Chapter 1 An Overview of Marketing Marketing can exist even if an exchange does not occur An exchange has the possibility to happen if 5 conditions occur 1 There must be at least 2 parties 2 Each party has something that might be of value to the other party 3 Each party is capable of communication and delivery 4 Each party is free to accept or reject the exchange offer 5 Each party believes it is appropriate or desirable to deal with the other party 1 2 Marketing Management Philosophies 4 competing philosophies influence how an organization uses marketing production sales market societal Production orientation is a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace furniture industry Sales orientation is 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 means selling things and collecting money Marketing concept is a simple and intuitively appealing philosophy that articulates a market orientation states that social and economic justification for an organization s existence is the satisfaction of the customer wants and needs while meeting organizational objectives o Focuses on customer wants and needs so that the organization can distinguish its products from competitors offerings o Integrating all the organization s activities to satisfy customer wants o Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly o Firms that adopt and implement the marketing concept are said to be market oriented a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer s decision to purchase a product Societal marketing orientation extends the marketing concept by acknowledging that some products that customers want may not really be in their best interests or in the best interests of society as a whole the idea that 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 long term best interests Customer is in charge thanks to the internet and social media 1 3 Differences Between Sales and Market Orientations The organization s focus o Sales oriented inward looking focus on selling what the organization makes rather than what the market wants o Market oriented put customers at the center of their business o Customer value the relationship between benefits and the sacrifice necessary to obtain those benefits those interested in customer value offer products that perform earn the trust of the consumer avoid unrealistic pricing give the buyer facts offer organization wide commitment in service and after sales support and co creation o Customer satisfaction customers evaluation of a good or a service in terms of whether it has met their needs and expectations o Companies can expand market share in 3 ways attracting new customers increasing business with existing customers retaining current customers o Relationship marketing a strategy that focuses on keeping and improving relationships with current customers o Empowerment delegation of authority to solve customers problems usually by the first person the customer notifies regarding a problem o Teamwork collaborative efforts of people to accomplish common objectives The firm s business o Sales oriented defines its business in terms of goods and services o Market oriented defines its business in terms of the benefits its customers seek Those to whom the product is directed o Sales oriented targets its products at everybody or the average customer o Market oriented aims at specific groups of people o Customer relationship management a company wide business strategy designed to optimize profitability revenue and customer satisfaction by focusing on highly defined and precise customer groups customer segments tracking customer interactions fostering customer satisfying behaviors linking all processes of the company The firm s primary goal o Sales oriented seeks to achieve profitability through sales volume and tries to convince potential customers to buy even if the seller knows that the customer and product are mismatched o Sales oriented place a higher premium on making a sale than on developing a long term relationship with the customer Tools the organization uses to achieve its goals o Sales oriented seek to generate sales volume through intensive promotional activites mainly personal selling and advertising o Market oriented recognize that promotion decisions are only one of four basic marketing miz decision that have to be made 1 4 Why Study Marketing Marketing plays an important role in society is important to business offers outstanding career opportunities affects your everyday life
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