4.1: The Role of Marketing

What we will study?

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By the end of this unit you should be able to:
  • Understand what marketing is and the role of marketing
  • Recognize the difference between market orientation and product orientation
  • Differentiate between commercial and social marketing
  • Identify market characteristics
  • Evaluate the importance of market share and market leadership
  • Compare and contrast the marketing objectives of for profit and non-profit

Key terms

  • Marketing: The management task that links the business to the customer by identifying and meeting the needs of customers profitably – it does this by promoting the right product at the right price at the right place to the right customers.
  • Market size: The total level of sales of all producers within a market.
  • Market growth: The percentage change in the total size of a market (volume or value) over a period of time.
             -  Total revenue or quantity the firm generates / Total revenue or quantity the whole industry generates.
  • Market share: The percentage of sales in the total market sold by one business.

Types of markets

Consumer markets:  Markets for goods and services bought by the final user of them.

Industrial markets: Markets for goods and services bought by businesses to be used in the production process of other products.

Types of market orientation

Market Orientation: Satisfy the increasingly demanding consumer base empowered by knowledge and information. Product decisions on consumer demand, as established by market research.

Product Orientation: Concentrating solely on the strength of their product and effectively ignoring the needs of the market.

Other types of marketing

Social Marketing: It is an attempt to balance three concerns: company profits, consumer wants, society’s interests.

Marketing by the government or non-for-profit organizations that seeks to meet the negative externalities in society or promote the positive externalities is referred to as social marketing. This “cause” related marketing such as posters that state “smoking is bad for your health” or “wear your seat belt” are designed to change habits, values, promote action or alter behaviors patterns. Value related campaigns such as promoting tolerance are popular in multicultural nations. Social marketing is subsidized by government programs and continually seeks to promote beneficial services or products. 

An amazing example of very clever social marketing

Asset-led marketing: Asset led marketing uses product strengths such as the name and brand image to market both new and existing products. With asset led marketing, Marketing decisions are based on the needs of the consumer and the assets. When a business bases its marketing mix on what the business sees as it's internal strengths, the business's marketing is said to be 'asset-led'. A good example of this is basing an expansion strategy on a well-respected brand name. So Disney launched it’s cruise holidays under the Disney brand with the focus on family fun. Brand is not the only asset that can be used as a basis for a marketing strategy, the asset may be actual or perceived technological lead e.g. Apple, or distribution network e.g. Walmart.

The marketing plan

Marketing strategies explain how the marketing function fits in with the overall strategy for a business. Examples of marketing strategies could be:
Business Strategy

Grow sales



Increase profits

Build customer awareness
Example Marketing Strategies

  • Launch new products
  • Expand distribution (e.g. open more shops)
  • Start selling products into overseas markets
  • Increase selling prices
  • Reduce the amount spent on television advertising 
  • Implement a public relations programme
  • Invest more in advertising
Once a strategy has been identified, then the business must develop an action to turn the strategy into reality. The starting point for this plan is the setting of marketing objectives. Marketing objectives are the specific targets for marketing set by the business to achieve their corporate objectives.
Examples of marketing objectives might be:
  • Increase sales by 10%
  • Launch a new product by the end of the year
  • Achieve a 95% customer satisfaction rating
  • Increase the number of retail outlets selling our products by 250 within 12 months

It is important for a business to set marketing objectives because managers can then have targets for their work. They can then measure more effectively the success or failure of their marketing strategies to achieve these objectives.
Adapted from Tutor2u.net

Advantages and disadvantages of marketing plans?

Well this all dependents on the quality of the plan. Any good plan should have been made in consultation with different departments, imagine a plan that called for a huge expense on promotion but had not been approved by the Finance Department.......... Disaster! If plans are linked to SMART objectives it will have a greater opportunity for success, but a good plan in itself is not enough if it is not reviewed and reevaluated periodically to take into account changes in external and internal conditions. 

Textbook review

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 The Role of Marketing – Introduction to Basic Concepts

1.   Define the term marketing  (p179)                                                                                                   
(2 marks)
2.   List three external factors that determine the growth or decline in a market size?     (p180)           
(3 marks)    
3.   Clearly explain the difference between a market and product orientation?  (p181)             
(2 marks)
4.   How is the marketing of services different to the marketing of goods?  (p182)                      
(2 marks)
5.   In a paragraph response, explain the main elements of a marketing plan?  (p185)                
(6 marks)

Key terms