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Lesson - Marketing Orientation Jump To
Today, to be effective in marketing, an organisation has to be marketing oriented. It needs to adopt a marketing
based business philosophy in all its functions. Let us commence by looking at some basic concepts relating to
marketing and marketing orientation.
Basic Concepts
A market consists of buyers and sellers - trading in products/services. The price is normally set by the
supply of or the demand for, the product. The market for any business consists of its actual and potential
customers. This market may be local (e.g. a street market), national (e.g. the mass market) or international.
http://www.marketingterms.com/dictionary/b/
1. An electronic organiser.
1. An electronic organiser
■ Small but with enough space for details of appointments, notes, expenses, etc.
■ Office/factory employees.
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Lesson - Marketing Orientation Jump To
The marketing function in any organisation must link production to consumption. To do this, marketing must ensure
that the demands of its customers are met by what is being produced; whether products or services or both. If it
achieves this, it will meet customer needs/wants and help the business make a profit.
The term marketing is used extensively in modern life. If you stop someone in the street and ask them what it
means, they will probably use words like "advertising", "market research" and "a modern word for selling". In fact,
marketing is a lot more than just selling, advertising and research, although all of these functions are important
aspects of marketing.
"Marketing is the management process which identifies, anticipates, and supplies customer requirements
efficiently and profitably".
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Lesson - Marketing Orientation Jump To
Marketing as a philosophy
● Marketing is a management process, and the support of management for the marketing concept is a key
element in its success. Today, a company has to be marketing orientated if it is to be successful.
● Marketing is involved with identifying customer requirements - usually with market research.
● We have to consider current needs and anticipate the requirements of the customer in the future. This
requires planning - a very important aspect of the marketing process. The satisfaction of the needs will
require the supplier to provide benefits - the right market offering at the right place at the right time.
● Truly market-driven companies adopt strategic level marketing, where marketing has a key role in defining
the long-term objectives and mission of the company. In this way, a strategic framework is established
whereby the customer is placed at the centre of the organisation's activities.
● Marketing is not just for profit-making companies. Marketing is for any organisation that has customers,
and that includes charities and government bodies. Very many selling jobs in fact are in non-profit-making
organisations, although very often the people who have those jobs would not think of themselves as
salespeople!
Marketing is a business philosophy, the process responsible for anticipating, identifying and satisfying
customer current and future needs.
The characteristics of a marketing orientation are in contrast to that of product orientation. See Figure 1.1.2.
Marketing is basically about anticipating and serving customer needs, but where does the concept come from?
Below we identify the evolution of the marketing concept; from product orientation to market orientation.
Production Orientation
The Industrial Revolution and the subsequent mass-production techniques introduced by Henry Ford and others
changed all that. This period gave rise to what is generally called "production orientation". This is a view that if
you make something cheap enough, people will buy it. That was certainly the thinking behind Henry Ford's model
that, rather famously, was quoted as being available in "...any colour you wanted providing it was black". Ford's
idea was to make a simple model and produce it in large volumes to reduce costs. It worked, of course, because the
demand for cars was huge and customers would buy what was available. Today, though, the choice in cars is huge
and Henry Ford's ideas would seem laughable. What has changed is the fact that, whereas in Ford's day demand
exceeded supply, today the situation is reversed and now the customer is king! There are still situations where a
product focus is required. An engineering company producing components to specification, for example.
Sales Orientation
Whilst production orientation is not as common today, sales orientation is still found occasionally in today's
business environment.
Originally sales orientation was associated with scripted presentations and closing techniques. Today, the modern
sales oriented organisation uses non-manipulative selling techniques that are based upon marketing principles:
Product Orientation
Product orientation is another view that has many problems and is also very common.
Product oriented organisations essentially push their products without focus on the customer requirement or
business need. It takes the view that if it makes a better quality or better specified item, the item must sell. A good
example of this was the Digital Equipment Company (now part of HP), which developed and perfected the
minicomputer. Unfortunately, they continued to do so long after the demand for minicomputers had been replaced
by the use of personal computers. It is very easy for an organisation to forget that it is in business to serve
customers.
Think about your organisation's products or services. Is your organisation really meeting customer needs or
is it "pushing" products.
Marketing Orientation
Market-oriented companies put the customer first. One of the great writers on marketing, Philip Kotler, suggests
that there are four main features of marketing:
Market Focus
Marketing is all about satisfying needs. No organisation, no matter how big, is able to satisfy every need in the best
possible way. The basis of marketing is to focus on those areas of the market that a company can serve to a very
high standard.
Customer Orientation
The company has to meet customer needs from the customer's point of view. It is easy to identify and focus on a
market but still not satisfy customer needs. Researching customers to ensure that their needs are being identified is
the role of market research and in many companies an important part of the customer feedback comes from the
salesperson. The customer is king.
Coordinating Marketing
As David Packard of Hewlett Packard said, "Marketing is too important to be left to the Marketing Department!"
You do need a marketing department, but Packard's point is the whole company must be market oriented. Orders
are lost because a customer, well looked after by the marketing department and sales force, is offended by bad
treatment from the accounts department, or despatch. Everyone in the company must work towards customer
satisfaction at every level.
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Lesson - Marketing Orientation Jump To
Profitability
Professor Kotler lists this as a further aspect of marketing. Achieving a profit is an aim of marketing, however,
marketing is not just for profit-making commercial organisations. It is for every organisation that has customers,
whether profit making or not.
Marketing Strategy
Marketing strategy follows a firm's understanding of its purpose and objectives, and from these it will derive its
vision of what (and where) it wants to be. Its mission statement will describe what it does to get there.
The strategic plan defines how a business can make best use of its competences, assets and strengths to serve
customers needs and wants effectively and efficiently. Today, the customer should be the focus of all planning and
execution of strategy, tactics and operations.
In contrast to the approaches of even a few years ago, where organisations often developed products in isolation and
without consultation with the customer and then 'marketed' it, in contemporary business, customer orientation is at
the crux of marketing strategies. Successful organisations see the vital role of understanding the 'big' picture, the
marketplace, and only then formulating their business development strategy of defining products, services and
markets to operate in.
● Market focus.
● Customer orientation.
● Co-ordinated marketing.
● Profitability.
A marketing-based organisation is customer-centric. The customer is the focus of all planning and
execution of strategy, tactics and operations.
A company that adopts market orientation and focuses on customer preferences rather than its own ideas
about a product/service can gain major competitive advantage over its more product-oriented competitors.
It can also increase its share of the cake in the customer's business.
Read more about the marketing concept at:
http://www.netmba.com/marketing/concept/
Think of an example, perhaps from your own business context, of how market orientation as a strategy has
led to competitive advantage and increased business.
There are many examples from differing sectors. A good example is from the IT sector, where a contrast can be
made between the product-oriented and market-oriented approaches.
A product oriented company in the IT sector typically delivers to the client a set of disparate hardware and/or
software systems. The client then configures the system, including selection of relevant applications to support
their business. A marketing oriented company, on the other hand, will seek to understand the total customer
problem and empathise with the customer pains. It will seek to carry out a situational assessment and propose a
total solution. It is likely to help the client analyse their business needs, evaluate their business processes and then
select the most suitable hardware, storage systems, software and business applications, and configure the system
to the satisfaction of the client. It may even help the client with the day-to-day running and maintenance of the
system.
If conducted well, the customer will have made huge cost savings (as this approach is usually more efficient). In
return, the vendor would have carved out a very lucrative revenue stream, with high profit margins - a 'win-win'
scenario. Profit margins are generally much higher for integrated services than individual products. Many IT
services companies (e.g. EDS, IBM, Accenture) take this approach in their business strategy. Marketing
orientation helps companies get up the value chain.
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Lesson - Marketing Orientation Jump To
To complete these knowledge check activities, please log on to the Virtual Learning Environment.
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Resource Library
Websites:
http://marketingteacher.com/
http://www.strategy-business.com
http://www.franteractive.net/
http://www.thetimes100.co.uk/
http://www.netmba.com/strategy/
References:
Hamel, G and Prahalad C K (1996) Competing for the Future, Harvard Business School Press
Johnson, G and Scholes, K (2002) Exploring Corporate Strategy, 6th Edition, Prentice Hall
Mintzberg, H, Quinn, J and Ghosal, S (1998) The Strategy Process, Concepts, Prentice Hall
Piercy, N (2001) Market-led Strategic Change: Transforming the Process of Going to Market, Butterworth
Heinemann