Wednesday, 4 March 2009

Marketing Management Philosophies

Marketing management is defineed as the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives. But What are the concepts philosophies behind these activites? What weight should be given to the interests of the organization, customers and society? Very often these interests conflict. Invariably, the organization's marketing management philosophy influences the way it approaches its buyers.


There are five alternative concepts under which organizations conduct their marketing activities: the production, product, selling, marketing, and societal marketing concepts


PRODUCTION CONCEPT: 

The philosophy that consumers will favour products that are available and highly affordable, and management should therefore focus on improving production and distribution efficiency. This concept is one of the oldest philosophies that guides sellers.


This philosophy states that any amount of goods produced will sell if it is available and affordable to customers. When firms adopt this concept, generally they produce goods on a mass production level, to be able to produce large quantities, therefore make it more available; investing in technology is essential, to reduce the costs of production and make it more affordable. In such case the management is required to focus mostly on improving the production and distribution of a part.


Advantage: Useful in two type of situation - first when the demand for a product exceeds the supply. Second situation occurs when the product's cost is too high and improved productivity is needed to bring it down.

Disadvantage:

- This is an inward looking orientation. 

- In production orientation, business is defined in terms of prod

ucts that the company is making. The management does not define business in t

erms of serving particular needs.

- The purpose of the firm is to manufacture product and aggressively sell them to customer. Eg. - Film industry 

- When customer need change, production oriented companies are not able to sense them and they continue to produce product and services.


Example: Texas Instruments (TI) follows this philosophy of increased production

 and lower costs in order to bring down prices. Film companies define their business in term of product produce and believe in aggressive selling.

PRODUCT CONCEPT:

Some companies become centered on constantly improving the product. Such companies prescribe to the philosophy of product concept. Continuous attempt are made to improve the product and its quality, as it is believed that customer would always prefer to buy product that is superior.


Advantage: A product orientation leads to obsession with technology because managers believe that technical superiority is the key to business success.

Disadvantage: This often results in a myopic focus on the product, without any attention on the other ways in which customer can fulfill their needs. This is called marketing myopia. 

The customer does not buy a product, he buys an offering that fulfill his needs. This concept will become clearer with the following example.


Example: Let us believe that firm is producing a mousetrap. Manufacturers believe that

if they can build a better mousetrap, the world will beat a path to their door." But they are often rudely shocked. Buyers may well be looking for a better solution to a mouse problem, but not necessarily for a better mousetrap. The solution might be a chemical spray, an exterminating service or something that works better than a mousetrap. Furthermore, a better mousetrap will not sell unless the manufacturer designs, packages and price is attractive; places it in convenient distribution channels; and brings it to the attention of people who need it and convinces them that it is a better product.

SELLING CONCEPT

The idea that consumers wll not buy enough of the organization's products unless the organization undertakes large-scale selling and promotion effort.


Advantage: When the firm have overcapacity, selling concept become beneficial to sell their product.It can also be applicable in non-profit organizations or societies (See the example).

Disadvantage: Selling is largely a wasteful activity because a company truly practicing marketing concept will not need to sell its product. Marketing make selling redundant. Selling consume a lot of organizational resources, as the company force the product on customer.


Example: A political party, will vigorously sell its candidate to voters as a fantastic person for the job. The candidate works hard at selling him or herself - shaking hands, kissing babies, meeting donors and making speeches. Much money also has to be spent on radio and television advertising, posters and mailings. Candidate flaws are often hidden from the public because the aim is to get the sale, not to worry about consumer satisfaction afterwards.


MARKETING CONCEPT: 

“This is a business philosophy that challenges the above three business orientations.” The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. Surprisingly, this concept is a relatively recent business philosophy.


The marketing concept rests on four pillars:  target market, customer needs, integrated marketing and profitability.


Example: Many successful and well-known global companies have adopted the marketing concept. Procter & Gamble, Marriott, Nordstrom and Mc Donald's and Pizza hut follow it faithfully. Toyota, the highly successful Japanese car manufacturer, is also a prime example of an organization that takes a customer- and marketing-oriented view of its business.


However, the marketing concept does not mean that a company should try to give all consumers everything they want. Marketers must balance creating more value for customers against making profits for the company. The shortest definition of marketing is "meeting needs profitably".


THE SOCIETAL MARKETING CONCEPT:

This concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors (this is the original Marketing Concept).  Additionally, it holds that this all must be done in a way that preserves or enhances the consumer’s and the society’s well-being. In other words we can say that organizations have to balance consumer satisfaction, company profits and long term welfare of society.


This theory emphasizes that organizations should not only think of cut-throat policies to achieve targets and jump ahead of competitors but should have ethical and environmental policies and then back them up with action and regulation.


Example: One such company is the international corporation Johnson & Johnson which stresses community and environmental responsibility. 


It may sound appropriate and ethical, but societal marketing concept is hard to implement as not all companies have a social conscience. 


The commonality in all five philosophies is that they all have the same goal which is organizational profit. The first three concepts production, product and selling, focus all on the product. The last two concepts marketing and societal marketing, focus on the customer. The choice as to which concept or philosophy to adopt depends on the circumstances of the situation.

 

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2 comments:

mark pedia said...

Marketing Management Philosophies is perfectly defined by the author.
Special thanx to author for helping me by providing this topic.

Nikunj Jain said...

thnxxxx :) :)

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