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The Marketing ManagementPhilosophies
BA 5 Principles of Marketing
Prof. Gwenetha Y.Pusta,PhD
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Marketing Management
We describe marketing management ascarrying out tasks to achieve desired
exchanges with target markets. What philosophies should guide these
marketing efforts?
Five alternative concepts under whichorganizations conduct their marketingactivities.
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The Production Concept
One of the oldest philosophies that guidesellers.
Firms choose to pursue a business philosophy
that focuses on making products that are widelyavailable, affordable and require little sellingeffort.
Based on the belief that products that are widely
available and affordable will sell. Therefore management should focus on
improving production and distribution efficiently.
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Marketing as a Business
PhilosophyOuter
Directed
Inner
Directed
Product
Orientation
Sales
Orientation
Market
Orientation
Relationship
Marketing
Orientation
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The Production Concept
Useful in two types of situations:
Occurs when the demand for a product
exceeds the supply. The second occurs when the product
cost is too high and improved
productivity is needed to bring it down.
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If We Build It, They will Come
A secondary belief of the product orientationis that “good products will sell themselves”known as the product concept.
Also known as the “better mouse trap” fallacyand based on the idea that customers willalways prefer and therefore purchase thebest products in the market.
Customers look to purchase value – the bestproduct for the best price that best suits theirneeds and wants.
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The Product Concept
The idea that consumers will favorproducts that offer the most qualityperformance, and features and that the
organization should therefore devote itsenergy to making continuous productimprovements.
Can lead to marketing “myopia”
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Sales Orientation: Selling What
We Make Promotes the business philosophy of
“selling what we make”
Most firms practice the selling conceptwhen they have overcapacity.
Their aim is to sell what they make
rather than make what the marketwants.
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The Market Orientation: Make
What We We Can Sell In contrast to product and sales
orientations, market-oriented firms
gather, share, and use informationabout “the market” (customer,
competitor, market trends) to make
decisions before engaging in the salesprocess.
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Market Oriented Firms
Actively seek out customers’ needs and
wants and then develops and provides
products that satisfy previouslyidentified or anticipated shortages anddesires.
Can be described as those businessesthat practice the three pillars of themarketing concept.
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The Three Pillars of the
Marketing Concept
L on g- t e r m
S u c c e s s
C o o r d i n a t e d
M a r k e t i n g
C u s t om e r F o c u s
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Customer Focus
Pertains to obtaining information about thecustomer needs and wants and then providingproducts that fulfill these shortages anddesires.
Needs are unsatisfactory conditions thatprompt a customer to take action to make thecondition better.
Needs are basic and reflect shortages ofnecessities.
Wants are desires to obtain more satisfactionthan is absolutely necessary to improve the
unsatisfactory condition.
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Coordinated Marketing Effort
It represents the business mindset thatadopting and implementing a market
orientation should not be the soleresponsibility of the marketingdepartment.
Is a group effort with a variety ofdepartments involved
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Long-Term Success
Business achieve long-term success byconducting customer-oriented business
practices. Tends to focus on building and
maintaining customer relationships that
lasts a lifetime.
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The Relationship Marketing
Concept Seeks to create and
sustain mutually satisfying
long-term relationship with
customers and key
players.
Referred to as the “350
degree view” of serving
customers.
Considers the impact of
operations and focuses
increasingly on sustaining
long-term relationship with
customers.
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Three Considerations
Marketing Network
CRM Company
Relationship Marketing
Concept
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A Marketing
Network
Includes the company and its stakeholders,who form mutually profitable businessrelationships.
Ex: HP network includes Intel, Nokia;Celestica and Agilent.
Marketing networks create environments thatfacilitate technological and marketingsynergies among companies and institutions.
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Customer Relationship
Management CRM is the process of identifying, attracting,
differentiating and retaining customers.
Deals with business to business marketing,services marketing, personal selling andsales management.
The goal is to provide coordination amongcustomer functions by integrating people,process and technology to maximizerelationships with customers.
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Summary
Learning objective of understandingconcepts and fundamental differences
of business philosophies or orientations. Product oriented firms are
manufacturing oriented, focusing largely
on product itself. Disadvantage: unsold inventories
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Summary
Consequently, the business is facedwith becoming sales oriented and
communicating to the market why itsproduct would be of interest toconsumers.
In contrast market oriented firms gather,share and use information about the“market” to make a decision.
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Summary
Hence, marketing as a business philosophy isbest described by those businesses that
practice the three pillars – customer focus,coordinated marketing and long-termsuccess.
Finally relationship marketing seeks to create
and sustain mutually satisfying long-termrelationships with customers and key players.