The Marketing
Concept/orientation
• Discuss the Marketing
Concept/orientation
• Evaluate the benefits and costs of
a marketing orientation for a
selected organisation
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marketing teacher.com
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Marketing Orientations
• Organizations design and carry out their
marketing strategies under five alternate
orientation:
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•
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Production orientation
Product orientation
Selling orientation
Marketing orientation
Societal Marketing orientation
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The Production Concept
• Consumers will favour products that are
available and highly affordable
• The organization should focus on improving
production and distribution efficiency
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The Production Concept
This concept holds that customers will prefer
products that are widely available and
inexpensive
Problems with adopting production concept
 In a competitive market any company that takes too narrow a focus
whereby they concentrate only on reducing production costs run the risk
of not meeting the requirements of consumers.
 There are exceptions to the rule though,
Application of Production Concept
This orientation is applicable / fine where a company is faced with a
situation where:
 demand exceeds supply or
 the product cost is too high and efficiencies have to be gained in
production in order to gain customers or
 buyers are more interested in obtaining the product than they are in
specific features or
 the buyer will buy what is available rather than wait for what they really
want
The Product Concept
• Consumers will favor products that offer the
most quality, performance, and features
• The organization should devote its energy to
making continuous product improvements
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The Product Concept
This concept holds that consumers favour those
products that offer the most quality,
performance, or innovative features
Problems with Product Concept
 A product orientation can lead to an obsession with technology because
the managers in the organization believe that technical superiority is the
key to business success.
 Continuous product improvements may not be what customers actually
want – as is perhaps the case with one of the most recent innovations –
the WAP (Wireless Application Protocol) phone.
 product orientation often leads to marketing myopia (Leavitt 1960).- the
focus on the product rather than on the customer needs its presumes to
satisfy.
 Myopia may cause a company to ignore crucial changes in the market
place because it causes marketers to look within the organisation rather
than through the window
The Selling Concept
• Consumers will not buy enough of the firm’s
products unless the firm undertakes a largescale selling and promotion effort
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The Selling Concept
This concept holds that consumers and
businesses, if left alone, will ordinarily not buy
enough of the organisation’s products. The
organisation must, therefore, undertake an
aggressive and promotion effort
Problems with the selling concept
I. the problem with this approach is that it fails to consider customer
satisfaction. When customers are introduced to buy products that they
do not want or desire, they will not buy them again
II. Customers are likely to communicate any dissatisfaction with the
product through negative word of mouth and may dissuade potential
customers from similar purchases
III. With a focus on short-term results – creating transactional sales –
rather than on building long-term, profitable relationships with
customers, the type of company following this type of concept will often
lose out when more customer focused competition enters the market
Application of the Selling Concept
I. The selling of ‘unsought’ goods represents an example of this type of
company orientation. E.g. goods whose existence consumers are not
aware of like insurance
II. It is also used by companies introducing new goods or with excessive
inventory
III. Politicians used the selling concept too – political parties sell their
candidates aggressively to capture voters
The Marketing Concept
This concept holds that the key to achieving
organisational goals consist of the company
being more effective than competitors in
creating, delivering and communicating
superior customer value to its chosen target
markets.
The Marketing Concept
• Achieving organizational goals depends on
knowing the needs and wants of target
markets and delivering the desired
satisfactions better than competitors do
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Figure 1.3 - The Selling and Marketing
Concepts Contrasted
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Selling vs Marketing Concepts
Selling Concept
Marketing Concept
Starting point
Factory
Market
Focus
Existing products and
Customer needs
needs of sellers
Means
aggressive Selling and
Integrated marketing
promoting
Ends
(desired
results)
Profits through sales volume
Profits through customer
satisfaction
Sales Functions and Marketing Functions
• It is important to realise at this stage that selling as an organisational
concept is different to the sales function within a company.
ACTIVITY
 What are the differences between the selling and the marketing
functions in an organization?
 How far do the two functions complement each other and how far do
they stand alone?
 Make notes to illustrate your answer
The Societal Marketing Concept
• A company’s marketing decisions should
consider consumer’s wants, the company’s
desires, consumers’ long-run interests and
society’s long-run interests
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The Societal Marketing Concept
• Calls for sustainable
marketing—socially
and environmentally
responsible
marketing that meets
the present needs of
consumers while also
preserving the ability
of future generations
to meet their needs
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According to UPS, social
responsibility “isn’t just good for
the planet. It’s good for business.”
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The Societal Marketing Concept
This concept holds that the organisation’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 in a way that preserves and
enhances the customer’s and society’s wellbeing
Figure 1.4 - The Considerations Underlying
the Societal Marketing Concept
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Benefits of Marketing Orientation
• Being marketing oriented enable the company to
achieve a higher level of Branding. (e.g. Coca Cola
had achieved this and they stand ahead of their
competitors).
• Another benefit is that the company is
encouraged to innovate new products. (e.g. Coca
cola is innovative and always developing new
products).
• Marketing oriented companies tends to be aware
of the trend and the demand of the market. This
leads to effective pricing and promotion strategies
being adopted by companies
Cost of Marketing Orientation
• A strong market orientation does come with significant costs.
• Investment in marketing research is high because companies
need powerful market intelligence to respond accurately.
• Technological infrastructure is also critical in the early 21st
century as companies use databases to collect, analyze and use
customer data.
• Constant modifications to work processes require investment in
ongoing training. Constant product modifications also means
ongoing investment in new equipment and product iterations.
• Companies try to improve by changing its products/services
(sometimes to match that of competitors) which customers
might not always be happy with and might lead to decline in
sales.
Transaction marketing differs
from relationship marketing
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Time perspective
Primary communication
Customer feedback mechanism
Market size
Criterion for success
The marketplace isn’t what
it used to be…
Heightened competition
Globalization
Technologies
Industry convergence
Retail transformation
Disintermediation
Consumers are changing …
Consumer sophistication
Tech savvy
Self-expression
Buying power
Voice and influence
Co-creation
Self-service