1. Is marketing more important than selling? 2. Why should businesses take time and undertake competitor analysis?

BY AIMABLE INEZA inezaa@gmail.com

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6 AUGUST, 2011

TABLE OF CONTENT INTRODUCTION MARKETING AND SELLING CONCEPTS ... 2.1. Marketing concept 2.2. Selling concept . 2.3. The difference between marketing and selling COMPETITOR ANALYSIS IN ORGANIZATIONS 3.1. Purpose of competitor analysis . CONCLUSION .

PAGES

I. II.

1 1 3 5 5 5 6 7 8

III.

IV.

REFERENCE .

I.

INTRODUCTION

Todays businesses around the world cannot ignore the impact that the global economy is having on their performance. The advance of internet and information transparency has brought about an increasingly mobile workforce, rapidly changing technology and multiple business models. As a result, companies have become less capable of predicting and controlling the short-term shape of their very market. As a result, more and more companies are choosing to adopt a marketing-led philosophy to enable them to win market shares, capture and retain the hearts and minds of current and prospective customers. Palmer (2009) defines marketing as a business philosophy that puts customers at the center of an organizations considerations. This philosophy has to be reflected in basic values such as the requirement to understand and respond to customers needs and the necessity to search constantly for new market opportunities. On the other hand, selling is the art of persuading the consumer that buying the product or service will benefit him or her. Selling cant substitute marketing and as we shall discuss later on, there is a difference between marketing and selling. Lancaster, Massingham,& Ashford (2002) go further to suggest that selling is one of the marketing activities. At the end of this discussion, we shall be able to see whether marketing can work without selling or even selling taking place without marketing, and the purpose of competitor analyzing as part of marketing strategy. II. MARKETING AND SELLING CONCEPTS

Marketing is the entire business seen from the point of view of its final result, which is from the customers point of view. Many times the business success is not determined by the producer but by the customer; this calls for the application of marketing. Some other days the business survival lies in the organization trying to convince the customers that what they can offer is very important and this will call for the application of selling strategies. 2.1. The marketing concept According to Doyle& Stern (2006), marketing is perceived as a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others. Mullins& Walker (2010) tell that marketing attempts to measure and anticipate the needs and wants of a group of customers and responds with a flow of need-satisfying goods and services through the following: Targeting those customer groups whose needs are most consistent with the firms resources and 3

capabilities; developing products and/or services that meet the needs of the target market better than competitors, making its products and services readily available to potential customers; developing customer awareness and appreciation of the value provided by the companys offerings, obtaining feedback from the market as a basis for continuing improvement in the firms offering; and working to build long-term relationships with satisfied loyal customers. This interpretation suggests that the marketing concept is about keeping customer demand in their minds while designing products. The diagrammatic presentation of the marketing concept may be drawn below:
7. MARKETING RESEARCH Quantitative; Qualitative. 5. FACTORS INFLUENCED BUT NOT CONTROLLED Government regulations; Competitor behavior; Structure of distribution Non-marketing costs. 6. PRICING Demand Cost Margin Competition

3. PRODUCT POLICY A. Product attributes: style, color, quality, brand name, differentiation etc. B. Product line: length of line complements etc.

2. DISTRIBUTION CHANNELS A. B. C. D. E. Retailers Wholesalers Distributors Jobbers Sales agents etc.

1. A. B. C. D. E. F.

THE CONSUMER When does he buy? How does he buy? What does he buy? Why does she buy? Where does she buy? Who is she?

A. PERSONAL SELLING Motivation, organization, Quotas, budgets, recruiting

4. PROMOTIONAL METHODS AND PROGRAMS B. ADVERTIZING Appeals, to whom? Media, budget, timing

C. SALES PROMOTION Deals, promotion, exhibits, demonstrations, premiums

Figure 2.1. The diagrammatic presentation of the marketing concept Adopted from the Murray State University website: campus.murraystate.edu

The diagram above shows a relationship between the different elements of the marketing concept. Element 5 of the factors influenced but not controlled is almost at the center of all elements because it is the one that influences the marketing concept.

2.2. The selling concept The selling concept was quite common before the emergence of the marketing concept. According to the selling concept, if the customers are not constantly reminded, they will not be motivated to but the product so the firms have to advertise aggressively to remain prominent. By being aggressive, firms will be able to push their products to the customers and make sales. At the heart of the sales concept is the desire to sell a product that the business has made as quickly as possible to fulfill sales volume objectives. When viewed through the marketing concept lens, however, businesses must first and foremost fulfill consumers' wants and needs. The belief is that when those wants and needs are fulfilled, a profit will be made. In the sales approach, not much time is spent learning what the customer's ideal product would be because the salesperson has little say in seeing that their company's product is modified. Furthermore, they aren't rewarded for spending time listening to the customer's desires unless they have a product to match their desires that will result in a sale. (Note, however, that sales people aren't restricted to the use of the sales concept; oftentimes they use the marketing concept instead.) 2.3. The difference between marketing and selling Doyle (2006) suggest that the difference between marketing and selling lies in the fact that selling tries to push the customer to buy what the business has while marketing tries to get the organization to develop and offer what the customer will find of real value. The concepts surrounding both selling and marketing differ. The selling concept, instead of focusing on meeting consumer demand, tries to make consumer demand match the products it has produced. Marketing encompasses many research and promotional activities to discover what products are wanted and to make potential customers aware of them. In the table below is the differences suggested by Stanton, Etzel& Walker (1994) In selling
Emphasis on the product Company makes products& figures out how to sell it

In marketing
Emphasis on customers wants Company first determines customers wants before producing

Management is sales-volumes oriented Planning is short-run oriented (todays products& markets) Needs of seller are stressed

Management is profit oriented Planning is long-term oriented (New products, tomorrows markets, and future growth) Wants of buyers are stressed

Figure 2.2. Some distinctions between selling and marketing Adapted from Stanton, Fundamentals of marketing 1994 p.7. 5

III.

COMPETITOR ANALYS IN ORGANIZATIONS

Brassington& Pettitt (2000) define competitor analysis a systematic attempt to identify and understand the key elements of a competitors strategy, in terms of objectives, strategies, resource allocation and implementation through the marketing mix. Before a firm plans and implements a competitor analysis, it should be able to know who its competitors are. Kotler& Armstrong (1996) observes that normally, it would seem a simple task for a company to identify its competitors. For example, Barclays bank knows that Standard Chartered bank is its major competitor. At the narrowest level, a company can define its competitors as other companies offering a similar product and services to the same customers at similar prices. But in actual sense, companies face a much wider range of competitors. The company might define competitors as all firms making the same product or class of products, thus Toyota would see itself competing against all other automobile makers. Even more broadly, competitors might include all companies making products that supply the same service. Here Toyota would see itself competing against not only automobile makers but also companies that make motorcycles or even bicycles. More broadly again, competitors might include all companies that compete for the same consumer dollar. For example, here Toyota would see itself competing with companies that sell major consumer durables, new homes, or vacation abroad. Porter (1998) suggests a framework for analyzing competitors based on four key aspects of a competitor namely: Competitors objectives, assumptions, strategy and capabilities as illustrated in the diagram below:
What drives the competitor? What the competitor is doing or is capable of doing STRATEGY COMPETITOR RESPONSE PROFILE ASSUMPTIONS RESPONSE& CAPABILITIES

OBJECTIVES

Figure 3.1. A representation of competitor analysis framework Adapted from Michael E. Porter, Competitive Strategy, 1980, p. 49.

3.1. Purpose for competitor analysis Companies may need to analyze their competitors in order to stay alive on the market (survival); The marketing field is like a military battlefield where one has to constantly innovate their attack strategies so as to stay one step ahead of their competitor's and survive. If a company fails to analyze its competitors strategies, it will surely not identify changes in the environment; lose a lot of customers and money, eventually collapse. Businesses adopt a competitors analysis in their strategy to be able cope up with change; for example banks and microfinance institutions may need to take up a competitor analysis to find out why mobile telecommunications businesses end up taking a large number of their market shares. They may realize that actually mobile telecommunications transact faster and the customers like it that way. A competitor analysis can also help companies exploit opportunities; this is so because after a thorough analysis, company A may find that company B is no longer capable of offering a certain product or service in the required qualities yet A is capable of offering it. Yet again, it may decide to make a competitor analysis to improve on quality decision by improving on the quality of the products or services offered by its competitors. A competitors analysis may finally help a firm avoid surprises; through an analysis of its competitors a company may find out if there has been better products on the market that have replaced the existing ones. For example, bottling and packaging companies should take a competitors analysis especially on the products that preserve the environment such as lighter plastics or even recycled papers. IV. CONCLUSION

As Palmer (2009) put it, marketing has been presented as an indispensable approach to doing business. Marketing is most important where the main factor constraining a firms survival and growth is the shortage of customers for its products or services. This implies that marketing is not appropriate to all firms at all times and in all places. It should be at the discretion of management to decide where, when and how to apply the marketing and selling concepts. A competitors analysis as part of marketing strategy does not mean to break into the competitors offices, or use all sorts of unthinkable illegal means to obtain information. The necessary information may be obtained through an interaction with the competitors employees, accessing the competitors web pages on internet, attending tradeshows, picking it from their garbage, published information, channel members and key customers. 7

REFERENCE Brassington, F.,& Pettitt, S. (2000) Principles of marketing (2nd Edition) Pearson Education Ltd. Edinburgh Gate, Harlow Essex CM20 2JE England Doyle, P.,& Stern, P. (2006). Marketing management and strategy (4th Edition) Pearson Education Ltd. Edinburgh Gate Harlow Essex CM20 2JE England Kotler, P.,& Armstrong, G. (1996) Principles of marketing (7th Edition) Prentice Hall, Upper Saddle River, NJ 07458 Lancaster, G., Massingham, L.,& Ashford, R. (2002). Essentials of marketing (4th Edition) Mc GrawHill Shoppenhangers Road, Maidenhead, Berkshire, SL6 2QL Mullins, J.W.,& Walker Jr, C.O. (2010). Marketing management, a Strategic Decision-making approach (7th Edition) Mc GrawHill/Irwin 1221 Avenue of the Americas, New York, NY 10020 Palmer, A. (2009). Introduction to marketing, theory and practice (2nd Edition) Oxford University Press Great Clarendon Street, Oxford OX2 6DP Porter, M.E. (1998) Competitive Strategy, techniques for analysis industries and competitors. The Free Press, A division of Simon and Schuster Inc. 1230 Avenue of the Americas New York, NY 10020 Stanton, W.J., Etzel, M.J.,& Walker, J.B. (1994). Fundamentals of marketing (10th Edition) Mc GrawHill New York Http://www.gmnhome.com/