Marketing management is a business discipline which is focused on the practical application of
marketing techniquesMarketing is an integrated communications-based process through which individuals and communities are informed or persuaded that existing and newly-identified needs and wants may be satisfied by the products and services of others....
and the management of a firm's marketing resources and activities. Marketing managers are often responsible for influencing the level, timing, and composition of customer demand accepted definition of the term. In part, this is because the role of a marketing manager can vary significantly based on a business' size, corporate culture, and industry context. For example, in a large consumer products company, the marketing manager may act as the overall
general managerGeneral manager is a descriptive term for certain executives in a business operation. It is also a formal title held by some business executives, most commonly in the hospitality industry.-Generic usage:...
of his or her assigned product
From this perspect It consists of 5 steps, beginning with the market & environment research. After fixing the targets and setting the strategies, they will be realised by the marketing mix in step 4. The last step in the process is the marketing controlling.]]
Marketing managemerketing strategy]] and design effective, cost-efficient implementation programs, firms must possess a detailed, objective understanding of their own business and the
marketA market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, and goods and services are exchanged, forming part of the economy. It is an arrangement that allows buyers and sellers to exchange things...
in which they operate. In analyzing these issues, the discipline of marketing management often overlaps with the related discipline of
strategic planningStrategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people...
.
Traditionally, marketing analysis was structured into three areas: Customer analysis, Company analysis, and
Competitor analysisCompetitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats...
(so-called "3Cs" analysis). More recently, it has become fashionable in some marketing circles to divide these further into certain five "Cs": Customer analysis, Company analysis, Collaborator analysis, Competitor analysis, and analysis of the industry Context.
department analysis is to develop a schematic diagram for market segmentation, breaking down the market into various constituent groups of customers, which are called customer segments or market segmentations. Marketing managers work to develop detailed profiles of each segment, focusing on any number of variables that may differ among the segments: demographic, psychographic, geographic, behavioral, needs-benefit, and other factors may all be examined. Marketers also attempt to track these segments' perceptions of the various products in the market using tools such as
perceptual mappingPerceptual mapping is a graphics technique used by asset marketers that attempts to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition.Perceptual maps can have any...
.
In company analysis, marketers focus on understanding the company's cost structure and cost position relative to competitors, as well as working to identify a firm's core competencies and other competitively distinct
company resourcesThe resource-based view is an economic tool used to determine the strategic resources available to a firm. The fundamental principle of the RBV is that the basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firm’s disposal...
. Marketing managers may also work with the accounting department to analyze the
profitsAccounting profit is the difference between price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.A key difficulty in measuring profit is in defining costs...
the firm is generating from various
product linesProduct lining is the marketing strategy of offering for sale several related products. Unlike product bundling, where several products are combined into one, lining involves offering several related products individually. A line can comprise related products of various sizes, types, colors,...
and customer accounts. The company may also conduct periodic brand audits to assess the strength of its brands and sources of
brand equityBrand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name . And, at the root of these marketing effects is consumers' knowledge...
.
The firm's collaborators may also be profiled, which may include various suppliers,
distributorsDistribution is one of the four elements of marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user....
and other channel partners,
joint ventureA joint venture is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise...
partners, and others. An analysis of
complementaryA complementary good or complement good in economics is a good which is consumed with another good; its cross elasticity of demand is negative. – It is two goods that are bought and used together. This means that, if goods A and B are complements, an increase in the demand for good A results in an...
products may also be performed if such products exist.
Marketing management employs various tools from
economicsEconomics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
and competitive strategy to analyze the industry context in which the firm operates. These include
Porter's five forces"Porter's five forces" is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. It uses concepts developing Industrial Organization economics to derive five forces which determine the competitive intensity and...
, analysis of
strategic groupA strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies. For example, the restaurant industry can be divided into several strategic groups including fast-food and fine-dining based...
s of competitors,
value chainThe value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance....
analysis and others. Depending on the industry, the
regulatoryRegulation is "controlling human or societal behaviour by rules or restrictions." Regulation can take many forms: legal restrictions promulgated by a government authority, self-regulation, social regulation , co-regulation and market regulation. One can consider regulation as actions of conduct...
context may also be important to examine in detail.
In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using
SWOT analysisSWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are...
. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive
positioningIn marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization...
and
product differentiationIn marketing, product differentiation is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as one's own product offerings.Differentiation...
, degree of
vertical integrationIn microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies are united through a hierarchy with a common owner. Usually each member of the hierarchy produces a different product or service, and the products combine to...
, historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. As such, they often conduct
market researchMarket research is any organized effort to gather information about markets or customers. It is a very important component of business strategy...
(alternately
marketing researchMarketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing products and services. The term is commonly interchanged with market research; however, expert practitioners may wish to draw a distinction, in that market research is concerned...
) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:
- Qualitative marketing research
Qualitative marketing research is a set of research techniques, used in marketing and the social sciences, in which data is obtained from a relatively small group of respondents and not analyzed with inferential statistics...
, such as focus groups
- Quantitative marketing research
Quantitative marketing research is the application of quantitative research techniques to the field of marketing. It has roots in both the positivist view of the world, and the modern marketing viewpoint that marketing is an interactive process in which both the buyer and seller reach a satisfying...
, such as statistical surveyStatistical surveys are used to collect quantitative information about items in a population. Surveys of human populations and institutions are common in political polling and government, health, social science and marketing research. A survey may focus on opinions or factual information depending...
s
- Experimental techniques
Experimental research designs are used for the controlled testing of causal processes. The general procedure is one or more independent variables are manipulated to determine their effect on a dependent variable...
such as test marketA test market, in the field of business and marketing, is a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out...
s
- Observational techniques
In marketing and the social sciences, observational research is a social research technique that involves the direct observation of phenomena in their natural setting...
such as ethnographicEthnography is a branch of anthropology. It is a methodological strategy used to provide descriptions of human societies, which as a methodology does not prescribe any particular method , but instead prescribes the nature of the study Ethnography (Greek ethnos = folk/people and graphein =...
(on-site) observation
Marketing managers may also design and oversee various
environmental scanningEnvironmental scanning is a process of gathering, analyzing, and dispensing information for tactical or strategic purposes. The environmental scanning process entails obtaining both factual and subjective information on the business environments in which a company is operating or considering...
and
competitive intelligenceA broad definition of competitive intelligence is the action of defining, gathering, analyzing, and distributing Intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization.Key...
processes to help identify trends and inform the company's marketing analysis.
Marketing strategy
Once the company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make key strategic decisions and develop a
marketing strategyMarketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage...
designed to maximize the revenues and
profitsAccounting profit is the difference between price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.A key difficulty in measuring profit is in defining costs...
of the firm. The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth,
market shareMarket share, in strategic management and marketing is, according to Carlton O'Neal, the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company's sales revenue divided by the total sales revenue available in...
, long-term profitability, or other goals.
To achieve the desired objectives, marketers typically identify one or more target customer segments which they intend to pursue. Customer segments are often selected as targets because they score highly on two dimensions: 1) The segment is attractive to serve because it is large, growing, makes frequent purchases, is not price sensitive (i.e. is willing to pay high prices), or other factors; and 2) The company has the resources and capabilities to compete for the segment's business, can meet their needs better than the competition, and can do so profitably. In fact, a commonly cited definition of marketing is simply "meeting needs profitably."
The implication of selecting target segments is that the business will subsequently allocate more resources to acquire and retain customers in the target segment(s) than it will for other, non-targeted customers. In some cases, the firm may go so far as to turn away customers that are not in its target segment. The doorman at a swanky nightclub, for example, may deny entry to unfashionably dressed individuals because the business has made a strategic decision to target the "high fashion" segment of nightclub patrons.
In conjunction with targeting decisions, marketing managers will identify the desired
positioningIn marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization...
they want the company, product, or brand to occupy in the target customer's mind. This positioning is often an encapsulation of a key benefit the company's product or service offers that is
differentiatedIn marketing, product differentiation is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as one's own product offerings.Differentiation...
and superior to the benefits offered by competitive products. For example,
VolvoVolvo Cars, or Volvo Personvagnar AB, is a Swedish automobile manufacturer founded in 1927 in the city of Gothenburg, Sweden, and currently owned by Ford Motor Company....
has traditionally positioned its products in the
automobileAn automobile, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
market in North America in order to be perceived as the leader in "safety", whereas
BMW, is a German automobile, motorcycle and engine manufacturing company. Founded in 1916, it is known for its performance and luxury vehicles. It owns and produces the MINI brand, and is the parent company of Rolls-Royce Motor Cars.-Company history:...
has traditionally positioned its brand to be perceived as the leader in "performance."
Ideally, a firm's positioning can be maintained over a long period of time because the company possesses, or can develop, some form of
sustainable competitive advantageCompetitive advantage is, in very basic words, a position a firm occupies against its competitors.According to Michael Porter in his theory of generic strategies, the three methods for creating a sustainable competitive advantage are through:...
. The positioning should also be sufficiently relevant to the target segment such that it will drive the purchasing behavior of target customers.
Implementation planning
After the firm's strategic objectives have been identified, the target market selected, and the desired positioning for the company, product or brand has been determined, marketing managers focus on how to best implement the chosen strategy. Traditionally, this has involved implementation planning across the "4Ps" of marketing:
Product managementProduct management is an organizational lifecycle function within a company dealing with the planning or marketing of a product or products at all stages of the product lifecycle....
, Pricing, Place (i.e. sales and
distributionDistribution is one of the four elements of marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user....
channels), and
PromotionPromotion involves disseminating information about a product, product line, brand, or company. It is one of the five key aspects of the marketing mix....
.
Taken together, the company's implementation choices across the 4Ps are often described as the
marketing mixThe marketing mix is generally accepted as the use and specification of the 'four Ps' describing the strategy position of a product in the marketplace. The 'marketing mix' is a set of controllable, tactical marketing tools that work together to achieve company's objectives...
, meaning the mix of elements the business will employ to "go to market" and execute the marketing strategy. The overall goal for the marketing mix is to consistently deliver a compelling
value propositionA value proposition is an analysis and quantified review of the benefits, costs and value that an organization can deliver to customers and other constituent groups within and outside of the organization...
that reinforces the firm's chosen positioning, builds customer loyalty and
brand equityBrand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name . And, at the root of these marketing effects is consumers' knowledge...
among target customers, and achieves the firm's marketing and financial objectives.
In many cases, marketing management will develop a
marketing planA marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. It can be for a product or service, a brand, or a product line. Marketing plans cover between one and five years....
to specify how the company will execute the chosen strategy and achieve the business' objectives. The content of marketing plans varies from firm to firm, but commonly includes:
- An executive summary
- Situation analysis to summarize facts and insights gained from market research and marketing analysis
- The company's mission statement or long-term strategic vision
- A statement of the company's key objectives, often subdivided into marketing objectives and financial objectives
- The marketing strategy the business has chosen, specifying the target segments to be pursued and the competitive positioning to be achieved
- Implementation choices for each element of the marketing mix (the 4Ps)
Project, process, and vendor management
Once the key implementation initiatives have been identified, marketing managers work to oversee the execution of the marketing plan. Marketing executives may therefore manage any number of specific projects, such as sales force management initiatives, product development efforts, channel marketing programs and the execution of
public relationsPublic relations is the practice of managing the communication between an organization and its publics. Public relations gains an organization or individual exposure to their audiences using topics of public interest and news items that do not require direct payment...
and advertising campaigns. Marketers use a variety of
project managementProject management is the discipline of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives...
techniques to ensure projects achieve their objectives while keeping to established
schedulesIn project management, a schedule consists of a list of a project's terminal elements with intended start and finish dates. Terminal elements are the lowest element in a schedule, which is not further subdivided...
and budgets.
More broadly, marketing managers work to design and improve the effectiveness of core marketing
processesA business process or business method is a collection of related, structured activities or tasks that produce a specific service or product for a particular customer or customers...
, such as
new product developmentIn business and engineering, new product development is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process: one involves the idea generation, product design, and detail engineering; the other...
,
brand managementBrand management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product's perceived value to the customer and thereby increase brand franchise and brand equity...
,
marketing communicationsMarketing Communications are messages and related media used to communicate with a market...
, and pricing. Marketers may employ the tools of
business process reengineeringBusiness process reengineering is, in computer science and management, an approach aiming at improvements by means of elevating efficiency and effectiveness of the business process that exist within and across organizations...
to ensure these processes are properly designed, and use a variety of
process managementProcess management is the ensemble of activities of planning and monitoring the performance of a process. Especially in the sense of business process, often confused with reengineering....
techniques to keep them operating smoothly.
Effective execution may require management of both internal resources and a variety of external vendors and service providers, such as the firm's
advertising agencyAn advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising for its clients. An ad agency is independent from the client and provides an outside point of view to the effort of selling the client's products or services...
. Marketers may therefore coordinate with the company's Purchasing department on the procurement of these services.
Organizational management and leadership
Marketing management may spend a fair amount of time building or maintaining a marketing orientation for the business. Achieving a market orientation, also known as "customer focus" or the "marketing concept", requires building consensus at the senior management level and then driving customer focus down into the organization. Cultural barriers may exist in a given business unit or functional area that the marketing manager must address in order to achieve this goal. Additionally, marketing executives often act as a "brand champion" and work to enforce
corporate identityIn marketing, a corporate identity is the "persona" of a corporation which is designed to accord with and facilitate the attainment of business objectives...
standards across the enterprise.
In larger organizations, especially those with multiple business units, top marketing managers may need to coordinate across several marketing departments and also resources from finance, research and development, engineering, operations, manufacturing, or other functional areas to implement the marketing plan. In order to effectively manage these resources, marketing executives may need to spend much of their time focused on political issues and inte-departmental negotiations.
The effectiveness of a marketing manager may therefore depend on his or her ability to make the internal "sale" of various marketing programs equally as much as the external customer's reaction to such programs.
Reporting, measurement, feedback and control systems
Marketing management employs a variety of metrics to measure progress against objectives. It is the responsibility of marketing managers – in the marketing department or elsewhere – to ensure that the execution of marketing programs achieves the desired objectives and does so in a cost-efficient manner.
Marketing management therefore often makes use of various organizational control systems, such as sales forecasts, sales force and reseller
incentiveIn economics and sociology, an incentive is any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way...
programs,
sales force management systemSales force management systems are information systems used in marketing and management that help automate some sales and sales force management functions...
s, and
customer relationship managementCustomer relationship management are methods that companies use to interact with customers. The methods include employee training and special purpose CRM software...
tools (CRM). Recently, some software vendors have begun using the term "
marketing operations managementMarketing Operations Management is a vision of end to end marketing optimization, from planning and budgeting, through marketing content management, to global marketing execution and analysis....
" or "
marketing resource managementMarketing Resource Management provides the software infrastructure to support Marketing Operations Management. Marketing Operations Management is the alignment of people, process and technology to support marketing activities and improve marketing effectiveness...
" to describe systems that facilitate an integrated approach for controlling marketing resources. In some cases, these efforts may be linked to various
supply chain managementSupply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers...
systems, such as
enterprise resource planningEnterprise Resource Planning is a term usually used in conjunction with ERP software or an ERP system which is intended to manage all the information and functions of a business or company from shared data stores....
(ERP),
material requirements planningMaterial Requirements Planning is a software based production planning and inventory control system used to manage manufacturing processes...
(MRP),
efficient consumer responseEfficient Consumer Response is a joint trade and industry body working towards making the grocery sector as a whole more responsive to consumer demand and promote the removal of unnecessary costs from the supply chain....
(ECR), and inventory management systems.
Measuring the return on investment (ROI) of and
marketing effectivenessMarketing effectiveness is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results for both the short-term and long-term. It is also related to Marketing ROI and Return on Marketing Investment ....
various marketing initiatives is a significant problem for marketing management. Various market research, accounting and financial tools are used to help estimate the ROI of marketing investments. Brand valuation, for example, attempts to identify the percentage of a company's
market valueMarket capitalization/capitalisation is a measurement of the size of a business enterprise equal to the share price times the number of shares outstanding of a public company...
that is generated by the company's brands, and thereby estimate the financial value of specific investments in brand equity. Another technique,
integrated marketing communicationsIntegrated Marketing Communications is a term used to describe a holistic approach to marketing communication. It aims to ensure consistency of message and the complementary use of media. The concept includes online and offline marketing channels...
(IMC), is a CRM database-driven approach that attempts to estimate the value of marketing mix executions based on the changes in customer behavior these executions generate.
See also
- Predictive analytics
Predictive analytics encompasses a variety of techniques from statistics, data mining and game theory that analyze current and historical facts to make predictions about future events....
- Strategic management
Strategic or institutional management is the conduct of drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives...
- Enterprise Marketing Management
Enterprise Marketing Management defines a category of software used by marketing operations to manage their end-to-end internal processes. EMM is subset of Marketing Technologies which consists of a total of 3 key technology types that allow for corporations and customers to participate in a...
- Marketing Effectiveness
Marketing effectiveness is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results for both the short-term and long-term. It is also related to Marketing ROI and Return on Marketing Investment ....
- Marketing performance measurement and management
Marketing performance measurement and management is a term used by marketing professionals to describe the analysis and improvement of the efficiency and effectiveness of marketing. This is accomplished by focus on the alignment of marketing activities, strategies, and metrics with business goals...
- Commercial operations management
Commercial Operations Management unifies marketing and sales within organisations. This is accomplished by integrating Brand Management, Innovation management, Product Management, Marketing Operations Management , Channel & Sales Management and Customer Interaction Management...
- Marketing Resource Management
Marketing Resource Management provides the software infrastructure to support Marketing Operations Management. Marketing Operations Management is the alignment of people, process and technology to support marketing activities and improve marketing effectiveness...