Marketing Role in The Value Chain

Golden eggs in bird's nest

Michel Porter’s value chain model is studied, to the best of my knowledge, by every business student. It is indeed a very useful tool that helps to understand how companies create value for themselves and their customers.

In this model all business activities are divided into 2 groups. The first group consists of primary activities that have a direct impact on value creation. The second group consists of support activities that back all primary activities and therefore have an indirect impact on value creation.

As students, we often used this model to prove that one’s choice of specialization, whether it was HR, finance, marketing, supply chain, or IT, to be superior over all other specializations. Hence, those whose specialization fell in the primary activities would say that companies exist because of them, and those whose specialization fell in the support activities would argue that their job is to hold the whole company together.

Those debates intrigued me to consider the deep role of marketing, that is seemingly limited in the value chain model, in an organization.

Thus, in order to understand that role it is necessary to have a common ground on what marketing is, and as I personally admire Dr. Philip Kotler therefore I will use his definition. “Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit”.

From that we can see that marketing plays a role in:

  • Administrative activities (finance): because it is concerned with profit.
  • Product and technology development (R&D): because it explores customers’ needs and wants.
  • Procurement (supplier management): because delivering and creating value involves building relationships with suppliers.
  • Inbound logistics: because raw material quality and supply scheduling affects target market satisfaction
  • Operation (packaging): because it is directly related to the product that satisfies the needs and wants.
  • Outbound logistics, sales, and services: these are obviously marketing related activities.
  • HR: although it is not clear from the definition above, “internal marketing” is a concept that is directly related to HR activities as it promotes company’s policies, vision, and mission to employees and aims to keep them motivated.

As such I can bet that I would win any argument with my classmates on which activity is superior in value creation!

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