by Tanya Smith

Created on: March 08, 2009

Marketing can be considered the most important function in a company and is not restricted to the role of advertising and sales, although that is a big part of its function. From the time of a company's inception, marketing helps target a customer base and indentify their needs and desires. Strategic marketing helps develop a company's success by directing those desires and needs to the goods and services provided by the firm and maintaining the company's focus on its customers.

Use of the Marketing Mix tells the company what products are in demand, ensures products are distributed properly in respect to timing and placement. Through marketing promotions, customers learn what products are "right" for them in other words, which products fit their lifestyle and level of income. The company is also guided by marketing as to what price would be appropriate to sell the product or services they produce by comparing the prices other companies charge for similar products/services, such as McDonald's "Big Macs" and Burger King's "Whoppers".

Marketing can help a company build and maintain a long-term relationship with customers by inspiring product loyalty, and keeping them returning to buy the company's products or services. Coca Cola is a good example of this. Their advertisements often appeal to a customer's pride in their nation, such as how Coke is promoted as being "American" around Fourth of July, or appealing to customer sentimentality over how Coke is part of their memories, reminding them of things such as how they drank Coke alongside grandparents or how they left out a Coke for Santa Claus on Christmas Eve. Marketing helps inform customers of any differentiation in product between the company and its competitors and helps companies understand how their products are viewed by consumers, so they can adapt or change them to meet needs better.

The "Pepsi Challenge" a popular taste test used by Pepsi to have customers at large events such as races, concerts, and state fairs is a good example of Pepsi trying to differentiate their product from Coke. The strategy was so successful that the "Pepsi Challenge" inspired Coke to change its popular formulation to make it taste more like Pepsi. They called it the "New Coke". However, the attempt to change the product was unsuccessful as loyal customers did not like the new formula as much as the original Coke. This was not the product people remembered, enjoyed and valued. A large drop in sales eventually brought a return of the original Coke. It was a costly mistake for Coca Cola, reducing their profitability for a short time.

Marketing may not be the most important function in a company in terms of assisting in preparation of financial statements, or in advising how to build a product. Managers in other areas become important in those areas of specialization. A marketing executive can not advise on how to build an airplane or develop a new fuel alternative for cars or prepare a company for an IRS audit. Marketing does not have control over those areas but rather plays a secondary role.

At times, marketing can also play a negative role by sending out the company's message in ways that deter sales and lead to counter-profitability. One example is a headache medicine known as "Head On" whose tv commercials yelled the words "Head On!" repeatedly until consumers became annoyed by the phrase. The company tried to change its marketing tactics by making their marketing error a joke by having commercials show customers who admitted their commercials were annoying, even though they liked the product. Eventually, tv advertising dissipated or disappeared completed and the role of marketing proved detrimental to business.

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