Marketing, Customer Value, And The Relationship Between The Two, With Regards to Smiggle
Marketing Theory and Practice- MKF1120
Lecturer- Peter Wagstaff
Due Date- 30 March, 2012
Marketing is a management function which involves creating, communicating and delivering value for an organisation’s customers (Kotler, Brown, Burton, Deans & Armstrong (2010). Although many earlier academics define marketing as merely a process of satisfying customer needs in order to gain profits, more recent developments of the definition include its inherent connection with delivering superior value to customers in order to maintain ongoing relationships (Webster, 1992). Marketing
Concepts of marketing have adapted over time, according to various cultural contexts and developments in academic thinking. The simplest delineation of marketing is “meeting needs profitably” (Kotler et al., (2010), however this definition understates the wide variety of marketing functions and practices that are omnipresent in the marketing world today. Through time, marketers and organisations have realised that organisations that focus all energy on profit making, are unlikely to maximise profits. Instead, marketers must seek to identify target customers and their specific needs, and then deliverer appropriate value to customers to build long-term, profitable relationships (Kotler et al., 2010). Because of this, the Australian Marketing Association (2007) understands marketing as being a process, which involves “exchanging offerings” not only with customers, but also with clients, partners and “society at large”. This interpretation not only appreciates the continuous nature of marketing, but also the fact that it is about mutual exchange with all publics, and not just customers. Smiggle must maintain good relationships with various publics including customers, but also suppliers and employees. To do this, Smiggle must benefit all publics by determining their specific needs, and then satisfying these needs in the form of offerings. Therefore, “meeting needs profitably” is undoubtedly at the core of marketing theory, however in practice, marketing is much more complex as it involves mutual exchange of offerings in order to establish and strengthen relationships. Another key aspect of marketing requires organisations to continually anticipate and respond to changes in their external environments. Environments are factors that may influence an organisation’s performance, and include competitors, customers, suppliers, pressure groups and more general factors such as global, economic and technological conditions (Robbins, Bergman, Stagg, & Coulter 2012). Lynch (1994) observes that organisations must constantly scan these environments, because without an acute understanding of these conditions, organisations cannot comprehend what their target markets need, or will need in the future. This idea revolves around creating competitive advantage, which Smiggle achieves by monitoring changes in its customers’ behaviours and attitudes, knowing its competitors such as Kiki K, and comprehending changes in its broader environment. For example, Smiggle’s battery operated products such as the electric eraser, have responded to changes in Smiggle’s technological environment, in which there is an increasing demand for automatic products. As well as this, the eraser exemplifies Smiggle’s understanding of the current dire state of the economic environment, and therefore retails at only $7.95. Therefore Smiggle distinguishes itself from its competitors by being highly sensitive to its environment and creating products that deliver superior value to its target markets. Customer Value
Arguably, the most critical aspect of marketing is “creating, communicating, and delivering value to customers” (Shultz, 2007). Kotler et al. (2010) define customer value as the difference between the benefits a customer gains from a...
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