Chapter 1 What is Marketing 11 20 12 1 50 PM Marketing is a philosophy an attitude a perspective or a management orientation that stressed customer satisfaction at large Marketing is an organization function and a set of processes used to implement this philosophy Marketing is the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society entails processes that focus on delivering value and benefits to customers not just selling goods services and or ideas Uses communication distribution and pricing strategies to provide customers and other stakeholders with the goods services ideas values and benefits they desire Involves building a long term mutually rewarding relationship when these benefit all when and where they want them parties concerned One desired outcome of marketing is an exchange people giving up something in order to receive something they would rather have Marketing can occur even if an exchange does not exist Marketing Management Philosophies Four competing philosophies strongly influence an organizations marketing process o Production sales market and societal marketing organizations Production Orientation A philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace Means that management assesses its resources and asks these questions o What can our engineers design o What can we do best o What is easy to produce given our equipment referred to as the field of dreams orientation production orientation falls short because it does not consider whether the goods and services that the firm produces most efficiently also meet the needs of the marketplace sometimes what a firm can best produce is exactly what the market wants o Ex Apple has a history of production orientation creating computers operating systems and other gadgets Firms that succeed in competitive markets have a clear understanding that they must first determine what customers want and then produce it rather than focusing on what management thinks should be produced Sales Orientation Based on the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits To sale oriented firms marketing means selling things and collecting money Problem with sales orientation as with production orientation is a lack of understanding of the needs and wants of the marketplace o These firms often find that despite the quality of their sales force they cannot convince people to buy goods or services that are neither wanted nor needed One danger of sales orientation is failing to understand what is important what is important to the firms customers drive sales o When this occurs sales oriented firms sometimes use aggressive incentives to o EX Toyota after recalling 1 million cars offered zero percent financing increased cash back and free maintenance packages as well as lower lease deals Market Orientation The marketing concept is a simple and intuitively appealing philosophy that articulates a market orientation states that the social and economic justification for an organizations existence is the satisfaction of customer wants and needs while meeting organizational objectives o Philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customers decision to purchase a product it is synonymous with the marketing concept o Recipe for success is to consistently deliver a unique experience that your competitors can not match Requires a thorough understanding of your customers and distinct capabilities that enable your company to execute plans on the basis of this customer understanding and delivering the desired experience using and integrating all of the resources of the firm Firms that adopt and implement the marketing concept are said to be market oriented they assume that a sale does not depend on an aggressive sales force but rather on a customers decision to purchase a product o Achieving market orientation involves obtaining info about customers competitors and markets determining how to deliver superior customer value o Ex of firms with A customer service LL BEAN Overstock Zappos Amaazon Societal Marketing Orientation Extends that marketing concept by acknowledging that some products that customers want may not really be in their best interests or the best interests of society as a An organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals and society s whole long term best interests o Example marketing products and containers that are less toxic than normal more durable contain reusable materials etc Adopting a societal marketing orientation and clearly communicating this decision and the action that support it helps firms differentiate themselves from competitors and strengthens their positioning DIFFERENCES BETWEEN SALES AND MARKET ORIENTATION The difference between the two are substantial The organizations can be compared in terms of five characteristics the organizations focus the firms business those to whom the product is directed the firms primary goal and the tools used to achieve those goals The Organizations Focus oriented focus Customer Value Today many firms derive their competitive advantage from an external market Market orientation can help companies such as Zappos com and Bob s Red Mill Natural foods outperform their competitors these companies put customers at the center of their business in ways most companies do poorly or not at all The relationship between benefits and the sacrifice necessary to obtain those benefits Not simply a matter of high quality Customers value goods and services that are of the quality they expect and that are sold at prices they are willing to pay Low income families will pay for products if they deliver a benefit that is worth the money Marketers interested in customer value o Offer products that perform o Earn trust o Avoid unrealistic pricing o Give the buyer facts o Offer organization wide commitment in service and after sales support o Co creation Customer Satisfaction The customers evaluation of a good or service in terms of whether that good or service has met their needs and expectations Top management is obsessed with customer satisfaction and employees throughout the organization understand the
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