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Company Orientation Towards the Market Place

Company Orientation Towards the Market Place

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Published by Ragulan
Notes on Marketing orientation which includes sub sections such as product orientation, production orientation,sales orientation,societal orientation
Notes on Marketing orientation which includes sub sections such as product orientation, production orientation,sales orientation,societal orientation

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Published by: Ragulan on Aug 17, 2009
Copyright:Attribution Non-commercial

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09/04/2013

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Marketing activities should be carried out under a well-thought-out philosophy of efficient, effective, and socially responsible marketing. In fact, there are five competingconcepts under which organizations conduct marketing activities: production concept,product concept, selling concept, marketing concept, and societal marketing concept.
The Production Concept
The production concept
,
one of the oldest in business, holds that consumers preferproducts that are widely available and inexpensive. In simpleit assumes that goods areproduced because consumers will need them in their near future.Managers of production-oriented businesses concentrate on achieving high productionefficiency, low costs, and mass distribution. This orientation makes sense in developingcountries, where consumers are more interested in obtaining the product than in itsfeatures. It is also used when a company wants to expand the market.This orientation makes sense in developing countries such as China.Example one –Texas Instruments of USA, a firm engaged in the manufacturing of caculators gained sufficient economies of scale that them to bring down prices of theirproduct ranges it resulted to win major share of the American Calculator market.
The Product Concept
Product concept
,
which holds that consumers favor those products that offer the mostquality, performance, or innovative features.Managers in these organizations focus onmaking superior products and improving them over time, assuming that buyers canappraise quality and performance.A new or improved product will not necessarily besuccessful unless it’s priced, distributed, advertised and sold properly.Product-oriented companies often design their products with little or no customerinput, trusting that their engineers can design exceptional products. A General Motorsexecutive said years ago: “How can the public know what kind of car they want until theysee what is available?” GM today asks customers what they value in a car and includesmarketing people in the very beginning stages of design.Eg -Colleges,department stores, and the post office all assume that they are offering thepublic theright product and wonder why their sales slip. These organizations too often are lookinginto a mirror when they should be looking out of the window.
 
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Selling concept
This concept holds, the consuerms will not buy enough of the organizations productsunless it undertakes a large selling and promotional effort.The selling concept is practiced most aggressively with unsought goods—goods thatbuyers normally do not think of buying, such as insurance and funeral plots. The sellingconcept is also practiced in the nonprofit area by fund-raisers, college admissions offices,and political parties.Most firms practice the selling concept when they have overcapacity. Their aim is to sellwhat they make rather than make what the market wants.It focuses on creating sales transactions rather than on building long-term, profitablerelationships with customers. This can sometimes leads to long term impact on salesbecause dissatisfied customers do not buy again. Worse yet, while the average satisfiedcustomer tells three others about good experiences, the average dissatisfied customer tellsten others about his or her bad experience.
The Marketing Concept
The marketing concept, based on central tenets crystallized in the mid-1950s, challengesthe three business orientations we just discussed.18 The
marketing concept
holds thatthe key to achieving organizational goals consists of the company being more effectivethan its competitors in creating, delivering, and communicating customer vlue to itschosen target markets.Theodore Levitt of Harvard drew a perceptive contrast between the selling and marketingconcepts: “Selling focuses on the needs of the seller; marketing on the needs of thebuyer. Selling is preoccupied with the seller’s need to convert his product into cash;marketingwith the idea of satisfying the needs of the customer by means of the product andthe whole cluster of things associated with creating, delivering and finally consuming it.”The marketing concept rests on four pillars:
target market, customer needs, integrated 
m
arketing,
and
 profitability.
The selling concept takes an inside-out perspective. Itstartswith the factory, focuses on existing products, and calls for heavy selling and promotingto produce profitable sales. The marketing concept takes an outside-in perspective.Itstarts with a well-defined market, focuses on customer needs, coordinatesactivities thataffect customers, and produces profits by satisfying customers.Eg –3M, Motorola have made a practice of researching latent needs and developed theproducts.

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