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Role & Importance of

Stakeholders in Marketing
Essay

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Stakeholders in Marketing – Essay

Stakeholder marketing is broad term which involves different stakeholders who are
backbone of marketing. Role of stakeholders in marketing is crucial as they are involved
in process and activities within a given framework which increase value of the
organization (Lusch, 2011). There is strategic change in marketing industry in last few
decades as now it is not only focusing on economic benefits of the organization, it also
attain social responsibility where stakeholders play a vital role (Homburg, 2013).
Objective of this essay is to research and define stakeholders associated with marketing.
It focuses on importance of stakeholders and their contribution in the value addition of
organization. Six markets model with relation to stakeholders in marketing is discussed.
A brief highlight is made on importance of stakeholders in marketing as well as
guidelines for organization to add value for stakeholders is provided in this essay.

Stakeholders in marketing are defined by various literatures as many organizational

literatures define stakeholders in their own terms. Stakeholder are individuals or
collective bodies who have any interest in the organization, they affect the organization’s
strategy or affected by the strategy with a single purpose that is increase value to the
organization (Freeman, 1983). Clarkson said that stakeholders are people or a group of
people who claim ownership in the business. They have right and interest in marketing
affair of an organization as well as they have stake in past, present and future activities of
the organization (Clarkson, 1995). As for as stakeholders in marketing are concerned,
there is no uniformity in literature which develop a uniform definition of the term as
different authors have defined stakeholders in their own way. However in last few years
stakeholders in marketing are broadens by the literature definition as environmental
factors are also included in stakeholders (Laczniak, 2012).

Stakeholders are divided into two groups; primary stakeholders and secondary
stakeholders. Primary stakeholders include customers, employees, suppliers and
shareholder of the business. Stakeholder category is broadens by including government
and communities who are public stakeholders. Secondary stakeholders are various which
could include competitors, media and special interest groups. Sustainable development is
another term which includes environment dimension, economic dimensions and social
dimensions; all these factors are considered as stakeholders in marketing for sustainable
development (Driessen, 2013).

Secondary stakeholders have more prominent effect in promoting part of association

since they are in a roundabout way include in the arrangement and can impact the
advertising procedure. It is essential to comprehend these stakeholders and their effect on
promoting methodologies with the goal that an aggregate increment in riches creation
could occur just as corporate social obligation kept up. Government is significant
auxiliary partner which can control everything in light of the fact that it controls the law.
Keep the government law in promoting methodology advancement and usage.
Government is engaged with each progression of business activity legitimately or by
implication so there is no other alternative yet to tolerate the laws (Lusch, 2011).

Newcombe & Robert, in their article of Stakeholder Mapping describes the process as
“Use of stakeholder mapping is planned to identify stakeholders, group them and develop
strategies for managing them: characteristically by securing their support and
collaboration or overcoming their holdout. It is very useful in helping
entrepreneurs/directors to understand the social/economic and political situation.
Stakeholder mapping works by first identifying who the stakeholders in a project are and
then establishing their personal degree of interest and power. From here, strategies may
be worked out in order to manage and respond to the different situations that can occur.
Stakeholder positions can vary over time and the map will need to be revisited at various
points in the project. Stakeholders may also need to be increased or removed from the
map as the project growths.” It is technique to sort out and prioritize stakeholders as per
degree of importance and influence (Newcombe, 2003).

Model developed by Payne is a helpful tool to link about key stakeholders in reference
with marketing. Stakeholders play powerful role in growth of an organization’s
marketing value and sustainability. Six market model of stakeholders consist of customer
markets, influence markets, referral markets, supplier market, employee market and
internal market (Payne, 2005).
Customer markets are most important domain on marketing because it is the crucial
domain where marketing strategies work. Customer markets consist of final customer,
retailers, intermediates etc. Most of the marketing strategy surround about customer
markets because it is the area where marketers hit. Stakeholders in customer markets
directly influence the marketing department of an organization because if a customer is
not happy with the product, it is difficult to retain it and attract new customers. Brand
loyalty is main aim of any organization which is core responsibility of marketing
department that is why stakeholders’ impact on marketing is crucially observed by the
department (Payne, 2005).

Influence markets are generally third party stakeholders and could also include
competitors. Customers usually become influencers who give feedback of the product or
service to its friends, family and in their social circle. It is crucial type of stakeholder
market because verbal feedback counts a lot in selecting or rejecting a product. There is
term value added influencers which is used for stakeholders who attract customers to buy
products of the organization (Driessen, 2013). Competitors play part of influence markets
in terms of their advertisements or promotions could affect the sale of organization.
Competitors can be stakeholders too in light of the fact that their advertising techniques
could influence associations showcasing procedure. On the off chance that competitors
are utilizing forceful and imaginative showcasing methodology, at that point it becomes
challenge for the association to update its procedure to counter the focused technique
(Payne, 2005).

Referral markers or word of mouth shopping is crucial for organization because it affect
the choice of customers to purchase a certain product or not. It is similar to influence
markets and a very common approach where stakeholders of an organization especially
customers and retailers use their ‘suggestion’ for referring products. Ultimately customer
satisfaction is the turning point if customer is satisfied he/she will refer for the products.
It shows the importance of stakeholders in marketing (Homburg, 2013). Supplier markets
are another type of stakeholders’ impact on marketing in the model as suppliers are
equally important for the organization as customers. Strategic partnership with suppliers
is mandatory as they provide raw material, spare parts and small tools to the organization.
Media is another mind boggling auxiliary partner which is to deal with deliberately on the
grounds that media some of the time coerces the association by spreading controlled
news (Laczniak, 2012).

Employee or recruitment markets in the six market model is important stakeholder impact
markers as organizations want to keep best people in their workforce who add
significance value for them. Marketing staff should be innovative, competitive and
challenging so that they draft best marketing strategies and implement them in the
organization. Last type of stakeholder market is internal market which consists of
employees, customers and suppliers within the organization. Internal market stakeholders
show how much collaboration and harmony between them which can be applies to all
other stakeholders’ market model (Payne, 2015).

Stakeholders in showcasing are characterized by different writing the same number of

hierarchical writing characterize stakeholders in their very own terms. Partner are people
or aggregate bodies who have any enthusiasm for the association, they influence the
association's methodology or influenced by the system with a solitary reason that is
increment incentive to the association. Stakeholders are individuals or a gathering of
individuals who guarantee proprietorship in the business. They have right and enthusiasm
for showcasing undertaking of an association just as they have stake in past, present and
future exercises of the association (Lusch, 2011). With respect to as stakeholders in
advertising are worried, there is no consistency in writing which build up a uniform
meaning of the term as various writers have characterized stakeholders in their own
specific manner. Anyway in most recent couple of years stakeholders in promoting are
widens by the writing definition as natural components are likewise incorporated into
stakeholders.

Six markets model has implication for marketing managers about valuing stakeholders.
First they have to identify that which stakeholders have more value than others so they
will plan the strategy accordingly (Payne, 2015). There is no simple answer for this
because some strategies are purchase related where suppliers are main stakeholders, in
distribution strategies retailers are more relevant and in selling strategy customer is most
powerful stakeholder. This model helps the organization too to analyze which stakeholder
market domain is given more importance in a given strategy. After analyzing the six
model, marketing team also understand the interrelation between these markets and their
interest which lead to overall interest of organization (Driessen, 2013).

Stakeholders play an important role in marketing as they are directly associated and
influencing the organization. Their role in marketing is as crucial as in other functions of
an organization as all stakeholders are somehow directly or indirectly beneficiary if an
organization is growing. There is no doubt of importance for stakeholders in marketing
especially in recent years organizations are also accepting this reality that all stakeholders
should be on board for all important marketing decisions. Priority should be given to
stakeholders so that they can suggest any attributes while marketing department is
thinking about an product or idea (Homburg, 2013). Feedback is important from
suppliers, retailers and customers in case of any new product or service. A stakeholder
market analysis is done by various organizations where they take feedback from suppliers
whether they can provide a specific quality of raw material or spare parts in a give time
frame. Similarly retailers are surveyed about their shelf priority of item and whether they
have enough space for specific product range. Customer surveys are conducted online or
on social media about their choice of product, required feature, price range etc. All these
surveys are feedback for the organization to forecast about a specific product or service
(Lusch, 2011).

It is important to consider that a stakeholder has the ability to influence marketing

decisions if they are not considering stakeholders’ requirement and feedback. So it is
necessary to take all stakeholders on board based on the priority and ability to influence.
Government and communities are two important public stakeholders who can influence
the decision of marketing strategy (Homburg, 2013). For example, if marketing strategy
is developed to launch a bikini product in Islamic country; stakeholders will definitely
use their influence to change the strategy. It is important to consider cultural values and
norms in a community where business is launching the product. In some cultures, its
normal to have cross gender friendships while some cultures treat it as sin. Similarly
government rules and policies are defined; if an organization challenges it then there will
be action. To counter such situations, advertisement strategy should be carefully
developed by having in-depth analysis of community laws and cultural norms (Laczniak,
2012).

Marketing strategies of organizations should consider stakeholders as integral part of

organization and strategies should be formed based on stakeholders’ centric approach.
There is set of code of ethics which should be considered to implement in organization so
that stakeholders value also increases with organizations value increase. First code of
ethics is to follow the law; ignorance of law is no excuse. Marketing strategies should be
formed by following the law. It is important to consider cultural values and norms in a
community where business is launching the product. In some cultures, its normal to have
cross gender friendships while some cultures treat it as sin (Homburg, 2013). Similarly
government rules and policies are defined; if an organization challenges it then there will
be action. To counter such situations, advertisement strategy should be carefully
developed by having in-depth analysis of community laws and cultural norms.

Second code of ethics is about retailers who are members of an organization in

stakeholders’ centric approach. Marketing strategies should be formed to favor retailers
as well where extra discount could be given to them either in shape of price discount or
extra products if they sell a certain amount of product. It is also recommended to
establish commission base partnership so that if they achieve target they will be
rewarded. By giving such incentives, retailers could become part of your team and help in
value increase of business (Newcombe, 2003). Giving back to communities is an
excellent idea where a certain share of profit is distributed to employees, retailers and
charity. Employees are stakeholders who have the core strength in an organization.
There should be a code of conduct and written policies which safeguard employees from
politicization and unnecessary victim of management. Firing an employee is serious issue
where most companies do not have employee centric policy. It is recommended that
policy should be developed where employee cannot be fired just because manage do not
like him/her (Lusch, 2011).

A strong relationship with suppliers, a key stakeholder, should be build based on mutual
understanding and common goals which are to increase in value by maintaining quality.
It is important to mention that key of good relationship is trust. If suppliers are providing
material as per requirement then organization should work with them for long term
business relationships. Organizations should make sure that suppliers are being given
timely payments and no inside information leaks to the supplier’s competitors as it is
against code of ethics (Payne, 2005).

Secondary stakeholders have greater impact in marketing aspect of organization because

they are indirectly involve in the plan and can influence the marketing strategy. It is
important to understand these stakeholders and their impact on marketing strategies so
that a collective increase in wealth creation could happen as well as corporate social
responsibility maintained. Government is important secondary stakeholder which can
control everything because it controls the law. Follow the government law in marketing
strategy development and implementation (Driessen, 2013). Government is involved in
every step of business operation directly or indirectly so there is no other option but to
abide the laws. Media is another complex secondary stakeholder which is to handle
strategically because media sometimes blackmails the organization by spreading
manipulated (or sometimes real) news.

Competitors can be stakeholders too because their marketing strategies could affect
organizations marketing strategy. If competitors are using aggressive and innovative
marketing strategy then it becomes challenge for the organization to revise its strategy to
counter the competitive strategy. It is mandatory for organizations to create value for the
relevant stakeholders because trend of doing business is changed now. Corporate social
responsibility and ethical code of conduct is being adopted by the organizations which
could benefit the society as well (Homburg, 2013).
References:

Freeman, R.E. & Reed, D.L. (1983). ‘Stockholders and stakeholders: A new perspective
on corporate governance’, California Management Review, 25(3): 93-94.

Clarkson, M. (1995). ‘A stakeholder framework for analyzing and evaluating corporate

social performance’, Academy of Management Review, 20(1): 92-117
evaluating corporate social performance’, Academy of Management Review, 20(1): 92-
117.

Driessen, P. H., & Hillebrand, B. (2013). “Integrating multiple stakeholder issues in new
product development”: an exploration. Journal of Product Innovation Management, 30,
364–379.

Homburg, C., Stierl, M., & Bornemann, T. (2013). “Corporate social responsibility in
business-to-business markets”: how organizational customers account for supplier
corporate social responsibility engagement. Journal of Marketing, 77, 54–72.

Lusch, R. F., & Webster, F. E. (2011). “A stakeholder-unifying, cocreation philosophy

for marketing. Journal of Macromarketing”, 31, 129–134.

Laczniak, Gene R. and Murphy, Patrick E. (2012), "Stakeholder Theory and Marketing:
Moving from a Firm-Centric to a Societal Perspective". Marketing Faculty Research and
Publications. 116.

Payne, Adrian, David Ballantyne, and Martin Christopher. (2005) “A stakeholder

approach to relationship marketing strategy”: The development and use of the six markets
model. European Journal of Marketing: 855-871.

Newcombe, R., 2003. “From client to project stakeholders: a stakeholder mapping

approach”. Construction management and economics, 21(8), pp.841-848.