And the businesspeople?

For us as marketing laymen, it may be interesting to form an idea of the general perception of marketing of important businesspeople of today. In doing so, we will be able to compare our final conclusion about the role and influence of marketing with theirs. 

Leonard Lodish is professor and marketing guru of the Wharton School of the University of Pennsylvania. From his standpoint, no product will ever sell if the consumers do not know they need it.  Lodish even observed that 60% of business failures are really failures of marketing. Assuming this is true, marketing thus has a huge role in a company.

Frontman of Google, Eric Smidth describes the importance of marketing in a short video. Smidth explains that there is a new way to do marketing i.e. by measuring the results. These are the numbers, generated by the marketing department, which play a very important role in the way to business success.

To conclude, I will mention one of the most well-known quotes about marketing. David Packard founder of Hewlett-Packard said: “Marketing is too important to be left to the marketing department”.

It’s clear that these three people, among many others, are pro marketing. But then why is there such a debate about the influence of marketing nowadays?

Charlotte De Volder

http://www.businessweek.com/smallbiz/content/jun2001/sb20010618_984.htm

http://www.youtube.com/watch?v=RcG_h27D1gw

http://www.marketinginprogress.com/2010/03/13/david-packard-marketing-quote/

Index system marketing

I read this introduction on an index system selling site. I found it remarkable and fascinating because it has a double significance. They advertise about a product/system that is be used as an advertising tool.

They claim that "seeing is buying" so they recommend to bring special offers of their company under attention of their clients by using a display at the checkout. It's an unique system that brings along a lot of opportunities.

Marketing is a never-ending issue. It's important to bind your clients even when they left your shop. These costumer relations can be realised by setting up a system of loyalty cards. "Index" claims that their technology is proven the best in the world. 

I'm convinced by the statement of the effectiveness of this technology. I think it's really important these days for a brand to catch the eye. If no one knows about your product, you won't sell without regard to the excellence of it.


Stijn De Schutter
source: http://www.indexsystems.nl/Marketing.html

The American Marketing Association

The AMA is a huge union of marketing professionals and marketing tutors. It counts 38000 members in the USA and Canada and has connections with many American universities. They are responsible for writing some influential marketing publications.

It was founded in the early 1900's when a large group of marketeers merged. Their purpose was to inspire each other and collaborate. nowadays they make the news by creating virtual events about marketing strategies using social media chanels such as facebook. Their studies (and results) are revolutionary.

The AMA awards influential papers, articles and books in marketing. They publish some prominent journals, magazines and newsletters. To summarize they are a coordinating organization that influences a lot of beginning and seasoned marketeers.


Stijn De Schutter
Sources:
http://www.marketingpower.com/AboutAMA/Pages/AMA%20Publications/AMA%20Journals/AMAJournals.aspx

http://nl.wikipedia.org/wiki/American_Marketing_Association

Cause-related marketing and corporate philantrophy

I read this scientific article about cause-related marketing written by varadarajan and menon. To specificate further they mention: a coalignment of marketing strategy and corporate philantrophy.

In their article they try to explain what cause-related marketing contains. It is a new and promising marketing tool. They also try to define corporate philantrophy (through 3 rationales) which is a "hot topic" these days if you ask me. Their study explains cause-related marketing as a subject of corporate philantrophy.

Corporate philantrophy started as an overall attitude which chiefs took up. It later evolved into an phase of mandated corporate evolvement. Now it stands for an investment in social responsibility. In the beginning these attitudes were undertaken voluntarily; however not always with an altruistic purpose. Nowadays social values are taken very seriously in a corporation. It's important to keep the atmosphere healthy on the shop floor.


Stijn De Schutter
Source: http://www.jstor.org/pss/1251450

Social Influence Marketing

Social Influence Marketing is a recently new type of marketing. It means that people feel the influence of the social websites and the internet. The boom of the internet made it clear that companies need to advertise on the Internet to reach their public.

Social Influence Marketing is just so important as the traditional marketing because the net is still growing and people surf a lot on the Internet. There are also believers who think that the Social Influence Marketing will have a bigger effect on the customers than the other types of marketing.

This new form of Marketing uses Social Networks like Facebook, Linkedln,MySpace,.. Companies need to think how they will link to a social network and more important to what social network. Today Facebook is the most important network but you can never predict who long it will stay the leader  of the Social Network.

The influence of social networks is very big because there are not just your friends that you can see but in fact you can communicate with the whole world.

The conclusion is that Social Influence Marketing is something that every marketer need to use because it’s something that have a big influence and it’s still growing…

An-Sofie Despeghel 

http://www.goingsocialnow.com/2009/03/trends-in-social-influence-mar.html

http://www.shivsingh.com/goingsocial/2007/12/think-social-influence-marketi.html

Beyond the four P’s

I want to remark upon An-Sofie’s latest blog about the four P’s of marketing. These are considered to be the most important aspects when dealing with marketing decisions. But beside these key factors, there are still some other topics the marketing department shouldn’t ignore, such as environment, competition, development of the company, prospect, the costs to enter a market…

Some of them need more explanation. Environment first of all includes the government's policy. A good knowledge of subsidies, licensing requirements and price control are recommended. Further, a company has to keep in mind the influence of technological, demographic or cultural changes.

Prospect is another aspect an enterprise has to take into account, mainly in bounding its market segment. For example how much time the production department can spend on innovating products or processes. Also market studies can provide relevant insights for your niche.

Once more, this confirms marketing contains much more than I had first thought.

Pauline Deturck

http://www.businessplans.org/market.html

The marketing mix

We already know that the Marketing Department has a very important role in the company. Maybe it’s also necessary to think how you need to set up the right marketing mix.

The Marketing mix show us the basic elements of a marketing strategy. There are 4 P’s in the marketing mix. That are price, product, place and promotion.  Not every company has the same accent, there are companies that find the price the most important P but that depends on their strategy choice.

• ·         Price : You can choice a particular way to price your product. There is penetration pricing (to reach a big part of the market) , economy pricing (the lowest price ), price skimming, product line pricing..  The way you chose depends also on the type of company you are, a low-cost or a high-level company.
• ·         Product: Here they use different methods to do research on the products. A very known method is the product life cycle. Through the different stages in the product life cycle the marketing situation changes. You have 4 different stages: introduction, growth, maturity, decline. Each stage has his typical features.
• ·         Place:  The place of the marketing mix is the way of distribution of the product but also the place where the customer can buy the product.
• ·         Promotion:  With promotion the marketing mix means the way of communicating with the (possible) customers. There are different ways to reach the people, but the best known is through advertisement.

Nowadays there are people who suggest a  marketing mix with more P’s. They think there are three more P’s, that model names ‘the Extend marketing mix’. The extra  P’s stand for people, process and physical evidence. 


Despeghel An-Sofie

http://en.wikipedia.org/wiki/Marketing_mix#Extended_Marketing_Mix_.283_Ps.29

http://marketingteacher.com/lesson-store/lesson-marketing-mix.html

http://marketingteacher.com/lesson-store/lesson-pricing.html

http://www.quickmba.com/marketing/product/lifecycle/

Blue ocean strategy

Several blogs have already discussed the influence of the marketing department on business performance in general. The conclusions of the different studies, which are mentioned earlier, are the result of studying a large number of companies and marketing strategies. In this blog I want to focus on the blue ocean strategy.

While the red ocean strategy is a market-competing strategy and emphasizes the supply side, the blue ocean strategy is a market-creating strategy. This means companies are not competing on costs, but on value innovation, so are creating a new demand. Following this strategy allows a company to play a non-zero-sum game, which means the benefits gained by one company doesn’t include automatically a loss for other ones.

A question that pops up immediately is how long a company will be in that blue ocean position? This requires some explanation. Before answering I want to make clear it is not easy, because creating blue oceans is a dynamic process. There are three main barriers to move from a red ocean to a blue one. First of all you have the cognitive aspect. When changing strategy you'll have to make sure it still fits the vision and mission of the company. The second one is organizational; innovating requires large adaptations of the product process, which leads to the third aspect, the economical one. It causes high investments. To defend the blue ocean position, companies have to heighten these aspects.

Pauline Deturck

http://www.blueoceanstrategy.com/abo/what_is_bos.html

Merlo and Auh's study illustrated

This week I’ve found a study, written by Merlo and Auh, that investigates the relationships between market orientation, the marketing department’s influence, entrepreneurial orientation and the firm's performance. Before starting our own assay, it may be smart to have some background information and to put an eye on the results of our predecessors.

Merlo and Auh start out with 3 hypotheses:

(1) a strong market orientation will realize a strong business performance;

(2) there is a positive relation between market orientation and the marketing department’s influence;

(3) there is also a negative effect whereby a high entrepreneurial orientation decreases the positive interaction between market orientation and the marketing department’s influence (2).

Empirical findings, collected by survey questionnaires, gave the following results:
The effect of market orientation on the business performance is non-significant. Hypothesis 2 however, can be confirmed: a market orientation needs to be strengthened with a strong marketing department influence on the firm. The same conclusion is made for hypothesis 3, where the findings seem to confirm the prediction as well.

Of course this study focuses on only 3 main hypotheses. There is still a lot of space for new research that subsequently could lead to new results.  

Charlotte De Volder

http://www.springerlink.com/content/y2h8836682175410/fulltext.pdf

In reaction to An-Sofie's blog

Indeed An-Sofie,

I just read a blog about this problem as well. The article is written by expert on the field, Jerry R. Mitchell, whose firm for example relocates failing marketing departments. It mentions 4 reasons why marketers fail in 80 % of the cases.  According to Mitchell these are:

1.       They default to properly empower the marketing department within the organization.

2.       They do not hire the right, professionally trained people to staff the department.

3.       Not enough funds and employees are available to do the job right.

4.       Directors do not understand what to expect from marketing.

I think these issues are interesting for further research and could serve as a part of the introduction of our paper.

Charlotte De Volder

http://jerrymitchellblog.com/?p=152

Common mistakes in the marketing of a company

The marketing department has a big influence on the customers but  the marketing is also important in the competition with other companies. Considering that it’s important to make no mistakes in the marketing otherwise the competitors in your business will take a part of your market.

There are some mistakes that are common in the marketing of a company, I will explain them:

• Me- too product: There are several companies who sell a similar product, so everybody thinks it’s important to sell the best product. Because of that some companies will set up a big market research, work longer at the research and development of the product,… But for some products the first mover advantage is better than the fast follower advantage.
• A company needs to show good results to Wall Street but if they have very good results the chance is bigger that there will be new competitors on the market. So sometimes it happens that the race to good results lead to creative accounting and bad decisions. That makes that a company needs to find a good balance In the focus on the numbers.
•  Companies that have a lot of success become less objective. They feel like they are something invincible and make because of that feeling, bad decisions.
•  It’s also important to target a group of people you want to reach with your product. It’s not possible to sell a product to all the people, you need to be strong in your target market.

There are a lot more  mistakes that the marketing department can make, but these are four mistakes that happen frequently. 

http://www.forbes.com/2005/10/21/marketing-advertising-jacktrout-cx_jt_1024trout.html

Despeghel An-Sofie 

A Cross-national Investigation into the Marketing Department’s Influence within the Firm

In addition to Stijn’s blog, I searched for other studies that confirm the conclusions of Stijn's survey. Especially on the fact that consumer's behavior (and related to this, the whole business performance) is influenced by the marketing department, as well as by institutional factors.

Comparing two different studies, I noticed a remarkable resemblance. Both of them point out that the influence of the marketing department is different across countries. This establishes the conclusion I have already mentioned. I was surprised to read that a good-working marketing department, which participates in several kinds of decisions, doesn’t guarantee a better business performance.  In general, they even had a negative influence in Sweden. The article gives a reasonable explanation for this. Too much influence in too many departments can cause coordination problems which results in confused customers.

Based on these two surveys I conclude that a strong marketing department can be related to a good firm's performance. Nevertheless this conclusion appears in most examined countries, there is no evidence of a direct positive correlation.

Pauline Deturck

http://www.msi.org/publications/publication.cfm?pub=1645

http://www.marketingpower.com/AboutAMA/Pages/AMA%20Publications/AMA%20Journals/Journal%20of%20Marketing/TOCs/SUM_2009.2/understanding_marketing_departments_influence.aspx

No respect for marketing?

The reason why there was so much attention for marketing, and it’s influence on the company , is the lack of respect this department receives lately. Several surveys and studies corroborate this statement: a study made by Ernst & Young, that questioned 1000 companies, concluded that not more than 15 percent hire marketing personnel  named as chief or senior chief. And it doesn’t stop there. At only 7 percent of the examined companies, a marketing function appeared in the top three of best remunerated functions.  

The danger is marketing considered as common sense. Not that important to a company so assignment of the function to a non market-practiced officer as an ‘extra job’ is applicable. Yet these findings are the opposite of Peter Druckers, management guru of the 20th century, unequivocal statement: “Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions:

marketing and innovation.” 

The consequences are huge: marketing’s function is marginalized, less or no attention from the boardroom etc.  While I am convinced that ignoring marketing in a company will have disastrous results I think this is a problem, demanding to be solved if we want to establish successful companies in the future.

Charlotte De Volder

http://www.brandingstrategyinsider.com/2009/08/gms-appointment-shows-no-respect-for-marketing.html

What is the Marketing Department's Role?

To understand the marketing department's influence in a company, I started looking up some more information about what this department exactly does. As Charlotte has already mentioned, it is much more than advertising.

Most authors agree on the fact that the marketing department plays a significant role in a company. It is the central vein through the body of a company. But one vein is not enough to make a whole body work. Therefore the other parts need to cooperate. In other words, it is highly recommended that every coworker participates in the marketing aspect to build up a consistent vision and mission. If a salesman, as well as a technician gets involved and brings on an interesting idea, the company will accomplish more in costomer-related discussions. So communication is the keyword to marketing. With everyone’s insights, a more satisfying service to their customers will be reached. In general, that is the goal a company wants to achieve.

Pauline Deturck

http://money.howstuffworks.com/marketing-plan4.htm

The influence of marketing in a company

Not much research has been made yet concerning this topic. This is one of the reasons why I’m interested in the effectiveness of marketing.

According to a survey of authors Homburg, Workman, and Krohmer there are some significant effects of marketing within a company. They examined three industry sectors in Germany and the U.S. Some of their conclusions:

-          The marketing department is rated the most influential unit within the firm concerning decisions on the strategic direction.

-          Marketing’s influence results from different determinants, not directly from individuals.

-          It’s not correct to assume that all consumer behavior can be explained by common theories of marketing. Institutional factors also have an impact.

To conclude they mention that managers must be sensitive to intraorganizational influence as a potential barrier to organizational change. Managers must be aware of the fact that their organizational form is not the single result of their rational choices. There are other factors that also count, like cultural and institutional issues.

Stijn De Schutter

Source: http://www.msi.org/publications/publication.cfm?pub=506

The tasks of a Marketing Department

Because we are starting our topic ‘ The influence of the marketing department in a company’  it is necessary to know what exactly the marketing department do. I found on the internet that tasks of the marketing department are so much more than what I  thought.

The marketing department has a very important role in a company. The best known task is that they need to focus on the customers, listen to their needs  and help them by producing a good / service that is suitable to their needs. The Marketing Department looks also for the ‘branding’. They create the image of the company, they invent the slogans, the publicity,.. So that the customers knows for what the company stands.

The competition between the companies can you describe in some sentences : What is different in their strategy? What  type of customers do they serve? .. it’s necessary to know that and maybe you  can change some points in your strategy for reaching more people.  So studying  about the market competition is also a task for the management department.

It’s a very interesting topic because the marketing department can change a lot in the company. If they make a mistake in their strategy it will have a big influence on the success of the company. 

Despeghel An-Sofie 

http://www.wiglafjournal.com/corporate/2007/03/what-does-a-marketing-department-do/

So much ignorance...

Earlier this week I was surfing on the internet looking for some information about marketing. Many articles I had read  when I suddenly realized I confused marketing with sales, advertising, putting a logo on a product etc. I went through the web and found an interesting article about what marketing is and is not. Fast enough I understood that marketing is so much more than putting a logo on anything and anywhere.   

Through many years, in which marketing activities scattered among different departments changed into real marketing departments, there are still many misunderstandings about marketing. So starting our blog about this subject it might be useful to clear up a few things.

One of the biggest stumbling block is the idea that sales will rise by just making more promotion. If a product is not  studied well, it is plausible that spending more on advertising will only do harm to your company. Another miscalculation is that customers should only care about a low price. Not the price but the price-quality relationship does matters.  So marketing is not about designing a new brochure or hosting a website, it’s every relationship a company has with someone or something outside the company. Nothing more, nothing less. The fact that even many entrepreneurs misunderstand marketing, makes me believe that this is an interesting subject with a lot of public ignorance.     

http://www.knowthis.com/blog/postings/classic-marketing-mistakes-that-may-never-go-away/

Charlotte De Volder