Marketing is cross functional and not a stand-alone function
Marketing has been seen as the function that drives an organization due to its sheer proximity with the consumer. Like other functions, marketing works as a separate department with its own objectives and goals, which are in line with those of the organization.
This paper does treat marketing as a department – it views it as a philosophy.
The issue being explored here is that can the philosophy of marketing be made cross-functional? The idea of marketing becoming inter-functional is related to the idea of customer orientation of an organization. Peter Drucker in 1954 had suggested that to be truly customer-centric an organization must adopt the marketing concept, which entails that the key to achieving its organizational goals consists of the company being more effective than its competitors in creating, delivering and communicating customer value to its chosen target markets. One of the steps that help adopt the marketing concept is integration of functions.
If customer satisfaction is the goal of the organization then marketing alone cannot be expected to meet it. Customer satisfaction is heavily dependant on the performance of other departments, which necessitates the need for marketing to involve itself with other functions.
The marketing concept however is very difficult to implement however brilliant it may conceptually. Very few companies have been successful in doing the same. This paper details the case of Wolverine Controller Company, an Indianapolis based producer of flow controllers, which is an excellent example of marketing becoming a cross functional organization. This should serve as a model for organisation that intend to adopt the marketing concept and become cross functional in its approach.
“Marketing is cross functional and not a stand-alone function”
1. Have marketing departments delivered?
Henri Fayol, who is regarded as one of the founding fathers of the management science, had said that no management principle is absolute by itself and cannot be applied with the same effect in a similar situation. Modifications to the approach must be made depending on the problem at hand and the situational variables that affect it. This belief is based on a simple premise that recognizes that each problem is unique and merits an unique solution. However, modern practioneers merely acknowledge his contribution and but do not seemed to heed his advice. They choose to apply solutions that have worked in the past.
The ever-mystifying phenomenon called the consumer, who continues to be under the scrutiny of all organisations. They spend years understand how they behave in the hope that the marketing efforts can be more focused and profitable. Traditionally, the understanding of a consumer has been typically a function of the marketing department, which acts as the ‘contact point’ between the company and the consumer. How effective have marketing departments been in this regard?
To be fair, marketing departments of companies across categories have displayed a sound knowledge of the consumer using sources like studies commissioned to marketing research firms, inputs from their sales forces, primary research etc. But at the same time marketing professionals have realized that with consumer behaviour is becoming increasingly difficult to ascertain and predict using conventional investigational tools. Sometimes such tools have proved to be grossly inadequate in understanding consumer behaviour. For instance conventional information gathering techniques used in market research like the five point Likert’s scale have proved to be unsuitable for rural research. So there is a silent agreement that true knowledge of the consumer is not best obtained methods being practiced by existing marketing departments of organisations.
But the more relevant issue here is – have marketing departments been able to deliver on its basic tasks – the planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals?
Companies in the past and today have recruited the brightest minds for the marketing department. But the marketing department in the past lacked clarity in functioning, which is also the case with many companies today. For all practical purposes the difference between sales and marketing took the entire 90’s decade to be established. The best perspective about marketing efficacy came from the President of the one of the “Big three” automobile companies who said in 1980 said“ .. the auto companies are in the Dark Ages. They confuse sales and marketing. The ‘sales and marketing guys’ are all sales guys. They don’t sell cars to the public, they sell them to the dealers….”
Marketing professionals are also to blame equally. For most marketing is just the 4 Ps. These just provide an operational framework but most companies rarely look beyond them for marketing mix variables Companies like Harley-Davidson and Virgin have steered cleared of the trodden path and set new standards in marketing. They have used a mixture of techniques like buyer clubs, unconventional advertising and public relations to create customer-focused solutions. Like traditional marketing companies like Procter and Gamble they too have been successful companies. So is there some aspect that traditional firms have not looked at?
To some extent yes. Marketing has been accorded the exalted status of reaching out a company’s produce to a suitable customer. To succeed in it’s task it has looked at well established functions like sales, advertising, market research and external resources like distribution. However, it has rarely looked beyond the marketing department and marketing-related functions to accomplish it’s mission. Unfortunately marketing departments themselves became an organization entity within companies, which spent more time reconciling the disparate views of sales and marketing rather concentrating on their assigned functions. Marketing departments are not known to consider other departments as their partners in the task of reaching out to consumers, which may not be the correct assumption to make. They choose to direct the functions of departments like R&D and manufacturing to suit consumer needs and yet do not involve them in the process of delivering customer value. Hence it would be fair to conclude that the manner in which marketing has been practiced has not integrated the other functions of an organisation. This is a sheer waste of available resources. But then the question is should marketing strive to become cross-functional?
2. The failure of the marketing concept
The prominence given to the marketing function stemmed from the adoption of customer orientation as an approach in the early 1950’s. This was primarily due to the writings of Peter Drucker who propounded the concept of customer orientation in his book The Practice of Management where he addressed a fundamental question – what is a business? In his view the objective of a business was not to make to profits, its purpose was to create customers and profits were a result of gaining customers.
He stressed on the importance of marketing and not sales was the key to growing business along with innovation. He cited the example of Cyrus McCormick, the inventor of the mechanical harvester, who also invented market research and analysis, the concept of market share or standing, modern pricing policies, sales/service specialists, after sales service and customer credit way back before the middle of the 19th century. He stated that the European businesses were sales oriented and had hence stagnated.
Drucker went on say, “Marketing is not only much broader than selling, it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of the final view of its final result, that is the customer’s point of view.”
This signaled the shift from what is today known as the selling concept to the marketing concept1. Drucker’s views were based on GE’s development of a new marketing approach, which integrated all marketing functions and an analytical perspective based on market research that had been adopted in 1950. In fact in their annual report of 1952 they proclaimed the customer had been put first in the process of production planning, attempting to build consumer appeal into the product design stage. The report stated the marketing man would be introduced at the beginning of the production cycle instead of the end and would integrate marketing into each phase of the business. GE became the vanguard in implementing the marketing concept by understanding the customers drive markets and not products. In addition companies like IBM, Procter & Gamble, General Foods, Xerox and HP have championed the marketing concept.
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