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THE ROLE OF MARKETING


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SectionB2(e)ofthePaperFABStudyGuidestatesthatcandidatesshouldbeabletodescribetheroles
andfunctionsofthemaindepartmentsinabusinessorganisation:researchanddevelopment,
purchasing,production,directserviceprovision,marketing,administrationandfinance.Thenextsection
oftheStudyGuideamplifiestherequirementsinrelationtomarketing,settingoutthefollowinglearning
outcomes.

Explaintheroleofmarketinginanorganisation:
1. thedefinitionofmarketing
2. themarketingmix
3. therelationshipofthemarketingplantothestrategicplan.

Thisarticleprovidesanintroductiontotheseimportantmarketingconcepts.

WHATISMARKETING?
ThedefinitionofmarketingpublishedbytheUKsCharteredInstituteofMarketingisthemanagement
processresponsibleforidentifying,anticipatingandsatisfyingcustomerneedsprofitably.

Thereisnodoubtthatmarketingisamanagementprocess,asmostsuccessfulorganisationsregardit
asacrucialsetofcoordinatedactivitiesthatmustbedrivenfromthestrategiclevelofabusiness.Many
organisationshaveanexecutivedirectorwithfunctionalresponsibilityformarketingbut,evenifthisisnot
thecase,itisusuallynecessaryforastrategicmarketingplantobeputinplaceandimplemented,
consistentwiththegoalsandobjectivessetoutinthecorporateplan.

Despiteawidelyheldperceptionthatmarketingissynonymouswithselling,thedefinitionconfirmsthatthe
scopeofmarketingextendsfarbeyondsellingalone.Indeed,abusinessstrategybuiltonsellingand
withoutdueattentiontootherimportantmarketingactivitiescanhaveseriousshortcomings:the
customersneedsmaybeoverlooked,theorganisationmaysellgoodsandservicesthatthecustomer
doesnotneed,orthecustomermayhaveneedsfortheorganisationsproductsandservicesbutmay
purchasethewrongones.

Theessenceofmarketingiscapturedinthewordsidentifying,anticipatingandsatisfying.These
implyaprocessthroughwhichtheorganisationmustfindoutwhatcustomerswant,orcarryoutresearch
intowhatcustomersarelikelytowantinthefuture,andthenfulfiltheseneedsbydeployingitsresources
inanappropriatemanner.Theprocesshastobedynamic,asneedsandpreferenceschangeovertime,
renderingsomegoodsandserviceslesssuitablefortheirneeds,orevenobsolete.Therearecountless
examplesofproductsthathavefulfilledgenuineneedsinthepast,sometimesforlongperiodsoftime,but
haveeventuallybeensupersededbyalternativechoicesduetochangesinneeds,tastesand
preferences,orhavebecometotallyunnecessaryforconsumers.Examplesincludeaudiocassettes,
Super8cinefilmsandprojectors,twintubwashingmachinesandcashregisters.

Successfulbusinessorganisationsthereforeregardmarketingasacontinuousprocess,throughwhich
actualandperceivedcustomerneedsareconstantlyanalysedandmonitoredinordertofulfiltheseneeds
totheextentthattheorganisationsresourcesandcapabilitiesallow.

THEMARKETINGMIX
Themarketingmixisamodelusedwhenconsideringtherangeofactivitiesnecessarytoconstructand
implementacomprehensivemarketingstrategy.ItismostcommonlyexpressedintermsofthefourPs
ofproduct,price,promotionandplace.Placeinthiscontextreferstoallactivitiesassociatedwith
distribution.

Product
Thiselementofthemarketingmixconsidersthetechnicalfeatures,benefitsandlimitationsoftheproduct
orproductsofferedbythebusiness.Dependingonthenatureofthebusiness,productscanbephysical

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goodsorservices.

Thetechnicalfeaturesoftheproductareimportantbecausetheywilldeterminewhetheritwillmeetthe
actualoranticipatedneedsofthecustomer.Featuresareexpressedastechnicalspecificationsand
capabilities,andsometimesthelimitstowhichtheproductissubject.

Benefitsaretheutilitytothecustomerandconfirmwhatmaybeexpectedoftheproduct.Benefitshave
animportantroletoplaywhendevisingpromotionalactivities,andarethereforethecruciallinkbetween
theproductandpromotionelementsofthemix.

Someproductsaresubjecttoaderiveddemand,sothefeaturesmaybequitedistinctfromthebenefitsof
theendproduct.Forexample,nobodyactuallywantsamortgage,asthisrepresentsalarge,longterm
financialcommitment.Thebenefitliesinowninganapartmentorhouse,andwithoutthemortgage,of
course,fewpeoplecanrealisethisaspirationintheshortterm.

Productplanningconsidersthepositionoftheproductwithintheportfolioofproductsofferedbythe
organisation,andthepotentialcontributiontheproducthastomaketoitsfuturesuccess.Nearlyall
productsmaybeconsideredwithreferencetotheproductlifecycle.Thismodelsuggeststhatproducts
passsequentiallythroughvariousstagesovertime,withrevenuesincreasingthroughtheintroductionand
growthstages,thentailingoffandeventuallydecliningasshakeout,maturityanddeclinetakeplace.The
productofprofessionalfirmsistheservicestheyoffer,whicharemainlyintangiblebutmaysometimes
bedeliveredasreportsandotheroutputs.

Price
Thisrefersnotonlytothepriceoftheproduct,buttoallcostsrelatedtothepurchase.Itmaybe
expressedinmonetaryterms,arateofinterest,costs,fees,oracombinationofalltheseelements.The
pricemaybeaoneoffpayment,oraseriesofpaymentsovertime.Itmaybesubjecttotimelimits(such
asaspecialdealforalimitedperiod).Itmayalsobeconditionalonpurchasingotherproducts,ora
minimumlockinperiod,suchasamobiletelephonecontractwithaminimumduration.

Inthecontextofprofessionalservices,priceisexpressedasfeesorcharges.

Promotion
Promotionreferstoallactivitiesthatareintendedtoinformthecustomerandinfluencethepurchasing
decision.Therangeofpromotionalmediadeployedbyanorganisationissometimesreferredtoasthe
promotionalmix.Thisincludes:
advertising
directselling,suchasfacetofaceinteractionsandtelephoneoronlinesales
publicrelations
merchandising
sponsorship.

Promotionmaybehighlyspecifictoindividualproductsorarangeofproducts,ormayenhancebrand
recognitioninrespectoftheorganisationspublicimage.Insomecases,thenameoftheproductmay
becomesynonymouswiththeorganisationitself.Forexample,theballpointpenwasoncereferredto
routinelyasabiro,whichisboththeinventorssurname(LaszloBiro)andthenameofhiscompany.
Likewise,avacuumcleanerisstillcalledahooverbymanyconsumers,Hooverbeingthenameofjust
oneproducer.

Thepromotionalmixvarieswidelyfromorganisationtoorganisation.Fastmovingconsumergoods
producersrelyextensivelyonadvertising,whilelifeassurancecompanieshavetraditionallyuseddirect
sellingtoamuchgreaterextent.

Marketsegmentationcanbeusedforbothresearchandplanningpurposes.Itishighlyrelevantwhen
consideringthepromotionalmix,andisalsoimportantwhenconsideringtheotherelementsofthe
marketingmix.Marketsegmentationinvolvesanalysisofthemarketwithreferencetohomogeneoussub
setsthatsharelikecharacteristics.Commonlyusedsegmentsinclude:
age
gender
geographicallocation
socioeconomicgroups
psychologicalfactors,suchasriskappetite,desiretoconformorbedifferent,andsoon.

Segmentationprovidesinsightsintostrategicopportunitiesandoptions.Forexample,somecompanies
chooseahighlyfocusedapproachbytargetedmarketingaimedatveryspecificmarketsegments(Club
1830holidays,insurancefordriverswithcleanlicences),whileothersapplydifferentiatedmarketing
strategiestoaddressseveralsegmentsdeployingdifferentmarketingmixes(fastmovingconsumer
goodscompaniesoftenproducelowpricebrandsandpremiumpricedbrandswithintheirproduct
portfolios).

Aslegalconstraintsanduniversallyacceptedprofessionalstandardshavechangedovertime,the
promotionalmixusedbyprofessionalfirmshaschangedradicallyinrecentyears.Inmanycountries,
accountants,lawyersanddoctorswereforbiddenfromadvertisingatall,andhadtorelyontestimonials
andpersonalreferrals,andevenwhensuchruleswererelaxed,manyprofessionalsfrownedupon
promotionintheconventionalsense.Suchattitudesarerarelyencounteredtoday.

Place
Thisreferstoallactivitiesrelatedtomovingtheproductfromtheproducertotheconsumer.Itis
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concernedwithdistributionthroughtheproducerschannelstomarket.

Distributionmayinvolvephysicallymovingtheproducttotheconsumer,ortointermediarieswhotake
responsibilityfordifferentstagesofdistribution,suchasagentsandwholesalers.Inretailindustries,
distributionwasonceonlyconcernedwithtransferringgoodsfromthepointofproductiontothepointof
sale,butthelogisticshavenowchangedasmorecompaniesembraceonlineordersandhomedelivery
alongside(and,insomecases,insteadof)theirstores.

Advancementsininformationandcommunicationstechnologyhavechangedthefaceofdistributioninthe
last20years.Inmanycountries,ithasbecomeapparentthatretailshopsarefindingitincreasingly
difficulttocompetewiththemoredirectchannelsfacilitatedbyecommerce.Whilefortheforeseeable
futureconsumerswillcontinuetorelyonthetraditionalshoppingexperienceforcertaingoods,suchas
freshfoodandfashion,itisclearthatcertainbusinessescannotexpecttheirtraditionalbusinessmodelto
besustainable.Thishasbeenborneoutbythecollapseofsomelongestablishedcompanies(suchas
Woolworth)andthedifficultiesencounteredbyothers(suchasvarioustravelandholidaycompanies).

Professionalfirmsnowrelyheavilyonvirtualchannelstomarket,havingpreviouslybeenhighly
dependentonfacetofaceinteraction.

THEEXTENDEDMARKETINGMIX
InadditiontothefourPs,someorganisationsincorporateadditionalelementsintotheirmarketingmix.
Themostcommonofthesearepeople,processesandphysicalevidence.

People
Thiscomponentofthemarketingmixisespeciallyimportant:
whengoodsofferedareconsideredtobehomogeneousbycustomers
forservices,whichareintangibleandthereforehavetobedifferentiatedinaneffectivemanner.

Peoplearethemostunpredictableresourceemployedbyanorganisation,asthecontributionofany
individualcanvaryfromdaytoday,orevenduringanysingleday.Peoplefacilitateinteractionsbetween
thebusinessandthecustomer,soitisimportantthatemployeesaddvalueatthepointofsaleandin
backofficeroles.Somewritersrefertoeachinteractionbetweenthecustomerandanindividual
employeeasamomentoftruth.Eachmomentoftruthisanopportunitytodelightthecustomeror
merelysatisfythecustomer,butitisalsoamomentwheninappropriatebehaviour,attitudes,moodor
languagecandrivethecustomeraway,possiblynevertoreturn.

Whenconsideringthispartofthemarketingmix,theorganisationhastoconsidermatterssuchas:
thedutiesthatshouldbecarriedoutbypeople,andhowthesedutiesshouldbeallocatedbetweenthem
theextenttowhichtaskscanbeautomated,makingtheserviceexperiencemoreeffectiveandefficient,butwithout
diminishingvaluetothecustomer
theexpectationsofcustomerswhendealingwithpeopleintheorganisation
theextenttowhichcompetitiveadvantagecanbeobtainedbyenhancingthecontributionthatemployeesmay
potentiallymake,whichcanbeachievedthrougheducation,training,development,incentivesandothermotivational
stimuli.

Processes
Processesarevitallyimportantwhentheycanimpactontheeffectivenessofdeliveringbenefitstothe
customer.Automationandthelinkingofprocesseshavepartstoplayhere.Successfulbusinesses
capitaliseontheuseoftechnologytoundertaketasksthatareperformedbetterbymachinesthan
people,whileatthesametimeaskingtheirpeopletofulfilrolesthatonlypeopledowell.

Manybusinesseshaveseenarevolutioninthewaythatcustomerneedsareaddressedbyfocusingon
processchanges.Theseincludethesystemsusedbyairlinesforbooking,ticketingandmoving
customersthroughairportsandontoairplanes,andthesystemsusedbyfinancialinstitutionstoprovide
remotebankingservices,includingcurrentaccountsandcardproducts.

Addingvaluethroughchangesinprocessesmaybeachievedbyadjustingandrefiningexistingsystems
(processdesignandredesign),orbyreengineeringprocessescompletely.

Physicalevidence
Whenconsideringthepurchaseofagood,thecustomermayrespondtophysicalcues,suchaswhether
thepackagingispleasingontheeyeorwhetherthegooditselfisaestheticallyattractive.Inthecontextof
theextendedmarketingmix,physicalevidenceisespeciallyrelevanttoservices.Asstatedearlier,
servicesareintangible,sothoseresponsibleformarketingcandesignandimplementphysicalcuesto
whichthecustomermayrespondpositively.

Therearemanywaysthatthiselementofthemixcanbeusedeffectively,includingattentionto:
thedesignofthebuildinginwhichtheserviceisdelivered,andsometimestheenvironmentinwhichthebuildingis
situated
interiorlayout,decor,signage,aswellasuseofcontemporaryfloorplans
uniforms
designofwebpagesandforms
businesscards
loyaltycards.

THERELATIONSHIPOFTHEMARKETINGPLANTOTHESTRATEGICPLAN

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Thestrategicplanofanorganisationisformulatedinordertoachievetheorganisationslongterm
objectives.Atypicalplanninghorizonisfiveyears,thoughthismaydependonthenatureofthebusiness.
Forexample,adotcomcompanymaychooseashorttimescaleiftechnologicaldevelopmentsinitsfield
ofoperationarechangingfast,whileanoilormineralsextractioncompanymightplanforamuchlonger
periodoftime.

Thestrategicplansetsobjectivesthatwillbeconsistentwithitsvaluesandmissionasenvisagedbythe
directors.Inordertorealisetheobjectivessetdownintheplan,itisnecessaryforeachfunctionalareaof
thebusinesstocreateitsownplan.Therefore,therewillbeaproductionplan,ahumanresourcesplan,a
financialplan,andsoon.

Marketingobjectivesmustbeconsistentwithstrategicobjectives,andbedrawnupalongsidethem.Few
organisationscanoperatewithoutpayingattentiontotheenvironmental(PEST)factors,sooneofthe
firststagesofplanningistoanalysethesefactorsandconsidertheminrelationtotheopportunitiesand
threatspresentedbyexternalforces.Themarketingplanmustalsotakeaccountoftheinternalstrengths
andweaknessesoftheorganisation.Strengthsaretheplatformuponwhichcompetitiveadvantagecan
bebuilt,whileweaknessessignalcurrentlimitationsthattheorganisationmayormaynotbeableto
overcome.

Atthisstage,manyorganisationscarryoutamarketingaudit,whichaddressesthreequestions:
wherearewenow?
wheredowewanttobe?
howdowegetthere?

Themarketingplancanthenbeformulated,settingspecificobjectivesanddetailedplansonhow
marketingresourceswillbeappliedtoachievethem.Formanyorganisations,thedetailedplansmaybe
structuredaroundthevariouselementsofthemarketingmix.

WrittenbyamemberofthePaperF1/FABexaminingteam

Lastupdated:20Apr2015

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