Why is Marketing Important to a Business?

The ‘marketing’ in any business organization addresses pertinent business aspects that make its role indispensable to every business entity. A functional marketing unit paves the path for the organization to achieve its goals, objectives, mission and vision.

Factors showing the Importance of Marketing to a Business

Aspects important to business addressed by marketing include:

1. Business Environment Scanning

The marketing department performs the function of business environment scanning. The field staff fill in field observations in their daily report formats. Marketing executives and managers regularly collect and organize marketing intelligence from published reports and direct interaction with customers, vendors and other industry players. The back office marketing staff gathers customer information from order forms and maintains relevant customer data.
Marketing information systems, a part of the MIS of the organization, utilize research and decision support systems to analyze and interpret market intelligence and data. Market intelligence enables marketing managers to conduct SWOT analyses, five forces analyses, grid analyses, demand forecasting, and future course marketing plans and programs.

2. Demand Generation

The marketing function generates demand for the products and services of an organization and ensures timely placement of orders by wholesalers, retailers and end customers. Demand fulfilment of end customers or business customers in the supply chain results in cash inflows when customers buy the firm’s products and pay the stipulated price.

3. Demand Forecasting

Based on market intelligence, marketers present their demand forecast and support their reports with data and findings. Based on demand forecasts presented by the marketing department, the organization can plan its products and productions. Marketers in demand forecast reports can present:

• Forecasts for present products
• Forecasts for new products
• Forecasts for present markets
• Forecasts for new markets

4. Strategy Formulation

The marketing department works on product, price, place and promotion strategies. A strategy is a plan that is implemented considering the existing business environment scenario and the expected changes. In the face of changes, strategy formulation and implementation come into play as older plans give away and help the organization realize its goals and objectives.

5. Product Planning

A product or service is the offer a firm makes to its customers. A production or distribution firm can have a solo product or an expanded product space in product length, breadth, and depth dimensions. The marketing department gathers product intelligence from markets that suggest whether to expand or contract product lines, what new products can be introduced, whether derivatives should be modified, should new processes or technology be availed and other related issues. Product planning also considers layers of products that can be offered to different customers, starting from rudimentary to augmented product offers. Packaging, labelling and branding decisions and product life cycle marketing also fall within the purview of product planning.

6. Market Planning

The marketing department also presents market plans based on market intelligence and sales reports. A market plan for a firm’s offers presents:

• Market segmenting, targeting and positioning plan (STP)
• Current market segments size, growth and attractiveness
• The size of current market segments served
• The size of current market segments not served
• New markets segments size, growth and attractiveness
• Market penetration and market expansion plans
• Consumer behavior studies and marketing implications.

7. Promotion

Marketing helps in the promotion of the products in the following way:

• Charting out a promotion strategy
• Message and content strategy
• Regular promotion and advertisement campaigns
• Choice of promotion media and channel mix
• Digital marketing campaigns and SEO
• Setting of promotion budgets
• Sales promotion
• Contracts with external advertizing and promotion agencies
• Brand promotion and brand endorsement
• Event management
• Monitoring effectiveness of promotion campaigns.

8. Pricing

Marketing helps in the Pricing aspects of business as follows:

• Pricing of a firm’s offer concerning value proposition
• Pricing of firm’s offer for product-market positioning
• Pricing bases and transparent pricing breakup
• Announcing price cuts or price raise
• Adjusting of prices to accommodate inflationary pressures
• Adjusting of prices to accommodate for changes in inputs
• Rapid penetration or slow penetration pricing
• Rapid skimming or slow skimming pricing
• Product price for wholesalers, retailers and end customers
• Ceiling price, floor price and maximum retail price
• Unit order, small order and bulk order pricing
• Product export pricing
• Product life cycle pricing for product introduction, growth, maturity and decline phases.

9. Sales and Distribution

The sales and distribution function ensures the all-time availability of a firm’s offer at the selected POS (Point of sales) and intermediary channels. The sales and distribution department address the following aspects of business:

• Appointment of distributors, wholesalers and retailers
• Appointment of franchisees and marketing agents
• Appointment of exporting intermediaries and channels
• Recruitment and training of sales staff
• Management of intermediary channels and salesforce
• Management of company retail outlets and showrooms
• Territory mapping and area planning.

10. Customer Relationship Management

Customers are the pivotal stakeholders of the business. A firm’s customers are the entities that buy the firm’s products. For a producing firm, the customers can be business entities of the supply chain, namely the distributors, wholesalers, retailers, industry customers. Customers are also the end-users who buy a firm’s products from the channels or directly from their online site. Customer satisfaction occupies an essential business plan, and hence most marketing departments have dedicated customer servicing staff.

The CRM unit of the marketing department looks into the following aspects of business:

• Maintaining existing customer database
• Categorizing of existing customer database into high, medium and low purchasers
• Monitoring the customer database and introducing offers
• Assessing customer profitability and cost of customer retainer ship
• Planning and implementing customer loyalty programs
• Designing customer interaction and feedback
• Undertaking customer surveys
• Responding to customer complaints
• Monitoring customer post-purchase behavior and repeat purchase requirements
• Product installation and maintenance services at customer site.

11. Public Relations

The public relations function of marketing deals with maintaining a positive image of an organization and its products, services and brands in the public’s minds. The PR department of marketing monitors public sentiment and releases communications for the public that enhance or sustain the corporation’s image and its offers. Any negative news or lousy publicity is immediately attended to by PR that undertakes to clear fallacies and negative word of mouth through a press release, press conference and media communications.

Conclusion

Marketing is a dynamic function in any business enterprise. The marketing strategies, programs and plans do not remain static. Still, they are revised and modified in light of the current business scenario to address the opportunities and threats present in the current marketing situation and pave the way for the organisation’s future progress. Check the difference between finance and marketing.