Marketing and its Contribution to Sustainable Business

            Keeping the strategic window open involves the maintenance of a sustainable competitive advantage. On the other hand, that competitive advantage should also be market led. Most of the firms view their outputs or offerings to be the main focus of their competitive strategies. While their ability to compete effectively in particular markets, serves as the primary aim of that strategy. This is done by offering a competitive bundle of benefits or value to its consumer. The prime importance here is the firm’s positioning of its offer relative to another’s.

            On the other hand, an alternate view concentrating on the organization’s resources, as well as its maintenance of the superior resources and processes, leads to competitive advantage. These resources and processes are designed to efficiently utilize such resources. Although both resources are not mutually exclusive, they can still complement each other.

 

Core Competencies and Competitive Advantage

            Competitive advantage should be built based on the core competencies. By identifying its distinctive competencies, and then relating it to its core products, purposeful plans can be developed by the firm, with the utilization of those capabilities. If required, new capabilities can also be acquired in order to achieve the greatest sustainable advantage possible. Attractive opportunities are being overlooked if a firm incorrectly identifies its core competencies, leading to the pursuance of the poor ones.

            Most businesses accidentally develop capabilities in key functional areas during their search for the competitive advantage. In order to attain sustainability, these capabilities must acquire the nature of exceptionality, meaning they are hard to imitate, and should support the organization’s business strategy. Despite the turbulent impacts of the environment on businesses, an organization can better achieve and maintain its advantageous position, by stressing the development of these key capabilities. This development is one of the primary ways identified where firms can achieve competitive advantage. In this context, firms must develop processes that allow the collection of information on market opportunities, as well as the development of goods and services in able to meet the targeted customers’ needs. In addition, this should also allow them to price the products according to the market information collected, and to communicate the product advantages to its potential customers, followed by the final distribution of the product to its customers.

            Organizational capabilities play an important role in the achievement of competitive advantage. According to Grant, an organizational capability is defined as the firm’s ability in performing a productive task repeatedly, which either directly or indirectly relates to its capacity in creating value, through influence in the transformation of inputs to outputs. These capabilities come about through the integration of the skills and knowledge of the firm’s employees. Therefore, a marketing capability is developed upon the habitual application of the firm’s marketing employees of their knowledge and skills, in the transformation of marketing inputs into outputs. The combination of the intangibles with the tangible resources/assets is required in this process. On the other hand, the concept of marketing capabilities, in practice refers to the integrative processes designed in the application of the collective knowledge, skills and resources of the firm in its market-related needs. This enables them to add value in its goods and services, adapt to market conditions, take advantage of the market opportunities, and meet competitive threats.      

 

Core Competencies

            Core competencies serve as the bedrock upon which strategies are built. It is the one who gives a sustainable competitive advantage to every business. A core competence comprises of the technological and managerial capabilities of a firm, combined to provide a leadership position in the development of certain generic or core products. Its fundamental skills and knowledge behind its successful products are reflected in a firm’s existing core competencies. They may relate to world leadership in specific technologies, or to a particular skill/s of an organization/management. An example is the brand strength and the geographic spread of Coca-Cola.

            Its development becomes the basis for producing a competitive advantage, in the achievement of the strategic intent. Therefore, identification of the core competencies must be done with proper caution, to avoid wasting of resources and effort in further nurturing of non-core competencies. It also avoids the dissipation of concentration. Thus, it is better to buy in non-core competencies, while all internal efforts focus on the acquisition and development of what really matters. The ability of acquiring relevant core competencies and its effective application on the development of its core products is reflected on a firm’s capacity for competitive innovation. Capability, therefore, is infinite. It can be extended thru careful definition  of the required competencies and its means of acquisition and development. However, it is not constrained by its existing competencies, or its available resources.

            Focused investment in R&D can develop the missing competencies of a company internally. While the various forms of collaborative arrangements can acquire this externally. Nevertheless, internal development is costly, and only the largest organizations can afford this kind. In an era characterized by rapid diffusion of technology, the resultant competitive advantage maybe short lived. Much of this new technology is not protected and no real commercial benefit exists being the holder of patents. This is due to the fact that these are easily copied by their competitors. For that reason, internal development is not recommended in areas where intellectual property is considered “leaky” in nature. 

            Business strengths should not be seen in terms of a particular product, market sector, or even distribution channel. Rather, it should be on its capability in generating a range of rapidly evolving products or markets. The traditional rationale for structuring an organization as a collection of strategic business units, with maximum autonomy for each unit, becomes questionable. Instead, the overriding requirement is for the development and acquisition of common strands of expertise, which cut across products, markets, and business units. This may lead to some apparently strange combinations of business activities.

 

The Marketing Mix

            There exists the need for organizations to communicate with the customer through the strategic window. This can be made possible in numerous ways. This includes spoken and written communication, and other more symbolic forms of communication. This is the function of the marketing mix. Its elements should not be taken as individual entities, rather as a set of interconnected entities. They need to be set in conjunction to one another, as well as in the context of the presented strategic window.

            Careful formulation of the marketing mix is needed to effectively position one’s product in the people’s minds, and to make them more attractive to market segments. To be able to carry this out in actual operation, it is required to get the right blend of the product, its promotion price and its distribution. Portrayal of an image that will match the visualization of the product in the people’s minds, is your primary aim here. It is not only in the promotional messages (directed to target market) where the image is reflected. It is also reflected in its pricing strategy, mode of distribution, and its product/service appearance.

 

Product

            An organization’s products/services help in the creation of the firm’s image in the minds of its customers. This image is reflected in a customer’s perceptions and feelings towards the product/service. Thus, it is considered important for this reason, as experience with even a single product/service of a firm affects a person’s attitude towards its other products/services, even if he has not yet used that other product.

            Products are more than tangible objects, as services are more than a visible activity. People purchase products/services with the purpose of satisfying their needs and wants, and to obtain benefits as a result. Organizations, therefore, need to understand the nature of these needs and wants, to be able to appreciate the kind of benefits people expect to obtain. Among them are good value for money, novelty, availability, good design, ease of use, safety, and economy in use.

            A benefit is what makes a product/service attractive to a customer. Product decisions, therefore, have to be made with respect to this range of attributes. The considerations that the producer should include in his product/service are features, options, style, brand name, packaging, sizes, services, warranties, returns, and most of all quality.

 

Prices

            There are market conditions under which organizations can exert some control over the level at which price is set. If, however, organizational control is impossible in the setting of prices, it has to accept whatever price is determined by the market.

            In the case of a perfectly competitive market, producers have almost no control over prices. The market forces brought by the pressures of competition, as well as the consumer’s pattern of expenditures, is what determines the prices. However, this case is very rare in reality, since most markets are imperfect in nature, making some control over price setting possible.               

 

The Promotional Mix

            There are varieties of promotional vehicles available for a firm. These include advertising, publicity, sales promotion, and personal selling. The proportion of a firm’s marketing communications budget spent on each of the said activities differs across organizations and industries. However, considerable variation exists within product classes. For example in advertising, there are numerous ways to communicate your product, like thru television, radio, magazines, etc.

            The most appropriate marketing mix for a specific product, should be influenced by a number of factors. These are the available budget, its promotional message, complexity of the product or service, market size and its location, distribution channels, life cycle, and competition.