Write an essay on Understanding the Marketing and Financial Practices?
Marketing is the process of flowing goods and services from producer to customer. Marketing management is concerned to identify and anticipate the customers’ need. According to that goods are produced and services are rendered for maximum satisfaction.
Finance is the backbone or life-blood of an organization. Financial management is the process of acquiring, allocation and management of fumed to achieve the organizational goal. Some firms deal with manufacturing capacities to produce goods and some firms deal with services. The goods and services are sold to earn profit. So, funds should be raised to acquire manufacturing and other facilities.
This study includes the understanding of marketing and financial practices and the various areas of those.
There are some requirements which help to achieve the organizational goal such as distinctive high quality product and service, reasonable price of the product and service, applying of modern technologies and systems, etc. Company should have a clear vision to maintain those important elements. It has examined by the researchers that there are various factors which influence the long-term of the organization. In the middle of 1970s, it was started to realize by the sociologists that traditional model was not so enough to help in understanding the large variances between goals and outcomes. Most of the models are incorporated structure, people and systems (Pride and Ferrell, 2010). Culture is fully unique component that influences the function of the organization. In Marketing Management, the concept of organizational culture is very important. In general, marketing gives focus mainly to the consumers than the organizational issues. According to the marketing management, the study of culture basically deals with the understanding of behavior of consumer, defining of culture and sub-cultures in marketing segment and cross-cultural comparison of international markets (Kotler and Keller, 2009). But, several scholars have already started to focus on the impact of organizational culture in the process of marketing management for managerial effectiveness.
There are two types marketing model in marketing management such as transaction cost and relationship marketing. Relationship marketing creates more value because it helps in placing the value on establishing the long-term business relationships. Due to globalization, building new partnership and managing of a network of relationships become more important part in strategic plan. There are three aspects which are related to relationship marketing issue. The major aspect develops a relationship element to the traditional form of marketing management concept. The second aspect recommends to marketing change the transactional form of marketing into relational form of marketing. The third aspect is to create relationship between transactional marketing and relational marketing which would help in create right mix of both of the marketing approach (Bovee & Thill, 2013).
In the present marketing scenario, CMP (Contemporary Marketing) group suggests a new paradigm. The limitations of above three aspects of relationship marketing are recognized by contemporary marketing practices group. The CMP groups find out the impact of various factor of environment. According to the contemporary marketing practices, both transactional and relational marketing may be applied together.
As said by Batory et al. (2005), there are three dimensions of relationship marketing: Interaction marketing, Network marketing and Database marketing. In 1997, the classification was modified. There were two aspects: Transactional exchange and Relational exchange. According to those two aspects, marketing are classified into four distinctive types: Transaction Marketing, Database Marketing, Interaction Marking and Network Marketing.
According to Gittens and Pilgrim (2013), transaction marketing helps on economic transaction. However, according to the transactional exchange is able to categorized. Firm and the buyers are two parties who are involved in general market. In market, the communication is mainly occur inters of transact the exchange. The contact is impersonal. The relationship is discrete in nature. The balance of Passive buyers and active seller helps in balancing the power description. It focuses on satisfying and attracting the potential buyers through managing as well as controlling the element of market like marketing mix (Kerin et al. 2011).
Database marketing creates focus on information and economic transaction. In a specific target market, the parties are a firm and buyers. Flow of communication occurs from individual to firm. In order to expand the marketing, database is more important rather than other thing. The relationship is over both time and separate during the time of database marketing. However, it is formal relationship but the communication occurs through the application of technology. Berk and DeMarzo (2011) argued that the passive buyers and active seller described the balance of power. Various type of tools and techniques of information management are used to develop and control the exchanges with the customer and organization for long term (Gittens and Pilgrim, 2013).
Bonham and Langdon (2009) suggesed that interaction marketing has an interactive relationship between a buyer and seller. Both individual buyers and sellers are active and communication occurs individual to individual across the firms. It is continuous and ongoing in terms of duration (short or long term). The nature of exchanges may be formal or informal. Both mutually active buyer and seller describe the balance of power. Therefore, it is interdependent in nature. Face to face interaction is observed in interaction marketing.
Network marketing refers to the relationships between organizations. There are not only two parties in network marketing. Multiple parties are involved such as buyers, the seller and other organizations. Flow of communication occurs from one organization to another organization involving individuals. The range of contact may be from interpersonal to impersonal and distant to close. The nature of exchanges may be formal or informal. All active and adaptive firms describe the balance of power.
There are three important activities in a firm: Production, Marketing and Finance. Firm raises the required amount of capital and utilizes it in activities which give a return on the invested fund.
The main difference between accounting and finance is that Finance helps in financial decision-making process. There are three major areas of financial decisions in the function of financial management: investment decision, financing decision and dividend decision (Berk and DeMarzo, 2011).
Investment decisions include determination of capital required for the firm and allocation of that fund to earn the benefits in term of cash.
Financing decision is the second important function of financial decision. The decision is taken regarding where from and how to finance and determination of proportion equity and debt.
The managers decide how much profits should be distributed and kept as retain
There are various financial activities in financial management which are described below
Financial planning identify the kind of resources are required to acquire and develop the resources to accomplish the organizational goal.
Budget helps to draw the figure of expected expenses and earnings over a period of time. The expenses and earnings are categorized according to the business activities. Budget is very useful to keep tracking the operating activities according to the plan.
For a new business, it is very difficult to manage the cash flow. Cash flow statement is the most important financial statement. The overall objective of managing cash flow is to meet the short-term liabilities of the firm. Cash flow statement refers to the difference between total cash received and total cash spent.
It is very difficult to take decision regarding the credit term to customer or clients. If a company gives more credit period to its customer and side by side gets short credit from suppliers, it is very difficult to meet the short-term solvency.
Budget deviation analysis helps to detect the how well company is tracking the plan, how much to budget accurately in the future and where problems can be raised in spending.
Financial statements make understand the current and future position of the business. There are two types of statements: Profit & loss Account and balance Sheet. Profit & loss Account shows the overall status of profit or loss by adjusting the all incomes and expenses over the periods of time. Balance sheet shows the total liability and total assets position of the company (Bonham and Langdon, 2009).
Conclusion
Thus to conclude, it can be said that financial analysis explains the performance of the business, whereas evaluation of marketing practice helps business organization to adopt long-term strategy and implementation of such strategies to attain its objectives. Both the practices supports business organization to find out weak area of the organization and measurable actions are taken on that to overcome the situation and to achieve the organizational goal.
Reference List
Batory, SS, William, N and Heineman, A 2005, ‘Ethical marketing practices: An investigation of antecedents, innovativeness and business performance’, Journal of American Academy of Business, Cambridge, vol. 6, no. 2, pp. 135-42.
Bovee, CL and Thill, JV 2013, ‘The art and science of marketing’, in Business in action, 6th edn, Pearson, Upper Saddle River, pp. 290-313.
Bovee, CL and Thill, JV 2013, ‘The art and science of marketing’, in Business in action, 6th edn, Pearson, Upper Saddle River, pp. 290-313.
Bovee, CL and Thill, JV 2013, ‘Financial information and accounting concepts’, in Business in action, 6th edn, Pearson, Upper Saddle River, pp. 390-413.
Gittens, D and Pilgrim, S 2013, ‘Foreign direct investment and human capital: a dynamic paradox for developing countries’, Journal of Finance, Accounting and Management, vol. 4, no. 2, pp. 26-49.
Pride, W. and Ferrell, O. (2010). Marketing. Australia: South Western Cengage Learning.
Kotler, P. and Keller, K. (2009). Marketing management. Upper Saddle River, N.J.: Pearson Prentice Hall.
Kerin, R., Hartley, S. and Rudelius, W. (2011). Marketing. Boston: McGraw-Hill/Irwin.
Bank, W. (2010). Global Development Finance 2010. Washington: World Bank.
Berk, J. and DeMarzo, P. (2011). Corporate finance. Boston, MA: Prentice Hall.
Bonham, A. and Langdon, K. (2009). Finance. Harlow, England: FT Prentice Hall.
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