Transcript 1. Marketing Orientation

Hello everybody,
My name is Doti Chee, I am from Singapore and I am
the head of teaching staff cum senior lecturer in Btec
and Top Up Year.
The modules that I teach in ITP are Marketing
Principles, Managing Professional Development,
Common Law, Quality Management, Contemporary
Issues in Marketing Management and Contemporary
Developments in Business & Management.
My email address is [email protected] and my
mobile no is 01646534606.
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Chapter 1A
MARKETS AND MARKETING
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1.
Marketing Orientation
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 1.1 History of markets and marketing
 - Read course book page 4 - 5
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1.
Marketing Orientation
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 1.2 Marketing defined
Customer needs
Marketing
Identifying
Anticipating
Supplying
Mutually
beneficial
exchange
Firm’s objectives
There are many definitions of marketing. Here we will consider four that
provide insight into how marketing is used in practice.
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Marketing Orientation
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 1.2 Marketing defined
Definition 1
Marketing is the management of
exchange relationships
o
o
o
all relationships between the organization and the outside world, especially
when they relate to customers, need to be managed
organization will be judged by customers, suppliers, competitors and
others according to their personal experience
e.g. manner of telephone operator or tone of a receptionist’s voice –
contacts are vital in creating a positive image for the organization with
customers and the public
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Marketing Orientation
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 1.2 Marketing defined

Definition 2
Marketing is the management process
which identifies, anticipates and
supplies customer requirements
efficiently and profitably
o
o
definition is that of the Chartered Institute of Marketing
emphasizes the wide scope of marketing, ranging from initial identification
of customer needs by means of research, right through to eventual
profitable satisfaction of those needs
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Marketing Orientation
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 1.2 Marketing defined
Definition 3
Marketing is concerned with meeting
business objectives by providing
customer satisfactions
o
o
o
stresses the importance of the customer and more particularly, customer
satisfaction
when people buy products or services they do not simply want the
products, they also want the benefits from using the products or services
products and services help to solve a customer's problems. It is the
solution to these problems that customers are buying
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Marketing Orientation
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 1.2 Marketing defined

Definition 4
Marketing is the process of planning and
executing the conception, pricing,
promotion and distribution of ideas,
goods, and services to create exchanges
that satisfy individual and organizational
goals
o
o
definition provided by American Marketing Association
expands on the previous one and considers what is involved in marketing
to satisfy both the customer and the company
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1.
Cocnept
1.3 Marketing
Concept
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1. Marketing Orientation
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 1.3 The Marketing Concept

- Consumer wants
o
o
o
Based on what consumer wants
Would people mind paying extra?
How to satisfy the consumer while still making a profit?
o
or
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Marketing Orientation
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 1.4 Customer Orientation
- Customer satisfaction
o
o
‘without customers, you don’t have a business’
satisfying customers’ needs at a profit should be the central drive of any
company
- Sales orientation
o
o
focuses on the needs of the seller
Preoccupied with seller’s need to convert his product into cash
The marketing concept suggests that companies should focus their
operations on their customers’ needs rather than be driven solely by the
organization’s technical competence to produce a particular range of
products or services or by a belief in the sales force
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1.
Marketing Orientation
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 1.5 Implications for businesses
When a company understands consumers, it can
design products to appeal to them
Therefore, a company needs to:
o
an understanding of the market, based on research and not on
unsupported hunches (guesses)
o
a spirit of innovation: the company must be willing to change as
customers’ requirements change
o
skilled direction and administration of its marketing activities
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Marketing Orientation
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
1.6 The history of production and marketing orientations
Definition:
Production orientation describes a company
which makes what it thinks the customer
will buy. It may make good products but will
not take the trouble to find out whether there
is a market for them.
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Marketing Orientation
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Organizations realized that in the face of strong
competition they had to get closer
to their markets and to their customers.
A market orientated organization will have:
 a commitment to meeting the needs of customers more successfully than the
competition
 a structure and process of operation which are designed to achieve this aim
o
all activities must be coordinated around the needs of the customer when
making decisions about what to produce and subsequently, how and where
the product or service is to be made available.
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Marketing Orientation
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Marketing concept has three elements:
 Customer orientation
 Coordination of market led activities
 Profit orientation
 1.7 The different orientations in modern practice
- Production orientated companies
o believe that consumers will buy products that are widely available and cheap
o managers concentrate on achieving high production efficiency and wide distribution
- Sales orientated companies
o make products which are not carefully tailored to consumers’ needs, but will then use
aggressive advertising and selling methods
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Marketing Orientation
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- Market orientated companies
o only commit itself to meeting the needs of the customer
o will set up right structures and processes
o Establish customer service departments, often in highly competitive and
low profit margin businesses such as retailing
Advantages of Marketing Orientated Companies:
o Product tailored to the needs of the customer
o Research and development enables the market-led company to
keep ahead of the competition
o Opportunities arise out of a continuous research thrust
o Knowing your customer enables you to communicate more efficiently,
with cost effective marketing communications
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Marketing Orientation
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Advantages of Marketing Orientated Companies: (cont’d….)
o Produce what you can sell rather than sell what you produce
o Leads to long-term relationships with high customer satisfaction
Disadvantages of Marketing Orientated Companies:
o Extensive market research needed into customer needs/wants
o Expensive and time consuming – time delay for product to market
o “Me-too” products that can undercut because there are no costs of
research and development
o Irrational consumer behavior – no amount of research will alter the fickle
nature of the average customer
o Dynamic nature of market place – today’s products become tomorrow’s
throwaways
o Too narrow a focus
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Marketing Orientation
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Advantages of Sales Orientated Companies:
o
Product manufactured relatively inexpensively with minimum time delay to
market
o
Flexibility within production capabilities which ensures swift response to supply
demand imbalance
o
Suits small and medium sized business units that are not particularly well
financed – minimizes cash flow problems
Disadvantages of Sales Orientated Companies:
o
Sell what you produce as opposed to produce what will sell – no product
innovation
o
Needs extensive sales promotion effort to sell product
o
No opportunity for long-term profitable growth – concentration on short-term
transactional approach
o
Little emphasis on customer satisfaction means limited loyalty and word of
mouth marketing
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Marketing Orientation
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 1.8 Marketing and the business system
- Distribution system
o system for getting goods to customers
o involves lorries, wholesalers and retailers and
mail order
o also includes warehouses and the system for
agreeing to supply customers
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Marketing Orientation
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Features of distribution system:
 It may be long or short
o
e.g. of short chain is an airline buying a new aircraft from manufacturer
o
e.g. of long chain is pocket calculators made in the Far East and sold to
Britain, involving the maker, an export agent, a shipping company, a
wholesaler and retailers
 It may be owned by the producer (branches)
o
owned by producers - e.g. manufacturer of plywood with its own furniture
shops
o
owned by independent - e.g. book wholesalers and bookshops which are
not owned by publishers
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Marketing Orientation
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Features of distribution system:
 Final customers
o
the customers at the end of the system
o
they may also be producer of other goods e.g. customers of the car
headlamp bulbs are mostly car manufacturers)
- Information system
o
o
gets information from customers perhaps by conducting interviews or
questionnaire
sends information to customers by advertising, catalogues and other forms
of publicity. The main goal is to get across the special features of a
product, which make it a better buy than its rivals – this message is
called the product’s unique selling proposition, or USP.
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Marketing Orientation
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The flow of influence
 Pest factors
o
Political and legal factors e.g. consumer boycotts of countries with
oppressive regimes (government) and laws on employment, advertising,
product safety and the granting of credit to customers
o
Economic influences such as income levels, employment levels, the rate
of inflation and the rate of economic growth
o
Social influences such as fashion and peer group pressure
o
Technological influences such as the growth of computer-aided
manufacturing and the availability of CD-ROM to consumers
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2.
Marketing Issues
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2.1 Differentiation and product positioning

Definition
Product differentiation occurs when specific
products or brands each have a specific
combination of costs and benefits which a
particular set of potential customers seek. This
allows the product to be positioned in the market
for specific customers
o In marketing, product differentiation (also known simply as “differentiation is the
process of distinguishing the differences of a product or offering from others, to make it
more attractive to a particular target market. This involves differentiating it from
competitors products as well as one's own product offerings.
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Marketing Issues
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2.2 Contact and distribution

Definitions
Contact is ensuring that the customers
know about a product or service.
Distribution is ensuring that products
or services are made accessible and
available to consumers or buyers.
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Marketing Issues
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2.3 Needs and profit

Definitions
Marketing is concerned with the matching of an
organization’s capabilities with consumers’
wants
Marketing is the process of determining consumer
demand for a product, motivating its sale and
distributing it into ultimate consumption at a
profit.
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