[Type text]
Henley Business School
Strategic Marketing
Assignment
The use of specific cultural references and gender
markers in these course materials does not imply
bias or criticism.
The copying, storage in any retrieval system,
transmission, reproduction in any form or
resale of the course materials or any part
thereof without the prior written permission
of Henley Business School is an infringement of
copyright and will result in legal proceedings.
Henley Business School reserves the right to
change course content, structure and all terms
and conditions related to the programmes at its
sole discretion.
www.henley.ac.uk
© Henley Business School, April 2015
Item code: STMK-AQ-7A
ii
© Henley Business School, April 2015
STMK-AQ-7A
Introduction
The assessment of the Strategic Marketing module is by assignment only. The assignment
comprises an individual written report providing you with the opportunity to research and
reflect on the application of the concepts and techniques studied in this module to a
specific organisational problem or challenge.
Your assignment is to be based on a marketing-related problem or opportunity of your
choice within your organisation. Typically, it will be associated with the department or
function where you are currently employed, but it may also cross functional, or even
organisational, boundaries where appropriate. The marketing activity (or activities) you
choose should have clearly identifiable internal and/or external customers. The outcome
should be a report bringing together theory and practice. Within your analysis and
discussion you should develop your learning from the course and use concepts and
theories to help you to analyse, justify and discuss the challenges and your plan and
recommendations.
Purpose of the assignment
The assignment is designed to:
test your understanding of the concepts and theories introduced in the module
test your ability to apply relevant concepts and theories to practical situations and
problems
You are encouraged to reflect on how the ideas and concepts presented in the module
have informed your thinking on management theory and practice. Where possible, think
about marketing theory and its applications in the broader context of other modules you
have studied on the MBA: what are the implications of marketing strategy and
implementation?
Throughout the assignment your analysis should draw upon appropriate material from the
module.
Assessment brief
Identify a marketing-related problem or opportunity within your organisation. You have
two options:
(A) Focus on a current marketing problem or opportunity, propose a course of action
likely to deliver value to the business, and describe the implementation and expected
impact of the proposed course of action.
or:
(B) Focus on a past marketing problem or opportunity, describe and critique the
course of action taken at the time, and propose further action.
© Henley Business School, April 2015
1
Strategic Marketing: Assignment
Suitable marketing problems and opportunities include, but are not limited to, the
following:
customer service problem
ethical dilemma
internal branding initiative
marketing communications in the Web 2.0 environment
emerging pricing models
evolving customer and/or market trends
market segmentation initiatives
relationships with stakeholders
challenges across the value chain
The report needs to include the following five elements:
Option A
Option B
1
Executive summary
Executive summary
2
Part 1: Analysis of a current marketingrelated problem or opportunity within
your organisation
Part 1: Analysis of a past marketingrelated problem or opportunity within
your organisation
3
Part 2: Proposed future course of action
likely to deliver value to the business
Part 2: Critique of the course of action
taken at the time
4
Part 3: Implementation and expected
impact of the proposed course of action
Part 3: Recommendations for future
action
5
Part 4: Interdependencies and reflection Part 4: Interdependencies and reflection
These elements are described in detail below.
2
© Henley Business School, April 2015
STMK-AQ-7A
Element
Description – Option A
Description – Option B
Executive
summary
You should provide a concise executive summary at the front
of your assignment report, presenting a high-level summary of
the problem or opportunity, the recommended course of
action, the justification for that course of action and the
business benefits. Typically, this should be no longer than one
page.
You should provide a concise executive summary at the front
of your assignment report, presenting a high-level summary of
the past problem or opportunity and associated course of
action, assessment of that marketing initiative and proposal for
future actions. Typically, this should be no longer than one
page.
Part 1
Analysis of a significant current problem or opportunity
Analysis of a significant past problem or opportunity
(30% of marks)
In summary, in this section of your assignment you should
briefly describe the contextual setting of the selected
marketing activity. This is to be followed by a clear
identification of the significant marketing problem or
opportunity, and a careful analysis of the chosen problem or
opportunity using models and frameworks from both the
module material, and supported by appropriate evidential
data.
In summary, in this section of your assignment you should
briefly describe the past problem or opportunity, carefully
explaining how it impacted on the performance of the
organisation and/or department or function in which the
problem or opportunity was located. This should be done
using relevant models and frameworks from the module
material, and be supported by appropriate evidential data.
More specifically, this section should set out the context and
structure for your assignment, including:
– overview of the organisation and/or department or function
in which the problem or opportunity is located, and its
business strategy
More specifically, this section should set out the context and
structure for your assignment, including:
– overview of the organisation and/or department or function
in which the problem or opportunity was located
– overview of the relevant context surrounding the marketing
initiative under analysis
– overview of the relevant context contributing to the problem – your relationship to the organisation/initiative to be
or opportunity that you intend to analyse
discussed
– your relationship to the organisation/challenge to be
This section needs to clearly identify, with justification, a
discussed
marketing initiative that impacted on the organisation’s
This section needs to clearly identify, with justification, a
critical problem or opportunity relating to marketing that
© Henley Business School, April 2015
performance, clearly showing what was the underlying
problem or opportunity that motivated the adoption of that
3
Strategic Marketing: Assignment
impacts on the organisation’s performance, clearly showing
how the challenge has arisen and the impact that it has. The
analysis of the current problem or opportunity may draw on
data from secondary sources (e.g. marketing audits, customer
surveys, etc) and/or simple fieldwork such as interviews with
key stakeholders.
specific marketing programme. The analysis of the past
problem or opportunity may draw on data from secondary
sources (e.g. marketing audits, customer surveys, etc) and/or
simple fieldwork such as interviews with key stakeholders.
Part 2
Proposed strategic actions and rationale
Critical analysis of the past course of action
(30% of marks)
Propose a strategy (a course of action) to address the problem Critically analyse the strategy (course of action) taken at the
or opportunity you have identified in your analysis in Part 1 and time, in response to the problem or opportunity described in
that is intended to deliver value to the business.
Part 1.
Explain how the proposed strategy addresses the significant
problem or opportunity presented in Part 1.
Your analysis should include a critique of why that specific
course of action was taken, a clear assessment of whether it
addressed the problem or opportunity presented in Part 1, and
how it delivered and/or failed to deliver value to the business.
Part 3
Implementation and impact
Future action
(30% of marks)
Detail the actions that will need to be taken to implement the
change proposed and realise the intended business benefits.
Discuss financial considerations of your proposals, and
consider the impact of that change, identifying the likely
benefits and risks, clearly indicating how these will be
measured.
Identify what needs to be done to either capitalise on the
success or correct the failure identified in Part 2.
In particular consider the effects of the change on the future
ongoing management of the marketing objectives in the areas
of:
In particular, consider the effects of your proposal on the
future ongoing management of the marketing objectives in the
areas of:
– the organisation’s objectives
– marketing strategies
– relationships with key stakeholders
– the organisation’s objectives
– marketing strategies
– relationships with key stakeholders
4
© Henley Business School, April 2015
STMK-AQ-7A
Part 4
Interdependencies and reflection
Interdependencies and reflection
(10% of marks)
To demonstrate broader, holistic thinking you should examine
the implications of your proposal on broader management
challenges.
To demonstrate broader, holistic thinking you should examine
implications of the past course of action on broader
management challenges.
You should also reflect on how the approaches taken in the
module relate to other modules you have studied so far – e.g.
what are the strengths and weaknesses of a strategic marketing
approach for the problem you have been reviewing? Similarly,
you should discuss how insights from other modules have or
would impact on your recommendations and the expected
outcomes.
You should also reflect on how the approaches taken in the
module, relate to other modules you have studied so far – e.g.
what are the strengths and weaknesses of a strategic marketing
approach for the problem you have been reviewing? Similarly,
you should discuss how insights from other modules have or
would impact on your recommendations and the expected
outcomes.
You should conclude with a short reflection on the value
gained from undertaking the module and the assignment task
in your appreciation of the link between marketing and other
parts of the organisation, and its contribution to the business.
You should conclude with a short reflection on the value
gained from undertaking the module and the assignment task
in your appreciation of the link between marketing and other
parts of the organisation, and its contribution to the business.
© Henley Business School, April 2015
5
Strategic Marketing: Assignment
Assignment preparation guidance
Your assignment must show, concisely, that you can apply what you have studied in the
module. Therefore, do not write a descriptive or narrative account. Rather, demonstrate
the use of relevant concepts, tools and methods of analysis described in the module
materials to a practical challenge, drawing on material from the module as appropriate.
Models or frameworks should be used in order to inform the analysis of the key dimensions
of the situation being investigated. It is important to be selective regarding the models
chosen – a smaller number of well chosen models will carry more weight than using many
models with little relevance to the situation. Moreover, the chosen models should not
simply be reproduced or included in your assignment without discussion of their
relevance. Your work should include contemporary marketing references. While it is
acceptable to reject specific concepts and theories, you should be careful to argue for your
acceptance or rejection fully and try to highlight your viewpoint with relevant evidence.
The outline structure given in this assignment brief provides a clear, step-by-step approach
to tackling the assignment. You are encouraged to adopt this approach. Write in
appropriate managerial style, while ensuring that you properly reference your sources.
Submitting your assignment
When you are ready to submit your assignment, please do so via the electronic submission
of assignments area. Further information about using this electronic facility is given in the
programme handbook.
Submission date
Please refer to My Calendar on your course home page for the assignment submission
deadline for this module.
If you foresee difficulties with the deadline, please discuss your circumstances with your
programme administrator as soon as possible.
Word count
Your assignment should be approximately 5,000 words in length.
The word count comprises all text (including contents pages, executive summaries and
text in tables or diagrams, etc), with the exception of appendices and
bibliography/references.
You should attach to the end of your assignment a note of the number of words used
(excluding appendices and bibliography/references).
Assignments that exceed the specified word count range by more than 20% or that are
more than 10% below the specified word count may be returned unmarked to you. No
other penalty will apply and a returned assignment will not be considered a ‘fail’. You will
be expected to amend the work to within the specified word count and to resubmit.
6
© Henley Business School, April 2015
STMK-AQ-7A
Use of appendices
You are advised to be cautious when including appendices in assignments. There are no
specific criteria for marking or mark allocation available for appendices, so the assessment
process focuses on the appropriate use of appendices.
When deciding whether or not to include appendices, consider the following points.
Appendices should add value or detail to the discussion and analysis undertaken in
the main body of the assignment.
They offer students the opportunity to give greater relevant and appropriate detail
to support the main analysis and discussion.
Models, theory and discussion that demonstrate critical evaluation and analysis of
issues related to the module being assessed should always be presented within the
main body of the text. This discussion should make sense without referring to the
appendices. Using bullet points in the text (which does not constitute analysis) and
putting the detailed analysis in the appendices is not acceptable practice and could
result in failure.
The inclusion of appendices should not be viewed as an opportunity to include
anything that cannot fit in the word count.
Assignments that make excessive use of appendices suggest inappropriate use. As a
guide, we would not normally expect appendices to exceed one third of the length
of the assignment.
Appendices should always be referenced at the appropriate point within the
discussion in the main body of the text.
© Henley Business School, April 2015
7
Strategic Marketing: Assignment
Appendix 1 Assessment grade criteria
Please refer to your Programme Handbook for further information on the marking categories shown in the table.
70–100
60–69
50–59
0–49
‘Distinction’
‘Merit’
‘Pass’
‘Fail’
Content
Content
Content
Content
Overall
Overall
Overall
Overall
Excellent selection and application of
a range of appropriate module tools
and concepts to develop an in-depth
and critical analysis of the topic.
Very good selection and application
of appropriate module tools and
concepts to develop a good level of
analysis of the topic.
Competent selection and application
of appropriate module tools and
concepts to develop an analysis of
the topic that offers some insights.
Inappropriate, poor or no use of
module tools and concepts; failure to
develop a coherent discussion or
analysis of the topic.
Strong demonstration of in-depth
and critical understanding of module
materials through application to
practice.
Clear demonstration of
understanding of module materials
through application to practice.
Demonstration of ability to apply
module materials through
application to practice.
Poor or no demonstration of
understanding of module materials
or failure to demonstrate ability to
relate them to practice.
Draws insightful conclusions
thoroughly grounded in in-depth
analysis of practical situation.
Draws appropriate conclusions well
grounded in analysis of practical
situation.
Draws conclusions grounded in
analysis of practical situation.
Failure to draw conclusions and/or
conclusions not grounded in analysis.
Excellent use of evidence to support
analysis and discussion.
Very good use of evidence to support Good use of evidence to support
analysis and discussion.
analysis and discussion.
8
Limited or inappropriate use of
evidence to support analysis and
discussion.
© Henley Business School, April 2015
STMK-AQ-7A
70–100
60–69
50–59
0–49
‘Distinction’
‘Merit’
‘Pass’
‘Fail’
Part 1
Part 1
Part 1
Part 1
Provides a critical analysis and well
structured discussion of the use and
usefulness of the chosen areas.
Discursive approach with some
critical analysis.
Discussion mainly descriptive with
little or no critical analysis.
Lack of critical analysis, discussion
and evaluation.
Demonstrates good ability to
compare, contrast and critique the
information available.
Demonstrates a limited ability to
compare, contrast and critique the
information available.
Part 2
Part 2
Part 2
Part 2
Comprehensive discussion/critique
of strategic action relevant to the
marketing problem or opportunity
with logical justification that flows
clearly from Part 1.
Adequate discussion/critique of
strategic action relevant to the
marketing problem or opportunity
with justification and links to Part 1.
Limited discussion/critique of
strategic action relevant to the
marketing problem or opportunity
that has some justification and links
to Part 1.
Minimal or no discussion/critique of
strategic action relevant to the
marketing problem or opportunity
with minimal links to Part 1.
Part 3
Part 3
Part 3
Part 3
Fully explores future actions and
implementation issues with clear
links to Part 2. Critically discusses
impact on marketing objectives.
Identifies future actions and
implementation issues with clear
links to Part 2. Considers impact on
marketing objectives.
Identifies some future actions and
implementation issues with some
links to Part 2.
Limited or no identification of future
actions and implementation issues.
Not linked to Part 2.
Demonstrates an excellent ability to
compare, contrast and critique the
information available.
© Henley Business School, April 2015
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Strategic Marketing: Assignment
70–100
60–69
50–59
0–49
‘Distinction’
‘Merit’
‘Pass’
‘Fail’
Part 4
Part 4
Part 4
Part 4
Provides excellent personal reflection Very good and appropriate personal
to demonstrate greater insight and
reflection to enhance insight and
understanding.
understanding.
Personal reflection included but
could be developed in greater depth
or in more appropriate areas.
Limited or no personal reflection or
of little relevance to issue or the
development of understanding.
Structure
Structure
Structure
Structure
Addresses all components of the
assignment brief with appropriate
weighting across each component.
Addresses all components of the
assignment brief with appropriate
weighting across each component.
Addresses all components of the
assignment brief with appropriate
weighting across each component.
Significant omissions of components
of the assignment brief or
significantly skewed weighting across
each component.
Excellent linkages between
components developing a strong,
logical structure to the overall
argument that is easy to follow.
Very good linkages between
components giving a logical
structure.
Explicit linkages between
components giving a coherent
overall structure.
Poor or no linkages between
components; illogical or incoherent
structure.
Presentation
Presentation
Presentation
Presentation
Clear presentation with some use of
graphical and tabular presentation.
Poor presentation with no use of, or
over-use of inappropriate,
presentation formats.
Excellent presentation including
Very good presentation including
creative and appropriate use of
appropriate use of graphical and
graphical and tabular presentation to tabular presentation.
support the analysis.
10
© Henley Business School, April 2015
STMK-AQ-7A
70–100
60–69
50–59
0–49
‘Distinction’
‘Merit’
‘Pass’
‘Fail’
All figures and tables appropriately
captioned and discussed in text.
All figures and tables appropriately
captioned and discussed in text.
All figures and tables appropriately
captioned and discussed in text.
Limited or incorrect captioning of
figures and tables; no in-text
discussion.
Accurate referencing using the
Harvard referencing system.
Accurate referencing using the
Harvard referencing system.
Accurate referencing using the
Harvard referencing system.
Limited or no referencing or clear
demonstration of failure to
understand the concept of
referencing.
Word count appropriate within
allowed range.
Word count appropriate within
allowed range.
Word count appropriate within
allowed range.
Word count above or below allowed
range.
© Henley Business School, April 2015
11
COMPANY PROFILE
“We honour the potential in every human being like a seed waiting to blossom… if only
someone would take the time to nurture it, water it, and believe in its inevitable growth”
1
1.
ABOUT US
Bridging the Gap recognizes the importance of providing synergistic services to clients by building
capacity and developing effective, integrated human capital and business strategies.
BTG’s services focus on the clients' most critical issues and opportunities: strategy, brand
management and marketing, organization, operations, technology, transformation, digital,
advanced analytics, corporate finance, mergers & acquisitions and sustainability across all
industries and geographies. We bring deep, functional expertise, but are known for our holistic
perspective: we capture value across boundaries and between the silos of any organization. We
have proven a multiplier effect from optimizing the sum of the parts, not just the individual pieces.
Two decades ago we were among the first to recognise South Africa’s need for the development
of human capital. Today as a Level 1 Contributor according to the BBBEE Codes, we continue to
lead the way spearheaded by our highly experienced executives. We are 100% Black Owned with
a shareholding of 40% held by female.
Projects executed have been across a range of industry sectors in private sector, government and
SOE’s and our focus is on developing capacity in organisations to increase service delivery and
organisational effectiveness.
BTG is committed to:
Customised solutions for improving effectiveness and efficiencies.
On-time delivery within the confines of a given fiscal discipline.
Long-term strategic relationships with emphasis on adding value to our clients’ business.
Optimising and leveraging resources rather than duplicating what already exists.
Maintaining uncompromising high quality standards backed by a professional approach
and ethical business practices.
1.1
OUR VISION, MISSION & VALUES
Vision
To be a strategic, value-adding partner to our stakeholders.
Mission
To build and create capacity in people and organisations through
enhancing governance and growth, unlocking human potential,
and thereby empowering and developing people.
Our Values
Excellence
Professionalism
Integrity
Caring
Growth
2
1.2
OUR VALUE PROPOSITION
We focus on delivering expert knowledge through tried and tested products, services and
processes while remaining innovative and delivering quality service
We are about shifting organisations from ‘Good to Great’.
We keep abreast of market changes, innovation, advancements and human resources
best practices.
We aim to build and nurture relationships with clients, remaining strategic allies to the
business and its people.
Flexible and dynamic approach and business model that allows us to expand and
decompress through partnership.
1.3
OUR STRUCTURE
Ownership by HDI: 100% Black (60% M & 40% F)
Management Control: 100% Black (50% M & 50% F)
Citizenship: South African Citizens
Preferential Suppliers Procurement: 70% Black
1.4
OUR TEAM
Bridging the Gap has a team of full time professionals who are specialist in the Human Resources
discipline and a fraternity of 30 qualified consultants nationally, who provide high quality expertise
in various areas including; change management, strategy development, organisational design,
leadership development, project management, business process reengineering, IT systems
related to HR to name but a few.
3
2.
OUR APPROACH
BTG has a consultative and participative approach to our consulting work. We believe that any
external intervention in an organisation must be undertaken in a well thought through, planned
with clear deliverables. We believe that clear communication about the purpose of the
intervention needs to be communicated to all stakeholders in the organisation.
Our approach is to work directly with groups and individuals, with
the expressed purpose of enabling them to own the outcomes of
the process and to be responsible for the implementation and
monitoring of progress and results. We expect managers to
support and encourage their staff to engage with the consultant
team. We can provide coaching and follow up support at all
stages of a project, but the onus rests with the organisation’s
management and staff to ensure success.
This approach is different from the ‘expert does and delivers’ service taken by some consultancy
firms, and this approach means that we scope and cost the project appropriately to enable BTG
consultants to spend the necessary time on site with your staff. Most importantly, we believe that
organisational effectiveness is achieved through a well-designed interventions which should
address the following key dimensions:
Organisational Purpose
Internal and External Environmental factors
Business Processes & Systems
Organisational & People Competencies
Leadership
2.1
ORGANISATIONAL DEVELOPMENT
Our team of consultants work with organisations to develop, advance and strengthen strategy,
structure, process, people and culture to improve organisational effectiveness, in a healthy way.
We see our task as not an enabler and supporter for change rather than solve the client organisation’s
problems. Our role is to work collaboratively with the organisation’s leaders and members to help
identify, clarify, prioritise and deal with complex organisational issues. Creating an environment that
will strive to achieve daily operational excellence while generating innovative strategies for
sustainability and longevity.
4
Organization Development is a body of knowledge and practice that enhances organizational
performance and individual development, by increasing alignment among the various systems
within the overall system. OD interventions are inclusive methodologies and approaches to
strategic planning, organization design, leadership development, change management,
performance management, coaching, diversity, team building, and work/life balance.
The practice of OD is grounded in a distinctive set of core values and principles that guide
behaviour and actions.
2.2
PROCESS OF DELIVERY
We deliver comprehensive solutions that provide the client with value add in the various four
phase in 6 steps of organisational effectiveness, as articulated in the diagram above. These
solutions can be administered as a suite particularly for organisation transformation or as
standalone solutions to address specific requirements on areas of challenge. We follow deliver
all projects within four phases – Diagnostic, Planning, Implementation, Monitoring & Evaluation.
5
Diagnosis (1,2
Evaluation & lessons
(6)
1
6
2
Implementation (5)
5
3
Detailed Planning
4
(3,4)
1. Diagnosis – BTG utilises a variety of methodologies and approaches in order to assess
current and prevailing trends in an organisation, be it with regard to the strategy, people,
customers, finances, processes, performance or leadership. The diagnosis is meant to
paint an objective picture of the current situation as it is. This is particularly important in
order to inform appropriate solutions to address whatever issues that the situation analysis
yields.
2. Detailed Planning – This involves the development and agreement of detailed designs
and approaches to deliver the desired future state and final implementation plans.
Appropriate specific solutions are put in place in preparation for full-blown
implementation. In some instances, where appropriate, this stage may involve piloting
of solutions for purposes of customisation prior to a full scale implementation.
3. Implementation – BTG typically adopts a partnership approach to implementation in
order to ensure client ownership of the project, processes and results. Whilst our experts
lead the implementation of bespoke solutions, BTG’s keen interest in skills transfer propels
us to ensure that the client is involved at all stages.
4. Monitoring and Evaluation – BTG utilises a variety of techniques and tools in order to
provide continuous feedback to the organisation. Our monitoring & evaluation
methodologies speak to all areas of the organisation, are meant to add value to
decision making, learning and improvement initiatives within the organisation.
6
2.3
VALUES-BASED DELIVERY
The practice of OD is grounded in a distinctive set of core values and principles that guide behaviour
and actions. Values-Based Key Values include:
Respect and Inclusion – equitably values the perspective and opinions of everyone.
Collaboration – builds collaborative relationships between the practitioner and the client while
encouraging collaboration throughout the client system.
Authenticity – strives for authenticity and congruence and encourages these qualities in their
clients
Self-awareness – commits to developing self-awareness and interpersonal skills. OD practitioners
engage in personal and professional development through lifelong learning.
Empowerment –focuses efforts on helping everyone in the client organization or community
increase their autonomy and empowerment to levels that make the workplace and/or
community satisfying and productive.
3.
OUR SERVICES
Highly effective organizations exhibit strengths across five areas: leadership, decision making and
structure, people, work processes and systems, and culture. For an organization to achieve and
sustain success, it needs to adapt to its dynamic environment. Evaluating and improving
organizational effectiveness and efficiency is one strategy used to help insure the continued
growth and development of an organization. Our offering includes:
BTG ORGANISATION DEVELOPMENT
SERVICES
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Strategy Development
Organisation Diagnosis/Climate Surveys
Organisational realignment
Business Process Re-Engineering
Organisation Design Interventions
Change Management And Change
Capability Building
Performance Evaluation &
Management
Talent Management & Succession
Planning
Recruitment (Headhunting)
Organisational Learning And Coaching
Diversity Management
Reward and Remuneration Structuring
Board Of Directors Committee
Structuring, Reward Structuring
Leadership Development
AND THE BENEFITS ARE…
• Objectivity in the diagnostic process,
helping teams to confront the real issues no
matter how difficult
• Providing innovative and authentic
approaches to problem identification, and
encouraging pro-active rather than reactive approaches to issues
• Providing competent, independent
capacity to deal with highly sensitive,
complex, inter-racial, inter-gender issues
that may render teams dysfunctional
• Ensuring that organisations pro-actively
identify and deal with strategic issues
relating to mergers and acquisitions to
sustain success and effectiveness.
• Ensuring that organisations achieve
transformation objectives
7
4.
OUR CLIENTS & WORK
Successful development and implementation of organisational strategy for over 50
organisations nationally.
Change Management for Turnaround process for Department of Home Affairs, The Road
Accident Fund and The Agricultural Research Council.
Restructuring for SENTECH, CIVICUS and DFID.
Corporate Governance facilitation for organisations such as the SABC Board and Executive
Management, University of Venda, the Medical Research Council, the National Nuclear
Regulator, National Home Builders Regulatory Council, SacOil, AgriSeta
Our customised training and development interventions.
Our diagnostic climate surveys for divisions in organisations such as SABC, AVUSA (ex-Johnnic),
NHBRC, etc.
Placement of Board member, Executives and Senior Manager in large and medium
organisation.
8
9
5.
CONTACT DETAILS
Bruma
Johannesburg, 1862
South Africa, Gauteng
Tel: 083 430 7637
Email: tumi@btgh.co.za OR john@btgh.co.za
Webmail: www.btgh.co.za
[Type text]
Henley Business School
Strategic Marketing
Study guide
Authors:
Ana Canhoto, Guy Champniss, Moira Clark,
Anne Dibley, David James, Cristiana Lages,
Dan Nunan, Roger Palmer, Susan Rose,
Lyndon Simkin and Baskin Yenicioglu
The use of specific cultural references and gender
markers in these course materials does not imply
bias or criticism.
The copying, storage in any retrieval system,
transmission, reproduction in any form or
resale of the course materials or any part
thereof without the prior written permission
of Henley Business School is an infringement of
copyright and will result in legal proceedings.
Henley Business School reserves the right to
change course content, structure and all terms
and conditions related to the programmes at its
sole discretion.
www.henley.ac.uk
© Henley Business School, November 2017
Item code: STMK-SG-7A
ii
© Henley Business School, November 2017
Contents
Module overview 1
Part 1: The marketscape
Introduction to Part 1
9
9
Section 1
The theory of marketing 10
Section 2
Value and values 21
Section 3
Types of marketing 34
Section 4
The stakeholder approach 41
Section 5
Marketing in the digital era 49
Section 6
Global marketing 55
Section 7
Strategy and tactics 60
Section 8
Strategic marketing planning 67
Part 2: Value exploration
Introduction to Part 2
Section 9
79
79
Research in marketing 80
Section 10 Market insight 88
Section 11 Customer buying behaviour 96
Section 12 Competitor insight 118
Part 3: Value creation 127
Introduction to Part 3
127
Section 13 Segmentation, targeting and positioning 128
Section 14 Brand management 140
Section 15 Innovation and new product
development 152
Section 16 Pricing 163
Section 17 Channel management 172
Section 18 Integrated marketing communications 180
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iii
Part 4: Value delivery
193
Introduction to Part 4
193
Section 19 Relationship marketing 194
Section 20 Business-to-business strategic
relationships 204
Section 21 Customer engagement 210
Part 5: Evaluating and enhancing the value 219
Introduction to Part 5
219
Section 22 Value-based marketing evaluation 220
Section 23 Marketing metrics 225
References 239
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Module overview
Module overview
Aims and learning outcomes
Aims
The Strategic Marketing module is designed for practising managers to enable them to:
raise awareness of marketing as both a strategic and tactical function
develop an understanding of the practice of strategic marketing and the relevance
of key marketing concepts
Learning outcomes
By the end of the module it is expected that programme members should be able to:
critically analyse theoretical explanations of marketing situations and assess their
relevance
synthesise, evaluate and discuss leading theories and models that are used to
explain key concepts in strategic marketing
recognise the external and internal forces that impact upon the choices involved in
strategic marketing with regard to the development, production and distribution
of goods and services
evaluate the impact of technology on marketing management and customer
behaviour
identify factors that drive and influence the development of market structures and
the comparative differences across various business contexts
appreciate the value of data and information used to analyse markets, customers
and stakeholders
recognise the nature of relationships and partnerships that are vital to the creation
of customer value
be aware of the importance of ethical and socially responsible marketing strategies
Introduction
The Strategic Marketing module is designed to enable practising managers to understand
the underlying theoretical perspectives of the strategic management of markets across a
range of organisational situations. It provides you with knowledge and information about
both the theory and practice of contemporary marketing management. The learning
experience of this module will equip you to identify and evaluate the choices available to
an organisation within a marketplace and form effective marketing strategies to meet
those objectives. Upon completion of the module you will be able to engage in a strategic
debate at board level and be able to make informed choices regarding the selection and
development of marketing activities.
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Strategic Marketing
The module is designed to answer the question: ‘How can an organisation derive value
from a marketplace?’ You will be taken through the cyclical activity of analysing a market;
identifying value opportunities; and creating and delivering marketing programmes. At the
same time monitoring and evaluating the outputs and ultimate return of the marketing
investment to the organisation is crucial and the module emphasises the need for rigour in
marketing metrics. The module is structured into a series of parts, each of which
investigates different aspects of value creation and evaluation of the return that this
produces for the organisation. We explore these issues including a focus on the impact of
digital and interactive communication technologies. The module will help you analyse and
understand some of the changes that are occurring and their impact for strategic
marketing management across a range of organisational contexts including business to
consumer (B2C), business to business (B2B) and not for profit.
Module structure
The Strategic Marketing module comprises five sequentially related parts, which are
further subdivided into sections, as shown in Figure 1.
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Module overview
Figure 1 Module structure
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Strategic Marketing
Part 1 The marketscape
The first part introduces you to the discipline of marketing. It has eight sections.
Section 1 The theory of marketing: provides an overview of the various marketing
paradigms that have evolved over time, and highlights the current thinking around the
market orientation concept.
Section 2 Value and values: reviews the concept of ‘value’ by exploring what is valued
by customers and how value can be created within organisations, and then discusses
the ethical dimension of marketing.
Section 3 Types of marketing: examines the contribution that marketing can make
across a range of contexts, types of organisations and product offerings.
Section 4 The stakeholder approach: focuses on the transition from transactional to
relationship marketing, and the associated need to develop strategic relationships with
key groups of stakeholders.
Section 5 Marketing in the digital era: defines the key features of the digital era and
considers the part social media plays in the development of relationship marketing and
its impact on marketing communications.
Section 6 Global marketing: introduces the concept of ‘glocalisation’ and analyses the
impact of the global marketing environment on the marketing mix.
Section 7 Strategy and tactics: considers the relationship between marketing
objectives and overall corporate strategy, and draws a distinction between tactical and
strategic marketing.
Section 8 Strategic marketing planning: sets out the key components and structure
of an integrated marketing plan.
Part 2 Value exploration
The second part considers the value of marketing research and intelligence gathering. It
comprises four sections.
Section 9 Research in marketing: explains the need for marketing research, and
introduces relevant methodologies and tools for intelligence gathering.
Section 10 Market insight: examines the forces and actors that operate in an
organisation’s macro- and microenvironment.
Section 11 Customer buying behaviour: describes models of buyer behaviour for
both consumers and organisational customers.
Section 12 Competitor insight: looks at the role of competitor analysis in delivering
superior customer value.
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© Henley Business School, November 2017
Module overview
Part 3 Value creation
The third part introduces the process of market segmentation, as well as the components
of an effective marketing programme. It consists of six sections.
Section 13 Segmentation, targeting and positioning: explains the concept of market
segmentation, and how organisations use this information to target the most valuable
customer groups and position their offering accordingly.
Section 14 Brand management: defines branding and its role, and includes an
assessment of the value brands create, as well as how to build a strong brand,
particularly in a digital environment.
Section 15 Innovation and new product development: considers the factors behind
successfully introducing new products and product innovations to market.
Section 16 Pricing: examines the key role price setting plays in generating revenue and
communicating value to customers, as well as reviewing a range of pricing strategies.
Section 17 Channel management: explores the strategic importance of effectively
managing outbound logistics, marketing and sales, and customer services as part of the
marketing programme.
Section 18 Integrated marketing communications: reviews the role of integrated
marketing communications in creating meaningful engagement and stakeholder
relationships.
Part 4 Value delivery
In the fourth part we focus on how internal processes and staff behaviours impact on the
customer experience. It has three sections.
Section 19 Relationship marketing: discusses the philosophy behind relationship
marketing and customer loyalty, as well as considering the role of customer
relationship management.
Section 20 Business-to-business strategic relationships: identifies the essential
factors for successful B2B relationships and discusses the opportunities for co-creating
value.
Section 21 Customer engagement: considers the importance of perceived quality and
outlines the factors that influence the customer experience, before identifying
strategies for managing service failures.
Part 5 Evaluating and enhancing the value
In the final part, we consider the tools and techniques that allow marketing activities to be
measured and evaluated. It comprises two sections.
Section 22 Value-based marketing evaluation: considers the impact of marketing
activities on an organisation’s financial and non-financial performance, and how, if at
all, this can be measured.
Section 23 Marketing metrics: sets out a framework of metrics for assessing the
return on marketing investment and discusses the role of dashboards in providing
meaningful information to senior managers.
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Strategic Marketing
Practice applications
There is a set of practice applications to complement the module. The practice
applications can be accessed online, alongside the module materials, and also as a pdf
download.
Practice applications are designed to give programme members the opportunity to apply
their learning to practical situations. Programmes members might like to share their
output with others or store it for future reference, for example, by using the various areas
available in their VLE.
Module textbook
The module uses a textbook. Table 1 identifies how the chapters of the textbook relate to
the parts and sections of the study guide and provides a list of the key topics and models
covered in each part.
We highly recommend reading this study guide carefully and using the textbook as an
additional resource to take you through the content materials.
The textbook is as follows.
Key resource
Dibb, S, Simkin, L, Pride, W M, & Ferrell, O C (2016) Marketing: Concepts and Strategies,
7th edn. Hampshire: Cengage Learning (Textbook provided)
Key resources
These are resources, such as textbook chapters, journal articles, video clips etc, that form
an integral part of the module.
They are supplied via links in the online module materials and are also available via the ARC
Online in the resources area for the module.
It is expected that programme members will access all of the key resources, as they form a
key element of the module materials.
Further resources
These are suggested resources, such as textbook chapters and journal articles, which
programme members may wish to follow up if they are particularly interested in a subject
that isn’t covered in depth in the module materials.
Further resources are not generally supplied. They are listed at the end of each section of
the module materials and also in the ARC Online in the resources area for the module.
References
The module contains a references section, which provides full reference details for all
references cited in the materials. References are provided in the Harvard (or author–date)
style.
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Module overview
Table 1 How the study guide relates to the textbook chapters and the key topics and models covered
Study guide
Section(s)
Textbook chapter(s)
Key topics
Key models
1 The
marketscape
1
2
3
4
5
6
7
8
The theory of marketing
Value and values
Types of marketing
The stakeholder approach
Marketing in the digital era
Global marketing
Strategy and tactics
Strategic marketing planning
1–4, 22–4
Marketing orientation
Customer perceived value
Ethical marketing
Types of marketing
Service-dominant (SD) logic
Globalisation
Social media marketing
Strategy vs tactics
Developing marketing plans
Components of market orientation
(Sergeant, 1999)
Product category volume (PCV) model
(Hollensen, 2005)
Data-to-value cycle (Smith et al, 2006)
Product vs service continuum
(Shostack, 1977)
Generic strategy selection (Hollensen,
2003)
Six markets model (Christopher et al,
2008)
2 Value
exploration
9 Research in marketing
10 Market insight
11 Customer buying behaviour
12 Competitor insight
2, 3, 5, 6, 9
Marketing environment
Customer decision journey
Business buying process
Competitor analysis
Marketing information system (MIS)
(Kotler and Armstrong, 2004)
SWOT (strengths, weaknesses, threats,
opportunities)
Porter’s Five Forces
PESTLE (political, economic, social,
technological, legal, environmental)
PESTLEID (as above, with the addition
of international and demographic)
Consumer decision-making (CDM)
model (Blackwell et al, 2001)
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Strategic Marketing
Segmentation analysis
Value proposition
Brand building
Diffusion of innovation
Value-based pricing
Vertical marketing systems
Multichannel environment
Integrated marketing
communications (IMC)
campaign development
Ansoff matrix
Directional policy matrix
Consumer-based brand equity (CBBE)
(Keller,1993, 2012)
Product lifecycle (PLC) model
Boston Consulting Group (BCG) matrix
Four pillars of IMC (Kliatchko, 2008)
19 Relationship marketing
n/a
20 Business-to-business strategic
relationships
21 Customer engagement
Transaction vs relationship
marketing
Customer relationship
management (CRM)
Strategic relationships
Customer effort
Customer lifetime value (CLV)
Recency, frequency and
monetary value (RFM)
Six markets model (Christopher et al,
2008)
Model for functional CRM
22 Value-based marketing
evaluation
23 Marketing metrics
Value-based approach (VBA)
Key metrics
Marketing dashboards
3 Value creation
13 Segmentation, targeting and
positioning
14 Brand management
15 Innovation and new product
development
16 Pricing
17 Channel management
18 Integrated marketing
communications
4 Value delivery
5 Evaluating and
enhancing the
value
8
7, 8, 10–21
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© Henley Business School, November 2017
Introduction to Part 1
Part 1 The marketscape
Introduction to Part 1
Part 1 introduces you to the discipline of marketing. Here we explore the various
definitions and interpretations of marketing as both an organisational function and
philosophical approach to managing markets. An organisation’s marketing activity aims to
influence the choices made by stakeholders, particularly customers, in relation to its
business. We take a historical look back at the various marketing paradigms that have
evolved over time and the economic, social and technological influences that have
influenced such change. The Strategic Marketing module adopts a value-based approach
to marketing and here we introduce you to the concept of value and how this yields
advantage to the organisation. We aim to ensure that you can distinguish between
strategic versus tactical marketing decisions and at the same time encourage you to
consider both the relational and ethical aspects of marketing management decisions.
Finally, we introduce you to the practical aspects of the structure and content of an
effective integrated marketing plan.
Part 1 structure
Part 1 comprises eight sections:
Section 1 The theory of marketing
Section 2 Value and values
Section 3 Types of marketing
Section 4 The stakeholder approach
Section 5 Marketing in the digital era
Section 6 Global marketing
Section 7 Strategy and tactics
Section 8 Strategic marketing planning
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Strategic Marketing
Section 1 The theory of marketing
Aims and learning outcomes
Aims
The aims of this section are to:
explore the various definitions and interpretations of marketing
introduce key marketing paradigms and analyse how they have evolved over time
present the market orientation concept
Learning outcomes
After working through this section you should be able to:
recognise the key theories of marketing and the significant changes that have
occurred
compare market orientation and product orientation
debate which marketing orientation is being practised by your own organisation
and whether it is appropriate or not
Introduction
Although marketing is a relatively new discipline it has been subject to a number of
evolutionary changes. These have been in response to the wider environment and the
changing business context as it has developed through the industrial revolution to the
current emerging information economy. This section provides an overview of the various
marketing paradigms that have resulted from market changes, and then highlights the
current thinking around the market orientation concept.
1.1 The breadth of marketing
In the 21st century, marketing activity occurs all around us all of the time.
10
Political leaders seek to persuade you to vote for them – they are marketing their
manifesto, their vision for the future.
Universities and schools compete for research funding and student placements –
they are marketing their distinctive subject specialisation or style of delivery.
Not-for-profit (third-sector) organisations campaign for social justice or
environmental change – they are marketing their cause.
Individuals dress to impress or even shock you – they are marketing their own
personal identity, differentiating themselves from the crowd.
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Section 1
Global advances in education, in our capacity to manufacture and distribute goods and
services more efficiently and effectively, the levels of both individual and corporate wealth
to which we aspire, and the proliferation of new technologies and means of
communication, have all promoted constant (some would argue enforced) engagement
with more and more marketing activity as we live our daily lives.
Given the power of information and communication technology (ICT), it is not surprising
that many people associate marketing with advertising and public relations. The role of
marketing is assumed to be that of promoting products and services to key target
audiences as well as supporting and augmenting sales activities within organisations so
that they will be successful in driving positive return on investment (ROI) for their owners.
However, as you will see during this module, the range of modern marketing outcomes
that marketers might wish to achieve can be as complex as the characteristics of the
markets they seek to serve today. Table 1.1 illustrates some of these outcomes.
Table 1.1 Different types of product and service advertising
Desired marketing outcomes
Examples
Promoting a product image
www.coca-cola.co.uk
www.cocacolazero.com
Driving short-term sales
www.easy.com
www.headandshoulders.com
www.lorealparis.com
Supporting a longer term relationship
www.rolls-royce.com
www.villagevet.co.uk
www.unison.org.uk
www.unitetheunion.com
Lifestyle and personal marketing
www.linkedin.com
www.youtube.com
www.facebook.com
Marketing a service rather than a product
www.amazon.co.uk
www.ecostreet.com
www.bitc.org.uk
www.cim.co.uk
Corporate brand
www.nestle.com
www.redcross.org.uk
Promoting a cause
www.vodafonefoundation.org
think.direct.gov.uk/
Communication with stakeholders
www.btplc.com/Sharesandperformance
www.vodafone.com/content/index.html
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Strategic Marketing
1.2 The evolving nature of markets and marketing
The American Marketing Association (AMA) defines marketing as:
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.
(AMA, 2014)
Marketing is therefore concerned with an exchange process in which value is derived for
both parties (the buyer and the seller). Dibb et al (2016: 11) view marketing as consisting
of ‘individual and organisational activities that facilitate and expedite satisfying exchange
relationships in a dynamic environment through the creation, distribution, promotion, and
pricing of goods, services, and ideas’.
Although today in most parts of the world marketing involves freedom of exchange
between equal parties, this may not always have been the case. As illustrated in Figure 1.1,
the evolution of marketing can be conceptualised by comparing the changing power
relationship between consumers and producers over time.
Figure 1.1 Marketing evolution
(Adapted from Berthon, Holbrook & Hulbert, 2000)
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Section 1
Early marketing endeavour, pre-industrial revolution, was characterised by a power
equilibrium maintained through a lack of the information channels open to us today.
Inefficiencies in transportation and communication, and not least in the perishable nature
of goods, meant that the majority of products were sourced, developed and exchanged on
a local basis, driven by personal contact or individual referral. Power was of less significance
and broadly shared.
The onset of the industrial revolution ushered in huge economies of scale for producers
eager to meet the needs and wants of expanding markets. Producer-led power
predominated as consumers had little choice but to accept standardised offerings that
delivered lower prices and higher profits.
As economies grow and industrialisation brings with it lower costs of production,
increased competition and greater economic wealth, so markets are first flushed with an
array of product choice that in time gives way to market congestion and maturity. History
shows us that these trends might take decades to come about, but as the developed
economies of Europe and the Americas mushroomed through the midpoint of the 20th
century so the concept of the marketing-led organisation was born.
With time, markets increasingly become saturated, technological advancement overcomes
consumer ignorance of alternatives and as a consequence supply increasingly outgrows
demand. In this situation we see service and the advent of the service culture introduced in
order to add value, and with it longevity, to customer relationships, both business to
consumer (B2C) and business to business (B2B). Thus we see a shift in the balance in
power, with power now vested more with the customer than the producer.
The final, contemporary, stage of market evolution finds customers more demanding and
fragmented in their needs than ever before; greater commoditisation of products occurs,
requiring producers to seek alternate ways to differentiate. The acceleration of knowledge
and technological advancements are such that for both parties – the customer and the
producer – the challenges involve the management of information overload and pressure
of time, requiring greater interactivity and collaboration between parties. Traditional
boundaries between buyer and seller become less well defined, or are only best defined in
relation to particular offerings. The nature of value itself shifts from the physicality of the
product, through to the intangibility of service orientation, to the immediacy for both
parties of the interactive virtual environment. Today the online environment has become a
social exchange network through which products, services, information, leisure pursuits,
communication and personal relationships can be exchanged and managed. Lusch (2007)
refers to this contemporary stage of marketing as the ‘marketing with’ era, where value is
created not as an exchange of products and services but it is rather realised as they are
being used together with customers and society at large. This era is characterised by value
co-creation by various stakeholders through a collaborative process.
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Strategic Marketing
Try and identify the internal markets (i.e. senior management, sales force, IT
department, production department, etc) and external markets (different types of
customers, suppliers, the media, the distribution chain) with whom the marketing
department need to interact.
How and in what ways do existing and potential customers articulate the ‘value’ in
the goods and services that you offer to them? Is it similar to the ‘value’ that your
organisation ascribes to them?
What are the key underlying opportunities and constraints facing your organisation
in each of the markets identified?
How will your organisation compete effectively against the competition in each of
these markets?
How is the technological revolution in new and interactive media impacting on
your current and future relationships with customers and other key stakeholder
groups?
How and by whom should these relationships be managed in a consistent and
integrated manner?
1.3 Market orientation
Marketing in one form or another has been present throughout history, but it only really
emerged as a coherent business philosophy and structured way of doing things in the mid1950s (Dibb et al, 2016: 18).
The industrial revolution transformed the means of production in the late 19th century,
heralding unprecedented opportunities to mass-market products in developing markets.
Higher production efficiency, standardisation, access to low-cost labour markets and
resulting lower costs in the production process all contributed towards a ‘production
orientation’ in many organisations. Regarded by many marketers as confined to history,
recent growth in emergent, fast-developing geographical markets (e.g. Asia, the Indian
sub-continent and China) owes much to a refocus on production orientation.
The immediate and sustaining growth delivered to Western economies garnered from
mass production, early promotion campaigns and a focus on product utility did much to
develop a strong ‘product orientation’ within marketing theory and practice throughout
the first half of the 20th century. Here both the organisation as a whole, and its marketing
focus, is heavily dependent on innovating and delivering superior products – researching
them, sourcing them, bringing them to market with speed and efficiency, extending and
innovating them over time.
As markets develop and grow, new entrants emerge and the pace of competition quickens.
In order to survive and prosper organisations must continually innovate and refine their
product offerings in the light of challenges faced from competitors and the nature of
customer feedback on the utility of products and services currently offered. To secure
sufficient demand for products and services in the light of increased competition, or to
stimulate demand for products that would otherwise not achieve a positive consumer
response, organisations often focus upon a ‘sales orientation’ designed, through tactical
promotional campaigns or direct selling, to bolster product sales and secure short-term
marketing objectives.
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Section 1
Adopting a sales orientation can be very appealing to the organisation. Where effective, a
sales orientation delivers immediate short-term cash and, with it, profitability to the
organisation. It focuses marketing and sales staff on a single, tangible course of action – to
make that next sale. There is a strong, measurable and directly accountable link established
between marketing objectives and performance outcomes. Aggressive sales techniques
can and do alter immediate customer behaviour in favour of the organisation in both B2C
and B2B markets. Sales orientation fits well with the manner in which publicly quoted
companies report operational performance to financial markets.
However, there are risks associated with a single focus upon sales. The needs of customers
might well become subverted by the overriding transaction focus within the organisation
of making another sale. Focused as it is on short-term results, a sales orientation might
simply reflect a broader commitment by the owners (or those most powerful within the
organisations) to a ‘financial orientation’ that will be followed even at the expense of the
needs of customers and other less powerful stakeholder groups. Here the task of
management (and of marketing) will be to maximise the amount of cash that can be
achieved from any given asset.
Selling tries to get the customer to want what the company has, marketing on the other
hand, tries to get the company to produce what the customer wants.
(Levitt, 1960: 45–56)
Under this approach sales and marketing campaigns can become increasingly short term
and tactical in nature. They will inevitably focus more on customer acquisition to the
detriment of retention and development of longer term loyalty. The quest for immediate
sales results tends to focus the interest of marketers on narrow, top-performing segments
now, to the detriment of segments that offer potential for development in the future.
Short-term transactional approaches tend to restrict the opportunities for relationship
building, and to create a greater likelihood of reconsideration by the customer on each
purchase occasion.
By contrast, ‘market orientation’ takes a broader, more integrated, view of the
philosophical and organisational demands that must be met by marketers if organisations
are to be market or customer led. Here the organisation is focused upon understanding
the needs and wants of the customer segment(s) in the market, and ensuring that their
products and/or services meet those needs.
Product, sales and market orientations mean that organisations follow distinctive
philosophies, and marketing management and staff concentrate on different activities.
Figure 1.2 identifies the differences in the three orientations.
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Strategic Marketing
Figure 1.2 Product, sales and market orientations
(Adapted from Doyle, 2002: 39)
1.4 Conceptualisations of market orientation
There have been numerous alternative conceptualisations of market orientation promoted
by academics and practitioners over the past 30 years. However they may differ, at the
heart of the concept lies the idea of a commitment across an organisation to meeting the
needs and wants of customers.
A customer-led company recognizes that its only true assets are satisfied customers.
Without satisfied customers the balance sheet’s assets are merely scrap.
(Doyle, 2002: 40)
Market-orientated organisations begin by serving a particular market only when they have
a clear understanding of the needs of their customers. They strive to maintain close links
with their customers seeking to match or exceed customer expectation of the goods and
services that they bring to that market, being ever mindful of the need to differentiate their
offers from those provided by competing organisations. In essence, market orientation
refers to the way an organisation implements the marketing concept.
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Section 1
Kohli & Jaworski (1990) define market orientation in the following manner.
The generation of appropriate market intelligence pertaining to current and future
customer needs, and the relative abilities of competitor entities to satisfy these needs;
the integration and dissemination of such intelligence across departments; and the coordinated design and execution of the organisation’s strategic response to market
opportunities.
The definition given above has been usefully distilled into three equally important
behavioural strands (Narver & Slater, 1990): customer orientation, competitor orientation
and interfunctional co-ordination as illustrated in Figure 1.3. Each component must be
aligned if the organisation is to be able to build an effective capacity to respond to market
changes.
Figure 1.3 The components of market orientation
(Adapted from Sargeant, 1999: 31)
In market-orientated organisations, it is the creation of real customer focus and the
responsiveness of the organisation to changing customer and market demands that
provides the context within which marketing strategy is developed. The quality of products
and services provided across the whole organisation will need consistently to exceed
customer expectation and consequently drive added value by comparison with
competitive offerings.
To avoid being overtaken by competitor offerings the competitor orientation requires
diligent appreciation by the organisation of the short- and longer term strengths and
weaknesses of current and future competitors. You will learn more about how marketers
gain customer and competitor insight in Part 2 of this module.
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Strategic Marketing
Interfunctional co-ordination relates to the manner and degree to which the organisation
utilises its internal capacity to support the creation of added value for its customers. The
nature of the interdepartmental dynamics across the organisation as a whole supports or
negates effort towards market orientation. Where conflicts of culture, purpose and priority
occur across different departments within an organisation, market orientation is likely to
break down.
This behavioural approach to the components of market orientation makes it possible in
principle to diagnose an organisation’s level of market orientation, to identify superior and
less effective areas of performance, and to create practical strategies to advance
performance for the future. Achieving and sustaining market orientation is an ongoing,
dynamic process across the entire organisation. Senior management, across all functions,
must be actively committed to its attainment if it is to be sustained.
Where it is achieved, market orientation is associated with positive performance outcomes
for the marketing activity itself and for the organisation as a whole, particularly in
conditions of high market turbulence, rapid technological advance, fluctuating economic
conditions and strong competition. Marketing and broader organisational planning cycles
are integrated in a holistic manner. Staff and other stakeholder groups identify first with
the organisation as a whole and not with their own interest within it, and
interdepartmental relations are based on co-operation, not rivalry.
1.5 Market driven or market driving?
Our earlier description of market orientation focuses mainly on ‘follower’ tendencies: that
is to say following the lead of customers and to some extent competitors. While that has
been true of many interpretations of market orientation, by both academics and
practitioners, this was not necessarily what was originally intended by Jaworski et al
(2000), as they highlight in the following key resource. As you read their article consider
how your organisation approaches market orientation. Does it drive markets, is it market
driven or a combination of both?
Key resource
Jaworski, B, Kohli, A K & Sahay, A (2000) Market driven versus driving markets. Journal of the
Academy of Marketing Science, 28 (1), 45–54
So, in summary, market-oriented organisations are driven by their continued appreciation
of the special characteristics present in the markets in which they are operating. But they
may also be engaged in a more proactive marketing strategy explicitly designed to reshape,
educate or lead the customer or market towards needs and wants that are currently either
not present or exist in a latent form.
Table 1.2 outlines the different characteristics associated with organisations whose
marketing philosophy tends towards the ‘market-driven’ compared to the ‘market-driving’
approach.
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Section 1
Table 1.2 Characteristics of market driven vs market driving
Market driven
Market driving
General
Organisations respond to
activity within existing known
market parameters
Organisations act to create
change in existing market
structures and the behaviours
of customers and competitors
Customer
orientation
Adaptation
At the cutting edge of new
customer needs and wants
Identifying,
analysing and
answering to the
customer
Predicting which technologies
are likely to be successful given
customer needs and wants
Shape customers’ behaviour
proactively
Respond to market structure
Predict the evolution of
customer needs and market
boundaries
Competitor
orientation
Continuous benchmarking
Shape market structures
proactively
Imitating others
Pioneer
Identify difficult-to-imitate
internal and external
competences
Discontinuous disruption
(Adapted from Hollensen, 2005: 29)
Carrillat et al (2004) took these ideas further and developed a framework for marketdriving organisations that emphasises the importance of transformational leadership and
culture in the market-driving orientation. You will meet ideas regarding internal staff and
climate again in Part 4, when we look at ‘value delivery’ in relation to customer
management. Another theme, that of ‘capacity to innovate’, is encountered in more detail
in Part 3 (Value creation) where we look at innovation and new product development
(NPD) as a process. So as you work through the module there will be recurring themes and
ideas, and this blurring of boundaries between functions and their activities is one of the
major challenges of marketing in the modern organisation.
Summary
In this section we explored the various definitions and interpretations of marketing as both
an organisational function and a philosophical approach to managing markets. An
organisation’s marketing activity aims to influence the choices made by stakeholders,
particularly customers, in relation to its business. We took a historical look back at the
various marketing paradigms that have evolved over time, and the economic, social and
technological aspects that have influenced such change.
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Further resources
Berthon, P, Holbrook, M B & Hulbert, J M (2000) Beyond market orientation: a
conceptualization of market evolution. Journal of Interactive Marketing, 14 (3), 50–66
Carrillat, F A, Jaramillo, F & Locander, W B (2004) Market-driving organizations: a
framework. Academy of Marketing Science Review, 2004 (5), 1–14
Lusch, R F (2007) Marketing’s evolving identity: defining our future. Journal of Public Policy
and Marketing, 26 (2), 261–8
Webster Jr, F E (2005) A perspective on the evolution of marketing management. Journal of
Public Policy and Marketing, 24 (1), 121–6
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Section 2
Section 2 Value and values
Aims and learning outcomes
Aims
The aims of this section are to:
introduce the concept of value
examine the role of values in marketing
consider the ethical aspects of marketing management decisions
recognise how value and values yield advantage to the organisation
Learning outcomes
After working through this section you should be able to:
identify the difference between value as perceived by the customer and that which
is created by the organisation
understand the role of values within a marketing context
Introduction
In this section we review a central concept within marketing, that of ‘value’, and explore
how value is perceived by the customer and created within the organisation. The structure
of the module is based around this theme. In Part 2 (Value exploration) we look at how we
explore and understand what the customer values, and in Part 3 (Value creation) we look
at how the organisation develops value-based marketing activities to meet customer
expectations. Not surprisingly, customer and organisational value rarely meet perfectly and
so some form of reconciliation must occur. The methodology proposed to achieve this is a
‘data-to-value cycle’, where customer insight is used to inform and modify organisational
practices. This continuous cycle will also be developed in more detail in Part 4 (Value
delivery).
The second half of this section turns to an equally important, but often under-represented,
area in terms of the ‘values’ that we bring to the marketing process as individuals,
organisations and industry sectors. In this context we define values as those deeply held
beliefs or moral principles that we use to make decisions about how to behave. Needless
to say, environmental factors, such as globalisation and increasing pressure from various
stakeholder groups, create a business environment where many different sets of values can
collide. Therefore exploring values, ethics and professional codes of conduct is particularly
useful and important to the practice of marketing.
You may already be familiar with values at a personal and work–life level, and values in a
business context. In this section we examine ethical decision-making and ethical climates
as they impact on marketing practices.
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2.1 Definition of customer value
We mentioned before that marketing is an exchange process in which value is derived.
Two strategic questions regarding the nature of value dominate the marketing literature.
What is it that is perceived to be of value to existing and potential customers and
stakeholders in the goods and services that organisations and their competitors
bring to market?
How does (or should) an organisation identify, plan and manage value creation for
customers in the course of its activities?
2.2 Customer value
The concept of value is directly associated with the specific needs and wants of existing
and prospective customers. It represents the perceived benefits that consumers receive
from the exchange of ownership in goods or services associated with purchasing
behaviour. Organisations that deliver products and/or services with higher perceived value
and lower relative costs develop competitive advantage over others and ensure continued
success. Value, thus defined in the minds of customers, is a subjective or perceived
construct not always directly linked by them to utility, but guided by it.
It is how customers themselves rate and rank the offerings presented to them by alternate
organisations that is critical in affecting purchasing decisions. Identifying and distilling
customer value requires extensive marketing research if it is to be properly understood
and assessed.
You will learn more about this in Part 2 of this module. An illustration of the components
of customer-perceived value is shown in Figure 2.1.
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Section 2
Figure 2.1 Customer-perceived value
(Adapted from Hollensen, 2005: 32)
Many different factors (some direct and some indirect) affect the positive or negative
perceptions of value by the customer in terms of: the impact upon these factors by
marketers and customers alike, the relative costs associated with known or projected
purchasing behaviour, and the perceived benefits that will accrue.
Customer-perceived value therefore can be conceptualised as a multidimensional
construct:
Functional: refers to the rational and economic valuations made by individuals.
Emotional: the affective dimension is less developed, but captures the feelings or
emotions generated by the products or services.
Social: relates to the social impact of the purchase made.
(Sánchez-Fernández & Iniesta-Bonillo, 2007)
Customers make an overall assessment of what is received and what is given (sacrificed) by
a particular supplier compared with other competitors by considering the combination of
product quality, service quality, price affordability and shopping experience (Chang &
Dibb, 2012).
This judgement results in customer-perceived value that is measured by both products/
services and customers’ experiences during the buying process. This approach goes
beyond the traditional emphasis on product benefits and costs in customer-perceived
value by considering the entire consumption process. According to Chang & Dibb (2012)
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customers, rather than sellers, ‘own’ the process of assigning value to product and service
offerings, which has implications for what can be done to improve value perceptions.
2.3 Needs, wants and demands
At the most fundamental level, we can distinguish between customer needs, wants and
demands (Doyle, 2002).
An expressed need is a basic requirement that individuals or groups of individuals
are compelled to address. We all have a need for food, for security and for some
form of shelter, as well as emotional-based needs relating to love, self-esteem and
the positive development of the human and natural environments. These basic
needs are often broad in nature and are not the product of marketing activity, but
are more properly considered as the outcome of human biology and the
fundamental nature of social relationships.
Wants are narrower and reflect a particular desire for a product or service that will
meet an underlying need. Wants come in many shapes and sizes and are complex
in nature. They are shaped by our social and cultural experience, communicated
and refined for us through interaction with the media and by personal experience,
and made explicit and transformed into purchasing behaviours by the marketing
activities of organisations.
The resulting demand for particular goods or services reflects the presence of a
want requiring satisfaction. For demand to be real, this must be coupled with an
ability or willingness to pay for the goods or services. Goods and services must be
offered that not only reflect what existing and potential customers need and want,
but also what they are prepared to pay for.
In deciding between alternative product and service offerings, customers must to make
choices. Choice is in turn determined by the nature of the need(s) requiring satisfaction:
the perceived benefits accruing from the alternative product or service options available,
and our ability to match those needs and benefits to current purchasing capacity.
Foxall (2005: 8) states that choice:
involves a multiplicity of possible outcomes, the arousal of conflict as a result of the
individual’s perception that mutually exclusive outcomes are open to him, and an
attempt to reduce this conflict by means of cognitive activity.
Choice therefore is a cognitive and behavioural activity, and one that is affected by shifts in
the nature of the need and the offerings available. Our customers apply cognitive effort to
the process of selecting between alternatives. You will learn more about customer
decision-making in both a B2B and a B2C context in Section 11 (Customer buying
behaviour).
In order to stimulate demand for a product or service, marketers offer higher or lower
levels of utility to consumers or, alternatively, vary their price. Brock Smith & Colgate
(2007) synthesise the existing customer-value literature in order to develop a practical
framework for customer-value creation. This is designed to identify categories of value that
might support the determination of competitive advantage in any marketing scenario.
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Four core elements to customer value are identified:
1. functional or instrumental value
2. experiential or hedonic value
3. symbolic or expressive value
4. cost or sacrifice value
Key resource
Chang, C & Dibb, S (2012) Reviewing and conceptualising customer-perceived value.
Marketing Review, 12 (3), 253–74
Brock Smith, J & Colgate, M (2007) Customer value creation: a practical framework. Journal
of Marketing Theory and Practice, 15 (1), 7–23
2.4 Organisational value
The traditional production, product or sales view of marketing (as discussed in Section 1)
places value creation towards the middle or end of an organisation’s interactions with its
customers. Goods and services are developed by the organisation with little regard to
customer preferences or wants, and the focus of marketing endeavour centres around
promotion and sales.
Today in modern, congested, fast-moving markets where customers retain an abundance
of choice, increased service and quality expectation are the norm. Greater access to
knowledge, and learning of alternative offerings, brings with it greater consumer power
and the opportunity to defect to other suppliers. To be truly effective in the modern world,
customer-led organisations must anticipate the impact that their product or service
offerings will have on the customer’s own value chain prior, during and after the creation
and delivery of the offering.
In competitive terms, value is the amount that buyers are willing to pay for what a firm
provides them (perceived value) less the sacrifices that the customers offer to obtain
access to the value (e.g. money, time). A firm is profitable if the value it commands
exceeds the costs involved in creating the product. Creating value for buyers that
exceeds the costs of doing so is the goal of any generic strategy.
(Hollensen, 2003)
The notion of organisational ‘value chains’ was first defined by Porter (1985) and has been
widely adopted in the marketing literature to analyse the process by which organisations
‘add value’ to products and services in the minds of customers, and thereby achieve
competitive advantage.
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Analysis of organisational value chains enables the marketer to classify the activities and
processes that exist generically in all organisations as they transform raw materials or
intuitive service ideas into product and service delivery. At each stage in this process there
are opportunities for the organisation to ‘add value’ to the product or service.
The value chain consists of nine sequential activities.
Primary activities relate to:
1. inbound logistics (receiving raw materials)
2. operations that transform materials into products or services
3. outbound logistics that take the products or services to market
4. marketing and sales
5. service
Support activities across the organisation combine to add further value through:
6. procurement
7. technology development
8. human resource managemen
9. the organisational infrastructure deployed (planning, finance, etc).
Marketing critiques of the generic value-chain approach focus upon its simplistic linear
progression, the dominance of the supplier-orientated needs implicit within its
progression, and the lack of interaction that customers might have at each different stage
of the process.
Even if value for the customer is given as a goal, the customer remains a lost soul and a
passive recipient of the provider’s output.
(Gummesson, 2002)
As markets become more congested and complex so the value chain applicable to any one
organisation cannot be viewed in isolation from the value chains of others operating in the
same market. Effective strategic focus can only be achieved where value-chain analysis is
extended across all the parties that interact to deliver value to the end consumer –
suppliers, business partners, customers, internal employees, etc.
Merchant (2012) argues that ‘conversations’ should become central to how organisations
work and urges them to shift from linear supply-chain management to integrating
customer feedback into product design, distribution and delivery.
The value chain is not a collection of independent activities, but a system of
interdependent activities within and across organisations that combine to deliver value to
the end customer, and with it competitive advantage for the organisations concerned.
Hollensen (2003) builds upon the work of Normann & Ramirez (1993) in developing the
concept of a ‘value constellation’ to describe the chain of different players and the manner
in which they must interact if real added value is to be established and maintained, as
illustrated in Figure 2.2.
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Section 2
Figure 2.2 Value constellation
(Hollensen, 2003: 46)
2.5 Bridging the gap between customer and
organisation perceptions of value
Most organisations make some use of existing customer intelligence to inform and
enhance customer value. This is, in itself, an increasingly important source of competitive
advantage, particularly where product or service attributes and price variation are minimal.
Organisations seek to use discrete knowledge of customer preference to enhance value
creation in the construction of their product or service offerings in a manner that it is
difficult for competitors to emulate.
Smith et al (2006) identify the manner in which organisations seek to use market
intelligence and customer knowledge to add value for the organisation and the customer
as the value chain progresses. Bridging the gap between customer perceptions of value
and those placed upon it by the organisation, they apply the ‘data-to-value cycle’ (Figure
2.3) rather than the linear value-chain model in order to express the complex nature of
information exchange necessary to inform real value creation for all parties.
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Figure 2.3 The data-to-value cycle
(Smith et al, 2006)
The authors go on to propose 12 rules of value creation, as outlined in Table 2.1.
Table 2.1 The 12 ‘rules’ of value creation
Number
Rule
1
Find data that records customers’ unmet, as well as met, needs
2
Use and synthesise multiple data sources
3
Use information to challenge current thinking
4
Do not rely on purely statistical analysis of quantitative data
5
Be explicit and rigorous about managing knowledge
6
Begin with real, needs-based segments
7
Target value-seeking segments
8
Value delivered is proportional to change achieved
9
Change what the customer wants changing, not just what you can
change
10
Act faster than the market changes
11
Create a knowledge-sharing culture
12
Value creation does not happen in isolation from the rest of the
business
(Adapted from Smith et al, 2006: 138)
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Smith et al (2006) go on to point to three key lessons that must be observed by
organisations if this process is to be achieved effectively.
1. Clarity of definition – value creation is a complex co-operative activity, clear
definition of the terms used is central to success.
2. Clarity of process – managing the creation of value requires clear understanding of
the different stages and activities to be undertaken.
3. Clarity and observance of rules – the process must be ordered and consistently
applied.
In managing this process a balance between shareholder value and customer value must
always be achieved by the organisation.
A new stream of thinking, which centres around a service-dominant (SD) logic in
marketing (Vargo & Lusch, 2004), asserts that value creation occurs when a customer
consumes, or uses, a product or service, rather than when it is manufactured. The SD logic
in marketing will be further discussed in Section 4.4, but it should be noted here that
increasingly value creation is considered as a process where the customer is involved as a
co-creator of value (Payne, Storbacka & Frow, 2007). A view of market ecosystems is
evolving among both academics and practitioners alike, where value creation occurs
through a continuous and reciprocal actor-to-actor (A2A) buying and consumption
behaviour as opposed to fragmented B2B or B2C transactions (Wieland et al, 2012).
Key Reading
Wieland, H, Polese, F, Vargo, S L & Lusch, R F (2012) Toward a service (eco)systems
perspective on value creation. International Journal of Service Science, Management,
Engineering, and Technology, 3 (3), 12–25
2.6 Values, norms and marketing ethics: an
introduction
So far in this section we have focused on the importance of value to both customers and
suppliers as a central component in the conceptualisation of marketing. Here we introduce
the equally important but often under-represented significance of the values that we bring
to the marketing process as individuals, organisations and industry sectors.
In its broadest form, ethics can be defined as a set of moral principles or values, something
that we all share but we interpret and action in a highly personal and relative manner.
When differing or opposing ethical norms conflict it is often difficult to find effective
resolution, even where artificial societal constraints on behaviour in the form of law or selfregulatory codes of conduct seek to mitigate disputes and guide appropriate behaviour.
Left unchecked, conflict, physical harm or open warfare might ensue.
In the same way, within society and business activity there are generally held rules of
acceptable and unacceptable behaviour (often unspoken or only partially operationalised).
While not necessarily illegal in nature, unethical business or marketing behaviour is
behaviour generally regarded by the majority of the community concerned as
inappropriate, unfair, manipulative or coercive behaviour. Table 2.2 lists some unethical
marketing behaviours.
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Table 2.2 Common unethical behaviours in customer-contact settings
Misrepresenting the nature of the service or creating unrealistic expectations
Promising a non-smoking room when none are available
Quoting a short wait time when actual wait times are much longer
Quoting only partial prices or prices for the least desirable service options
Exaggerating the benefits of a specific service offering
Misrepresenting the credentials of the service provider
Creating a false need for service
Customer manipulation
Giving away a guaranteed reservation
Engaging in excessive overbooking of capacity
Changing customer appointments for illegitimate reasons
Performing unnecessary services
Overcharging for services
Attempting to pad a bill with hidden charges
Failing to indicate when a gratuity has been added to a bill
Hiding mistakes or errors in service delivery
Hiding damage to customer possessions
Making it difficult to invoke a service guarantee
General honesty and integrity
Treating customers unfairly or rudely
Being unresponsive to customer requests
Failing to follow stated company policies and procedures regarding service delivery
Sharing customer information with third parties without permission
(Adapted from Schwepker & Hartline, 2005)
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Section 2
Business ethics (and marketing ethics as a subset of that inquiry) therefore focuses upon
the nature of human and organisational conduct undertaken in the course of the business
of that organisation. For managers, ethics in the workplace refers to rules (standards and
principles) governing the conduct of that organisation and the individuals within it. Ethical
behaviour in an organisational context therefore relates to:
behaviour that is consistent with the principles, norms, and standards of business
practice that have been agreed upon by society.
(Trevino & Nelson, 2006)
Business ethics and appropriate ethical practice require clear analysis and determination of
that which is intrinsically the ‘right’ action at the individual, group, organisational or
industry level in any given circumstance.
Identification of the ‘right course of action’ might well compete with other individual or
organisational imperatives, not least those associated with alternate courses of action that
will readily deliver more efficient or effective performance or the generation of higher
levels of profit or commercial advantage. Often, even when individuals know what the right
thing to do is, they find it difficult to do because of organisational or industry pressures.
Ethical marketing managers will need to make choices at each of the levels cited above to
ensure consistency of purpose and equity in behaviour.
Trevino & Nelson (2006) identify three basic steps that managers can apply in seeking to
establish and resolve ethical dilemmas:
1. moral awareness – recognising an ethical dilemma is present
2. moral judgement – deciding what is right or wrong in the case in question
3. ethical behaviour – doing the right thing in the actions that follow
In order to ensure that decisions are taken in an ethical manner, ethical decision-making
must take into account the characteristics of the individual decision-makers, and the
characteristics of the organisation and industry within which they operate, as illustrated in
Figure 2.4.
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Figure 2.4 Ethical decision-making model
(Trevino & Nelson, 2006: 16)
Managers, supervisors and co-workers have a significant impact on individual ethical
decision-making within organisations. Managers set the context for action, evaluation,
reward and punishment. The predominant ethical climate will be heavily influenced by the
quality and the content of the leadership and direction provided by managers. Supervisory
staff provide immediate, intermediate guidance and support – a bridge between
management and co-workers – and will often have the benefit of practical experience to
reinforce guidance on ethical decisions. Colleagues and co-workers provide a direct
reference point for ethical decision-making and behaviour. Decision-makers who associate
with others that behave unethically will be more likely to behave unethically as well.
Organisations must pre-plan if they are to be able to manage the wide variety of
opportunities that will occur where ethical decisions must be taken in a controlled,
directed and effective manner.
Pre-planning, the existence of codes of best practice, clear human resource management
reward policies and customer-service requirements will all help to mitigate inappropriate
behaviour and guide appropriate decision-making in any particular context. As with any
other activity, ethically sound organisations plan and organise marketing activity within the
context of well established, widely agreed and encouraged codes of practice and guidance.
In Section 9.3 (Ethical issues in marketing research) you will learn about such codes of
practice that now regulate marketing research practice in terms of the contact and access
to people, particularly children and the vulnerable.
Summary
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Section 2
The Strategic Marketing module adopts a value-based approach to marketing. In this
section we introduced you to the concept of value and values, and examined how these
yield advantage to the organisation.
Further resources
Smith, B, Wilson, H & Clark, M (2006) Creating and using customer insight: 12 rules of best
practice. Journal of Medical Marketing, 6 (2), 135–9
Ferrell, O C (2005) A framework for understanding organisational ethics. In: Peterson, R A
(ed) Business Ethics: New Challenges for Business Schools and Corporate Leaders. New York:
M E Sharpe
Hartley, R F (2006) Perrier – overresponding to a crisis. In: Marketing Mistakes and Successes,
10th ed. John Wiley & Sons, Chapter 8, pp119–27
Payne, A F, Storbacka, K & Frow, P (2007) Managing the co-creation of value. Journal of the
Academy of Marketing Science, 36 (1), 83–96
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Section 3 Types of marketing
Aims and learning outcomes
Aims
The aim of this section is to:
recognise the different roles of marketing in a range of contexts and types of
organisations
Learning outcomes
After working through this section you should be able to:
identify the key features of the various types of marketing reviewed in this section
understand the relationship between the role of marketing and the type of
organisation
Introduction
While marketing has its roots within the commercial sector there has been a growing
awareness of the contribution that marketing practices can offer within other types of
organisations, such as not-for-profit (charities, arts, etc), politics, and so on. Some of these
were highlighted at the start of Part 1, and we return to them briefly in this section to
discuss some of the important differences in the types of business and social context to
which marketing is applied today.
The module textbook gives insight into how to organise the marketing function, the
evolving roles and tasks of the marketing manager, including how recent developments
affect the role of marketing in the organisation.
3.1 Product vs services marketing
As mentioned earlier, classical marketing arose with the development of mass production
of goods, which opened up markets for a wide range of products. We can therefore think of
products as tangible goods offered in t...
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