Company’s orientation towards the workplace(3)

8/9/2019 Companys orientation towards the workplace(3)

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Companys orientation

towards the marketplace

-- Deep Puri

-- Akash Agarwala-- Pavan Kumar


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A Prelude

What philosophy should guide a company marketing efforts?

What relative weights should be given to the interests of theorganization, the customers, and the society? Very often theseinterests conflict.

The competing concepts under which organizations haveconducted marketing activities include:

A. Production concept

B. Selling concept

C. Marketing concept andD. The Holistic marketing concept


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Approaches to Market Orientation

Earlier approaches:

Production conceptProduct concept

Selling concept

Marketing concept

Contemporary approaches:

Relationship Marketing Internal Marketing

Integrated Marketing

Performance Marketing


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The Production Concept

Holds that consumers will prefer products that are widelyavailable & inexpensive.

Managers therefore focus on achieving high productionefficiency, low costs & mass distribution.

Managers assume that consumers are primarily interested inproduct availability & low prices.

This orientation makes sense in developing countries wherecompanies take advantage of the countrys huge andinexpensive labour pool to dominate.

Concentration is on building production volume andupgrading technology to lower costs, leading to lower pricesand market expansion.


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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

colourthat he wants so longas it is black"


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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 marketneeds.

This can lead to Marketing Myopia


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The Selling Concept

Holds that consumers & businesses if left alone will ordinarilynot buy enough of the organizations products

The starting-point is the factory, the focus are products, themeans are selling & promotion and the ends are profits throughsales volume

Therefore the organization must undertake aggressive sellingand promotion effort

This concept assumes that consumers typically show buyingapathy or resistance and must be cajoled into buying

Also assumed that the business has effective selling andpromotional tools and power.

Marketing based on hard sell carries risk of consumers badword of mouth and/or future rejection.

Practiced most aggressively with unsought goods eginsurance.


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Marketing Concept

This concept, emerged in the 1950s, and challenged the earlierconcepts

Shift from make & sell to sense & respond. The task formarketers is not only to find the customer, but also provide theright products for the customers.

This concept holds that the key to achieving an organizationsgoals consists of being more effective than competitors increating, delivering and communicating superior customer valuein a chosen customer segment.

All functions work together to respond to, serve and satisfy thecustomer

The starting point is the target customer; the focus is customerneeds, the means being integrated marketing and the ends being

profits through customer satisfaction.


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Marketing V/s. Selling Concept

Factory ProductsSelling &

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 )


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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 todays market and

product

4. Management is profit oriented4. 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 buyers2. Focuses on needs of seller

1. Emphasis is on customer wants1. Emphasis is on product

Marketing ConceptSelling Concept


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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


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Holistic Marketing Concept

Recognizes that everything matters in marketing and a broad,

integrated perspective is necessary.

Four broad components:

1. Relationship marketing

2. Integrated marketing

3. Internal marketing

4. Performance marketing


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Relationship Marketing

Aims at building mutually satisfying long term relationshipwith key constituents in order to earn and retain their business.

The ultimate outcome being the building of marketingnetworks that consist of the company and its supportingstakeholders.

the marketing thrust therefore should be to build an effectivenetwork of relationships with key stakeholders and the profitswill follow. Advances in technology enhances informationflow and partnership.

CRM is a great enabler of relationship marketing


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CRM allows tracking and analyzing ofeach 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 computewhat 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 byany information contained in their

databases

(Source:http://en.wikipedia.org/wiki/Relationship

_marketing)


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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 tostimulate 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.


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Integrated Marketing

Aims at devising marketing activities and assembling fullyintegrated marketing programs to create, communicate and delivervalue for consumers.

The 4Ps called as the Product Mix are suitable modified both in theshort 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 therecognised marketing disciplines but it also draws on otherdisciplines such as lean management, knowledge management andorganisation development. It is a natural progression of the effectsof developing concepts of marketing planning such as IMC, 360degree branding, relationship marketing and CRM on organisationchange.


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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.


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Internal Marketing

Source: http://www.performanceforum.org/internal_marketing_best_practice_study.63.0.html


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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 theirday-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 toall 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 companys culture, particularly in cases where culture is a

source of differentiation for the brand.


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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 isnt based on estimates.

Its based on actual results meaning that a marketing programs

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.


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Performance Marketing


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The Societal Marketing Concept

This concept evolved from the need to factor in the environment/socialfactors such as resource shortage, explosive population, world hunger andpoverty, environmental deterioration etc into the marketing concept.

The organizations task is to determine the needs, wants and interests oftarget markets and to deliver the desired satisfaction more effectively andefficiently than competitors are, in a way that preserves or enhances theconsumer and the societys well-being.

This concept calls on marketers to build social and ethical considerationsinto their marketing practices.

Firms must balance the criteria of company profits, consumer wantsatisfaction and public interest.

Some firms see cause related marketing as an opportunity to enhancecorporate reputation, raise brand awareness, increase customer loyalty, build

sales and increase press coverage.


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Shift in Marketing Management

Marketing does the marketing Everyone does the marketing

Organization by Product unitsOrganization by Customer

Segments

Making everything Buying more goods andservices from outside

Using many suppliersWorking with fewer suppliers in

a partnership.

Focus on gaining marketshare

Focus on building customershare

Emphasis on tangible assets Emphasis on intangible assets


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Shift in Marketing Management

Building brands throughadvertising

Building brands through

performance and integratedcommunications

Attracting customers throughstores & salespeople

Products available online

Selling to everyone Serving a well-defined targetmarket

relying on old marketpositions

uncovering new ones

Focus on gaining marketshare

Focus on building customershare

Focus on the financialscorecard

Focus on the marketingscorecard


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Thank You

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Company’s orientation towards the workplace(3)