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Edit Comment Close Premium member Presentation Transcript Company’s orientation towards the marketplace: Company’s orientation towards the marketplace -- Deep Puri -- Akash Agarwala -- Pavan Kumar A Prelude: A Prelude What philosophy should guide a company marketing efforts? What relative weights should be given to the interests of the organization, the customers, and the society? Very often these interests conflict. The competing concepts under which organizations have conducted marketing activities include: Production concept Selling concept Marketing concept and The Holistic marketing concept Approaches to Market Orientation: Approaches to Market Orientation Earlier approaches: Production concept Product concept Selling concept Marketing concept Contemporary approaches: Relationship Marketing Internal Marketing Integrated Marketing Performance Marketing The Production Concept : The Production Concept Holds that consumers will prefer products that are widely available & inexpensive. Managers therefore focus on achieving high production efficiency, low costs & mass distribution. Managers assume that consumers are primarily interested in product availability & low prices. This orientation makes sense in developing countries where companies take advantage of the country’s huge and inexpensive labour pool to dominate. Concentration is on building production volume and upgrading technology to lower costs, leading to lower prices and market expansion. The Production Concept : The Production Concept Ford Model T Voted in the list of 50 worst cars of all time – TIME magazine Henry Ford – “"Any customer can have a car painted any colour that he wants so long as it is black " The Product Concept: The Product Concept Holds that consumers favour products that offer the most quality, performance or innovative features. Managers therefore focus on making superior products and improving them over time. They assume that buyers admire well-made products and can appraise quality and performance. Design products with little or no customer input, trusting their engineers can design exceptional products. However, these managers are sometimes caught up in a love affair with their product and do not realize what the market needs. This can lead to ‘Marketing Myopia” The Selling Concept: The Selling Concept Holds that consumers & businesses if left alone will ordinarily not buy enough of the organization’s products The starting-point is the factory, the focus are products, the means are selling & promotion and the ends are profits through sales volume Therefore the organization must undertake aggressive selling and promotion effort This concept assumes that consumers typically show buying apathy or resistance and must be cajoled into buying Also assumed that the business has effective selling and promotional tools and power. Marketing based on hard sell carries risk of consumers’ bad word of mouth and/or future rejection . Practiced most aggressively with unsought goods – eg insurance. Marketing Concept: Marketing Concept This concept, emerged in the 1950s, and challenged the earlier concepts Shift from “make & sell” to “sense & respond”. The task for marketers is not only to find the customer, but also provide the right products for the customers. This concept holds that the key to achieving an organization’s goals consists of being more effective than competitors in creating, delivering and communicating superior customer value in a chosen customer segment. All functions work together to respond to, serve and satisfy the customer The starting point is the target customer; the focus is customer needs, the means being integrated marketing and the ends being profits through customer satisfaction. Marketing V/s. Selling Concept : Marketing V/s. Selling Concept Factory Products Selling & Promotion Profits through sales volume Target Market Customer Needs Integrated Marketing Profits through Customer satisfaction Starting Point Focus Means Ends Selling Concept ( Inside out Perspective ) Marketing Concept ( Outside in perspective ) Marketing V/s. Selling : Marketing V/s. Selling 8. Customers are given special importance, attention and viewed with respect 8. Customers are taken for granted 7. Price fixation is on the basis of customer demand and competition. 7. Price fixation is on the basis of cost of production 6. Views business as a customer satisfying process 6. Views business as a good producing process 5. Broad integrated concept and planning is long run oriented in terms of new product, tomorrow's market and future growth 5. Narrow concept and planning is short run oriented in terms of today’s market and product 4. Management is profit oriented 4. Management is sales volume oriented 3. Company first determines the customer wants and then figures out how to make and deliver a product to satisfy those wants. 3. Company first makes the product and then figures out how to sell it 2. Focuses on needs of buyers 2. Focuses on needs of seller 1. Emphasis is on customer wants 1. Emphasis is on product Marketing Concept Selling Concept Market Orientation Types: Market Orientation Types Reactive market orientation: understanding and meeting customers’ expressed needs. Results in basic innovations. Proactive market orientation : Focus on customers’ latent unexpressed needs. More advanced, high level innovation is possible – HP, Motorola, 3M, Apple, Sony Total market orientation the best combination Holistic Marketing Concept: Holistic Marketing Concept Recognizes that ‘everything matters’ in marketing and a broad, integrated perspective is necessary. Four broad components: Relationship marketing Integrated marketing Internal marketing Performance marketing Relationship Marketing: Relationship Marketing Aims at building mutually satisfying long term relationship with key constituents in order to earn and retain their business. The ultimate outcome being the building of marketing networks that consist of the company and its supporting stakeholders. the marketing thrust therefore should be to build an effective network of relationships with key stakeholders and the profits will follow. Advances in technology enhances information flow and partnership. CRM is a great enabler of relationship marketing Relationship Marketing: Relationship Marketing CRM allows tracking and analyzing of each customer's preferences, activities, tastes, likes, dislikes, and complaints. In web applications, the consumer shopping profile can be built as the person shops on the website. This information is then used to compute what can be his or her likely preferences in other categories. These can then be shown to the customer through cross-sell, email recommendation and other channels. Marketers can personalize documents by any information contained in their databases (Source:http://en.wikipedia.org/wiki/Relationship_marketing) Relationship Marketing: Relationship Marketing The six markets model: six markets central to relationship marketing are: internal markets, supplier markets, recruitment markets, referral markets, influence markets, and customer markets. Referral marketing is developing and implementing a marketing plan to stimulate referrals. Although it may take months before you see the effect of referral marketing, this is often the most effective part of an overall marketing plan and the best use of resources. Marketing to suppliers -- aimed at ensuring a long-term conflict-free relationship in which all parties understand each others' needs and exceed each others' expectations. Influence markets -- government regulators, standards bodies, lobbyists, stockholders, bankers, venture capitalists, financial analysts, stockbrokers, consumer associations, environmental associations, and labor associations. Integrated Marketing: Integrated Marketing Aims at devising marketing activities and assembling fully integrated marketing programs to create, communicate and deliver value for consumers. The 4P’s called as the Product Mix are suitable modified both in the short run as well as the long run. Has two key themes: 1. many different marketing activities communicate and deliver value. 2. when co-ordinated, marketing activities maximize their joint efforts Integrated Marketing not only overcomes the fragmentation of the recognised marketing disciplines but it also draws on other disciplines such as lean management, knowledge management and organisation development. It is a natural progression of the effects of developing concepts of marketing planning such as IMC, 360 degree branding, relationship marketing and CRM on organisation change. Internal Marketing: Internal Marketing Internal marketing is the practice where everyone in the organization embraces appropriate marketing orientation/culture. It requires the task of hiring, training and motivating able employees who want to serve customers well. Internal marketing involves at one level, the integration of marketing functions of sales and marketing and at another level, marketing orientation must be embraced by other functions to ”think customer”. It requires vertical alignment with senior management and horizontal alignment with other departments. PowerPoint Presentation: Internal Marketing Source: http://www.performanceforum.org/internal_marketing_best_practice_study.63.0.html Internal Marketing Values: Internal Marketing Values People matter: The main driver for most IM initiatives is to create a work environment where people feel excited and rewarded in their day-to-day tasks IM drives performance: Employee satisfaction is a key element in developing customer satisfaction, as every employee is considered an extension of the brand. Anyone can make a difference: Successful results are credited to all employees, at all levels and functions, not just at senior management. Employee loyalty is critical: Employees will remain loyal to the company, even in difficult times, if the company is transparent about the challenges it is facing and about its strategic direction. Culture can be a competitive advantage: IM preserves and helps evolve a company’s culture, particularly in cases where culture is a source of differentiation for the brand. Performance marketing : Performance marketing Performance marketing is a comprehensive term that refers to marketing and advertising programs in which marketers — also known as affiliates or publishers — are paid when a specific action is completed, such as a sale or lead. Advertising rates are only paid if and when a consumer makes a purchase or completes a lead form. The trackability of performance marketing isn’t based on estimates. It’s based on actual results — meaning that a marketing program’s effectiveness is accurately determined, down to the mouse click. Affiliate marketing is also called "performance marketing", in reference to how sales employees are typically being compensated. Such employees are typically paid a commission for each sale they close, and sometimes are paid performance incentives for exceeding targeted baselines. PowerPoint Presentation: Performance Marketing The Societal Marketing Concept: The Societal Marketing Concept This concept evolved from the need to factor in the environment/social factors such as resource shortage, explosive population, world hunger and poverty, environmental deterioration etc into the marketing concept. The organization’s task is to determine the needs, wants and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors are, in a way that preserves or enhances the consumer and the society’s well-being. This concept calls on marketers to build social and ethical considerations into their marketing practices. Firms must balance the criteria of company profits, consumer want satisfaction and public interest. Some firms see cause related marketing as an opportunity to enhance corporate reputation, raise brand awareness, increase customer loyalty, build sales and increase press coverage. Shift in Marketing Management: Shift in Marketing Management Shift in Marketing Management: Shift in Marketing Management Thank You : Thank You You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.