Business Fundamentals: Functions, Management, and Marketing

Posted on May 22, 2025 in Business Administration and Management (BAM)

Business Fundamentals and Core Functions

A business is a for-profit organization focused on maximizing revenue and minimizing costs.

Essential Business Functions

  • HR Management (Human Resources Management)
  • Marketing
  • Finance & Accounting: Recording business transactions.
  • Operations & Production
  • R&D & Innovation (Research & Development): Needs to be more convincing and constant because satisfaction, emotion, and perceived benefit decrease over time.
  • Management Information Systems (MIS): Providing the right information to the right people at the right time.

Key Characteristics of Managers: The POLC Framework

Managers typically exhibit four core characteristics, often summarized by the acronym POLC:

  • Planning: Setting goals and determining how to achieve them.
  • Organizing: Assigning tasks, arranging priorities, assembling resources, and allocating resources.
  • Leading: Fostering positive emotions and motivating employees.
  • Controlling: Measuring results, comparing them with goals, and correcting deviations when needed.

Understanding Marketing: Engaging Consumers and Creating Value

Marketing is the process by which companies engage consumers, build strong customer relationships, and create consumer value in order to capture value from consumers in return.

It involves a value exchange between two key partners:

  • Businesses seek profit and positive reactions, such as Word of Mouth (WOM).
  • Customers seek value and satisfaction.

The Practical Marketing Process: STP and Beyond

STP (Segmentation, Targeting, Positioning)

  • Segmentation
  • Targeting
  • Positioning
  • Developing initial ideas for products/services (what, to whom, where) – (Note: This step is often not explicitly included in textbooks).

Market Research

Market Research Concept

Market research involves:

  • Collecting data
  • Analyzing data
  • Reporting the results
Market Research Process
  1. Identify Research Objectives
  2. Data Identification
    • What data to collect
    • Types of data (quantitative/qualitative)
    • Sources (primary: interviews; secondary)
  3. Where to Collect Data: The Marketing Environment
    External Environment (Often uses secondary data)
    • General Macro Environment (PESTE Analysis)
      • Political & Legal: Focus on laws and regulations related to products/services.
      • Economic: GDP, GNP, demand/supply, inflation/deflation.
      • Social & Cultural: Demographics, beliefs, habits, values, norms, buying patterns, language.
      • Technology: Technologies for creating/producing products/services and supporting technologies (e.g., IT).
      • Environmental: Land, air, water, etc.
    • Industrial Micro Environment
      • Suppliers
      • Customers
        • Consumer Customers
          Key Characteristics of Consumer Customers
          • Buy for need satisfaction and perceived values.
          • Personal consumption.
          • Consumers are vast in number.
          Consumer Buying Process
          1. Need Recognition
          2. Information Search
          3. Alternatives Evaluation
          4. Purchasing Decision (Buy) – Provide convenience
          5. Post-Purchase Reactions (perceived cost vs. perceived value)
          Participants in Consumer Buying
          • User
          • Deciders
          • Need Initiators
          • Influencers
          • Buyer
        • Business Customers
          Key Characteristics of Business Customers
          • Buy for cost reduction (-) and revenue generation (+), leading to profit (+).
          • What a business buys: Raw materials/parts, capital items (e.g., buildings), supplies, services.
          Business Customer Buying Process
          1. Need Recognition
          2. Information Search
          3. Optional Step: Call for Offers
          4. Alternatives Evaluation
          5. Purchase
          6. Post-Purchase Evaluation
          7. Post-Purchase Reactions
          Participants in Business Buying
          • Important Person (Decision Maker)
          • Purchasing Department
      • Competitors
        • Direct Competitors
        • Input Competitors
        • Potential Competitors
      • Marketing Intermediaries (Distribution Channel)
      • Substitute Products
    Internal Environment
    • Resources
      • Visible Resources (e.g., money)
      • Invisible Resources (e.g., reputation)
    • Culture (Vision, habits, etc.)
    • Functions
      • Marketing
      • Marketing’s relationship with all business functions (including advanced functions).

    By analyzing both external and internal environments, businesses can identify Strengths, Weaknesses, Opportunities, and Threats (SWOT).

  4. Data Analysis
  5. Report the Analysis Results

Customer Identification and Relationship Management

  • Customer identification, segmenting, selecting customers, and targeting customers (STP).
  • Develop and maintain Customer Relationships (CR).

Marketing Mix and Promotion Strategies

Marketing Efforts (Positioning)

  • The 4 Ps Model: Product, Price, Place, Promotion.
  • Additional Ps for Services: People, Process, Physical Evidence.

Promotion Mix

  • Advertising
  • Sales Promotion
  • Public Relations (PR)
  • Personal Selling

Understanding Customer Types: B2B vs. B2C

  1. Business Customers (Business-to-Business – B2B): Primarily look for profit.
  2. Consumer Customers (Business-to-Consumer – B2C): Primarily look for positive emotion and satisfaction.

Needs vs. Wants in Marketing

  • Needs: The fundamental things required for survival.
  • Wants: The specific forms human needs take, shaped by individual personality and society.