Planning Marketing: Partnering to Build Customer Relationships
The company’s strategic plan establishes what kinds of businesses the company will operate and its objectives for each. Then, within each business unit, more detailed planning takes place. The major functional departments in each unit—marketing, finance, accounting, purchasing, operations, information systems, human resources, and others—must work together to accomplish strategic objectives.
Marketing plays a key role in the company’s strategic planning in several ways. First, marketing provides a guiding philosophy the marketing concept that suggests that company strategy should revolve around building profitable relationships with important consumer groups. Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and assessing the firm’s potential to take advantage of them. Finally, within individual business units, marketing designs strategies for reaching the unit’s objectives. Once the unit’s objectives are set, marketing’s task is to help carry them out profitably.
Customer value is the key ingredient in the marketer’s formula for success. , marketers alone cannot produce superior value for customers. Although marketing plays a leading role, it can be only a partner in attracting, keeping, and growing customers. In addition to customer relationship management, marketers must also practice partner relationship management. They must work closely with partners in other company departments to form an effective internal value chain that serves customers. Moreover, they must partner effectively with other companies in the marketing system to form a competitively superior external value delivery network. We now take a closer look at the concepts of a company value chain and a value delivery network.
Partnering with Other Company Departments
Each company department can be thought of as a link in the company’s internal value That is, each department carries out value-creating activities to design, produce, market, deliver, and support the firm’s products. The firm’s success depends not only on how well each department performs its work but also on how well the various departments coordinate their activities
For example, Walmart’s goal is to create customer value and satisfaction by providing shoppers with the products they want at the lowest possible prices. Marketers at Walmart play an important role. They learn what customers need and stock the stores’ shelves with the desired products at unbeatable low prices. They prepare advertising and merchandising programs and assist shoppers with customer service. Through these and other activities, Walmart’s marketers help deliver value to customers. However, the marketing department needs help from the company’s other departments. Walmart’s ability to offer the right products at low prices depends on the purchasing department’s skill in developing the needed suppliers and buying from them at low cost. Walmart’s information technology department must provide fast and accurate information about which products are selling in each store. And its operations people must provide effective, low-cost merchandise handling.
A company’s value chain is only as strong as its weakest link. Success depends on how well each department performs its work of adding customer value and on how the company coordinates the activities of various departments. At Walmart, if purchasing can’t obtain the lowest prices from suppliers, or if operations can’t distribute merchandise at the lowest costs, then marketing can’t deliver on its promise of unbeatable low prices. Ideally, then, a company’s different functions should work in harmony to produce value for consumers. But, in practice, departmental relations are full of conflicts and misunderstandings. The marketing department takes the consumer’s point of view. But when marketing tries to develop customer satisfaction, it can cause other departments to do a poorer job in their terms. Marketing department actions can increase purchasing costs, disrupt production schedules, increase inventories, and create budget headaches. Thus, other departments may resist the marketing department’s efforts.
Yet marketers must find ways to get all departments to “think consumer” and develop a smoothly functioning value chain. One marketing expert puts it this way: “True market orientation does not mean becoming marketing-driven; it means that the entire company obsesses over creating value for the customer and views itself as a bundle of processes that profitably define, create, communicate, and deliver value to its target customers. . . . Everyone must do marketing regardless of function or department.”10 Thus, whether you’re an accountant, an operations manager, a financial analyst, an IT specialist, or a human resources manager, you need to understand marketing and your role in creating customer value.
Partnering with Others in the Marketing System
In its quest to create customer value, the firm needs to look beyond its own internal value chain and into the value chains of its suppliers, distributors, and, ultimately, its customers. Consider McDonald’s. People do not swarm to McDonald’s only because they love the chain’s hamburgers. Consumers flock to the McDonald’s system, not only to its food products. Throughout the world, McDonald’s finely tuned value delivery system delivers a high standard of QSCV quality, service, cleanliness, and value. McDonald’s is effective only to the extent that it successfully partners with its franchisees, suppliers, and others to jointly create “our customers’ favorite place and way to eat.”
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