Marketing Budgeting (RLE Marketing)

A Political and Organisational Model

Nigel Piercy

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317652762
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

This book represents a radical departure from the established theory in taking an organisational view of resource allocation in marketing, which stresses the importance of structure and process rather than just budgeting technique. The book describes and analyses marketing organisation and processes in terms of organisational power and politics and models market budgets as political outcomes.

1

Introduction – Aim and Purposes

The underlying goal of this work is to examine the process of marketing resource allocation – particularly, but not exclusively, in budgeting financial marketing expenditures – in terms of inputs to and outcomes of that process, and thus necessarily the approach taken is somewhat different to that found in the normal treatments of marketing budgeting. Specifically, the goal is to bring to bear certain of the findings and empirical tools established in other disciplines, to add a further dimension to the existing theory of marketing resource allocation or budgeting, through the development of a new conceptual frame of reference, which is supported by the presentation of new empirical data.

It may be noted that, in fact, this work does not stand alone, but is related to two earlier works (Piercy and Evans, 1983; Piercy, 1985b), and these antecedents are explicated in this chapter. It will be seen, thus, that the key concepts running through this analysis are: organisational structure in marketing, information processing and control, and the implications of these last factors for organisational power and political behaviour.

While this approach does not purport to provide a complete explanation of resource allocation behaviour in marketing, when it is taken in conjunction with the received prescriptive and descriptive theories, it provides a significant additional analytical lever of interest both to practitioners and to researchers or students of marketing.

The groundwork necessary before proceeding to the main body of the work is contained in this introductory chapter and consists of: a statement of the concept of marketing which is adopted for this study; the relationship between this work and theory development in marketing; the nature of the information-structure-power model; a clarification of the rationale of the general approach to be taken here; and an initial explication and justification of the resource allocation process in marketing as the topic for study.

MARKETING MANAGEMENT AND THEORY

The Definition of Marketing

An initial problem faced is that the term ‘marketing’ used above is itself somewhat problematic to isolate. It will be seen that two difficulties arise – the marketing function in business organisations is subject to much criticism and attack at present (see pp. 102–110 below), and in Chapter 4 it will be seen that marketing both as a corporate function and an academic discipline is in a stage of transition in various ways, although both those discussions do, at least, imply some shared understanding of what marketing is – even if indicating dissension regarding what it should be. However, two further difficulties in pinning down the meaning of ‘marketing’ are that: different formal definitions abound in the literature; and there are many elaborations of the ‘philosophy’ of marketing.

It should be stated quite explicitly at the outset that the view taken of marketing in this present study is biased and selective in that it concentrates on: business decision making, in a corporate setting, and is concerned therefore with a managerial focus. This selectivity may be contrasted with the views of others.

There is, in fact, a demonstrably large array of formal definitions of marketing, and these have been reviewed by others at various times in the past two decades (e.g. Baker et al, 1967; Crosier, 1975) without any clear conclusion being reached. No such exhaustive review is attempted here, rather it is adequate for present purposes to compare one or two of the prominent views in US and UK literature.

In the UK, definitions by academic writers during the past twenty years have included the following:

(a) Marketing is the primary management function which organises and directs the aggregate of business activities in converting consumer purchasing power into effective demand for a specific product or service and in moving the product or service to the final consumer or user so as to achieve company set profit or other objectives. (Rodger, 1965)

(b) Marketing is the way in which any organisation or individual matches its own capabilities to the wants of its customers. (Christopher et al, 1980)

On the other hand, the main professional institute in the UK offers the view that:

(c) Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably. (Institute of Marketing)

In the US, the most prominent writer suggests that:

(d) Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. (Kotier, 1984)

However, this last writer also defines marketing management as:

(e) the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives. (Kotier, 1984)

Perhaps the major contrast is between conceptualising marketing as a process of social or economic exchange, in (d) , and marketing as a management function in (a), (c) and (e) .

In fact there have been many who suggest that the search for a definition of marketing is likely to be fruitless (e.g. Matthews et al, 1964; Foxall, 1981), which is explained by such writers as arising from the ‘amorphousness’ of the field and the difficulty in combining consiseness and comprehensiveness. Certainly, pragmatically the meaning of marketing in the relatively concrete terms of organisational arrangements varies greatly (Hayhurst and Wills, 1972).

The classic study of the historical development of marketing (Bartels, 1962) offers some insight to this problem. Bartels argued that the history of marketing may be interpreted both in an absolute and relative manner. The former perspective, of an absolute viewpoint, suggests that marketing thought begins with simple enquiry and findings, progresses to the status of a discipline, finally to emerge as a science. The relative viewpoint appraises the stage of thought in relation to the circumstances bringing it forth, implying that completeness is defined as adequacy, which is to say that the body of thought is appraised not as an independent variable evolving of itself, but as one dependent on such factors as market problems and practices to determine its emergence, form and character.

The relevance to this present discussion is that the absolute perspective suggests the lack of definition or agreement on the marketing paradigm may be explained partly in terms of the evolution of the discipline, since the area itself may be an entity not stable enough to allow permanent definition, as it progresses to its assumed final state. On the other hand, apparently divergent views may be explained from the relative viewpoint by arguing that the body of implicit and explicit theory constituting the field is a function of the circumstances surrounding it, where those circumstances may well both change over time and be substantially different for different organisations, suggesting the legitimacy and possibly inevitability of continued divergence in definition, and indeed understanding of the phenomenon.

It follows from our present emphasis on contingency theories (see pp. 121–130 below) that the latter argument is preferred.

On the other hand, it is possible to argue that the real divergence in views of marketing is actually rather limited, and reflects no more than differences in breadth of perspective (Bell, 1972), which allows for a continuum of views ranging from the marketing systems model of exchange patterns within an economy, to more limited views of the management of advertising and selling in organisations. In this present study, the bias is towards the latter area rather than the former, since the interest is in what has been defined above as marketing management.

One way ot organising the various views of managerial marketing, developed elsewhere (Piercy, 1982), is to categorise concepts of marketing as relating variously to strategy, programmes and information. In the first area of marketing strategy, concern is with broad product-market direction, the form of competition to be pursued, ‘marketing orientation’, and so on. With the growth in corporate and strategic planning, what is less clear is how this area relates to the marketing sub-unit, if there is one. Such issues might be regarded as the task area of general rather than functional marketing management.

The second area – the marketing programme – is concerned with the management of the ‘marketing mix’ – product policy, pricing, distribution and marketing communications. The task activities concerned may be demonstrated by considering the responsibility patterns of chief marketing executives, as shown in Table 1.1. This area is apparently more easily identified with a marketing sub-unit as an area of functional management, although in fact, it would seem that there are many jurisdiction disputes and variations in practice (Piercy, 1985a), and it has been suggested that the real control of the marketing mix by marketing departments is commonly exaggerated by the literature (Hayhurst and Wills, 1972).

The third area – marketing information – may be associated with either of the first two: a general management service function, possibly associated with corporate planning, for scanning the environment and providing control data, or a marketing department function for the analysis, planning and control, of markets, marketing performance and the marketing environment (Piercy and Evans, 1983).

Table 1....

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Dedication
• Preface
• 1. Introduction - Aims and Purposes
• Part I Marketing Budgeting in Theory and Practice
• Part II An Organisational and Political Perspective for Marketing and Budgeting
• Part III An Empirical Study of the Power Amd Politics of Marketing Budgeting
• Part IV Conclusions
• Appendices
• Author Index
• Subject Index