Core Concepts of Marketing

MARKETING:DEFINITIONANDJUSTIFICATION 21

ever,thesewerenotenoughtoimproveSASrevenue.Otherthingshadtobedonetoattract
business-classcustomers.TheapproachtakenbySASwaslargelysymbolicinnature.They
puteveryonewhoboughta full-priceticketin"Euroclass,"entitlingthemtousea special
boardingcard,anexecutivewaitinglounge,designersteelcutlery,anda smallnapkinclip
thatcouldbetakenasa collector'sitem.Theseandothervalueswereprovidedatnoextra
costtothecustomer.Theapproachwasverysuccessful;businessclasspassengersflocked
toSAS,sincetheyappreciatedtheperceivedincreaseinvalueforth e priceofa ticket.

TheBudget
Marketingmixcomponentsmustbeevaluatedaspartofanoverallmarketingstrategy.There-
fore, theorganizationmustestablisha marketingbudgetbasedontherequiredmarketing
efforttoinfluenceconsumers.Themarketingbudgetrepresentsa plantoaaocateexpen-
dituresto·~achofthecomponentsofthemarketingmix.Forexample,thefirmmustestab-
lishanadvertisingbudgetaspartofthemarketingbudgetandallocateexpenditurestovarious
typesofadvertisingmedia-television, newspapers, magazines. Asalespromotionbudget
shouldalsobedetermined,allocatingmoneyforcoupons, productsamples,andtraue
promotions. SimilarlY,budgetsarerequiredforpersonalselling,distribution, andproduct
development.
Howmuchshouldbespent?Considerthefollowingexample.Acommonquestion
thatmarketersfrequentlyaskis,"Arewespendingenough(ortoomuch)topromotethe
saleofour products?" Areasonablean swer wouldrevolvearoundanotherconsideration:
"Whatdowewanttoaccomplish?Whatareourgoals?"Thediscussionshouldnext tum
tothemethodsforachievementofgoalsandtheremovalofobstaclestothesegoals. This
stepisoftenskippedoravoided.
Usually,whenthequestionisasked,"Arewespending enough?"anautomaticanswer
isgiven,intermsofwhatothersspend. Knowingwhatothersinthesameindustry spend
canbeimportanttoanorganizationwhoseperformancelagsbehindthecompetitionorto
anorganizationthatsuspectsthatitsexpendituresarehigherthantheyneedtobe.Butgen-
erally,knowingwhatothersspendleadstoan unproductive"keeping-up-with-the-Joneses"
attitude.italsoassumesthattheothersknowwhattheyaredoing.

EvaluatingResults
Nomarketingprogramispl annedandimplementedpelfectly.Marketingmanagerswilltell
youthattheyexperiencemanysurprisesduringthecourseoftheiractivities.InaneffOlt
toensurethatperformancegoesaccOfdingtoplans,marketingmanagersestablishcontrols
thatallowmarketerstoevaluateresultsandidentifyneedsformodifications inmarketing.
strategiesandprograms.Surprisesoccur,butmarketingmanagerswhohaveestablishedsound
controlprocedurescanreacttosurprisesquickly andeffectively.
Marketingcon~rolinvolvesa numberofdecisions.Onedecisionis whatfunction~to
monitor.Someorganizations monitorthei r entiremarketingprogram,whileothers choose
tomonitoronlya partofit, suchastheirsalesforceortheiradvertisingprogram. Asec-
ondsetofdecisionsconcerns thcestablishmentofstandardsforperfolmance;e.g., market
share,profitability,orsales.AthirdsetofdecisionsconcernshowtocollectinfOlmation
formakingcomparisonsbetweenactualperformanceandstandards.Finally,totheextent
thatdiscrepanciesexistbetween actualandplannedperformance,adjustmentsinthemar-
ketingprogramorthestrategicplanmust bemade.
Oncea planisputintoaction,a marketingmanagermuststillgatherinformationrelated
totheeffectivenesswithwhichtheplanwasimplemented.Informationonsales,profits,
reactionsofconsumers, andreactionsofcompetitors mustbecollectedandanalyzedso
thata marketingmanagercanidentifynewproblemsandopportunities.