Marketing in the modern organization

Marketing in the modern organization
Marketing drives successful organizations but it is often misinterpreted and sometimes
gets bad press. Critics use phrases like marketing ‘gimmicks’, ‘ploys’ and ‘tricks’ to
undermine the valuable effect that marketing can deliver. This is unfortunate because the
essence of marketing is value creation not trickery. Successful companies rely on customers
returning to repurchase, and the goal of marketing is long-term satisfaction, not short-term
deception. This theme is reinforced by the writings of top management consultant, the late
Peter Drucker, who stated:1
Because the purpose of business is to create and keep customers, it has only two central
functions—marketing and innovation. The basic function of marketing is to attract and
retain customers at a profi t.
What can we learn from this statement? First, it places marketing in a central role for
business success and focuses managers’ attention on attracting and keeping customers.
Second, it implies that the purpose of marketing is not to chase any customer at any price.
Drucker used profi t as a criterion. Please note that profi t may be used by many commercial
organizations, whereas in the non-profi t sector other measures of success might be used,
such as reduction of social deprivation or hunger. Consequently, the concepts, principles and
techniques described in this book are as applicable to Oxfam as to Apple.
Third, it is much more expensive to attract new customers than to retain existing ones.
Indeed, the costs of attracting a new customer have been found to be up to six times higher
than the costs of retaining old ones.2
 Companies which apply the principles of marketing
recognize the importance of building relationships with customers by providing satisfaction
and attracting new customers by creating added value. Grönroos stresse