F292 - Chapter 16


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  • Created by: Daisy
  • Created on: 22-04-11 15:11


 Definition of marketing - Identifying customer demand, satisfying customer demand and making a profit. Marketing consists of all three of these elements.

Significance of Marketing - The marketing department assists the business in the process of achieving their objectives.

Identifying Customer Demand-

  • A business needs to find out what customers actually want.
  • Even if a business has the most fantastic product, great promotion and a low price, if a customer doesn't want this then the business has wasted its money.
  • In order for the firm to find out what customers want the marketing department carries out market research.
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Satisfying Customer Demand and Making a Profit

Another aim of the marketing department - is to satisfy customer demand.

  • A firm identifys what the customer needs are through market research.
  • Then to satisfy there needs they use this information combined with the marketing mix to create a strategy. Then the aim of this strategy is to match supply with demand.
  • The firm must ask itself whether they are able to produce what the customer wants and if not whether they can convince the customer that they want the product.

Making a Profit

  • Firms do usually have a desire to make a profit as a stated objective.
  • Even organizations that do have a primary objective of making a profit, do still need to make a profit in order to avoid making a loss, and continue with the organization.
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Customer verus product orientation

The focus of marketing tends to place the customer at the heart of the process.

Traditionally firms employ one of two approaches -

  • Customer Orientation - This is where the business considers what the market wants before trying to produce it. Focuses on what customer want and then trying to break into that market.
  • Product Orientation-  Where a firm firstly produces a product and tries to convince the public and customers that they need it.

Most businesses must judge whether or not they are able to provide the customer with what they want or whether they should develop their idea and then use their skills in marketing to "Create" a demand in the market. It is a similar way that good marketing has helped create a demand for MP3 players.

In reality a business needs to adapt to the particular market that they are in, this may involve being both customer and product orientated at different times.

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The realtionship between marketing and other funct

The marketing department is just one aspect of the day to day operation of a business. Along with ;

  • Accounting and Finance
  • Marketing
  • Human Resources
  • Production 

All of these departments work together to achieve the stated objectives for the business.

However conflicts can sometimes arise between marketing and the other departments this could be for a number of different reasons.

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Accounting and Finance - conflicts with marketing

One of the key aims of the finance department is to control costs.

  • This could conflict with the marketing department because one of the key aspects of marketing is promotion.
  • Promotion can be quite be expensive and is unlikely to generate a return straight away.
  • Marketing research is another aspect of marketing and many important spending decisions are made based on its findings.
  • Market research can be costly and offers few guarantees as to it validity.
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Human Resources (People)

One of the aims of marketing is to create a demand.

  • An increased demand means that a company may have to employ more staff and or ask existing staff to work longer (entailing overtime pay).
  • On the over hand of the marketing department fail to generate sufficient demand and could mean that they may not need as many staff.
  • The aims of the departments contrast while the aim of the marketing department is to stimulate change. The Human resources department generally prefer stability.
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It is important that the marketing and production departments work close together.

  • A classic conflict between the two departments is the production department believing that they generate all the profit whilst the marketing department simply spends it. This is incredibly simplistic view but is an example of the kind of conflict that can go on.
  • If there in a customer orientated situation then the production department  needs to be involved in the market research process. As marketing cannot promise what production cannot deliver.
  • In a product- orientated situation, then the two departments need to work even closer together. As the production department needs to be able to convince the marketing department that what is being developed is saleable.
  • The marketing staff must be convinced so that they are can go on to convince the market about the value of the newly developed idea.
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Marketing Manager

A marketing manager makes decisions for the good of the marketing departments. Other stakeholders have different objectives

However good management  means everyone coordinating and contolling all areas enabling everyone to work together.

Conflict is much more likely in a struggling business.E.g during a struggling time a marketing manager may argue that increased spending is key to survival where as a finance director will take a different view.

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