The importance of employees in marketing

The importance of employees in marketing Inserts His/Her Inserts Grade Inserts 21 Introduction: The categorization of employees as the most valuable asset of an organization has been proclaimed by many marketing, human resource and other business experts (Kotler 1986, Judd 2002, Freeman, 1993; Shoniwa and Gilmore, 1996; Peak, 1997; Business Week, 2000). However, it is just a claim and no concrete measures are taken to harvest this invaluable asset. Companies focus on the four P’s of marketing strategy, rather than the role of employees in delivering customer satisfaction. Creating and delivering value to the customer is impossible without the commitment of the employees. The literature review will focus on the importance of human resources in marketing and the marketing mix. Topic: The topic the literature review is based on is the importance of employees in marketing. Conceptually, the review will look at this topic from different angles including the concept of people power in the marketing mix as proposed by Judd (2002) and internal marketing as covered by Rashid and Ahmed (2000). It will also cover the basic concepts of marketing such as customer orientation, differentiation and the marketing mix and relate them to the role of employees in the organization. The conceptual framework is that employees can be used to deliver value, differentiate the offering and achieve customer orientation resulting in achieving customer satisfaction. Thus, employees are an important element of marketing. The aims of marketing An organization needs customers to survive and be profitable and customers are looking for value. Marketing persuades the customer that value is to be found in a specific organization’s product or service thus an organization has two main marketing objectives which are to satisfy customers and to provide customers with a differentiated product that holds value for them. An introduction of marketing mix by Judd (2002) explains that it is the combination of price, promotion, placement and most importantly product that an organization develops to attract and satisfy customers. The marketing mix elements must provide an offering that holds value for customers and substantially differentiates the offering from competitors. According to Levitt (1986), marketing is basically about getting the customer and this customer orientation defines all aspects of marketing strategy. The argument for people power as the 5th P by Judd (2002) is based on this concept of customer orientation which is the cornerstone of marketing principles. Differentiation An organization can differentiate its product offering through product, design, style, name, logo, packaging, features, store location, availability, branding, goodwill and personal touch (Chamberlin, 1965). But the core concept is perceived differentiation in the mind of the customer, thus differentiation is only effective if it is perceived by the customer to add value to the product (Kotler 1986). Thus, on this basis of differentiation the organization can attract customers and satisfy them. Marketing mix The marketing mix denotes elements of marketing strategy and product development that can be modified by the organization. These elements represent the augmented product or service offering to the customer and can be differentiated to suit the customers’ needs. Price, place, promotion and product are widely accepted as the four P’s (McCarthy, 1960). However Kotler (1986) the marketing Guru, suggested that public relations should be a part of the marketing mix as did Mindak and Fine (1981). Political power has also been suggested as a marketing mix variable (Kotler, 1986) whereas Wind (1986) asserted there were 11 P’s in the marketing mix. Relationship marketing and the element of human resources in marketing Recently, the concept of relationship marketing has been pushed forward as a replacement for the marketing mix (Groonroos, 1994). Although, relationship marketing has gained prominence it does not compromise the significance of the marketing mix; according to Judd (2002). In fact, it is another concept of marketing that requires the harvesting of human resource to develop relationships and thus deliver value to the customer. It is in ideology close to the concept of people-power as an element of the marketing mix. The inclusion of people power as a 5th element was first discussed with regards to field sales in B2B marketing (Judd, 1986) and with regards to non-profit organizations (Judd, 2001). With reference to industrial and manufacturing concerns it was included in the marketing mix by Gross et al. (1993) and to small businesses by Parkinson (1988). Although, it has been discussed by many other scholars (Christopher et al., 1993; Harris, 1999), recently people power has ignited more interest with regards to organizations across all sectors of the economy. The importance of employees in marketing The role of employees in differentiating and delivering value is integral to an organization’s success. Kotler (2000) mentions employees as a differentiating element for organizations. According to him, an organization consisting of qualified, courteous and helpful staff is automatically differentiated from a competitor who does not have a customer-oriented staff. Many business authors mention the employees as the most important asset of an organization (Freeman, 1993; Shoniwa and Gilmore, 1996; Peak, 1997; Business Week, 2000) but this assertion has not had any real impact on the way organizations consider their human resources. Employees create value through providing superior service to the customer even if it is just delivering a package or transferring a phone call. Although motivational theories have changed from a more scientific to humanistic approach and managers of every organization claim in their annual reports that their employees are the driving force, or they are invaluable but implementation of these assertions in strategies and organizational behavior has been lacking. Creating customer satisfaction through employee involvement According to Judd(2002) the main aims of marketing which are delivering value to customers through differentiation and achieving customer satisfaction are attainable through the organization’s employees. The organization cannot be fully customer oriented until its employees are focused on creating and delivering value to the customers. Employees at all levels of the organization should be committed to the customer and that is the only way an organization can be fully customer oriented. Accordingly, it is vital that employees be included in the marketing strategy as the fifth P. The author proposes that people-power be included in the marketing mix as employees are as important in differentiating and delivering value to the customer as price, product, placement and promotion. The strategy of managing people in the organization to develop a customer oriented approach is found in many articles about internal marketing. Piercy (1995) states that views of performance diverge amongst internal and external markets and employees may perceive service to be high quality but customers may be of a differing opinion thus even employees not in contact with the customer should be aware of the customer’s needs and priorities and an analysis of divergence between external and internal market should be carried out. Internal barriers may be recognized and should be the basis of the internal marketing strategy and thus the gap between the external and internal market should be closed. Rashid and Ahmed (2000) in their article focus on the three step implementation of internal marketing. Firstly employees should be treated as customers and thus the second step involves marketing techniques to be used to move the employees to a more customer oriented approach. Thirdly, strategies should be developed create awareness about the employees’ role in the organization and its strategy and change management should be undertaken. Another approach to managing people power is that the CEO should be responsible for directing the organization into a more customer oriented approach (Levitt, 1969). Webster (1988) agrees with this concept of the CEO being the guiding force for commitment to marketing strategy. Judd (2002) however, takes a different approach by dividing employees into categories based on the level of involvement in the marketing mix and customer contact as mentioned previously. He proposes different strategies for different types of employees and claims this will be more effective than a blanket approach. He divides employees into contactors, influencers, modifiers and isolateds. Contactors are the developers of marketing strategy, influencers are people in power such as the board of directors and the CEO, modifiers are the point of contact such as receptionists and isolateds are the support staff. As contactors and influencers may already be customer oriented but modifiers and isolateds may need different strategies to develop customer orientation and focus on the bigger picture. Conclusion: The marketing mix combines the elements of price, product, promotion and placement to provide a differentiated and valued offering to the customer but if there is no employee commitment than this value can be lost. Marketing strategies that focus on customer orientation and differentiation through employees may be just as successful as forming strategies based on branding or product features. As commitment to the customer is not a part of motivational strategies, management needs to develop their own strategies to develop customer orientation through internal marketing. For marketers to develop a customer oriented approach in the organization, formalizing people power and developing and implementing strategies to harness this power is vital. Every employee in the organization should be committed to delivering value to customers. Employees that are not linked to the marketing plan or strategy are also vital in developing customer orientation within the organization. Thus either through the inclusion of people power in the marketing mix or through internal marketing, customer orientation should be developed throughout the organization including the CEO and the support staff. The inclusion of employees as a vital marketing force can help organization’s achieve their marketing goals and provide a superior and differentiated service through their employees. References: Bagozzi, R. P., Jose, A. R., Kirti, S. C. and Franciso, C. (1998), Marketing Management, Prentice-Hall, Upper Saddle River, NJ. Borden, N. H. (1964), “ The concept of the marketing mix”, Journal of Advertising Research, Vol. 4, June, pp. 2-7. Business Week (2000), “ The 21st century corporation”, Business Week, No. 3696, p. 278. Chamberlin, E. H. (1965), The Theory of Monopolistic Competition, Harvard University Press, Cambridge, MA. Christopher, M., Payne, A. and Ballantyne, D. (1993), Relationship Marketing, Butterworth-Heinemann, Oxford. Dickson, P. R. and Ginter, J. L. (1987), “ Market segmentation, product differentiation, and marketing strategy”, Journal of Marketing, Vol. 51, April, pp. 1-10. Freeman, J. M. (1993), “ Human resources planning-training needs analysis”, Personnel Management, Vol. 34 No. 3, pp. 32-4. Gro? nroos, C. (1994), “ From marketing mix to relationship marketing: towards a paradigm shift in marketing”, Management Decision, Vol. 32 No. 2, pp. 4-21. Gross, A. C., Banting, P. M., Meredith, L. N. and Ford, I. D. (1993), Business Marketing, Houghton Mifflin, Boston, MA. Harris, L. C. (1999), “ Barriers to developing a market orientation”, Journal of Applied Management Studies, Vol. 8 No. 1, pp. 85-101. Judd, V. C. (1987), “ Differentiate with the 5th P: people”, Industrial Marketing Management, Vol. 16, pp. 241-7. Judd, V. C. (2001), “ Toward a customer-orientation and a differentiated position in a nonprofit organization: using the 5th P – people”, Journal of Nonprofit & Public Sector Marketing, Vol. 9 No. 1/2, pp. 5-17. Judd, V. C. (2002), “ Achieving customer orientation using people-power, the 5th P”, European Journal of Marketing, Vol. 37 No. 10, 2003, pp. 1301-1313. Kotler, P. (1986), “ Megamarketing”, Harvard Business Review, Vol. 64, March-April, pp. 117-24. Kotler, P. (2000), Marketing Management, 10th ed., Prentice-Hall, Upper Saddle River, NJ. Kotler, P. and Andreasen, A. R. (1996), Strategic Marketing for Nonprofit Organizations, 5th ed., Prentice-Hall, Upper Saddle River, NJ. Levitt, T. (1969), The Marketing Mode, McGraw-Hill, New York, NY. Levitt, T. (1986), The Marketing Imagination, New expanded edition, The Free Press, New York, NY. McCarthy, E. J. (1960), Basic Marketing, Richard D. Irwin, Homewood, IL. Mindak, W. A. and Fine, S. H. (1981), “ A fifth P: public relations”, in Donnelly, J. H. and George, W. R. (Eds), Marketing of Services, American Marketing Association, Chicago, IL, pp. 71-3. Parkinson, S. T. (1988), “ Marketing update”, Journal of General Management, Vol. 14, Autumn, pp. 8-13. Peak, M. H. (1997), “ People are our greatest asset”, Management Review, Vol. 86 No. 6, p. 1. Piercy, N. F. (1995), “ Customer satisfaction and the internal market- Marketing our customer to our employees”, Journal of Marketing Practice: Applied Marketing Science, Vol. 1, pp. 22-44. Porter, M. E. (1985), Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, New York, NY. Rafiq, M. and Ahmed, P. K. (2000), “ Advances in the internal marketing concept: definition, synthesis and extension”, The Journal of Services Marketing, Vol. 14 No. 6, pp. 449-62. Shoniwa, S. and Gilmore, H. L. (1996), “ Development of human resources: a portfolio strategy”, SAM Advanced Management Journal, Vol. 61 No. 1, pp. 16-23. Sikula, A. Sr (2001), “ The five biggest HRM lies”, Public Personnel Management, Vol. 30 No. 3, pp. 419-28. Stershic, S. F. (2001), “ Leveraging your greatest weapon”, Marketing Management, Vol. 10, July/August, pp. 40-3. Swartz, D. J. (1973), Marketing Today, A Basic Approach, Harcourt Brace Jovanovich, New York, NY. Walls, J. E. and Self, D. R. (1995), “ Bridging the gap between organizational strategic planning and product differentiation”, in Thompson, D. L. and Owens Swift, C. (Eds), Transforming Marketing: On-line and Integrating, Atlantic Marketing Association, Statesboro, GA, pp. 191-6. Webster, F. E. Jr (1988), “ Rediscovery of the marketing concept”, Business Horizons, Vol. 31 No. 3, pp. 29-39. Wind, Y. (1986), “ Models for marketing planning and decision making”, in Buell, V. P. (Ed.), Handbook of Modern Marketing, McGraw-Hill Book Company, New York, NY.