Sustainable marketing management - Functional thinking, marketing vs. the environment & sustainable strategies

Seminar Paper , 2006 , 23 Pages , Grade: 1,7

Business economics - Offline Marketing and Online Marketing

The aim of this essay is to describe and to discuss the implications of a functional orientation on product development and market communication. Therefore firstly, the definition as well as the reasons of the need of the implementation of functional orientation are shown. Secondly, the consequences and dangers of this approach on product development and market communication are presented and discussed.

Further, the goal of the second part is to work out and describe the concepts of dematerialisation as well as functional orientation from a sustainable perspective. Therefore, the term ‘dematerialisation’ is definded and a brief general overview about the current situation is given. Secondly, this approach as well as the approach of functional orientation will be presented and discussed out of a sustainable perspective.

Finally, the aim of the last elaboration is to work out the paradoxes between the theoretical approach of marketing, namely the foundations of marketing, and the concepts and values of a sustainable society. It will be conducted, what problems might appear when these two approaches are brought together. Therefore, first of all the theoretical foundations of marketing are named and described. Secondly, the concepts and values of a sustainable society are shown and discussed. After this, the problems which are occuring, when these two approaches are brought together, are presented.

I. Functional Thinking

a.) Describe and discuss the implications of a functional orientation on product development and market communication.

The aim of this essay is to describe and to discuss the implications of a functional orientation on product development and market communication. Therefore firstly, the definition as well as the reasons of the need of the implementation of functional orientation are shown. Secondly, the consequences and dangers of this approach on product development and market communication are presented and discussed.

Functional orientation is defined as putting emphasis on functional areas. As a consequence different organisations and companies set their priorities differently on different functions and business units. A company which is known as innovative and has its competitive advantages in this function focusses on this and stresses the importance of the Reserch and Development departement. In general, the focus of functional orientation can be set on all of a companies’ different departements, but most likely are the departements of marketing, research and development, engineering, service or the operations. Different employees in different business units often see the set of priorities differently since it is very common to see his own unit as being the departement which leads the company (Fyock et al., 2002). One example of a company with a functional sales orientation would be that this enterprise sees transactions generating sales in a short-term perspective as more important as long-perspective relation with its customers (Kotler et al., 2004). Functional marketing orientation is understood as an approach to satisfy the needs to succeed in the global markets and to react on the hyper competition. Therefore the role of marketing has to be redefined. The traditional view to seperate functions and business units of a company which behave like sourced-out service departements for the enterprise should change to a holistic streamlining approach which integrates all core units such as marketing, human resource, finance, or the operations themselves (Tesar, 2002). One definition of ‘Product Development’ decsribes the phrase as ‘the overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product’ (Product Development, Industrial Design & Product Design, 2006). If we go more in detail and look at a more specific definition, product development is understood as ‘the set of activities beginning with the perception of a market opportunity and ending in the production, sale, and delivery of a product’ (Ulrich et al., 2000). One definition of market communication, which mainly focusses on the process of the communication describes market communication as ‘the process by which a message, encoded by a sender, is transmitted through a medium to a receiver, who decodes the message and provides feedback’ (Marketing Communication, 2006). Within a green background, Peattie confirms this definition, but adds that ‘communication is typically a relatively uni-directional process involving two parties’ (Peattie, 1995) since the sender of messages mainly send without receiving feedback from the receivers.

Projecting the approach of functional orientation on these two criteria within a company results in assessing the significance of these departements, i.e. shows the higher importance of product development or market communication compared to other criteria or goals of the company. As defined above, the functional orientation of a company makes one part or one business unit more influencing other departements or business units. A company, which is functionally orientated and sets its focus on product development is more innovative compared to other companies which set their focus differently within the same branch. This means, that for this company the most important goal would be to be innovative, to have and to keep the competitive advantage compared to its competitors. The functional orientation makes the company setting the emphasises of the different business units like that. For such a innovative company, the overall goal becomes being leader in terms of research and development and launching new products with new technologies before their competitors. One example for this is a company which is called ‘RWE SCHOTT Solar GmbH’ in Germany. This company focusses on solar technology and provides more new technologies in this field compared to its competitors (RWE SCHOTT Solar GmbH, 2006). Without having a sustainable background, in the clothes industry there is a perfect example of a company, in which the approach of functional orientation made and still makes market communiaction the overall leading goal within the company. This company is ‘Nike’, since this company outsourced its whole production and concentrates only on logistics and marketing. As a consequence market communication and the relation to its customers became the most important goal of the company.

One danger of this approach is, that the company focusses too much on one departement and underestimates the importance of other departemets. For example ‘Nike’ had several suppliers producing for them since the company had outsourced its whole production processes. As a consequence the influenece on quality and labor conditions became smaller. One of these suppliers employed children to produce clothes and shoes for Nike. The result of this was a very bad press, the lost of trust in the brand ‘Nike’ and decreasing sales (AZ Conni, 2006). This example shows, that the functional approach, setting the importances of goals and business units too unbalanced, can lead to certain difficulties and dangers within a company.

Concluding, it could be worked out, that functional orientation leads to giving importance to and further stressing the importance of different goals and business units within a company. Concerning ‘product development’ and ‘market communication’, this results in a very innovative or more customer-orientated company with the focus set on market communication.

b.) Discuss the concepts of dematerialisation and functional orientation from a sustainable perspective.

The aim of this paragraph is to work out and describe the concepts of dematerialisation as well as functional orientation from a sustainable perspective. Therefore, the term ‘dematerialisation’ is definded and a brief general overview about the current situation is given. Secondly, this approach as well as the approach of functional orientation will be presented and discussed out of a sustainable perspective.

According to Herman (Herman et al., 1989), the origins of dematerilisation lie on industrial ecology that discusses the interaction of technology and environment. In this tradition, this concept was used to refer to the inverse of materialising processes. This has the consequence, that socities should decrease inputs such as raw materials, commodities, and things as well as their outputs. These dematerialising processes are said to lighten up socities and economies in terms of materialisation and sustainability. Another source describes dematerilisation as a strategy or as an indicator in the framework of sustainable development, since dematerilisation is defined as the reduction of the throughput of materials in human societies. This could be measured geographically within different countries or regions, but also in terms of branches, industries, households or products. In 2002, a general increase of absolute inflows as well as outflows could be regarded. This shows, that there is not a general development of dematerilisation or against materialisation yet. But a decrease of material inputs and outputs per unit of GDP took place, what showed, that there was a certain first step of relative dematerialisation. This resulted out of material substitutions as well as out of efficiency improvements (Van Oers et al., 2002). As defined already above, a company with functional orientation puts emphasis on certain departements instead of giving the same importance to all business units of a company (Fyock et al., 2002).

From a sustainable perspective, the approach of dematerialisation can be strongly recommended and has to be supported. According to the WCED, sustainability is defined as a ‘development tht meets the needs of the present without compromising teh ability of future generation s to meet their own needs’. In a more detailed way, this means, that is intended to be a means of configuring civilization and human activity so that society, its members and its economies are able to meet their needs and express their greatest potential in the present, while preserving biodiversity and natural ecosystems, and planning and acting for the ability to maintain these ideals indefinitely.

This absolutely goes along with the approach of dematerialisation. Dematerialisation is exactly the opposite of the behaviour on today’s consumption markets since an overall consumption can be seen today. Everbody is consuming more and more.

Firstly, this is a consequence of the new ways of telecommunication which enabled consumers to purchase things easier and easier. This drastically changed the buying behaviour since compared to the situation thirty or fourty years ago, the location of purchasing things totally changed. In those days, people bought products in their towns or in cities which were located near the places where they were living. Today most people are able to buy things nearly everywhere – via internet and the new ways of telecommunication. This can be also seen as one consequence of globalization. According to literature especially companies are today able to source globally. That means instead of buying products or services in the countries, in which they are located, they purchase these goods globally. This allowed the recent decrease of economical, but especially legal obstacles of global trading (Wohltmann, 2000). This global sourcing is always only projected on companies, but it has to be projected as well on private households. One example are toys for children. More than 66 % of all in Europe sold toys are coming from China, which makes private households as well sourcing globally (Global Coalition To Bring Jiang To Justice, 2006). The second reason of this overall consumption results out of this. People are consuming more because the markets are becoming more and more transparent due to more information, e.g. from third parties on a market. As a result of this, prices and especially the seen value in goods, i.e. the customer’s valuation of a certain good, changed. This results in a higher consumption compared to consumption thirty or fourty years ago. To satisfy these needs of the customers, companies are forced to produce more with increasing input and output concerning their production. Even if effiency is raised and companies are producing more by investing less, compared to the past the total amount of consumption and in- and output of production changed. Comparing these figures, this has to be seen out of a long-term perspective. Then the differences concerning the total amounts of consumption and production can be regarded as significant.

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• College: Göteborg University
• Grade: 1,7
• Author: Niklas Kürten (Author)
• Publication Year: 2006
• Pages: 23
• Catalog Number: V79074
• ISBN (eBook): 9783638852852
• ISBN (Book): 9783638853583
• Language: English
• Tags: Sustainable, Functional