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MARKETING MANAGEMENT

Understanding the System

by ABMS Zahur
***Organisations may appoint a community relations officer to keep close contact with the community. A company is ultimately concerned with the attitude of the general public toward its products and activities. Though general public may not act in an organised way toward the company they carry around images of the company's standing as a 'corporate citizen' ... The organisation operates in a large environment of macroforces that shape the opportunities***
A marketer must have the skill to analyse and Improve the ability of an organisation for Its survival and growth In the changing environment of markets. He has two major tools, marketing system analysis and marketing process analysis. The analysis Identifies the major institutional components in an organisation's environment that Interact to produce results in the market place. Marketing process analyses are logical steps to plan the organisation's optimal adaptation to the market place of opportunities. It consists of three levels of analysis — exchange system analysis, organisational marketing analysis and macroenvironment analysis.
There are. generally speaking. two parties In a simple exchange situation — a marketer and a prospect. A marketer seeks a resource from someone else and is willing to offer somethlng-of-value in exchange. There may be five familiar exchange situations, namely (i) commercial transaction, (11) employment transaction. (ill) chic transaction, (iv) religious transaction, and (v) charity transaction. In (1) a seller offers a goods or service to a buyer In exchange for money. In (11) an employer offers wages and fringe benefits to an employee In exchange for employee's productive services, in (ill) a police force, for example. offers protective services to citizens in exchange for their taxes and cooperation. In (Iv) a mosque offers religious services to members in exchange for their contributions of money and time, in (v) a charity organisation offers gratitude and a feeling of well being to donors in return for contributions of money and time.
Exchange analysis is based on the assumption that people behave to maximise their self-interest. Acting out of self-interest does not. however, necessarily mean acting selfishly. Acting selfishly i/nplies the pursuit of self-gratification at the expense of others. Acting out of self-interest can include a concern for others, since the welfare of others can have an impact on one's self-interest. Interpreting human behaviour
from the perspective of self-Interest provides the marketer with the guidance for developing effective value of packages.
An organisational marketing system is an organisation and the set of significant interacting institutions and forces in the organisation's environment that affect its ability to serve its markets. The simplest marketing system consists of a single organisation serving a single market with no Intermediaries. suppliers or other parties involved. The company and Its market are connected by certain flows, the company dispatches (I) goods and services and (2) communications to the market : in return it receives (3) money and Information. In reality organisational marketing systems have many more components. One may distinguish five levels of successive larger environments in which the organisation operates. The levels are organisation, task environment, competitive environment. public environment and macro environment.
The marketing part of an organisation which sells many products to many end-users must attend to marketing functions. Company products, customer end-users and geographical markets, the design of an effective marketing department is itself a major challenge. Furthermore. we must recognise that the other departments of the organisation constitute an environment for the marketing department. If the marketing department wants to open a new geographical market, it must present a case to top management and financial vice-president. in particular, for support. If the marketing department
wants useful new products, it must Influence the work of the research and development department. An organisation is. liowever, not Just an economic machine, it has a culture as well. The culture may be favourable or Inimical to the marketing department.
The task environment consists of the company and three major institutions, namely suppliers, marketing intermediaries, and the market. The organisation must acquire a number of Inputs needed In the production process from outside suppliers to produce value for the market place. Generally speaking, the main classes of Inputs needed by sellers are labour, equipment, materials, fuel and energy, money and information. The company's task is to determine the optimal Input mix for the given output mix that it wants to produce. The optimal input mix is Influenced by the prices and availabilities of the various input goods, the company may decide to produce some of Its own needed Inputs and buy the rest from outside suppliers. The company's purchasing executive is responsible for buying the needed inputs at the best possible prices. He will check suppliers' quality of goods, prices, delivery reliability. warranties, credit terms, and miscellaneous sendees.
The marketing department has a direct interest in the efficiency of the company's purchasing of inputs. Before developing plans to increase sales, the marketing executive should check with the purchasing executive to make sure that the necessary materials can be obtained at the planned prices for producing the planned output.
with the financial officer to make sure that the company has the necessary working capital. and with the personnel officer to make sure that the company has the adequate manpower to produce the planned output.
Market Intermediaries are institutions that facilitate the distribution of the company's outputs to the final markets. There are three main types of market intermediaries, namely market middlemen, agent middlemen and facilitators. These intermediaries are all business units. The company seeking distribution for Its out put must either use established marketing Intermediaries or set up Its own. It may be pointed out in this regard that market intermediaries perform several functions such as research, promotion, contact, matching, negotiation, physical distribution. financing and risk taking.
The final component of the company's task environment Is the market Itself. Markets can be distinguished between industrial markets and consumer markets. Industrial markets buy for the sake of manufacture or resale. Consumer markets buy for consumption. Each of these markets can be divided into sub-market segments. Large companies serve several markets and market segments. It is desireable that they formulate different marketing programmes to meet the needs of the various served markets.
An organisation rarely stands alone In its effort to serve a given market. Its efforts to bring an efficient task-marketing system to serve the market are matched by similar efforts on the part of others.
The competitive environment consist not only of other companies but also of more basic things. The best way for a company to grasp its competition is to take the viewpoint of a buyer because (a) he is aware of less than the total set of existing brands, and (b) he may restrict his buying to a few retailers. The company, therefore, must Identify and monitor most closely those competitors who are seen to be closest to itself in the consumers’ mind.
A company must acknowledge a large section of publics that take an Interest in its methods of doing business. Because the actions of the organisation affect the Interest of other groups and these groups become significant publics. A company can view its publics In three ways, namely (a) reciprocal public (Interested in the company) (b) sought public (takes interest but not strongly), and (c) unwelcome public (the company shuns but it insists on taking interest).
Publics can substantially influence an organisation's fortunes. Most organisations establish public relations department to plan constructive relations with various publics. It is advisable to conceive public relations as a broad marketing operation rather than a narrow communication operation. As every organisation is physically located in one or more areas it comes into contact with local publics. These groups take an active or passive Interest in the activities of the organisation. Organisations may appoint a community relations officer to keep close contact with the community. A company is ultimately concerned with the attitude of the general public toward its products and activities. Though general public may not act in an organised way toward the company they carry around images of the company’s standing as a 'corporate citizen'.
The organisation operates In a large environment of macroforces that shape the opportunities and also pose threat to the successful functioning of the organisation.
The writer Is a retired Joint Secretary.