Marketing Communication as Company Dialogue with the Market: Value Creation and Integration Perespective

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1 Management and Business Administration. Central Europe Vol. 22, No. 4(127): p , ISSN , Copyright by Kozminski University Marketing Communication as Company Dialogue with the Market: Value Creation and Integration Perespective Jan W. Wiktor 1 Primary submission: Final acceptance: Abstract Purpose: The study aims to identify the role of communication in the process of creating and integrating value. The author considers three issues: 1) the identity and nature of marketing communication; 2) the structure of its functions and tasks in the creation of value; and 3) the role of marketing communication in the integration around value. Given the constraints of the study, the considerations are summary and selective and constitute an attempt at highlighting the key elements of the issue referred to in the study title. Methodology: The study is a theoretical reflection. By analysing the nature of marketing communication as a company s dialogue with the market, it finds a theoretical justification: confirmation of the main thesis concerning the broader and deeper functions of communication in value marketing. Conclusions: The essential functions of marketing communication lend themselves to a broader than hitherto presentation as a task revolving around creating and integrating value. Communication by nature provides information about the offer of the company and its values (as in the traditional sense) and also it creates these values. Its major task involves integration around value, both internally within the structure of the marketing mix, and externally in the relationship between the company and the market, the company s environment. Originality: Previous discussion of the issue in pertinent literature has placed communication at the final stage of the business activities and attributed to it the role of providing information about a particular utility, the value of the product in the process of social exchange. The author argues that this approach is incomplete. Marketing communication may be an area where value is created and may, at the same time, integrate values around the company s market oriented activities. Keywords: marketing communication, value marketing, marketing mix JEL: M31, M37 1 Cracow University of Economics Correspondence address: Cracow University of Economics, Department of Marketing, Rakowicka 27 St., Cracow, jan.wiktor@uek.krakow.pl. DOI: /mba.ce Vol. 22, No. 4(127), 2014

2 Marketing Communication as Company Dialogue with the Market: Value Creation... MBA.CE 195 Introduction The study concerns itself with identification of the role of communication in the process of creating and integrating value. Such a goal requires some comment and references to a number of assumptions and premises. These relate to the category of value, the essence of marketing and defining its identity from the scientific viewpoint, as well as a specific philosophy of conducting business and minding a company s own interests. First, the previous approach to the issue in pertinent literature relating to value marketing has placed communication at the far end of business activities and attributed to it the major function of providing information about a particular utility: the value of a product in the process of social exchange. This approach is understandable and relevant, but one can postulate that it is incomplete. Marketing communication can perform broader and deeper functions; it can constitute an arena for creating value and, at the same time, integrate it in the course of the company s activities on the market. The development of the information society (Toffler, 1985) and the network society (Zacher, 2007; Castells, 2008), and information and communications technology (ICT) are import ant prerequisites that validate this thesis. It is widely known that this development brings with it profound social and economic consequences for both the company, its business model and its customers alike in their private lives and the networks of social relationships. This argument will be the subject of reflection and specific verification and justification in the theoretical dimension. Second, the category of value is ambiguous and multi-dimensional. It has many meanings in different dimensions of science and its specific fields and disciplines, social life and the language of everyday communication. In philosophy, it is of interest to axiology (the philosophy of value) and has a clear ethical dimension (Rogoziński, 2012). It expresses both the goals of human activity and rules of conduct. Economics views value two-dimensionally as a feature of a good (product), which is subject to evaluation. Value is treated as a synonym of utility, benefits and profitability. It manifests itself through both utility value and exchange value. As such, it has a financial dimension, which is determined by the price of a good, product or object of exchange, but it also has a wider social dimension, which in praxeology is aptly represented by the category of benefit. It is the result of overall evaluation, comparison of the relationship between expenditure and effects in a broad social dimension and meaning. As such, it is an important component of efficient action, i.e. an action that is effective, beneficial and economical. Finally, the role of marketing communication is explained by the third element of value marketing ending the process of creating and delivering value. It seems, however, that the essential functions of marketing communication can be defined more broadly as a job involving creation and, at the same time, integration of value. Promotion by nature provides (as in the traditional sense) information on the company s offer and its value and creates this value itself. Its major task involves integration around value, both internally within the structure of the marketing Vol. 22, No. 4(127), 2014 DOI: /mba.ce

3 196 MBA.CE Jan W. Wiktor mix, and externally in the relationship between the company and the market. It is these assumptions that are the subject of reflection in this study. The reflection involves three issues: 1) the identity and characteristics of marketing communication; 2) the structure of its functions and responsibilities in creating value; and 3) the role of marketing communication in integration around the value. It is also obvious that given the constraints of the study, the considerations need to be summary and selective, trying to highlight the key elements of the issue as captured by the title of the study. Marketing Communication: Scope and Structure of Functions In both the theory and practice of marketing activities, the term marketing communication has various definitions and interpretations. The differences in presentation manifest themselves in two approaches: a broad one and a narrow one (Pilarczyk and Waśkowski, 2010; Pilarczyk, 2011; Waśkowski, 2011; Mruk, 2004; Garbarski, 2011; Wiktor, 2013). In narrow terms, promotion signifies an array of instruments and actions through which a company communicates its offer, i.e., communicates to the market information concerning the product or firm, shapes purchasers needs and preferences, stimulates and directs demand and reduces its price elasticity. In this sense, promotion is the activation of sales and is, as H. Meffert aptly and vividly said, a marketing loudspeaker and instrument with which the company advertises and supports the sale of its products (Meffert 1986: 446). In general, the nature of so perceived promotion is expressed by a one-way impact of the company on the market, transmission of its message and communication of values (features, benefits, utility). The initiative rests entirely with the company, as does the choice of instruments, form and frequency of interaction. The recipient of promotional activities is assumed to be a passive party, simply a recipient of information. His behaviour in the market play is aptly described by basic one-way information transmission models developed within the framework of sociology, including social communication. In turn within a wider sense, marketing communication combines elements contained in the definitions of promotion with a need and tools needed by the company to enter into a dialogue with the environment. Thus these days marketing communication becomes a term, but also a market reality, which is clearly broader than mere promotion. In much the same manner as in the modern theory of sociology and social communication, the content of the concept of communication presupposes dialogue, i.e., a two-way, bi-directional, interactive intercourse. However, promotion is devoid of dialogue. Marketing communication by definition assumes the need to convey sale related information and also the need to acquire (through market and marketing research) information relevant from the viewpoint of its general and specific objectives. Such a set-up assumes the existence of feedback, which is about an interactive, two-way flow of information necessary for the existence of a properly understood act and process of communication. DOI: /mba.ce Vol. 22, No. 4(127), 2014

4 Marketing Communication as Company Dialogue with the Market: Value Creation... MBA.CE 197 The challenges of the modern world dictate that promotional activities, their functions and tasks can be realised principally only by means of a unique dialogue between the company and the environment. This dialogue, having a nature typical of social communication, involves the participation of the company with its information and promotional activities on the one hand, and the involvement of the consumer with a structure of his needs, expectations and values on the other. Indeed, a company cannot promote its products or image in isolation from communication with the market. Each transaction of exchange conducted on the market is inextricably linked with numerous acts of communication. A company performs its promotional activities through communication aiming to induce desired actions and reactions on the part of purchasers. In turn, the purchaser s response comes in the form of either acceptance or denial of the company s marketing offer, expressed by means of a set of utilities relating to the promoted product equipped with a certain price and made available at a particular time and place. Because of the challenges of today s marketplace, market communication is a kind of dialogue between the company and potential purchasers. It is realised, on the one hand, through informational and persuasive activities and, on the other, through feedback involving the recipient and the sender of the message: the company s offer. Such dialogue, honest and ethical in nature, is in itself a value per se. An analysis of the underlying issue and identification of the nature of marketing communication requires that an important element be emphasised. Pertinent literature reveals an idea whereby a marketing communication system is equated with marketing as such. It is emphasised that communication cannot be limited to a certain group of tools and activities because everything can communicate (inform in the simplest basic approach) a message. According to this position, marketing is a special management function, and more broadly, a company s orientation that can even be considered as an extended form of market (marketing) communication. The entirety of a company s relationships with the market constitutes a specific communication channel through which flows streams of information creating value in the material and informational dimension (Figure 1). The link between the company, the purchaser and the market is no longer ensured by promotion alone, but rather by holistically perceived marketing, which is a communication system (Wiktor 2013: 52 55). This approach rightly emphasises that communication functions can be performed not merely by instruments referred to as promotional tools but by all the elements of a company s operations: its mission, strategies, and methods of their implementation or the composition of other elements of the marketing mix. In other words, relying on a system of value creation for the company and for the environment, marketing must constantly communicate the value (Doyle, 2003; Rudawska, 2008; Szymura-Tyc, 2005; Czubała, 2006). Communication is thus becoming an essential dimension and an arena for creating and revealing the company s identity, emphasising its social meaning and purpose. This thesis therefore fits into an organisation s features that are essential to a company s market orientation. Vol. 22, No. 4(127), 2014 DOI: /mba.ce

5 198 MBA.CE Jan W. Wiktor Figure 1 Marketing communication in value marketing: value creation and integration perspective Creating value material dimension Creating value value informational material dimension PRODUCT COMPANY MISSION STRATEGY PRICE DISTRIBUTION MARKETING COMMUNICATION GOALS FORMS INSTRUMENTS PURCHASER'S MARKET, OTHER STAKEHOLDERS VALUE INTEGRATION Source: author s own research. It is communication that has the potential it usually employs to create needs and new markets, shape shopping preferences, determine social capital of the brand, comprise the mechanism of customer loyalty, affect the form and content of the relationship between the company and the environment, and ensure a relationship between partners. Under the conditions of an information-based society, a wealth of services and functionalities is offered by the Internet. With development of Internet 2.0 and 3.0, communication in a very significant manner creates certain values and promotes the integration of the company around the value of both the company itself and consumer value, as well as the value of other stakeholder groups. It is in these dimensions that the identity of modern companies and organizations is encapsulated. Those in the vein of A. Noga s proposition become con-firms institutions oriented at the consumer, consumer s value, expected benefits and utilities (Noga, 2009, s. 295). This approach merits particular emphasis on the level of marketing communication and marketing of company value. The development of company confirmation involves the identification of new social market roles, both of the company and the consumer, and a clear emphasis on the need for ongoing dialogue, continuous communication between both entities based on the DOI: /mba.ce Vol. 22, No. 4(127), 2014

6 Marketing Communication as Company Dialogue with the Market: Value Creation... MBA.CE 199 communication of values. This communication leads to a new form of the company s market orientation dominated by dialogue and communication and a search for common interests, as expressed by the category of value integration. This scope of the concept of marketing communication and promotion, equating it with marketing, is too broad and somewhat controversial, though. The reality of a company s communication with the market is undoubtedly very broad and involves all aspects of a company s functioning to an extent that makes the term company as a communication network, which is increasingly encountered in pertinent literature, seems to be quite close to the truth. The thesis of delineation of the borderline between a system of marketing communication and the communication of value and promotion of the company through other marketing instruments is as difficult as today s blurred and indistinct boundary between the company and its environment. However, the natural and fully apparent uniqueness of individual functions of the company and its tools for implementation of strategic arrangements requires that the scope of considerations be limited to instruments and forms of promotion, properties and relationships that occur between them, forming a company s communication system with the market. Functions of Marketing Communication vs. Value Creation Perspective Value creation has two dimensions: a tangible material one and an informational one (see Figure 1). Marketing communication creates and clarifies the latter in a detailed manner. Its unique role in creating value results from the functions and tasks it performs and an essential feature of modern society: it has become an information and Internet-based society. In such circumstances, information is both a prerequisite for certain decisions and assessments of the company and the consumer and also constitutes a specific value of an autotelic and instrumental nature. This thesis fully corresponds to the nature of marketing communication, its features and tasks and allows analysing it in terms of creating specific utility and exchange values. In the process of value creation, its delivery and communication, the marketing communication system has significant functions. There is no need for a broader analysis of this; such analyses are available in pertinent literature, but one should only emphasise their structure and nature (Kotler and Keller, 2012, p. 509; Bruhn, 2013, p. 85 et seq.). The configuration and structure of the promotion function is complex. One can talk about three levels of the communication function: level I - main function of the system; level II basic functions common to the whole system of marketing communication; and level III detailed functions expressing tasks, properties, purpose and use of the various instruments (Wiktor, 2013, p ). Pertinent literature generally emphasises the informational, educational and persuasive functions, sales activation, but also (albeit a bit less frequently) competitive functions. Assuming that they are actually basic, one must emphasise an important facet. These functions should be placed in the broader context and perspective of the main function of the system. It is a specific marketing Vol. 22, No. 4(127), 2014 DOI: /mba.ce

7 200 MBA.CE Jan W. Wiktor communication mission. It can be described as a function that involves ensuring a company s permanent presence in the market. A company should safeguard its presence on the market in the real and symbolic informational sense through communication and do so in addition to other tools of creating value systems. The need for constant communication with the market in its numerous guises (company related, product related, institutional and spatial) becomes a condition of success. It is through promotion that a company may take and occupy a permanent place in purchasers social awareness on the map of their perception, among a set of criteria underlying market decisions, and also in the media (including social media) providing direct two-way communication. Therefore, it favours the formation of the image of the company and its products in consumers minds. This function requires ongoing actions. Information-wise, promotion should therefore be a continuous process, a process creating conditions for sustained market presence. A function aimed at ensuring continuous market presence is a function characterised by a high degree of generalisation. It constitutes a good, proper and essential platform for the identification of further basic and specific functions highlighting the role of communication in value marketing. Promotion s main function has a summary nature and this nature is essential in value marketing. This is determined both by the continuity of human needs manifesting themselves through demand and consumers behaviour in the market and a desire to ensure continuity of a company s operations and development. In their decisions, both parties in the exchange process are guided by a set of specific expected benefits values that constitute a premise of market decisions and a plane for the evaluation of each and every option. The importance of promotion in value marketing, the process of creating and integrating value, can be considered on two levels. They express the sphere of interests and expectations of both sides of the communication process: the sender (the company) and the recipient of the message (the purchaser of a company s products). This is emphasised by Kotler and Keller who stated that marketing communication allows companies to associate their brands with people, places, other brands, sensations, feelings and things. It can contribute to the capital of a brand by embedding the brand in customers memory and creating its image as well as to drive sales and even shape shareholder value (Kotler and Keller, 2012, p. 510). That means that communication makes an important contribution to the creation and integration of a complex and multiple structure of value for its participants. Two issues in particular should be stressed at this point. Through its basic functions (informational, persuasive and competitive), communication offers the possibility of winning customers. When it is pursued steadily and constantly with regard to the requirements of the function of permanent market presence, communication is a prerequisite for the formation of specific material and informational values satisfying selected market segments. Promotion can become an important component of marketing assets and an element of a company s competitive advantage. At the level of the recipient, the second player in the marketing communication process, the following circumstances, albeit of a different nature, are essential. The purchaser sees in marketing DOI: /mba.ce Vol. 22, No. 4(127), 2014

8 Marketing Communication as Company Dialogue with the Market: Value Creation... MBA.CE 201 communication the offer being attuned, both seemingly symbolically, information-wise and actually, to his individual needs and preferences and to the structure of the expected values. It is through promotion that marketing employs knowledge about the market and market segmentation in practice. It has information that is relevant to the purchaser in a given market segment and his value and selection of forms of communication and communication channels, which are most relevant from his point of view. An adequately programmed and professionally executed marketing communication system, coupled with appropriate prices and distribution channels, can lead to a meeting between the purchaser and the product. Marketing communication plays an important educational function for the purchaser. It provides the market with information about the product, its properties, characteristics, terms of use, ways of satisfying needs and enables the evaluation of competitive offerings. As such, it is the premise of creating specific informational, economic and social values for the consumer. Through promotion, the purchaser gains knowledge about the company, its mission and strategy of the mission s implementation, its market position, product and pricing structure, sponsorship and initiatives aimed at giving benefit to the local community, its presence in social networks and activity in other forms of online communication. All these elements form an architecture of values expected by the consumer. Role of Communication in Value Integration The second area for analysis of the issue involves the role of marketing communication in value integration. This thesis is a mental shortcut, but it is also complex. To develop and characterise it, it is advisable to highlight some of the conditions that apply to the possibilities and forms of integrating value by means of marketing communication. A company s communication with the market is a system that consists of a considerable number of specific forms and instruments. Kotler and Keller enumerate eight tools (Kotler and Keller, 2012, p. 512), while Bruhn identifies nine of these (Brun, 2013, p. 57). These tools can also be used in two substantially different communication environments: the traditional one and the hypermedia environment of the Internet (Victor, 2013, p. 73). Each of them is a carrier of certain functions, benefits or unique values. The professionalism of market communication management therefore requires ensuring consistency between their exchange and utility values. Integration in this dimension creates an integrated system of marketing communication. Its attributes and tasks are prerequisites for effective communication that integrates goals and anticipated benefits for the company and the consumer (Rossiter and Bellman, 2005; Bruhn, 2013; Pickton and Broderick, 2000). In particular, use is quite often made of the term integrated communication with respect to a form of integration offered by modern information technology. This involves the ability to freely move from place to place in virtual reality through mutual informational linking Vol. 22, No. 4(127), 2014 DOI: /mba.ce

9 202 MBA.CE Jan W. Wiktor of web pages, links, various forms and tools of online advertising, social media, theme websites, company blogs, browsers, etc. This is an important, albeit insufficient approach. Marketing communication is an important but not exclusive instrument of market activities. It constitutes an element of the marketing mix, expressed in various forms: the 4Ps (McCarthy), the 5Ps (Grönroos), the 4Cs (Lauterborn), etc. Each of these elements has a certain value in the real sense (4Ps of product, price, promotion and place where offers are available) and the informational sense (marketing communication). Together, they form a set of specific utilities, i.e., values to the consumer and purchaser. Marketing communication has an important task to fulfil in this area. It integrates all the tools, ensures consistency of the message and communicates certain values. This is an important argument for the analysis of the role of communication in value marketing. Thanks to this approach, it is possible to overcome the autonomisation of each of the tools and to build a coherent integrated set of elements that characterise the value of the company s offering to the market. Marketing communication can therefore be considered as a binder, a plane for the integration of the marketing mix. This argument corresponds to the concept of marketing integrated around a company s mission, strategy, statement of principles and values (Kotler and Keller, 2012, s. 22; Cardona and Rey, 2009). The concept of integrated marketing communication, and at the same time the integrating role of communication around value, has two basic dimensions: internal (within the company and its marketing strategy (Hajduk, 2010) and external. The external dimension expresses the need for consistency of promotional activities and consumer value systems, the recipient of the message and the legal system, ethics in the business world and the world of values recognised in a given social group that are followed, cultivated and reflected in moral standards. This is an important plane for the impact of marketing communication and also a memento designating its role in value marketing. No other instrument of the marketing mix can play this role by itself. Conclusions This study evaluates the role of communication with the market in value marketing within a system in which pertinent literature traditionally distinguishes three stages: creation, delivery and communication of value. It emphasises the important, though to some extent new, revised and expanded role of communication. It supports the thesis that in the reality of the Internet society, development of ICT, 2.0 and 3.0 marketing, transmission of information and communication of value are not the only important tasks of communication. Its tasks also involve the creation of value coupled with simultaneous integration of value or around a value. Marketing communication s role revolves not only around giving information for communicating value, but also around identifying the value, its structure and definition, thereby providing it in a physical (product in a market channel) and informational dimension. The creative and DOI: /mba.ce Vol. 22, No. 4(127), 2014

10 Marketing Communication as Company Dialogue with the Market: Value Creation... MBA.CE 203 integrative function of the marketing communication function manifests itself through the formation of specific information, which in the information-based society constitutes an autotelic value, a value in its own right. At the same time, it signifies an attempt at ensuring coherence of informational activities of the company and the consumer, their aspirations, expectations and values. In the case of the company, the coherence implies integration around its mission, strategy, attractiveness of its offer and also around the values that express its identity and principles, and values underlying the company s long-term operations. In the case of the consumer, such coherence involves the identification of the structure of his needs, preferences, anticipated benefits and values. In this cognitive perspective involving the creation and integration of value, the role of marketing communication is significant and indeed crucial. The argument is also reinforced by the very nature of marketing communication. It manifests itself through a company s dialogue with the market and the environment and a string of relationships and interactions that per se constitute fundamental autotelic values. R e f e r e n c e s Bruhn, M. (2013). Kommunikationspolitik, Systematischer Einsatz der Kommunikation für Unternehmen. München: Verlag Franz Vahlen. Cardona, P. and Rey, C. (2009). Zarządzanie przez misję. Kraków: Wolters Kluwer Polska. Castells, M. (2008). Społeczeństwo sieci. Warszawa: Wydawnictwo Naukowe PWN. Czubała, A. (ed.), Marketingowe strategie budowania wartości przedsiębiorstwa. Kraków: Akademia Ekonomiczna w Krakowie. Doyle, P. (2003). Marketing wartości. Warszawa: Felberg SJA. Garbarski, L. (2011) (ed.). Marketing. Koncepcja skutecznych działań. Warszawa: PWE. Hajduk, G. (2010). Poziomy, płaszczyzny i rodzaje integracji komunikacji marketingowej. W: B. Pilarczyk and Z. Waśkowski (eds.), Komunikacja rynkowa. Ewolucja, wyzwania, szanse. Zeszyty Naukowe nr 135. Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu. Kotler, Ph. and Keller, K.L. (2012). Marketing. Poznań: Dom Wydawniczy Rebis. Meffert, H. (1986). Marketing. Grundlagen der Absatzpolitik. Wiesbaden: Gabler. Mruk (ed.) (2004). Komunikowanie się w marketingu. Warszawa: PWE. Noga, A. (2009). Teorie przedsiębiorstw. Warszawa: PWE. Pickton, D. and Broderick, A. (2000). Integrated Marketing Communication. London: Financial Times Prentice Hall. Pilarczyk, B. (ed.) (2011). Komunikacja rynkowa. Strategie i instrumenty. Zeszyty Naukowe UE w Poznaniu, 208. Poznań. Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu. Pilarczyk, B. and Waśkowski, Z. (eds.) (2010). Komunikacja rynkowa. Ewolucja, wyzwania, szanse. Zeszyty Naukowe, 135. Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu. Rogoziński K. (2012). Zarządzanie wartością z klientem. Warszawa: Wolters Kluwer Polska. Rossiter, J.R. and Bellman, S. (2005). Marketing communication. Theory and applications. Pearson, Prentice Hall. Rudawska, E. (2008). Znaczenie relacji z klientami w procesie kształtowania wartości przedsiębiorstwa. Szczecin: Uniwersytet Szczeciński. Szymura-Tyc, M. (2005). Marketing we współczesnych procesach tworzenia wartości dla klienta i przedsiębiorstwa. Katowice: AE im. K. Adamieckiego w Katowicach. Toffler, A. (1985). Trzecia fala. Warszawa: PIW. Waśkowski, Z. (red.) (2011). Komunikacja rynkowa. Kultura, perswazja, technologia. Zeszyty Naukowe UE w Poznaniu, 209. Poznań. Wiktor, J.W. (2013), Komunikacja marketingowa. Modele, struktury, formy przekazu. Warszawa: Wydawnictwo Naukowe PWN. Zacher, L. (2007). Transformacje społeczeństw od informacji do wiedzy. Warszawa: C.H. Beck. Vol. 22, No. 4(127), 2014 DOI: /mba.ce