1. Means holding for sale or displaying for sale, offering for sale, selling, delivering or placing on the market in any other form.
2.Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
3. In popular usage, "marketing" is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning of the practice and science of trading.
Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling. It is also concerned with anticipating the customers' future needs and wants, which are often discovered through market research.
4. Marketing is a societal process which discerns consumers' wants, focusing on a product or service to fulfil those wants, attempting to move the consumers toward the products or services offered.
5. Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably.
6. Marketing is essentially about marshalling the resources of an organization so that they meet the changing needs of the customer on whom the organization depends.
7. The right product, in the right place, at the right time, at the right price.
Saturday, November 8, 2008
Market Orientation
Market Orientation – Essential foundation for a strong marketing strategy
Apple Computers, Starbucks Coffee, Virgin Group, L’Oreal, Nike, Singapore Airlines, Banyan Tree and Samsung are among some of the most successful brands in the world. Much has been written about the power of their brands that has allowed them to dominate their respective industries not only in the domestic markets but also globally. Most if not all accounts of success of such brands have emphasized on the branding process, the systems of brand management and the role of the brand equity in enhancing the company’s overall profile. The dynamics and the cultural aspect that are the powerful underlying forces behind these brands are rarely talked about.
In today’s hyper competitive global markets, success depends more on the overall vision and philosophy of the companies that drives their activities rather than on their product level or business unit level strategies. The role of brand equity in a company’s market capitalization and shareholder value maximization is well documented. But to achieve such strong brand equity, companies need to develop a culture and an orientation that not only supports market oriented thinking but also nurtures the integration of cross functional integration of thought and activities. This article takes a detailed look into the components of such an orientation and what makes a company’s internal structure conducive to building strong brands.
Market orientation
Market orientation is usually defined as the organization wide generation, dissemination, and responsiveness to market intelligence. This definition at once changes the dominant paradigm that has defined marketing for decades. Marketing has traditionally been defined within the narrow confines of the 4P framework. Such a conceptualization of marketing has relegated marketing to a tactical discipline to be performed by middle level marketing managers who did not possess the overall holistic view of the organization. But the connected knowledge economy, globalizing, converging and consolidating industries, fragmenting and frictionless markets, empowered customers and adaptive organizations among others are forcing organizations to alter their view of marketing.
The concept of market orientation is built on three pillars of customer focus, coordinated marketing and profitability. An organization’s capabilities to develop an orientation towards each of these three pillars depend on the internal structure and culture. The next section further elaborates these three constructs and how they allow companies to create a strong internal culture that can support building brands.
Pillars of market orientation
Customer focus: Organizations have traditionally emphasized either profitability or market share (growth) as their guiding orientations. As the fundamental responsibility of any organization is to maximize shareholder value, such an orientation did not seem wrong. Further, with the advent of branded goods, globalization and increasing competition, companies placed a very high emphasis on products. But all these extant orientations have been challenged with the explosion of the Internet and resulting empowerment of customers. Internet to a great extent reversed the information asymmetry and allowed access to hitherto unavailable information about product features, price and peer recommendation. These factors are forcing companies to shift their fundamental orientation from that of profitability, growth and products to customers.
Customer centricity is at the center of creating any future corporate strategies. Customer centricity primarily proposes that the basic philosophy of companies should be to serve customers rather than sell products and in the course establish long-term relationships by treating customer as strategic assets.
Coordinated Marketing: For a company to have a market orientation, marketing has to break the narrow confines of the tactical 4P framework. Marketing should be transformed into a company-wide discipline practiced by anyone and everyone. Simply, marketing has to become a coordinated, cross-disciplinary function. This is easier said that done.
For any discipline to claim a much broader responsibility and scope beyond its functional domain, the ability to quantitatively measure the outcomes of its activities becomes paramount. This is where marketing has been suffering for a long time. Measuring marketing productivity has indeed become a major challenge for marketers. But further, marketers have refused to acknowledge that customers are not the sole responsibility of the marketing department but of the company as a whole. These factors have together stalled marketing from becoming a coordinated activity that involves other functions such as finance, operations, human resources and strategy within any company.
Profitability: In today’s global capital economy, the future potential of the company and its potential attractiveness is often controlled by the capital markets. Companies and managers are constantly under immense pressure to demonstrate the financial strength every quarter. The effect of quarterly results on the company’s stock price, the signals that such results have come to convey to a wide array of stakeholders and the extent to which financial analysts have managed to unleash havoc and terror for companies have collectively forced companies to adopt a very short-term perspective on profitability.
Further, the focus on short term profitability invariably comes at a very high cost. Most companies tend to ignore the impact of their actions on the long term strategic capabilities. Moreover, under the traditional marketing paradigms, short-term focus was inevitable as the emphasis was on products rather than on customers. But within the framework of market orientation, profitability encompasses both financial measures (such as ROI, EVA, and market share) and non financial measures (such as awareness, attitudes and behavioral patterns). Such a comprehensive measurement would allow companies to balance between short term and long term profitability with a cautious eye on long term financial health of the company.
These three pillars of market orientation have proven to allow companies to create a very strong philosophy and in turn contribute to companies’ long term strategic competence. But having followed the traditional marketing model for decades, it is indeed a tough call for companies to become market oriented. The following section of the article offers guidelines on how companies can establish a structure that allows management and employees to inculcate new way of thinking about marketing and ultimately channeling the aggregate mentality towards a market orientation.
Guidelines to adopt a market orientation
Leverage customer database systems: One of the greatest advantages that companies have today is the power of customer databases. The explosion of internet and the possibility of recording very specific details about customers, their online movement and their purchase behavior have only added power to these databases. The first step for companies in moving towards market orientation is to optimally leverage these databases.
The potential marketing intelligence that these databases offer would allow companies to understand the customers’ current and potential needs clearly. Such an understanding would lead to marketing functions to be in line with customers’ needs rather than compulsions centered around products. As such, pricing will be in line with customer’s willingness to pay rather than to cover costs, advertising and communications will inform, appeal and endear to customers, customer’s convenience will dictate distribution rather than logistical ease and product features would essentially reflect customers’ unmet needs rather than show off the latest technological supremacy. Such a shift from product centricity to customer centricity will be an important first step.
Create a marketing dashboard: To achieve complete market orientation, companies should create a systematic structure that would enable different functions to collectively discuss about customers and markets.
Traditionally, marketing department handles customers and their needs, finance looks after the money, operations is singly focused on production and strategy generally looks at the market outside to decide on the company’s future. A market orientation mandates that all these functions operate jointly. Marketing dashboards create a platform whereby representatives from each of these departments can come together and discuss the various functional issues so that the collective action will result in activities that enhances the company’s relationships with customers. Further, for marketing to become an organization wide discipline, it must not only understand the different functions within a company but also should be able to relate marketing activities to other functional activities. Marketing dashboards provides marketers a structured platform to ensure marketing become coordinated and company wide.
Constantly update metrics: Metrics used to measure the outcomes of marketing activities cannot be generalized across companies. Rather, they have to be modified and adopted depending on the company, the product class, the industry, the important criteria being measured and the ability of the company to track marketing investments. A first step in recognizing and developing useful metrics would be a collaborative discussion with other functional departments within the company. Further, the corporate mission and underlying philosophy would offer some insights into what metric are regularly tracked such as quarterly market share, relative share within the category, brand awareness, conversion ration through the purchase funnel, shifts in attitudes in response to advertising campaigns, shift in purchase patterns in response to discounts/promotions and so on.
But caution should be taken to ensure that these metrics capture both financial and non-financial measures. Marketing should also strive for developing metrics that go beyond the discipline and are able to capture the outcomes of all activities that bear on the relationship with customers. Such a move would take marketing a step closer to becoming an organization wide discipline.
SOME DIFFERENT APPROACHES FOR MARKETING ORIENTATION
The Marketing Orientation and the Marketing Concept
An organization with a market orientation focuses its efforts on 1)
continuously collecting information about customers' needs and
competitors' capabilities, 2) sharing this information across
departments, and 3) using the information to create customer value.
The market orientation simply defines an organization that understands the
importance of customer needs, makes an effort to provide products of
high value to its customers, and markets its products and services in a
coordinated holistic program across all departments. In what we call
the "Marketing Concept," the company embraces a philosophy that the
"Customer is King."
The Marketing Concept is an attitude. It's a philosophy that is driven down throughout the
organization from the very top of the management structure. The
Marketing Concept communicates that "the customer is king." Everything
that the company does focuses on the customer. Via the Marketing
Concept, a company makes every effort to best understand the wants and
needs of its target market and to create want-satisfying goods that
best fulfill the needs of that target market and to do this better than
the competition.
It wasn't always that way. There were other orientations that companies embraced over the years.
The Production Concept has been around for years. That concept simply suggests that customers
prefer inexpensive products that are readily available. In effect, "if
we make it, they will come."
The Product Concept suggests that companies that build the "better mousetrap" will gain
favor. The thinking here is that customers want products that have
higher quality, that offer better perfromance or do something unique.
The Selling Concept preceeded the Marketing Concept. From the 1920's until the 1950's,
most firms had a sales orientation. Competition had grown, and there
was a need to pursue the scarce customer. Sales could mean everything
from sales people to advertising to public relations, but little effort
was made to coordinate any overall marketing function. What we often
saw in the Selling Concept was the "hard sell" and the belief that
consumers wouldn't purchase unless they were sold.
The Holistic Marketing Concept that is embraced in the 21st century results in companies looking at
their overall marketing efforts. This includes how their marketing
affects society, as a whole. Marketing is also done internally
within the company. Without customers, a company will quickly flounder
-- thus the importance of the relationship. Holistic marketing looks
at the connectivity of the company, its people, its customers, and the
society in which it operates. The Societal Marketing Concept focuses
on.
.
A market orientated company is one that organizes its activities, products and services around the needs and requirements of its customers. In contrast, a product orientated company produces exciting and interesting products and seeks to demand-supply-for-goods-services--359.php] interest the market in these products. It is possible to be successful with either type of orientation, but it is harder to be successful with product orientation alone. It is all very well coming up with exciting and innovative products but you have to find a customer for them. Hence the importance of marketing orientation - because here you make sure that you have interested and enthusiastic customers first.
In the real world, market and product orientation are closely intertwined so that companies like Gillette, Coca-Cola and Travis Perkins, will:
• carry out market research into what consumers want
• organize product research in line with the results of market research
• constantly engage in qualitative market research to find out what focus groups of customers think of new ideas
• test market new products in smaller market areas before launching them onto a wider market
• evaluate ongoing customer perception of goods and services, in order to make improvements to technologies and product offerings.
Gillette is constantly developing its existing product range of razors. It uses panels of its own employees to test new products and to provide feedback so as to come up with good ideas for ongoing product development.
Product and market orientation should be seen as the twin blade of the scissors, rather than as completely separate approaches.
A marketing oriented firm (also called the marketing concept, or consumer focus) is one that allows the wants and needs of customers and potential customers to drive all the firm's strategic decisions. The firm's corporate culture is systematically committed to creating customer value. In order to determine customer wants, the company usually needs to conduct marketing research. The marketer expects that this process, if done correctly, will provide the company with a sustainable competitive advantage.
This consumer focus can been seen as a process that involves three steps. First customer want are researched, then the information is disseminated throughout the firm and products are developed, then finally customer satisfaction is monitored and adjustments made if necessary.
A marketing oriented firm will typically show the following characteristics:
• Extensive use of marketing research
• Broad product lines
• Emphasis on a product's benefits to customers rather than on product attributes
• Use of product innovation techniques
• The offering of ancillary services like credit availability, delivery, installation, and warranty
Organizations can be oriented toward marketing from a production, product, sales, or marketing perspective. Strategies, structures, and cultures, which reflect a company's basic orientation, must be integrated to ensure that marketing efforts communicate a clear corporate position. In a study of 31 hospitals, the Center for Health Services Education Research, St. Louis University, found that no hospital's organization fit neatly into a single category. For example, a hospital may have some service lines that were marketing oriented while other lines were production oriented. The majority of hospitals, however, were product oriented, focusing on productivity and financial performance rather than on market factors. The most effective sales orientation was observed in the for-profits. Their selling efforts, however, tended to be internally focused, with product development activities divorced from the planning and marketing functions. Only the for-profit hospitals showed the beginning of a marketing orientation. Developing a marketing orientation, especially in line divisions, requires a careful, well-orchestrated effort and the presence of several key factors: Access to capital and an emphasis on long-range planning and strategic spending The availability of hospital-specific market research. Key distribution channels. Talented middle managers. Up-to-date systems and structures equipped to serve new values and strategies. Leaders capable of communicating to the organization a vision of its role in the community.
Characteristics of high marketing orientation hospitals.
EARCH OBJECTIVES: Marketing has become a core management function in hospitals and hospital systems during the past decade. The rise of managed care has contributed to the expansion of marketing activities, and many marketing functions include managed care related activities. This paper assesses the marketing orientations of hospitals located in one state, and identifies the characteristics of those facilities associated with a high marketing orientation. Specific relationships between managed care activities and high marketing orientation are also examined. STUDY DESIGN: A survey of hospitals in a mid-Atlantic state was completed in which hospitals responded to items reflecting the five dimensions of marketing orientation as developed by Kotler and Clarke (1987) and as elaborated by Naidu and Naryana (1991). In addition, specific information on managed care activities as carried out by the hospital's marketing function was obtained. Organizational and utilization data collected by the state cost review agency was merged with hospital respondent data to form a completed data set. Following Naidu and Naryana's previous research (1991), respondent data was categorized into groups having either high or low marketing orientation, based on summative scores for the dimensions of marketing orientation. Those facilities having high marketing orientations are profiled in terms of their operating characteristics, and their managed care orientation. The total number of facilities in this study is 73. PRINCIPAL FINDINGS: There are significant differences between facilities having high and low marketing orientations. High orientation facilities tended to be larger in beds, spent more on marketing and public relations activities, and had a higher managed care orientations. The availability of a formal marketing department did not differentiate between high and low marketing orientation facilities. Similarly, ownership status was not significantly related to high marketing orientation. CONCLUSIONS: Hospitals vary in their marketing orientations, and hospitals having a high marketing orientation tend to be able to devote greater resources to the marketing effort. In addition, hospitals having a greater managed care orientation also have a high marketing orientation. However, in contract to findings of previous research, study findings indicate that the presence of a formal marketing department is not significantly related to the existance of a high marketing orientation. IMPLICATIONS FOR POLICY, DELIVERY OR PRACTICE: Administrators need to understand their marketing orientation, and those factors associated with a high marketing orientation. Hospitals can achieve a high marketing orientation regardless of the centralization of marketing tasks in a single department. Administrators should concentrate on enhancing their managed care orientations as this will contribute to a high marketing orientation.
Marketing orientation in the European Union mobile telecommunication market
Purpose - The main objectives of the paper are: to analyse marketing orientation application specifics in mobile telecommunication enterprises; and to develop and test an instrument for measuring the level of marketing orientation in the enterprises of the mobile telecommunication industry. Design/methodology/approach - The marketing orientation instrument was derived from systematic comparative analysis of the relevant marketing literature, supplemented by additional criteria relating to innovation and organizational learning. The empirical research method was expert assessment, conducted by means of online questionnaires. Correlation analysis and comparison with data from secondary sources were employed to test the validity of the procedure. Findings - The empirical research findings confirmed positive relationships between marketing orientation, enterprise performance and learning orientation in the target industry, but not between marketing orientation and innovativeness. Research limitations/implications - The paper reports a field study of marketing orientation in the mobile telecommunications industry in the 15 countries of the pre-2004 European Union. After acceptance of the new members into the EU there is a need to investigate the marketing orientation of the mobile communication operators in the newly accepted EU countries. Practical implications - The proposed marketing orientation instrument can be used to solve the issues of marketing orientation development. An enterprise is expected to achieve better performance results by improving operations related to each criterion of the measuring instrument, under conditions of constant monitoring and learning. Originality/value - The proposed marketing orientation development instrument is supplemented with additional innovation and organizational learning criteria. The first empirical marketing orientation research was performed for mobile telecommunication enterprises in the EU and confirmed positive relations between the marketing orientation level and the performance results of the EU mobile telecommunication operators. This research presents the empirical evidence that marketing orientation positively correlates with the constant organization learning.
Conclusion
Brand equity is undoubtedly the most important of corporate assets. To create strong brands, as important as a structured brand management process is a strong guiding philosophy that is customer and market oriented. Such an orientation spawns a self-enriching culture that not only drives the company in the right direction but also facilitates the creation of a strong corporate strategy. As such, companies would benefit tremendously by shifting from a complete product or growth orientation to a market orientation. Such market orientation after all is the basis for building strong brands
Apple Computers, Starbucks Coffee, Virgin Group, L’Oreal, Nike, Singapore Airlines, Banyan Tree and Samsung are among some of the most successful brands in the world. Much has been written about the power of their brands that has allowed them to dominate their respective industries not only in the domestic markets but also globally. Most if not all accounts of success of such brands have emphasized on the branding process, the systems of brand management and the role of the brand equity in enhancing the company’s overall profile. The dynamics and the cultural aspect that are the powerful underlying forces behind these brands are rarely talked about.
In today’s hyper competitive global markets, success depends more on the overall vision and philosophy of the companies that drives their activities rather than on their product level or business unit level strategies. The role of brand equity in a company’s market capitalization and shareholder value maximization is well documented. But to achieve such strong brand equity, companies need to develop a culture and an orientation that not only supports market oriented thinking but also nurtures the integration of cross functional integration of thought and activities. This article takes a detailed look into the components of such an orientation and what makes a company’s internal structure conducive to building strong brands.
Market orientation
Market orientation is usually defined as the organization wide generation, dissemination, and responsiveness to market intelligence. This definition at once changes the dominant paradigm that has defined marketing for decades. Marketing has traditionally been defined within the narrow confines of the 4P framework. Such a conceptualization of marketing has relegated marketing to a tactical discipline to be performed by middle level marketing managers who did not possess the overall holistic view of the organization. But the connected knowledge economy, globalizing, converging and consolidating industries, fragmenting and frictionless markets, empowered customers and adaptive organizations among others are forcing organizations to alter their view of marketing.
The concept of market orientation is built on three pillars of customer focus, coordinated marketing and profitability. An organization’s capabilities to develop an orientation towards each of these three pillars depend on the internal structure and culture. The next section further elaborates these three constructs and how they allow companies to create a strong internal culture that can support building brands.
Pillars of market orientation
Customer focus: Organizations have traditionally emphasized either profitability or market share (growth) as their guiding orientations. As the fundamental responsibility of any organization is to maximize shareholder value, such an orientation did not seem wrong. Further, with the advent of branded goods, globalization and increasing competition, companies placed a very high emphasis on products. But all these extant orientations have been challenged with the explosion of the Internet and resulting empowerment of customers. Internet to a great extent reversed the information asymmetry and allowed access to hitherto unavailable information about product features, price and peer recommendation. These factors are forcing companies to shift their fundamental orientation from that of profitability, growth and products to customers.
Customer centricity is at the center of creating any future corporate strategies. Customer centricity primarily proposes that the basic philosophy of companies should be to serve customers rather than sell products and in the course establish long-term relationships by treating customer as strategic assets.
Coordinated Marketing: For a company to have a market orientation, marketing has to break the narrow confines of the tactical 4P framework. Marketing should be transformed into a company-wide discipline practiced by anyone and everyone. Simply, marketing has to become a coordinated, cross-disciplinary function. This is easier said that done.
For any discipline to claim a much broader responsibility and scope beyond its functional domain, the ability to quantitatively measure the outcomes of its activities becomes paramount. This is where marketing has been suffering for a long time. Measuring marketing productivity has indeed become a major challenge for marketers. But further, marketers have refused to acknowledge that customers are not the sole responsibility of the marketing department but of the company as a whole. These factors have together stalled marketing from becoming a coordinated activity that involves other functions such as finance, operations, human resources and strategy within any company.
Profitability: In today’s global capital economy, the future potential of the company and its potential attractiveness is often controlled by the capital markets. Companies and managers are constantly under immense pressure to demonstrate the financial strength every quarter. The effect of quarterly results on the company’s stock price, the signals that such results have come to convey to a wide array of stakeholders and the extent to which financial analysts have managed to unleash havoc and terror for companies have collectively forced companies to adopt a very short-term perspective on profitability.
Further, the focus on short term profitability invariably comes at a very high cost. Most companies tend to ignore the impact of their actions on the long term strategic capabilities. Moreover, under the traditional marketing paradigms, short-term focus was inevitable as the emphasis was on products rather than on customers. But within the framework of market orientation, profitability encompasses both financial measures (such as ROI, EVA, and market share) and non financial measures (such as awareness, attitudes and behavioral patterns). Such a comprehensive measurement would allow companies to balance between short term and long term profitability with a cautious eye on long term financial health of the company.
These three pillars of market orientation have proven to allow companies to create a very strong philosophy and in turn contribute to companies’ long term strategic competence. But having followed the traditional marketing model for decades, it is indeed a tough call for companies to become market oriented. The following section of the article offers guidelines on how companies can establish a structure that allows management and employees to inculcate new way of thinking about marketing and ultimately channeling the aggregate mentality towards a market orientation.
Guidelines to adopt a market orientation
Leverage customer database systems: One of the greatest advantages that companies have today is the power of customer databases. The explosion of internet and the possibility of recording very specific details about customers, their online movement and their purchase behavior have only added power to these databases. The first step for companies in moving towards market orientation is to optimally leverage these databases.
The potential marketing intelligence that these databases offer would allow companies to understand the customers’ current and potential needs clearly. Such an understanding would lead to marketing functions to be in line with customers’ needs rather than compulsions centered around products. As such, pricing will be in line with customer’s willingness to pay rather than to cover costs, advertising and communications will inform, appeal and endear to customers, customer’s convenience will dictate distribution rather than logistical ease and product features would essentially reflect customers’ unmet needs rather than show off the latest technological supremacy. Such a shift from product centricity to customer centricity will be an important first step.
Create a marketing dashboard: To achieve complete market orientation, companies should create a systematic structure that would enable different functions to collectively discuss about customers and markets.
Traditionally, marketing department handles customers and their needs, finance looks after the money, operations is singly focused on production and strategy generally looks at the market outside to decide on the company’s future. A market orientation mandates that all these functions operate jointly. Marketing dashboards create a platform whereby representatives from each of these departments can come together and discuss the various functional issues so that the collective action will result in activities that enhances the company’s relationships with customers. Further, for marketing to become an organization wide discipline, it must not only understand the different functions within a company but also should be able to relate marketing activities to other functional activities. Marketing dashboards provides marketers a structured platform to ensure marketing become coordinated and company wide.
Constantly update metrics: Metrics used to measure the outcomes of marketing activities cannot be generalized across companies. Rather, they have to be modified and adopted depending on the company, the product class, the industry, the important criteria being measured and the ability of the company to track marketing investments. A first step in recognizing and developing useful metrics would be a collaborative discussion with other functional departments within the company. Further, the corporate mission and underlying philosophy would offer some insights into what metric are regularly tracked such as quarterly market share, relative share within the category, brand awareness, conversion ration through the purchase funnel, shifts in attitudes in response to advertising campaigns, shift in purchase patterns in response to discounts/promotions and so on.
But caution should be taken to ensure that these metrics capture both financial and non-financial measures. Marketing should also strive for developing metrics that go beyond the discipline and are able to capture the outcomes of all activities that bear on the relationship with customers. Such a move would take marketing a step closer to becoming an organization wide discipline.
SOME DIFFERENT APPROACHES FOR MARKETING ORIENTATION
The Marketing Orientation and the Marketing Concept
An organization with a market orientation focuses its efforts on 1)
continuously collecting information about customers' needs and
competitors' capabilities, 2) sharing this information across
departments, and 3) using the information to create customer value.
The market orientation simply defines an organization that understands the
importance of customer needs, makes an effort to provide products of
high value to its customers, and markets its products and services in a
coordinated holistic program across all departments. In what we call
the "Marketing Concept," the company embraces a philosophy that the
"Customer is King."
The Marketing Concept is an attitude. It's a philosophy that is driven down throughout the
organization from the very top of the management structure. The
Marketing Concept communicates that "the customer is king." Everything
that the company does focuses on the customer. Via the Marketing
Concept, a company makes every effort to best understand the wants and
needs of its target market and to create want-satisfying goods that
best fulfill the needs of that target market and to do this better than
the competition.
It wasn't always that way. There were other orientations that companies embraced over the years.
The Production Concept has been around for years. That concept simply suggests that customers
prefer inexpensive products that are readily available. In effect, "if
we make it, they will come."
The Product Concept suggests that companies that build the "better mousetrap" will gain
favor. The thinking here is that customers want products that have
higher quality, that offer better perfromance or do something unique.
The Selling Concept preceeded the Marketing Concept. From the 1920's until the 1950's,
most firms had a sales orientation. Competition had grown, and there
was a need to pursue the scarce customer. Sales could mean everything
from sales people to advertising to public relations, but little effort
was made to coordinate any overall marketing function. What we often
saw in the Selling Concept was the "hard sell" and the belief that
consumers wouldn't purchase unless they were sold.
The Holistic Marketing Concept that is embraced in the 21st century results in companies looking at
their overall marketing efforts. This includes how their marketing
affects society, as a whole. Marketing is also done internally
within the company. Without customers, a company will quickly flounder
-- thus the importance of the relationship. Holistic marketing looks
at the connectivity of the company, its people, its customers, and the
society in which it operates. The Societal Marketing Concept focuses
on.
.
A market orientated company is one that organizes its activities, products and services around the needs and requirements of its customers. In contrast, a product orientated company produces exciting and interesting products and seeks to demand-supply-for-goods-services--359.php] interest the market in these products. It is possible to be successful with either type of orientation, but it is harder to be successful with product orientation alone. It is all very well coming up with exciting and innovative products but you have to find a customer for them. Hence the importance of marketing orientation - because here you make sure that you have interested and enthusiastic customers first.
In the real world, market and product orientation are closely intertwined so that companies like Gillette, Coca-Cola and Travis Perkins, will:
• carry out market research into what consumers want
• organize product research in line with the results of market research
• constantly engage in qualitative market research to find out what focus groups of customers think of new ideas
• test market new products in smaller market areas before launching them onto a wider market
• evaluate ongoing customer perception of goods and services, in order to make improvements to technologies and product offerings.
Gillette is constantly developing its existing product range of razors. It uses panels of its own employees to test new products and to provide feedback so as to come up with good ideas for ongoing product development.
Product and market orientation should be seen as the twin blade of the scissors, rather than as completely separate approaches.
A marketing oriented firm (also called the marketing concept, or consumer focus) is one that allows the wants and needs of customers and potential customers to drive all the firm's strategic decisions. The firm's corporate culture is systematically committed to creating customer value. In order to determine customer wants, the company usually needs to conduct marketing research. The marketer expects that this process, if done correctly, will provide the company with a sustainable competitive advantage.
This consumer focus can been seen as a process that involves three steps. First customer want are researched, then the information is disseminated throughout the firm and products are developed, then finally customer satisfaction is monitored and adjustments made if necessary.
A marketing oriented firm will typically show the following characteristics:
• Extensive use of marketing research
• Broad product lines
• Emphasis on a product's benefits to customers rather than on product attributes
• Use of product innovation techniques
• The offering of ancillary services like credit availability, delivery, installation, and warranty
Organizations can be oriented toward marketing from a production, product, sales, or marketing perspective. Strategies, structures, and cultures, which reflect a company's basic orientation, must be integrated to ensure that marketing efforts communicate a clear corporate position. In a study of 31 hospitals, the Center for Health Services Education Research, St. Louis University, found that no hospital's organization fit neatly into a single category. For example, a hospital may have some service lines that were marketing oriented while other lines were production oriented. The majority of hospitals, however, were product oriented, focusing on productivity and financial performance rather than on market factors. The most effective sales orientation was observed in the for-profits. Their selling efforts, however, tended to be internally focused, with product development activities divorced from the planning and marketing functions. Only the for-profit hospitals showed the beginning of a marketing orientation. Developing a marketing orientation, especially in line divisions, requires a careful, well-orchestrated effort and the presence of several key factors: Access to capital and an emphasis on long-range planning and strategic spending The availability of hospital-specific market research. Key distribution channels. Talented middle managers. Up-to-date systems and structures equipped to serve new values and strategies. Leaders capable of communicating to the organization a vision of its role in the community.
Characteristics of high marketing orientation hospitals.
EARCH OBJECTIVES: Marketing has become a core management function in hospitals and hospital systems during the past decade. The rise of managed care has contributed to the expansion of marketing activities, and many marketing functions include managed care related activities. This paper assesses the marketing orientations of hospitals located in one state, and identifies the characteristics of those facilities associated with a high marketing orientation. Specific relationships between managed care activities and high marketing orientation are also examined. STUDY DESIGN: A survey of hospitals in a mid-Atlantic state was completed in which hospitals responded to items reflecting the five dimensions of marketing orientation as developed by Kotler and Clarke (1987) and as elaborated by Naidu and Naryana (1991). In addition, specific information on managed care activities as carried out by the hospital's marketing function was obtained. Organizational and utilization data collected by the state cost review agency was merged with hospital respondent data to form a completed data set. Following Naidu and Naryana's previous research (1991), respondent data was categorized into groups having either high or low marketing orientation, based on summative scores for the dimensions of marketing orientation. Those facilities having high marketing orientations are profiled in terms of their operating characteristics, and their managed care orientation. The total number of facilities in this study is 73. PRINCIPAL FINDINGS: There are significant differences between facilities having high and low marketing orientations. High orientation facilities tended to be larger in beds, spent more on marketing and public relations activities, and had a higher managed care orientations. The availability of a formal marketing department did not differentiate between high and low marketing orientation facilities. Similarly, ownership status was not significantly related to high marketing orientation. CONCLUSIONS: Hospitals vary in their marketing orientations, and hospitals having a high marketing orientation tend to be able to devote greater resources to the marketing effort. In addition, hospitals having a greater managed care orientation also have a high marketing orientation. However, in contract to findings of previous research, study findings indicate that the presence of a formal marketing department is not significantly related to the existance of a high marketing orientation. IMPLICATIONS FOR POLICY, DELIVERY OR PRACTICE: Administrators need to understand their marketing orientation, and those factors associated with a high marketing orientation. Hospitals can achieve a high marketing orientation regardless of the centralization of marketing tasks in a single department. Administrators should concentrate on enhancing their managed care orientations as this will contribute to a high marketing orientation.
Marketing orientation in the European Union mobile telecommunication market
Purpose - The main objectives of the paper are: to analyse marketing orientation application specifics in mobile telecommunication enterprises; and to develop and test an instrument for measuring the level of marketing orientation in the enterprises of the mobile telecommunication industry. Design/methodology/approach - The marketing orientation instrument was derived from systematic comparative analysis of the relevant marketing literature, supplemented by additional criteria relating to innovation and organizational learning. The empirical research method was expert assessment, conducted by means of online questionnaires. Correlation analysis and comparison with data from secondary sources were employed to test the validity of the procedure. Findings - The empirical research findings confirmed positive relationships between marketing orientation, enterprise performance and learning orientation in the target industry, but not between marketing orientation and innovativeness. Research limitations/implications - The paper reports a field study of marketing orientation in the mobile telecommunications industry in the 15 countries of the pre-2004 European Union. After acceptance of the new members into the EU there is a need to investigate the marketing orientation of the mobile communication operators in the newly accepted EU countries. Practical implications - The proposed marketing orientation instrument can be used to solve the issues of marketing orientation development. An enterprise is expected to achieve better performance results by improving operations related to each criterion of the measuring instrument, under conditions of constant monitoring and learning. Originality/value - The proposed marketing orientation development instrument is supplemented with additional innovation and organizational learning criteria. The first empirical marketing orientation research was performed for mobile telecommunication enterprises in the EU and confirmed positive relations between the marketing orientation level and the performance results of the EU mobile telecommunication operators. This research presents the empirical evidence that marketing orientation positively correlates with the constant organization learning.
Conclusion
Brand equity is undoubtedly the most important of corporate assets. To create strong brands, as important as a structured brand management process is a strong guiding philosophy that is customer and market oriented. Such an orientation spawns a self-enriching culture that not only drives the company in the right direction but also facilitates the creation of a strong corporate strategy. As such, companies would benefit tremendously by shifting from a complete product or growth orientation to a market orientation. Such market orientation after all is the basis for building strong brands
According to Philip kotler
According to Philip kotler, marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others.
In boarder term, marketing is the analysis, planning, implementation, and control of carefully formulated programs designed to bring about voluntary exchanges of values with target markets for the purpose of achieving organizational objectives. It relies heavily on designing the organization’s offering in terms of the target markets’ needs and desires, and on using effective pricing, communication, and distribution to inform, motivate, and service the markets. (Philip Kotler)
The main key points of marketing are as follows:
Managerial Process involving analysis, planning and control.
Carefully formulated programs and not just random actions.
Voluntary exchange of values; no use of force or coercion. Offer benefits .
Selection of Target Markets rather than a quixotic attempt to win every market and be all things to all men.
Purpose of marketing is to achieve Organizational Objectives. For commercial sector it is profit. For non-commercial sector, the objective is different and must be specified clearly.
Marketing relies on designing the organization’s offering in terms of the target market’s needs and desires rather than in terms of seller’s personal tastes or internal dynamics. User-oriented and not seller-oriented.
Marketing utilizes and blends a set of tools called the marketing mix – product design, pricing, distribution and communication. Too often marketing is equated either with just advertising or with just personal selling.
In marketing, it is always assume that it needs some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available. (Peter Drucker). Examples: Sony’s Walkman, Nintendo’s superior video game
Marketing includes selling but should be preceded by needs assessment, marketing research, product development, pricing and distribution. Selling focuses on products, aggressive selling and sales promotion with emphasis on price variations to close the sale. Maximize profits through sales volume. Marketing focus on customer needs. Integrated marketing plan encompassing product, price, promotion and distribution, backed up by adequate environmental scanning, consumer research, and opportunity analysis with emphasis on service. Maximize profits through increased customer satisfaction and hence raise market share. The marketing concept is a consumers’ needs orientation backed by integrated marketing aimed at generating consumer satisfaction as the key to satisfying organizational goals. A human need is a state of felt deprivation of some basic satisfaction. (Food, clothing, shelter, safety, belonging, esteem etc.) Abraham Maslow noticed that some needs take precedence over others. They are physiological needs, safety and security needs, love and belonging needs and esteem needs. Human wants are desires for specific satisfiers of these deeper needs. Demands are wants for specific products that are backed by an ability and willingness to buy them. Value and satisfaction can be as follows:
COMPCOMPARISON OF DIFFERENT DEFINITIONS OF MARKETING
The shortest definition of Marketing is meeting needs profitably.
According to Phillip Kotler Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Some other definitions are discussed here for comparison purpose.
In popular usage, "marketing" is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning of the practice and science of trading.
“Marketing is an activity. Marketing activities and strategies result in making products available that satisfy customers while making profits for the companies that offer those products.”
The following definitions are quite similar to this one:
“It refers to the management process which identifies, anticipates and supplies customer requirements efficiently and profitably.”
Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling. It is also concerned with anticipating the customers' future needs and wants, which are often discovered through market research.
The societal definition of marketing is:
“Marketing is a societal process which discerns consumers' wants, focusing on a product or service to fulfill those wants, attempting to move the consumers toward the products or services offered.”
“Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably.”
The essence of Marketing is “The right product, in the right place, at the right time, at the right price.”
"Marketing is the wide range of activities involved in making sure that you're continuing to meet the needs of your customers and getting value in return. Marketing is usually focused on one product or service. Thus, a marketing plan for one product might be very different than that for another product. Marketing activities include "inbound marketing," such as market research to find out, for example, what groups of potential customers exist, what their needs are, which of those needs you can meet, how you should meet them, etc. Inbound marketing also includes analyzing the competition, positioning your new product or service (finding your market niche), and pricing your products and services. "Outbound marketing" includes promoting a product through continued advertising, promotions, public relations and sales.”
“Marketing is an investment that, if done wisely, not only pays for itself but allows a business to grow. When proper marketing gets the message to the right audience, delivered in the right context, at the right price, you can't go wrong. Hiring an experienced marketing consultant can help the new business owner to develop effective strategies. Various books are also available on marketing strategies and can shed more light on the options available.”
According to Phillip Kotler Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Some other definitions are discussed here for comparison purpose.
In popular usage, "marketing" is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning of the practice and science of trading.
“Marketing is an activity. Marketing activities and strategies result in making products available that satisfy customers while making profits for the companies that offer those products.”
The following definitions are quite similar to this one:
“It refers to the management process which identifies, anticipates and supplies customer requirements efficiently and profitably.”
Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling. It is also concerned with anticipating the customers' future needs and wants, which are often discovered through market research.
The societal definition of marketing is:
“Marketing is a societal process which discerns consumers' wants, focusing on a product or service to fulfill those wants, attempting to move the consumers toward the products or services offered.”
“Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably.”
The essence of Marketing is “The right product, in the right place, at the right time, at the right price.”
"Marketing is the wide range of activities involved in making sure that you're continuing to meet the needs of your customers and getting value in return. Marketing is usually focused on one product or service. Thus, a marketing plan for one product might be very different than that for another product. Marketing activities include "inbound marketing," such as market research to find out, for example, what groups of potential customers exist, what their needs are, which of those needs you can meet, how you should meet them, etc. Inbound marketing also includes analyzing the competition, positioning your new product or service (finding your market niche), and pricing your products and services. "Outbound marketing" includes promoting a product through continued advertising, promotions, public relations and sales.”
“Marketing is an investment that, if done wisely, not only pays for itself but allows a business to grow. When proper marketing gets the message to the right audience, delivered in the right context, at the right price, you can't go wrong. Hiring an experienced marketing consultant can help the new business owner to develop effective strategies. Various books are also available on marketing strategies and can shed more light on the options available.”
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