketing where middlemen are eliminated. E. g. e. Bay, online marketing, e-payment etc. 14