Holistic Marketing

An account of evolution of the concepts of Marketing over the years of human existence – from
the primitive “Exchange Concept” to the latest “Holistic Marketing Concept”.

[This is an improved version of my earlier article of same title.]

Contents :

1. Introduction :

a. Definitions

b. What is Marketed

c. Marketing Concepts

d. Trends in Marketing Practices

2. Holistic Marketing Concepts :

a. Integrated Marketing

b. Internal Marketing

c. Relationship Marketing

d. Social Responsibility Marketing

e. Holistic Marketing Matrix

3. Future of Marketing

4. Conclusion

Introduction

Definitions of Marketing :

The Shortest Definition :

The shortest definition of Marketing Management is “Meeting Needs Profitably”.

1. Whose Needs ? - The needs of the people, or the customers or consumers,

2. Who is trying to meet ? - The Producer, Marketer or the Company,

3. What is the Objective ? - With profit to the company, & satisfaction to the customers.

The American Marketing Association (AMA) Definition :

Marketing is an organizational function and a set of processes for creating, communicating &
delivering value to customers and for managing customer relationships in ways that benefit the
organization & its stake holders.

Philip Kotler’s Definition of Marketing Management :

Marketing Management is the art & science of choosing target markets and getting, keeping and
growing customers thro’ creating, communicating & delivering superior customer value.

The Social Definition of Marketing :

Marketing is a social process by which individuals & groups obtain what they need, and want
thro’ creating, offering & freely exchanging products & services of value with others.

The Managerial Definition of Marketing :

It’s simply “The art of selling products”.

Peter Drucker’s view on Marketing Management :

The aim of marketing is to make “selling” superfluous. It’s to know & understand the customer
so well that the product or service fits him and sells itself. Ideally, marketing should result in a
customer who is ready to buy. All that should be needed then is to make the product or service
available.

[Source : Marketing Management By Philip Kotler & Kevin Lane Keller – 12e.]

What is Marketed

Marketing people are involved in marketing the following 10 types of entities as explained below
:

1. Goods – Physical products, consumer products, consumer durables, etc.

2. Services – Transport, repair & maintenance, legal, financial, consultancy, hotel, specialized
skills, professionals, etc.

3. Events – Trade shows, sports, world cups, vintage car rally, fashion shows, artistic
performance, annual functions, event management, etc.
4. Experiences – Theatres, opera, Disney-world, trekking, mountaineering, ocean cruise,
cinema, music concerts, etc.

5. Persons – Celebrity marketing, film stars, politicians, artists, performers, advertisers, and
now also CEOs of companies.

6. Places – Cities, states, countries for tourism, leisure & place for industrialization, real estate
agents & business, etc.

7. Properties – Ownership of tangible properties like real estate, house, apartment, farm house,
precious metals and intangible properties like financial portfolio of various securities, stocks,
bonds.

8. Organizations – Building up identity, image, reputation, and brand value in the minds of
consumers.

9. Information – It can be produced, packaged & marketed as a product – text books,

encyclopedias, magazines & journals on literature, science, technology, medicine info, available
thru internet

10. Ideas – The concept regarding a utility, business opportunity, advertising / marketing ideas,
scientific & technical, social, financial, psychological etc.

Marketing Concepts

The Marketing concepts under which organizations have conducted marketing activities have
undergone some sort of evolution during the period of human existence. Chronologically they
are :

1. Exchange Concept : This is the primitive & fundamental concept of marketing. Exchange of
goods and services between two agencies called buyer and seller, or exchange of goods and
services for money or barter system. This involves the process of obtaining a desired product or
service from someone else by offering something (money or any other item) in return.

2. Production Concept : This concept is one of the oldest, and suggests that the consumers will
like to buy the products which are available easily, cheaply & widely. So the marketers must
have a mass production facility (efficient production) with low price (cost efficiency) and make
it available very near to the customers (mass distribution). This concept is normally adopted
when the Company wants to expand.

3. Product Concept - This is the next step of evolution of marketing concepts. It depicts that
customers will go for those products which offer quality, utility, features, performance, value,
benefits, etc. So the marketers must improve the products in an innovative way & continuously.
This is more often accompanied by a suitable pricing, distribution, promotion (all the 4Ps of
marketing) program.
4. Selling Concept : This concept involves aggressive selling and promotional effort. “The
purpose of marketing is to sell more stuff to more people more often for more money in order to
make more profit”. This kind of marketing is practiced for goods & services which buyers
normally don’t like to buy, like insurance, dictionaries, encyclopedia, etc. The aim of the
marketers is to sell what they produce, rather than make what the market wants.

5. Marketing Concept - This concept was evolved in the 1950s, and for the first time the
attention was shifted to Customers. Instead of concentrating on the Products / Production /
Selling, the business became "Customer Oriented". The "Make & Sell" philosophy gave way to
the "Sense & Respond" philosophy. Instead of finding the right customer for the product, the
marketer now has to find the right product for the customer. The perceptive contrast between the
selling and marketing concepts – selling focuses on the needs of the seller, marketing on the
needs of the buyer. This concept holds the secret of the company being more effective than its
competitors in creating, delivering & communicating superior value to the targeted customers.

6. Holistic Marketing Concept – In the new marketing environment, companies wonder how to
operate & compete. Marketers in the current age are increasingly recognizing the need to have a
more complete & cohesive approach that goes beyond traditional application of marketing
concepts. This concept is based on the development, design and implementation of marketing
programs, processes and activities that recognize their breadth and inter-dependencies. Holistic
Marketing recognizes that “everything matters” with marketing - and that a broad integrated
perspective is often necessary. The important components are :

a. Integrated Marketing,

b. Internal Marketing,

c. Relationship Marketing,

d. Social Responsibility Marketing.

The Holistic Marketing Concept is an approach to marketing that seeks to recognize & reconcile
the scope & complexities of various marketing processes. We shall discus each one of these in
the following.

Trends in Marketing Practices

The marketplace is not the same as it used to be. It is rapidly changing as a result of major,
sometimes interlinking societal forces that have created new behaviors, new opportunities & new
challenges, such as :

Changing Technologies Customer Empowerment

Customization Deregulation
Disintegration Globalization
Heightened Competition Industry Convergence
Market Fragmentation Privatization
Retail Transformation Retail Transformation
Technological Advances The Internet Revolution

In response to this rapidly changing environments companies have restructured their business &
marketing practices in some of the following ways :

1. Reengineering : Appointing teams to manage customer-value-building processes & break

down walls between departments.

2. Outsourcing : Greater willingness to buy more goods & services from outside domestic or
foreign vendors.

3. Benchmarking : Studying “best practice companies” to improve performance.

4. Supplier Partnering : Increased partnering with fewer but better value-adding suppliers.

5. Customer Partnering : Working more closely with customers to add value to their operation.

6. Merging : Acquiring or merging with firms in the same or complementary industries to gain
economy of scale & scope.

7. Globalizing : Increased effort to “Think Global & Act Local”.

8. Flattening : Reducing the number of organizational levels to get closer to the customers.

9. Focusing : Determining the most profitable business & customers & focusing on them.

10. Accelerating :Designing the organization & setting up processes to respond more quickly to
changes in the environment.

11. Empowering : Encouraging & empowering personnel to produce more ideas & take more
initiative.

Accordingly the role of marketing organization is also changing. Traditionally, the marketers
have played the role of middlemen between the customers & the various functional areas of the
organization. In a networked enterprise, every functional area can interact directly with
customers. Thus marketing needs to integrate all the customer-facing processes so that customers
a single face (Integrated Marketing) & hear a single voice (Integrated Marketing
Communications) when they interact with the company.

Integrated Marketing

One of the major tasks of marketers is to “integrate” all the marketing activities & programs like
“creating”, “communicating” & “delivering” value to the customers. The marketing program
consists of various decisions on value-enhancing marketing activities that can be used. The
Famous Marketing Mix – the Four Ps, as devised by McCarthy constitute the traditional
marketing activities in four broad groups as given below in details :

1. Products – Design, Features, Brand Name, Models, Style, Appearance, Quality, Warranty,
Package (design, type, material, size, appearance & labeling), Service ( pre-sale, after sale,
service standards, service charges), Returns.

2. Price – Pricing Policies, List Price, Margins, Discounts, Rebates, Terms of Delivery,
Payment Terms, Credit Terms, Installment Purchase Facility, Resale Price, Maintenance prices.

3. Place – Channels of Distribution (channel design, types of intermediaries, location of

outlets, channel remuneration, dealer-principle relation, etc.), Physical Distribution
(transportation, warehousing, inventory levels, order processing, etc.)

4. Promotion – Personal Selling, Selling Expertise, Size of Sales Force, Quality of Sales
Force, and Marketing Communications - Advertising (media-mix, media vehicles, and
programs), sales promotions, publicity & public relations, direct & interactive marketing).

Now, these traditional concepts of Four Ps represent the sellers’ view of the marketing tools
available to influence buyers. In holistic marketing one has to see also the buyers’ point of view,
where each of these tools will deliver the customers’ benefit or value. Robert Lauterborn
suggested the buyers’ Four Cs as follows :

Product = Customer Solution Price = Customer Cost

Place = Convenience Promotion = Communication

Thus the successful companies are those who can meet (1) customer needs (2) economically, (3)
conveniently & (4) with effective communication. Two broad concepts of integrated marketing
are as follows :

1. Several different marketing activities are used to create, communicate & deliver customer
value,

2. All marketing activities coordinated to maximize their joint efforts.

Or in other words, the design & implementation of one activity is done with all other activities in
mind. The business of running a successful organization is to integrate the system for
management of demand, resources & network. Integrated marketing communication is a case in
point.

Internal Marketing

Internal marketing ensures that everyone in the organization adopts appropriate marketing
principles and the top management should see it happen. This is the management task of hiring,
training & motivating the employees to serve the customers well. Smart & successful companies
understand that there is as much activity outside the company as inside. For it makes no sense to
promise excellent services before the company’s service staff is ready to provide. Internal
marketing must happen in two levels as follows :

1. At the first level, all the marketing functions like, sales force, market research, customer
service, product management, advertising, etc. must go together, i.e., all the personnel should
work in tandem or unison for common goal.

2. At the second level, “marketing” must be embraced by other departments for a common goal
of the organization. All the relevant functional departments like Finance, HR, Operations,
Logistics, Systems, etc. must coordinate each other to have a marketing orientation. Only trying
to meet individual department’s target & norms and not supporting the marketing objectives will
take the company nowhere. One has to bear in mind that it’s marketing that earns revenue.

Internal marketing requires that everyone in the organization buy into the concepts & goals of
marketing, and engage themselves in selecting, creating, communicating & delivering customer
value. Only when all the employees realize that their jobs are to create, serve & satisfy the
customers does the company become an effective marketer.

Relationship Marketing

The development of deep, enduring relationships with all the people or firms involved directly or
indirectly in the firm’s marketing activities is appearing as a key goal; of marketing. This is the
concept of Relationship marketing – it aims at building mutually satisfying long-term
relationships with key parties like customers, financiers, suppliers, distributors & of course the
stakeholders, in order to earn & retain their business. It also builds strong economic, technical &
social binding amongst the parties. There are four key constituents of marketing are :

1. Customers

2. Employees

3. Marketing Partners : Channels, Suppliers, Distributors, Dealers, Retailers, Agencies, etc.

4. Financial Community : Shareholders, Stakeholders, Financiers, Investors, Analysts, etc.

5. Another key constituent is the Society : well-wishers, scientists, professors,

environmentalists.

The ultimate goal of relationship marketing is the building of a unique company asset called a
marketing network, which consists of the company & its supporting stakeholders as listed above
with whom it has built manual profit relationships. Interestingly, today, the competition is not
between companies as such, but between the carefully built marketing networks – whoever has a
better network wins. So the principle is simple – build an effective network, & the profits will
follow. But the practice is not so. The development & building of a strong relationship requires a
deep understanding of the capabilities & resources of different groups as well as their needs,
goals & desires. Relationship marketing involves the right kind of relationships with right
constituent groups, like Customer Relationship Management (CRM) with customers, Partner
Relationship Management (PRM) with other partners. Since these being separate subjects
themselves, are beyond the scope of this article.

Social Responsibility Marketing

Holistic marketing incorporates social responsibility marketing. This involves broader concerns
of the society at large, like social, legal, ethical & environmental in the context of marketing
activities. Companies operate in a society, and so do their customers and hence they should never
forget its contribution to the company. It requires that marketers carefully consider the role they
are playing in terms of social welfare. Companies need to evaluate whether they are truly
practicing ethical & socially responsible marketing. Several factors are driving the companies to
practice higher level of corporate social responsibility, such as :

1. Rising customer expectations,

2. Changing employees expectations,

3. Govt. Legislation & pressure,

4. Investor interest in social criteria,

5. Changing business procurement criteria.

Business success and continually satisfying the customers & other stakeholders are closely
linked to adoption & implementation of high standard of business & marketing conduct. The
most admired companies in the world adhere to a code of serving people’s interests, not only
there own. The following are the most important factors of socially responsible marketing :

1. Legal Behavior : Companies operate within the law of the land, and they must impart the
employees with adequate knowledge of law & how to practice them. We have Govt. laws,
Society laws, and the organizations must ensure the employees know & observe relevant law,
and restrain themselves from practicing illegal, antisocial, corruptive, anticompetitive practices.

2. Ethical Behavior: Companies must evolve & adopt a properly written code of conduct
based on the social & cultural ethics, decency, tradition & legal practices, and ensure that all
concerned are responsible in observing these guidelines. Today customers are well aware of the
social, cultural, ecological & environmental affairs in their day-to-day lives.

3. Social Responsibility Behavior: As said above, the customers also want to know what the
firm’s contribution to the society is, or what the company’s social conscience is while dealing
with customers & the stakeholders.

4. Cause Related Marketing: Contribution to the society can be enormous, and hence
companies choose a particular area of society for a particular cause. The examples are :
 a. Health awareness - Heart Diseases, AIDS, Cancer, Diabetic, Obesity, Old age, etc.

b. Running children’s home, old age home, rehabilitation centre, women’s home, etc.

c. Infrastructure - rural housing, hospitals, preserving archaeological places, maintaining roads

& parks, homes for endangered species;

d. Educational scholarship for the poor & needy, higher education facility, Institutes;

e. Treatment for destitute, food for the starving;

f. Information legal & technical help during the hour of need;

g. Volunteerism & Philanthropy.

The list can be endless. Reputed companies even have their own charitable trusts, and also have
special cause related marketing plans. Cause-related marketing is the concept where the specific
cause is directly or indirectly linked to the particular revenue transaction. The company has at
least one non-economic social objective and uses the revenue generated from the designated
sales. This concept is also known as Corporate Societal Marketing (CSM). The CSM can include
other activities like traditional & strategic philanthropy & volunteerism.

5. Social Marketing: Some marketing is conducted to directly address a social problem or

cause. Social marketing is done mainly by NGOs, Non-Profit or Govt. organizations to further a
cause, such as “No smoking”, “Say NO to Drugs”, etc.

The Holistic Marketing Matrix

HOLISTIC MARKETING

INTEGRATED INTERNAL RELATIOSHIP SOCIAL RESPONSIBITITY

MARKETING MARKETING MARKETING MARKETING

Products & Services Top Management Customers Community

Communications Marketing Department Partners Legal, Ethics
Channels Other Department Channels Environment

The Future of Marketing

The top management is slowly recognizing that the marketing in the older method is getting
wasteful and is demanding more accountability. There are a number of imperatives (must do) to
achieve marketing excellence, as presented below: Marketers must -
1. Be “Holistic” and not in bits & parts, i.e., not sectional or departmental.

2. Achieve larger influence in the company if they are to be the main architect of business
strategies.

3. Continuously create new ideas if the company is to prosper in a hyper-competitive economy.

4. Strive for customer insight & treat customers differently, but appropriately.

5. Build their brands thru performance, more than thru promotion.

6. Go electronic & win thru building superior information & communication systems.

In these ways, modern marketing will continue to evolve & confront new challenges &
opportunities. As a result, the coming years will see the demise of - - - & the rise of :

No The Demise of The Rise of

1 The marketing department Holistic marketing
2 Free-spending marketing ROI (return on investment) marketing
3 Marketing intuition Marketing science
4 Manual marketing Automated marketing

To become truly holistic in marketing & achieve these changes, what the marketers need are a
new set of skills, competencies in the following areas of expertise.

1. Customer Relationship management

2. Partner Relationship management

3. Database Marketing & Data-mining

4. Contact Centre Marketing & Telemarketing

5. Public Relation Marketing including Event & Sponsorship Marketing

6. Brand-building & Brand-asset Management

7. Integrated Marketing Communications

8. Profitability Analysis by Segment, Customer, Channel

9. Experiential Marketing
The Marketing Excellence Review: The Best practices :

POOR GOOD EXCELLENT

Product Driven Market Driven Market Driving

Mass Market Oriented Segment Oriented Niche Oriented & Customer Oriented
Product Offer Augmented Product Offer Customer Solution Offer
Average Product Quality Better Than Average Legendary
Average Service Quality Better Than Average Legendary
End-Product Oriented Core Product Oriented Core Competency Oriented
Function Oriented Process oriented Outcome Oriented
Reacting to Competitors Benchmarking Competitors Leapfrogging Competitors
Supplier Exploitations Supplier Preference Supplier Partnership
Dealer Exploitations Dealer Support Dealer Partnership
Price Driven Quality Driven Value Driven
Average Speed Better Than Average Legendary
Hierarchy Network Teamwork
Vertically Integrated Flattened Organization Strategic Alliances
Stock Holder Driven Stake Holder Driven Societal Driven

CONCLUSION

The Nineteenth century American author Ralph Waldo Emerson had said, “This time like all
times is a good one, if we but know what to do with it”. Thus, the exciting time for marketing
has arrived now. And also, in the relentless pursuit of marketing superiority & dominance, new
concepts, new rules, new tools & practices are ever emerging. There are a number of benefits of
successful twenty-first-century marketing. All we need are hard work, insight, right application
of mind & tools, inspiration, perseverance & of course a willingness to achieve greater heights.
Reference : For the preparation of this seminar article the following text book was referred.
Readers may refer to this book for further study :

“Marketing Management”, 12th. Edition (2006), By Philip Kotler and Kevin Lane Keller.
Chapters - 1 & 22.

© Himansu S M

Written - 09-Jun-2007. Published on KNOL 12-Sep-2008, Revised 18-Aug-

2009
Suggestions & improvements are welcome.