1a.Marketing Philosophies

8/7/2019 1a.Marketing Philosophies

http://slidepdf.com/reader/full/1amarketing-philosophies 1/34



` The Marketing Philosophies help determine themanagement of marketing.

` Companies approach and conduct business in

different ways in order to achieve their organizational goals.

` These are competing concepts by whichcompanies are guided in their marketing efforts.



`̀ Production conceptProduction concept

`̀ Product conceptProduct concept

`̀ Selling conceptSelling concept

`̀ Marketing conceptMarketing concept`̀ Societal marketing conceptSocietal marketing concept



Production Concept

Production Concept

Product Concept

Product Concept

Selling Concept

Selling Concept

Marketing Concept

Marketing Concept

Societal Marketing Concept

Societal Marketing Concept

Marketing Management PhilosophiesMarketing Management Philosophies



` Based on the fact that consumers favor productsthat are available and affordable

` Concentration on production efficiency and

effective distribution networks` Outweigh the customer¶s actual needs and wants

` Used primarily when demand exceeds supply andthe focus is on finding production methods that

can bring the price down to attract morecustomers



` When mass production techniques created the IndustrialRevolution, the volume of output was greatly increased.

` Yet the increased production of goods did not immediatelyeliminate the shortages from the pre-industrial era.

` The new mass production techniques provided economies of

scale allowing for lower costs of production and correspondinglower prices for goods.

` Lower prices greatly expanded the market for the goods, and thenew production techniques were struggling to keep up with thedemand.

` This situation meant that the product philosophy would work justas well in the new industrial environment.

` Consumers still did not need to be consulted for the organizationto sell its products.



` Henry Ford - the classic example of the production philosophy in useafter the Industrial Revolution

` Henry Ford pioneered mass production techniques in the automobileindustry - he offered cars at affordable prices to the general public

` Before this time, cars were hand made, and only the very wealthy couldafford them

` The public enthusiastically purchased all the Model T Fords that thecompany could produce

` The evidence that the production philosophy was alive and well in FordMotor Company came in Henry Ford's famous reaction to consumer requests for more color options

` He was said to have responded that "you can have any color car you

want as long as it is black´` Realizing that different colors would increase the cost of production and

price of the Model T's, Henry Ford, using the production philosophy,decided that lower prices were best for the public.



` Based on ways to improve the quality,performance, and features to attract buyers

` This philosophy tends to spend too much time

adding features to their products` Does not think about what people actually need

and want

` The product philosophy was the dominant

marketing philosophy prior to the IndustrialRevolution and continued to the 1920s.

` The organization knows its product better thananyone or any organization.



` The company knows what will work in designingand producing the product and what will not work. For example, the company may decide to emphasize the

low cost or high quality of their products.

This confidence in their ability is not a radical concept,but the confidence leads to the consumer beingoverlooked.

Since the organization has the great knowledge and skill

in making the product, the organization also assumes itknows what is best for the consumer.



` This philosophy of only relying on theorganization's skill and desires for the product didnot lead to poor sales.

` In much of the product philosophy era,

organizations were able to sell all of the productsthat they made.

` The success of the product philosophy era is duemostly to the time and level of technology in which

it was dominant.` The product era spanned both the pre-Industrial

Revolution era and much of the time after theIndustrial Revolution



` The period before the Industrial Revolution wasthe time when most goods were made by hand.

` The production was very slow and few goods

could be produced.` However, there was also a demand for those

goods, and the slow production could not fill thedemand in many cases.

` The importance for management of this shortagewas that very little marketing was needed.



` Product oriented organizations 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 theminicomputer.

Unfortunately, they continued to do so long after the demandfor minicomputers had been replaced by the use of personalcomputers.

It is very easy for an organisation to forget that it is in businessto serve customers.



` The gunsmith shop in Williamsburg, Virginia, still operates using theproduct philosophy.

` The gunsmiths produce single-shot rifles using the technologyavailable during the 1700s.

` They are only able to produce about four or five rifles every year, and

they charge from $15,000 to $20,000 for each rifle.` However, the high price does not deter the demand for the guns; their

uniqueness commands a waiting list of three to four years.

` Today's Williamsburg Gunsmith Shop situation was typical for organizations operating before the Industrial Revolution.

` Most goods were in such short supply that companies could sell allthat they made.

` Consequently, organizations did not need to consult with consumersabout designing and producing their products.



` Places the focus on sales rather than what peopleactually need or want

` Most of the time the product is misrepresented

` Results in high customer dissatisfaction` The selling era has the shortest period of

dominance of the three philosophies.

` It began to be dominant around 1930 and stayed

in widespread use until about 1950.



` It is a company centered approach

` The selling philosophy holds that an organizationcan sell any product it produces with the use of

marketing techniques, such as advertising andpersonal selling.

` Organizations could create marketing departmentsthat would be concerned with selling the goods,

and the rest of the organization could be left toconcentrate on producing the goods.



` The reason for the emergence of the selling philosophy was theever-rising number of goods available after the IndustrialRevolution Organizations became progressively more efficient in production, which

increased the volume of goods

With the increased supply, competition also entered production These two events eventually led to the end of product shortages and the

creation of surpluses

It was because of the surpluses that organizations turned to the use of advertising and personal selling to reduce their inventories and sell their goods

` The selling philosophy also enabled part of the organization to keepfocusing on the product, via the product philosophy

` In addition, the selling philosophy held that a sales or marketingdepartment could sell whatever the company produced



` The Ford Motor Company is also a good example of the sellingphilosophy and why this philosophy does not work in manyinstances. Ford produced and sold the Model T for many years.

During its production, the automobile market attracted more competition.

Not only did the competition begin to offer cars in other colors, the styling of thecompetition was viewed as modern and the Model T became considered as old-fashioned.

Henry Ford's sons were aware of the changes in the automobile market andtried to convince their father to adapt.

However, Henry Ford was sure that his standardized low-price automobile waswhat the public needed.

Consequently, Ford turned to marketing techniques to sell the Model T.

It continued to sell, but its market share began to drop.

Eventually, even Henry Ford had to recognize consumer desires and introducea new model.



` The selling philosophy assumes that a well-trainedand motivated sales force can sell any product.

` However, more companies began to realize

that it is easier to sell a product that thecustomer wants, than to sell a product the

customer does not want.

` When many companies began to realize this

fact, the selling era gave way to the marketingera of the marketing concept and philosophy.



` The marketing concept and philosophy states that theorganization should strive to satisfy its customers' wantsand needs while meeting the organization's goals.

` The best way to meet the organization's goals is also bymeeting customer needs and wants.

` The marketing concept's emphasis is to understand thecustomers before designing and producing a product for them.

` With the customer's wants and needs incorporated intothe design and manufacture of the product, sales andprofit goals are far more likely to be met.



` The marketing era started to dominate around1950, and it continues to the present.

` The marketing concept recognizes that thecompany's knowledge and skill in designingproducts may not always be meeting the needs of customers.

` It also recognizes that even a good salesdepartment cannot sell every product that doesnot meet consumers' needs.

` When customers have many choices, they willchoose the one that best meets their needs.



` Focuses on what people need and want

` Less focus on the needs of the seller

` This concept is about the importance of satisfying

the customer¶s needs to achieve companysuccess

` Products are developed around those needs andwants

` Relies upon marketing research to define marketsegments, their size, and their needs

` The marketing department makes the appropriatedecisions to satisfy those needs



` The organization strives to satisfy customer wantsand needs while meeting the organization's goals- "the customer is king"

` The implication of the marketing concept is veryimportant for management - It is not confined only to the marketing function /

department, but adopted by the entire organization.

From top management to the lowest levels and across all

departments of the organization, it is a philosophy or wayof doing business.



` The customers' needs, wants, and satisfactionshould always be foremost in every manager andemployees' mind.

` Wal-Mart's motto of "satisfaction guaranteed" is anexample of the marketing concept. Whether the Wal-Mart employee is an accountant or a

cashier, the customer is always first.



` With the customer's satisfaction the key to theorganization, the need to understand the customer iscritical.

` Marketing research techniques have been developed justfor that purpose.

` Smaller organizations may keep close to their customersby simply talking with them.

` Larger corporations have established methods in place tokeep in touch with their customers, be it consumer panels,

focus groups, or third-party research studies.` Whatever the method, the desire is to know the customers

so the organization can better serve them and not losesight of their needs and wants.



Marketing as an equal

function

Marketing as a more

important function

Marketing as the

important function

Customer as thecritical function

Customer as the controlling function -Marketing as the integrative function

11

22

44 55

33

P - ProductionF - Finance

M - Marketing

HR - Human Resources

C - Customer



`

Interpreted literally, the marketing concept only advocatesdiscovering consumers' wants and needs and satisfyingthem.

` Critics assert that consumers may not be aware of all of their wants and needs. In the 1950s, were consumers aware of a need to cook their food

by sending microwaves through their food?

In the 1960s, were consumers aware of a need to have personalcomputers in their homes?



`

Critics argue that the marketing concept's concentrationon consumers' wants and needs stifle innovation

` Organizations will no longer concentrate on research anddevelopment in hopes that one product in ten might meetwith consumer acceptance

` It is less likely come up with innovative products such asmicrowaves and personal computers



` Not only uses the same philosophy as themarketing concept, but also focuses around theproducts benefit to the betterment of society as awhole

` Greater emphasis is put on environmentalimpacts, population growth, resource shortages,and social services

` Concern for environment is very high

` Eco-friendly products, environmental friendlyproducts are in vogue today



` Emphasis on social responsibility

` Marketing strategy should deliver value to customersin a way that maintains or improves both theconsumer's and the society's well-being

` Most companies recognize that socially responsibleactivities improve their image among customers,stockholders, the financial community, and other relevant publics.

` Ethical and socially responsible practices are simplygood business, resulting not only in favorable image,but ultimately in increased sales



` Body Shop Body Shop is a cosmetic company found by Anita Roddick.

The company uses only vegetable based materials for its products. It is also against Animal testing, supports community trade, defend Human

Rights, and overall protection of the planet.

` Ariel Ariel is a detergent manufactured by Procter and Gamble.

Ariel runs special fund raising campaigns for deprived classes of the worldspecifically the developing countries.

It also contributes part of its profits from every bag sold to the developmentof the society.

` BritishAmerican tobacco Company

BAT is a British based Tobacco company. It was found in the year 1902.

BAT is involved in working for the society in every part of the world.

It conducts tree plantation drives as part of its societal marketing strategy.



` This concept was a forerunner of sustainable marketingin integrating issues of social responsibility intocommercial marketing strategies

` Early mention of this topic was by William Lazer (1969),

Philip Kotler and Sidney Levy (1971)` Should not be confused with Social Marketing

Social marketing uses commercial marketing theories, tools andtechniques to social issues

Social marketing applies a "customer oriented" approach and

uses the concepts and tools used by commercial marketers inpursuit of social goals like Anti-Smoking-Campaigns or fundraising for NGOs



What is Marketing Management about?

1a.Marketing Philosophies

Documents

Transcript of 1a.Marketing Philosophies