90

Long Range Planning,

Vol. 16, No. 4, pp. 90 to 92, 1983
Printed in Great Britain

0024-6301/83
$3.00 + .OO
Pergamon
Press Ltd.

Marketing: The Key to

Organizational
Effectiveness
R. W. Lawson,

Division

of Economic Studies, University of Shejjjeld,

The aim of this paper is to make clear the difference between

the marketing concept and marketing strategy. It advocates
that not only should the former be used by all structures of
business organizations, but that it is necessary to do so. It is the
marketing strategy chosen by the firm that is dependent upon
the organizational
structure and not the concept.

This article takes the form of a reply to Marketing

in Moderation-The
Marketing
Concept
and
Organizations
Structure
by H. H. Baligh and
R. M. Burton published in Long Rurzge Planning.
The criticism of the article arises from a basic fault
in the interpretation
of the concept of marketing. It
is undisputed
that the marketing
concept involves
orientation
of the,firms outlook towards its market
environment
and the wishes of the consumer.
Likewise it is accepted that the marketing
concept
involves the market environment
as the logical
basis for all the firms decisions including
those
regarding its organization.
It is obvious that each
organization
reacts and interchanges
with
its
environment
and therefore,
there must be a
feedback from structure to strategy as proclaimed
by Baligh and Burton.
Indeed the situation
can
perhaps be better reflected by the diagram below.
This diagram
reflects
the position
where
the
organization
is part of the whole and as such is
conditioned
by and in turn
conditions
the
environment.
In practise this can be shown on the
one hand where
changing
demand
from
the
environment
conditions
the outputs and structure
of the firm and on the other where technological
change generated
within an organization
subsequently influences the environment.
Advocates of
the marketing
concept stress that at all times one

The author

is Lecturer at the Division

University
of Sheffield,
Crookesmoor
Sheffield S16 1 FL.

of Economic Studies, the

Building,
Conduit
Road,

U.K.

must be aware of ones environment

and logically
both cases fall in with
this. Monitoring
the
environment
should enable one to both anticipate
changes originating
from the market place and
hence aid the decision
making
powers
of the
organization;
and to gauge the likely impact of
changes originating
from within the organization.
These changes may of course be either favourable or
adverse in their effects relating to the success of an
organization.

The main criticism of the marketing

concept by
Baligh and Burton seems to bc that it ignores costs
associated with organizational
change. Woodward
in her studies in South coast England certainly
observed some organizations
involved in great cost
difficulties
as a result of changing
markets and
market outlook. Her studies indicate that it is not
feasible for any organization
to change easilycertainly not the more rigid mechanistic
organizations as defined by Burns.3 Furthermore
as would
be commonly
expected, Woodward
did show that
different types of organization
are appropriate
to
different types of market situations and different
production
techniques.
Thus
in unit
type
production,
characterized
by large scale contract
work
where
the market
was found
prior
to
the
organization
was
orientated
production,
towards
product
development.
Alternatively
in
batch type production,
where development
and
production
preceded
selling, it is production
to
which the organization
is orientated.
The true
application of the marketing concept is to be found
in Woodwards
third
category-the
process
system. In this system the product
concept
is
developed
and tested to assure the existence of a
market before capital outlay and production
occurs.
Obviously
in this type of system it is marketing
which is the critical function. Woodwards
studies
indicated that the more rigid unit and batch systems
experienced
considerable
organizational
difficulties
if they were required
to change their central
function.

Marketing:

The Key to Organizational

Effectiveness

91

Environmental
Influences
on Organization

~-------_----_

INPUTS FROM
ENVIRONMENT

+I

__

ORGANIZATION

ii

1
b

I
i

OUTPUTS
TO
ENVIRONMENT

Organizational
Influences
upon the Environment

Figure

The problem to be answered though, is what are the

alternatives
to experiencing
costs and organizational
difficulties
in adapting
to the market
environment.
The point
brought
home
most
forcefully
by Levitt4 is that the market environment is a dynamic organism. Obviously
the rate of
change varies with the product and market, as is
reflected
by different
life cycles for different
products. The life cycle for coal can be measured in
hundreds of years whilst that of the hula hoop or
skateboard
is measured
in a matter of months.
However,
the environment
for both is changing
continually
and the rate of change will determine
the intensity with which it must be monitored.
A
dynamic environment
means that an organization
interacting
with it must likewise be prepared to
change or ultimately
perish. The hypothesis can be
extended
to show how different
organizations
respond to change in the market environmentthis
can be represented
diagrammatically
(see
Figure 2).

extreme full application

of the marketing
concept
ignoring all costs would involve every manufacture
being built without any of the advantages of mass
production.
Imagine custom built cans of beans of
every size for every size of family, every degree of
appetite,
every possible type of sauce for every
taste, all in wrappers
specially designed for the

A The Mechanistic

Market
Environment

This diagrammatic
representation
is designed simply
to reflect the way in which different organizational
structure
might
respond
over time to market
environment
changes. It is not intended
that the
market environment
changes at a constant rate but
is presented
in a linear fashion for the sake of
simplicity.
Likewise practical problems of mcasuring the amount of change are not considered.
The
important
points to note are that a rigid structure
should change in a stepped fashion whilst an organic
structure will change more gradually and will be
able to respond more easily to small environmental
changes. It will be likely that the mechanistic
type
structure will retain its form for as long as possible
before changing to cope with its new environment.
It is further likely that when an organizational
change is undertaken
it will be undertaken
not only
to meet the current environmental
situation but
also to meet future
predictions
regarding
the
environment.
The mistake made by Baligh and Burton involves
the belief that the full application
of the marketing
concept involves responding
to meet every change
in the market environment.
The employment
of
the marketing
concept is to enable one to identify
profitable
segments of the market and does not
involve ignorance of all costs. Taken to its logical

Type Organization

Time

B The Organic Type Organization

Market
Environment
Organizational
Structure

Time

Figure

92

Long

Range

Planning

Vol. 16

August

individual. Employing
the marketing concept does
not mean that one tries to satisfy completely
every
customer at any price. Its use is designed to ensure
that one is adequately
satisfying a large enough
number
of customers
in order to achieve
the
objectives
of ones organization
with regard to
profit,
turnover
or whatever
criteria
has been
previously
determined;
continual
monitoring
of
the environment
ensures
that either one can
continue to meet these objectives by changing the
product
mix or if it is more feasible, that ones
objectives must be revised in accordance with the
new
conditions.
The
position
which
seems
applicable to the first case study example by Baligh
and Burton. Adoption
of the marketing
concept
does not mean that the telephone company is forced
to take as much of the PBX market as it possibly can
but simply to ensure that it remains in a profitable
sector where it can survive. If the market declines
far enough so that the telephone company can no
longer achieve satisfactory
returns then it must
perforce change its structure and become involved
with problems
of regulation
and competition
in
order to survive.
If the telephone
company
is
monitoring
its environment
and is consciously
taking a decision not to alter its structure for cost
reasons this is just as valid an employment
of the
marketing
concept as if they attempted
to retain
their previous market by altering to meet its every
need. It is still using the market environment
as a
basis for its decisions regarding its structure. Only
by adopting a marketing concept is the firm likely
to recognize the point at which the environment
has changed sufficiently
to justify a change in its
structure with all the costs and difficulties involved.
Baligh and Burtons second case study suggests a
firm that has recognized a segment of the market as
being profitable enough for its own aims and enjoys
a strategy of concentrated
marketing
rather than
differentiated
marketing.5
Employment
of the
marketing
concept by the firm Dassault would
ensure the monitoring
of the total aircraft market,
or indeed transport market, in order to ensure that
they
remained
in a profitable
segment.
A
completely
introspective
firm is certain to come to
grief eventually since the dynamic market situation
will change leaving it with an obsolete product and
no knowledge
of how best to stay in business. The
firm must be marketing orientated in at least three
directions.
Firstly, it must watch for the changes in demand
originating
from the consumer-for
example the
increased wealth and industrial location associated
with the development
of North
Sea Oil has
stimulated a whole new system of domestic flights
in the United Kingdom.
Secondly,
it must
be remembered
that
the
environment
one is monitoring
not only includes
the customer
but also the competitor.
Structural

1983
changes
changes

may well be necessary to compete

instigated from such quarters.

with

Thirdly,
even if ones organizational
structure in
such a highly competitive
field as the aircraft
industry. allows one a leading edge in technological
development,
this is not always a guarantee
of
success. A classical example of this has been the
development
of the Anglo-French
Concorde.
Undoubtably
in many
respects
Concorde
is
recognized
as being
the most technologically
advanced passenger aircraft in the world, yet as a
commercial
venture it would have been a disaster.
The reason for this is evident-there
is simply not
an existing
market large enough
to make it a
profitable
concern after taking into account the
costs involved.
Monitoring
the aircraft
market
would have shown not a development
towards
faster flight but a development
towards large scale
economy
flights using long haul, large bodied
aircraft
with
low passenger
costs per head.
Concorde
is left with a small market segment
wanting
fast, expensive
flight.
It is doubtful
whether any commercial
firm acting alone could
have developed the plane such were the costs; but
the lesson remains true for any firm who neglects to
observe its environment
for the sake of its structure
or anything
else-it
will undoubtable
produce
something
that no-one wants.
In conclusion
it can be said that it is not the
marketing concept that is inappropriate
to all forms
of organization
but the marketing strategy the firm
adopts-that
is the degree of concentration
or
coverage
of the various segments.
To make the
correct choices regarding its strategy it must adopt
an environmentally
based outlook and ultimately
the
interrelated
aims
and
structure
of the
organization
must be derived from the market. The
alternative for Dassault is not to enter production
in
all market segments at high costs but to monitor the
total market. Then if the occasion arises when, after
allowing for organizational
upheavals, they could
be more profitably
engaged in another segment.
Recognition
of this will have been made using the
marketing
concept as a logical basis for all their
decisions.

References
(1)

H. H. Baligh and R. M. Burton, Marketing

in moderation-the
marketing concept and the organizations
structure, Long Range
Planning, 12, April (1979).

(2)

J. Woodward,

(3)

T. Burns, Mechanistic
and organismic structures,
New Age, New Society, 31 January (1963).

(4)

T. Levitt, Marketing
myopia, Modern
Marketing
Strategy
Bursk and Chapman),
Harvard University Press (1964).

(Ed.

(5)

P. Kotler,
Marketing
Management-Analysis
Control, 3rd edn, Prentice Hall (1976).

and

Management

and Technology,

HMSO

(1958).

Industry

Planning

in a