Marketing CompetenceDefining Marketing and Its Ingredients - Marketing Competence

Defining Marketing and Its Ingredients

“Marketing is still an art, and the marketing manager, as head chef, must creatively marshal all his marketing activities to advance the short and long term interests of his firm”

Neil Borden famously put it in 1984: “Marketing is still an art, and the marketing manager, as head chef, must creatively marshal all his marketing activities to advance the short and long term interests of his firm”. This was when he first coined the catchy phrase “Marketing Mix.” However, back then he was referring to a quite different meaning for the marketing mix than the one we have today. Still, reading his article now, and his reference to James Culliton who describes “the ‘decider’ as an ‘artist’ and a ‘mixer of ingredients’ who sometimes follows a recipe prepared by others, sometimes adapts a recipe to the ingredients immediately available, and sometimes experiments with or invents ingredients no one else has tried”, makes me think that today’s businesses should be reminded what the ingredients are and where to look for recipes. The amount of research and literature on the topic since 1984 has grown exponentially. Marketing has gradually become the leading business philosophy. The current business environment has reached new heights in turbulence, instability, uncertainty and volatility. Globalization and the rise of internet have increased competition dramatically. Modern management is constantly forced to study and analyse trends of all kinds – environmental, economic, political, social, technological, etc. Modern management has to read patterns, recognize threats, produce long-term strategies to secure future competitive positioning and adapt rapidly so that it can defend its current strengths. The strategic scope has shrunk, agility has become necessity. That’s why in this competitive landscape the top management of every company is obligated to develop strong understanding of marketing discipline and of all of its “ingredients” as well.

“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.”
(The Chartered Institute of Marketing, 2015)

“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.”
(American Marketing Association, Approved July 2013)

“The achievement of corporate goals through meeting and exceeding customer needs better than the competition”(Jobber, 2010)


The US management consultancy industry alone generated an overwhelming 39 billion USD in revenue, whereas the global strategic consultancy hit 38 billion USD, and the global marketing consulting accounted for another 16 billion USD. That was in 2013, with an average growth at not less than double digit across different areas, marketing and sales being amongst the fastest growing at 25%.

Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competences and gain sustainable competitive advantage. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and services that justify higher prices. Competitive advantage is sustained when strategy creates such customer value that is too costly to be imitated or impossible to be duplicated by the competitors. Diversified companies should have competitive, corporate or company-wide strategies for each of their business units. Corporate strategy defines what businesses should the corporation be in, and how much resources should be allocated to each of the business units. Hence, the whole adds up to more than just the sum of its units.

As it turns out, not only it sounds amazing, strategy is a pretty significant thing. Yet, so many companies fail to have a strategy while their top management avoids making strategic decisions. Why? Partly the problem is that managers simply do not understand what strategy is. Having vision and mission statement is not strategy. Things get worse as managers develop wrong understanding and mislead themselves that they make strategic decisions when, in fact, they make product decisions, operational effectiveness decisions, and growth decisions. Most probably they have strategic implications but do not address comprehensively the main question of achieving sustainable competitive advantage. These decisions should support strategy implementation, rather than form strategic directions. How is strategy formulated and implemented then? There are dozens of strategic approaches and tools. The process of strategy development, formulation and implementation is dynamic and includes three main activities: strategic analysis, strategic choice and strategic implementation. The tricky part is that one cannot be done without considering the other. Therefore, for the management to be able to make an informed decision about its strategy it needs to develop solid in-depth knowledge for its own company: resources, capabilities, skills, culture, processes, structure, etc. as well as knowledge for its suppliers, competitors and customers. To collect that data in a somewhat structured manner, put it on that table and make sense of it, one has to read patterns and draw insights. This is not a walk in the park. It is hard work and it requires proper equipment. This equipment comes in the form of frameworks and tools for analysis. These tools and frameworks are underpinned by management and marketing theories. Such theories signify the collective business knowledge of the past and, along with the great business leaders, shape the vision for the future. And future is what strategy is all about. If a business has no strategy, it has no future.

Marketing Management

Marketing management is the functional discipline of marketing within an organization. If strategy is done by the C-level executives and is future oriented, day-to-day marketing should be dealt in some way. Usually in a larger companies and B2C businesses the functions of marketing are delegated to a Marketing Department, which will have its marketing management and team. Smaller businesses tend to split marketing functions across business units, sales teams and top management. Either way these marketing-responsible personnel have to make decisions on a daily basis to address marketing core decisions.

Marketing Analysis and Planning

Marketing analysis is a set of activities organized towards detailed examination of the elements of the company, its structure, the industry it operates in – the competitors and the suppliers; and the markets it serves to – the customers. The tools and frameworks for the marketing analysis are the same that are used for the strategic analysis. Every company should develop its own unique sub-set of tools that is applicable to the company’s nature, industry and market. Simply, there isn’t a functional business that lacks marketing analysis in one form or another. For example, such marketing analysis may include:

  • Estimation of the size and attractiveness of a new or existing geographical market or the potential of a different product group;
  • Gathering intelligence for competitors’ products and prices;
  • Exploring new suppliers;
  • Trying to understand customers’ needs better as well as what they value in the company’s offering – lower prices, more features, bigger warranty, etc.

 The underlying idea here points out that instead of relying on myths and rumours, managers can make better informed decisions based on real data. This type of data though is usually collected in a chaotic manner and does not have structured approach. Respectively, it may result in ambiguous information and wrong decisions. Therefore, it is important for every business not only to collect that data, but to have a clear blueprint what data to collect, put it on a framework and make sense of it in advance.

The product of the marketing analysis is a marketing plan. The actual process is marketing planning. The marketing plan is detailed blueprint of how a chosen marketing strategy will be executed. A marketing plan is concerned with answering the following 3 questions: Where are we now? Where do we want to be? How do we get there? A marketing plan could be developed on a corporate level, business unit level and product level. The process is the same. So is the content. A quality marketing plan will be based on the business mission as a derivative of the strategic analysis and serves as the ultimate goal. It must have clear marketing objectives tied to a time schedule and backed up by the necessary resources and budget. As we already noted all of the strategic and marketing activities are interconnected and interdependent so the strategic marketing management and the marketing management are done simultaneously with close consideration of the elements of one other. The marketing analysis, planning and implementation are subject to persistent control, refinement and adjustment.

Segmentation, Targeting, Positioning

“If you’re not thinking segments, you’re not thinking” Ted Levvit wrote imperatively in his book Marketing Imagination. Segmentation comes naturally as a logical extension to the marketing concept. Still, customers have different needs and wants and they see the value of a company offering differently. Therefore, in order for a company to position itself with a higher value in a customers’ minds vis-à-vis competition, it needs to differentiate its product or service and tailor it to that particular customers’ requirement. In an ideal world every customer would represent its own segment and would have its unique offer – that is the so called customized marketing. That is of course impossible in the general case. Hence, the marketing manager looks for similarities or differences amongst the pool of customers and sub-divide them into market segments further on. Every segment is targeted with a dedicated to that segment marketing mix, including its specific products, prices, channels of distribution and promotional activities. Each marketing mix is positioned as providing superior value to the target segment either through better prices or higher level of benefit. This is the differentiated marketing approach. In contrast to it stays the undifferentiated or so called mass marketing. Under mass marketing concept the company treats its market as a segment of one and has only one marketing mix. This produces economies of scale, even though it limits differentiation possibilities dramatically. The decisions about market segmentation have a profound effect on business performance and may result in increased customer value and satisfaction as well as increased sales and profits. Yet, if it is not done properly, the results can vary from wasted time and resources to more catastrophic scenarios such as bankruptcy.

Marketing Mix

The modern concept of marketing mix is probably the most popular and widely applied marketing model. It has been defined as 4P and its extended version – the 7P. The 4P – product, price, place, promotion – is generally accepted for businesses which produce goods. The extended version of the 7P was initially developed for service dominant businesses and added people, processes and physical evidence. Both could be successfully utilized as long as decisions are made on the following points:

  • Product – How does the product or the service deliver value for the customer and what type of needs does it satisfy. Decisions have to be made about each of the value drivers that characterize the product: design, packaging, features, quality, branding, installation, warranty, etc. Decisions about the product mix -combination of products applicable to certain market segments – have to be made as well.
  • Price – Decisions about the pricing strategy. Different approaches can be employed, thus setting the price based on the costs; the price based on the perceived value and the price based on the competition out there. Market penetration or market skimming strategies. Product bundle pricing, product line pricing, optional product pricing and so on.
  • Place – Decisions about the distribution of the product. Which geographical markets should be served and how? What channels should be employed – selling to end-customers or selling through agents? And, finally, what type of strategy – intensive, selective or exclusive distribution?
  • Promotion – Decisions based on how to create awareness and communicate the value of your product within customers, stakeholders and the general public. Typical promotional activities include: advertising, personal selling, sales promotions, PR and on-line marketing.
  • People – Decisions based on the skills and knowledge of the people that will execute the service. Decisions on the behaviour and appearance of the people that will be in contact with the customer.
  • Process – Decisions about the process that will lead to execution of the actual service. Communicating that process with the customers. Revealing the process reassures customers about the quality and the value of the service.
  • Physical Evidence – Due to the intangible nature of the service, physical materials serve as evidence for the quality and benefit of the service. The physical evidence comprises all sorts of things. Like the physical environment, for instance, where the service is delivered through the ambience and the spatial layout, as well as through business brochures, headed papers, invoices, staff uniforms and many others.

Buyer Behaviour

Buyer Behaviour is a discipline within marketing that is concerned with understanding how and why customers behave and react to market interventions. It studies the concepts of customer satisfaction, perceived value, perceived quality, dissatisfaction, complaining, loyalty, price response, advertising response, worth-of-mouth, demand, customer acquisition and defection amongst the most important aspects of Buyer Behaviour.

Integrated Marketing Communication – IMC

Typically for a marketing concept there are few definitions for IMC amongst which the most comprehensive one is given by Schultz and Schultz, (1998): “IMC is a strategic business process used to plan, develop, execute and evaluate co-ordinated, measurable, persuasive brand communication programmes over time with consumers, customers, prospects and other targeted, relevant external and internal audiences.” In other words, IMC is the collaborative effort to communicate the value proposition with customers, shareholders and employees. The typical IMC mix includes the following main components, usually referred to as the “Big 5”: Advertising, Sales Promotion, Public Relations, Direct Marketing and Personal Selling. Additionally to these core elements, IMC employs on-line marketing, Sponsorship, Exhibitions, Field Marketing, Point of sale, Worth of Mouth and Internal Communications. The modern concept of IMC calls for shifting of the traditional transactional nature of the business towards relationship building with the customer. IMC is aligned with the company strategy as well as objectives and reflects on the decision of the marketing mix and target audiences defined by the segmentation process. Every company should develop its unique IMC mix in regards to the type of business (B2B or B2C), type of goods or services and type of industry it competes in.

Market Research

This is the process of gathering, analysing and interpreting information about a market, a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service. What is more, it includes thorough research into the characteristics, spending habits, location and needs of your business’ target market, the industry as a whole, and the particular competitors you face. This definition suggests that market research is a vast filed. Most of the companies do market research in one way or another. It could be done internally – by the company itself or it could be delegated to third parties – usually specialized agencies. The market research process is complex and may be time-consuming and expensive. Marketing oriented companies heavily rely on market research for different purposes – market segmentation, competitors and industry analysis, product development, advertising development, advertising effectiveness measurement, customer satisfaction measurement and so on.


As we have already prompted, business is about exchange. The arena where the exchange takes place is the market place. And as the name suggests, marketing is the science or the art, whichever ones prefers, examining the place itself and all the players involved. Many still think marketing is only expensive advertising, fancy brochures and pretentious PR. In fact it is much more than this. Real marketing is about analysis, planning, developing and executing. It is about understanding the industry environment, examining the competitive landscape and predicting social, environmental as well as   technological shifts. But it’s also about grasping company`s unique capabilities, defining core competences and recognizing value creation activities in the company. It implies that marketing is actually multi-disciplinary function which must take into account immense amount of diverse information.

So, we thought that a more structured scientific approach may come handy as opposed to a chaotic, rumour-based manner of leading the marketing of a company. And this structured scientific approach comes down to few fundamental pillars. The first thing is the strategy – giving answer to the question how a company will fight for and fight back its sustainable competitive advantage. The marketing strategy will point out the direction and will outline the path to get to that desired state in the future. Marketing strategy formulation will cast light on fundamental aspects of the business: its strengths, capabilities, unique skills and resources which will form the core competence of the business. In addition to this, it will also define the business competitive positioning through the prism of its competitors, suppliers and customers. Based on the company strategy a business will develop its marketing plan. The marketing plan will further utilize marketing specific analytical approaches to define market size and attractiveness, consumer behaviour, perceived value, customer profiling and so on. Ultimately, it will make decisions on segmentation, targeting and positioning. The next step is the marketing mix and branding decisions. Eventually, when the whole package is ready, the business will seek to employ the integrated marketing communication mix to spread the word for the business and to communicate the value of its offering.


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Hooley, G.J., Saunders, J.A. and Piercy, N. (1998) “Marketing Strategy and Competitive Positioning”, Prentice-Hall International

Levvit, T., (1986), “The marketing Imagination”, Free Press

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Mintzberg, H., (1987), The Strategy Concept I: Five Ps for strategy, California Management Review, Fall, pp 11-24

Porter, M., E., (1985), “Competitive advantage: creating and sustaining superior performance”, Free Press

Porter, M., E., (1987), “From competitive advantage to corporate strategy”, Harvard Business Review, May-June, pp. 43-59

Porter, M., E., (1996), “What is strategy”, Harvard Business Review.

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Sager, I., (2013), “Where the Growth Is in Management Consulting” [on-line] Available from: [Accessed: 28/08/2015]

Sirmon, M.A. Hitt, and Ireland, (2007), “Managing firm resources in dynamic environments to create value: Looking inside the black box”, Academy of Management Review, 32: 273–292.

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