Week 2 (MKT 111) Marketing Philosophies PDF

MKT 111 ELEMENTSOF MARKETING BY Dr. FABUNMI. A. O. THE MARKETING PHILOSOPHIES  INTRODUCTION  There are different concepts that guide organizations in conducting their marketing activities. E.g. organizations can only focus on production and try to reduce their cost...

MKT 111 ELEMENTSOF MARKETING BY Dr. FABUNMI. A. O. THE MARKETING PHILOSOPHIES  INTRODUCTION  There are different concepts that guide organizations in conducting their marketing activities. E.g. organizations can only focus on production and try to reduce their cost, or focus on improving the quality of product.  Similarly they can pay more attention to selling and promotion. In this way different concepts have evolved to help the organizations in managing their marketing activities. The concepts are production, product, selling, marketing, customer and societal marketing concept.  Marketing philosophy  A marketing philosophy is a foundational idea that becomes a part of all of the works that a marketing department accomplishes for a company or organization. MARKETING PHILOSOPHIES AND FUNCTIONS  There are six competing philosophies/concept under which organizations conduct marketing activities and they are: 1) Production philosophy 2) Product philosophy 3) Selling philosophy 4) Marketing philosophy 5) Customer philosophy 6) Societal Marketing philosophy.  Production philosophy  It entails concentration on the activities that would help in making goods and services available at cheaper prices.  The assumptions usually held by orgs. or individuals that adopt this philosophy are as follows: 1) consumers primary interests are the availability of product at low prices 2) consumers are highly price sensitive 3) major task of the org should be continuous reduction in costs 4) Focus on improving efficiency of production and distribution Product Philosophy  Is basically concerned with using high quality as a means of competition.  ASSUMPTIONS: 1) What consumers buy is the product itself and not necessarily the solution it will provide. 2) What primarily appeals to consumers in a product is its quality Product Philosophy  3.Consumers recognize the differences in the features and quality levels of competing brand of products  4. Quality is the main evaluative criterion used in choosing among competing brands  5. The main task of the organization is continuous product improvement Selling Philosophy  Focuses on aggressive techniques for overcoming customer resistance Production Selling Consumption  The selling philosophy is concerned with making use of any available means to achieve an organization’s competing goals of turning its already-produced goods and services into sales revenue.  Assumptions of Selling Philosophy 1) Consumers tend to buy only those things they are much aware of. 2) Consumers can be influenced to buy more through the means of promotion. 3) The main task of the organization is to build an aggressive sales oriented department. Marketing Philosophy  Focuses on satisfying customer needs and wants i.e. what the consumer wants is what the organization produces.  Focus of Marketing Philosophy Consumer Integrated Achievement of Consumer Need Marketing Organizational Satisfaction Goals Evaluation Effort Feedback Copyright Atomic Dog Publishing, 2002  Assumptions of Marketing Philosophy 1) Find out the needs, taste, expectations and desires of the consumers and recognize the need to satisfy same. 2) Develop appropriate goods and services that will satisfy the identified needs, tastes etc. 3) Consumers needs and want is the basis for grouping them into different market segments  Assumptions of Marketing Philosophy (Cont.) 4. Consumers would be attracted more to the products of the organization that satisfy their specific needs 5. The task of the organization is to first conduct a research before choosing its target market and the matching marketing programmes that would help it to effectively attract and retain customers.  Customer Philosophy  The ability of a company to deal with customers one at a time has become practical as a result of advances in factory customization, computers, internet, and database marketing software. ASSUMPTIONS: 1) Organizations collect information on each customer’s past transaction demographics, psychographics and media distribution preferences. 2) Organizations hope to achieve profitable growth through capturing larger share of each customer Customer Philosophy (Cont.) 3. this philosophy works best for companies that normally collect a great deal of individual customer information. Societal Marketing Philosophy  Focuses on satisfying customer needs and wants while enhancing individual, people in general, the environment and societal well-being.  It is an extension of the marketing philosophy  It emphasizes the satisfaction of consumer’s needs subject to the protection of long-term welfare of consumers and members of the public.  Assumptions of societal Marketing Philosophy 1) The needs or wants of consumers do not always agree with their long- run welfare and/or the society’s long-run interest 2) Consumers will favour those organizations, which are interested in both their presents as well as long-run welfare and the long-run welfare of the society. 3) The task of the organization is to satisfy the customers needs in such a way as to promote their long-run welfare and the society’s interests as the means of attracting and retaining customers. The Marketing Mix  The Marketing Mix  The marketing mix is the set of controllable marketing tools that the firm blends to produce the response it wants in the target market.  It consists of everything the firm can do to influence the demand for its products/Services. MARKETING MIX ( CONT.) Product Price Place Promotion People Physical Evidence Process MARKETING MIX ( CONT.)  Product: good, service or idea that offers a bundle of tangible or intangible attributes to satisfy the consumer  Price: what the product is exchanged for  Promotion: the communication of all other Ps  Place: all aspects of getting products to the consumer in the right location at the right time. MARKETING MIX ( CONT.)  In the context of services marketing, Booms and Bitner (1981) has suggested another extra 3Ps that contain; people, physical evidence and process. MARKETING MIX ( CONT.)  People: refer to all people directly or indirectly involved in the consumption of a service, example employees or other consumers.  physical evidence: relates to the environment in which the service is delivered. It also includes tangible goods that help to communicate and perform the service. Finally,  Process: is all about the procedure, mechanisms and flow of activities by which services are consumed.  Difference Between Marketing and Selling  In the selling concept, a company makes a product and then uses various methods of selling to persuade a customer to buy. In effect, the company is bending customers demand to fit the company’s supply. While in;  Marketing concept, the company finds out what the consumer wants or needs and then tries to develop a product/service that will satisfy that want and still yield a profit. Now the company is bending its supply to the will of consumer demand.  Selling  Emphasis is on the product  Company first makes the product and then figure out how to sell  Management is sale-volume oriented, in terms of today’s products and markets.  Stresses needs of seller  Planning is short term oriented, in term of today’s products and markets.  Marketing  Emphasis is on customer’s wants  Company, first determine what the customers wants and then figure out how to make and deliver a product to satisfy those wants  Management is profit oriented  Stresses needs of buyer  Planning is long run oriented, in terms of new products, tomorrow’s markets and future growth. Customer Satisfaction The feeling that a product has met or exceeded the customers’ expectation:  Focus on delighting customers  Provide solutions to consumers’ problems  Measuring satisfaction: complaint and suggestion systems, surveys, ghost shoppers, lost customer analysis  Review Questions 1. What do you understand by marketing? 2. Mention and explain the marketing philosophies that you have studied. 3. What are the functions of marketing? 4. What is marketing mix? 5. Highlight the marketing mix you have studied 6. Differentiate between marketing and selling concept.