“ The centrality of marketing in creating growth and shareholder value suggests a new role for marketing both as a discipline and function… the concept of marketing that will make it more effective in tomorrow’s boardroom is one of contributing to the creation of shareholder value. It can be defined as follows: Marketing is the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage.
Doyle, P., (2000), Valued-Based Marketing, Chichester: Wiley, p29.
By reference to academic literature, critically evaluate Doyle’s definition of marketing. Indicate how a company could apply this definition to create and manage its marketing
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The most accepted criteria to measure the effectiveness of marketing are increase in sales and market share (Butterfield, 1999) but Rappaport (1998) notes that sales growth raise economic profits only if the operating margin on the additional sales covers the higher costs and investment incurred to achieve the growth. Major business firms now almost universally accept that the primary task of marketing is to maximize returns to shareholders (Black et al., 1998). Moreover, Day and Fahey (1988) and Srivastava et al. (1998) have indicated that marketing can greatly increase shareholder value. Nevertheless, there has a change over the last decade since the marketing concept has been recognized to be important in setting the strategic direction and even the culture firms. Marketing has been migrated from being a functional discipline to being a concept of how business should be run (Greyser, 1997). Marketing is talked more and more as a key discipline in not-for-profit enterprises such as charities and or even in the public sector organizations such as universities and the police service. Doyle (2000) notes that marketing is the management process contributing to maximize returns to shareholder by improving the relationships with valued customer and building a competitive advantage. Firstly, marketing is the management process that concerns the need to make decisions- what decisions should be made and how they should be made. It helps an organization to define its