Monday 1 October 2012

How marketing contributes to the wealth of a firm


Marketing contribution to the wealth of a firm is somewhat we have heard much about, but is rare to observe and distinguish. Contrary, marketing is widely criticised because of its apparent weak efficiency in creating the wealth of a firm. The question of efficiency has been long discussed by both marketers and academia. Now it is so far away from a consensus, as previously.
In my opinion, many problems of this kind are caused partly because of putting aside some fundamental principles. In order to get some more clarification to the way marketing should be performed, let us turn back to the roots of economics. 
What is economics? Essentially it stands for a way of creating, distributing and using of the wealth. As individuals and firms are different in their incomes and wealth, economics and marketing as its part is required to explain, which is the source of the difference and how, and why prosperous ones differ from unsuccessful. 
After Edith Penrose, we used to believe that those firms, which possess resources, meeting four basic requirements – value, rarity, impossibility to be imitated or being substituted are best prepared for competition in the marketplace. 
However, the firm’s resources might not be sufficient to sustain competitive advantage, as only few resources are productive. Firms need to have distinct capabilities to integrate different resources and make them perform some advantageous task or activity. Resources are the source of capabilities of an organisation, and capabilities are the main source of achieving competitive advantage. A firm’s capabilities may be viewed as glue that binds together all the resources and enables them to be deployed advantageously. So marketing should perform a function of developing firm's capability to be competitive. Furthermore, marketing is seemed to be in a connection with an ability of a firm to behave appropriately in the marketplace. Thus, often underestimated internal marketing might be the crucial driver of business development and competitiveness. 

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