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The relationship of marketing to business strategy and operations

If we define business strategy largely as direction the firm`s resources to provide the best fit between the firm and its environment –and further, to obtain a lasting competitive or differential advantage –than it should be clear that marketing plays an important role in strategy formulation.
Marketing also plays a key role in development of operational (action) plans that are designed to implement a given strategy. In many, if not most, multiproduct companies, these plans are drafted within the marketing department. For example, a large consumer goods company assigns the responsibility for developing and implementing programs designed to build product volume and profit to a manager in the marketing department. This manager has specific responsibilities toward the product (to ensure its competitive superiority within certain cost constraints), advertising (making certain the advertising copy provides the maximum selling power and the media schedule delivers the message to the target audience in the most effective and efficient manner), merchandising (executes and evaluates sales promotions that are cost-effective), and adjustments to the plan during the fiscal year to deliver the required sales volume. These major responsibilities are detailed in an annual plane (complete with budget) that is updated quarterly.

The development of marketing system in society

Consider the Tiwi, an extremely primitive people living in the wilds of northern Australia. With the family as the center of Tiwi life, the household is the principal economic unit of their society. Each household is a self-sufficient production unit. Tiwi women gather vegetables, roots, grubs, worms and other delicacies from the surrounding countryside. The most experienced food gatherers are older women (often widows) who become the first wives of the young males. First wives supervise food gathering and other production activities of the younger women who subsequently join the household as additional wives of the polygamous men. The men contribute to their households` well-being by hunting and fishing.
Because of their subsistence-level lifestyle and the self-sufficiency of each household, the Tiwi are one of the last remaining societies in which marketing activities are seldom undertaken.
But even the Tiwi have learned the benefits of specialization and division of labor. The women concentrate on gathering and preparing vegetables and insects; the males specialize in hunting and fishing. Increased division and specialization of labor is one of the most important changes that occurs as societies move from a primitive economy toward higher levels of economic services or for use in the day-to-day operations of the organization (as when a university buys paper and typewriter or computer printer ribbons). These are called industrial goods and services.
Individual and organizations have different needs and wants to satisfy through exchange transactions, and they go through different decision processer when seeking exchange partners and choosing transactions. For example, consumers make many purchases on their own. Organization purchase decisions, however, are often made or influenced by a group or team representing different functional departments such as engineering, purchasing, and finance. Also, consumer markets typically consist of many more—and geographically dispersed –potential customer than organizational markets. Because of such differences, some marketing strategies and tactics are more appropriate and successful for consumer markets; others work better when selling to organizations. Throughout this book we examine differences in the buying behavior of these two types of customers, and the marketing strategies and programs relevant for each.