Managing ustomer Value - Essay Example

? MARKETING Task: Strategic planning is the process by which the feasible fit between an organization’s skills, objectives, resources and its changing marketing opportunities are developed and maintained (Lake, N. 2012, 9). In order to understand the role of marketing in strategic planning process, various theoretical views, pieces of empirical evidence and normative statements about contingent relationships between the level of business strategies and the organizational structures and processes involved in contacting marketing processes have to be integrated into one framework. The role of marketing in effective implementation of strategic planning process is determined by how different types of marketing organizations, programs and policies work better under different strategies. Different strategies of a business are accompanied by functional policies and competitive devices such as customer service, advertising and product quality (Dodds, B. 2003, 504). Marketing structures that play roles in the strategic planning process include formalization, specialization and centralization (Kellar, A. 2009, 389). These structures are, particularly, important in shaping the performance of an organization (Laforet, S. 2012, 163). Formalization is the degree to which working relationships and decisions are governed by standard policies, procedures and formal rules. Centralization is the locus of the authority and control of a decision within an organizational entity. In organizations that are highly centralized, only one or a few top managers hold most decision-making authorities. In decentralized firms, middle or lower level managers possess autonomy and participate in a wide range of decisions. Specialization is division of tasks and activities across positions within the system. High levels of centralization and formalization, together with low specialization levels, are likely to be associated with relatively efficient performance within marketing departments. In such departments, the top marketing managers use centralized decision-making authorities in setting a common direction for other departments while keeping overt conflicts minimal. The formal rules and procedures play a role in reutilizing activities and hold down risks and administrative costs. Therefore, higher formalization and centralization levels in the market department should positively relate to the ROI performance of low cost defender business units. Centralization, non-specialized and formalized organizations tend to be more efficient but less innovative and adaptive compared to those with the opposite structural characteristics. Despite business strategy being a general statement about how the unit chooses to compete in an industry, that unit encompasses a large number of different products, each facing a different competitive situation in different markets. There is the likelihood of existence of a considerable variation in marketing programs across products within similar business units (Freeman, B & Shaw L. 2009, 118). Since a business strategy fails to set a general direction of how the unit will compete, it should have an impact on the broad marketing policies cutting across products and product lines. The likelihood of a strategy being effective relies on the consistency of the marketing policies with the overall strategy, and how successful the unit is in adhering to the policies. One set of marketing policies broadly defines the nature of the products that the business offers to the market (Suder, G. 2007, 118). The policies cover a diversity of the product line, the general level of technical sophistication of the products and the target level of product quality in relation to the competitors. The prospector businesses heavily depend on the continuing development of new and unique products and the penetration of new markets as a primary competitive strategy. Hence, the adherence and policies of the prospective businesses which encourage the broad and technically advanced trade lines should relate positively to the performance on the critical dimension of share growth. The products should also be of a higher quality compared to competitor products. Marketing, in building profitable customer relationships, assists in finding new customers for a business (Bojanic, C. & Reid, D. 2009, 59). To achieve this, the industry sector identified for growth in strategic planning must be implemented throughout the business. The sales team must have a structured and designed commission to reflect closed sales in the business being pursued. When marketing and selling, a new market place, the products and services offered must be profitable both to the business and the customer. Customer profitability analysis must be conducted at the start of the sale and periodically during the sales cycle. Marketing of a business focuses on the targeted customers, who are the largest revenue generators. Marketing also helps in retaining current and past customers in a business (Stolt, R. 2010, 7). Since marketing attracted new customers to the business previously, marketers should continue putting effort to establish and strengthen the relationship already created. In order to design relationship programs with customers with the aim of meeting their needs, marketers should understand their buying habits and patterns, their organization, their operations and their growth plans. During marketing, many businesses offer special pricing, incentives of bundled package offers to attract new customers while completely ignoring their current customers. In order to prevent current customers from switching to the competitors in the same business field, loyalty programs such as discounts and incentives should be created as a way of appreciating them. Through marketing, customers are rewarded for their continued confidence in the product and services of the business (Changanti, R. 2005, 250). Discounts on future work or a free service is rewarded to customers basing on the number of businesses a customer does with the company. Through marketing, customers are reached out on a regular basis and provided with helpful information like success stories, case studies, new product and service launches and testimonials. Marketing leads to increased inclusiveness with customers, which makes them value their relationship with the business entity. This assists in the creation of profitable customer relationships. Customer relationship management is created with the aim of improving the relationship between the customer and the business entity (Ribbers, P. & Papazoglou, M. 2006, 309). The improvement occurs when the business creates new relations with new customers and also maintains the relationship that exists with the customers. If wrong data is used by the business entity for marketing purposes, difficulties in understanding customer requirements will arise, therefore, forcing the marketers to struggle in building relationships with customers. The information collected on customer relationship management also impacts on the finance, human resource management and customer service. References: Lake, N. (2012). The strategic planning workbook. London: Kogan Page. Dodds, B. (2003). Managing customer value: essentials of product quality, customer service, and price decisions. Lanham: University Press of America. Kellar, S. A. (2009). Information systems: a concise study. India: Prentice Hall of India. Laforet, S. (2012). Innovation in small family businesses. London: University Press of America Freeman, R. B., & Shaw, K. (2009). International differences in the business practices and productivity of firms. Chicago: University of Chicago Press. Suder, G. G. S. (2008). Doing business in Europe. Los Angeles: Sage Publications Bojanic C. D., & Reid, R. D. (1989). Hospitality marketing management. New York: Van Nostrand Reinhold. Stolt, R. (2010). The Importance of Customer Relationship Management in Business Marketing. Mu?nchen: GRIN Verlag GmbH. Chaganti, S. R. (2005). Pharmaceutical marketing in India. New Delhi: Excel Books. Papazoglou, M., & Ribbers, P. (2006). E-business: organizational and technical foundations. Chichester: John Wiley. Read More