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Unit
I

Marketing Philosophy
Introduction
This purpose of this unit is to give you an overview of a marketing-based organisation, and set the sales function within the context of marketing orientation. We will consider the evolution of the marketing concept and how a marketing-based
philosophy impacts organisational structures and relationships. You will gain an appreciation of the importance of market segmentation in market management, and become familiar with common criteria for market segmentation. We will examine the role of marketing research, and help you develop an understanding of the four elements of the marketing mix, the 4 'P's' - price, product, place, promotion. We will see how these elements combine to form the marketing strategy, which in turn
shapes sales strategy.

On completion of this unit you should be able to:

1.
2

Describe the evolution of the marketing concept.

Evaluate the impact of a marketing based philosophy on organisational structure and operational relationships.

3.

Explain the steps in the market management process and explain the importance of market segmentation in sales.
Analyse the role of marketing research in sales.

4.
F

Explain the four elements of the marketing mix, how they make up marketing strategy and form the critical input to sales strategy.

Marketing Orientation
The term marketing is used extensively in modern life. If you stop someone in the street and ask them what it means, they will probably use words like "advertising", "market research" an:.d"a modern word for selling" .Infact, marketing is a lot more than just

Advanced Certificate in Sales and Marketing

In this way. Marketing is a management process. Advanced Certificate in Sales and Marketing . and supplies customer requirements efficient$ and profitably". . We have to consider current needs and anticipate the requirements of the customer in the future. and the support of management for the marketing concept is a key element in its success. First we will In the next sections we shall consider what it means for an organisation to adopt a marketing-based business philosophy. anticipates. The Chartered Lrstitute of Marketing in the UK defines marketing as follows: "Marketing is the management process which identifies. We shall then go on to consider a marketing-based philosophy in more detail. So what is marketing orientation? explore this.usually with market research.the right market offering at the right place at the right fime. o Marketing is involved with identifying customer requirements . although all of these functions are important aspects of marketing. a strategic framework is established whereby the customer is placed at the centre of the organisation's activities. Today. advertising and research.a very important aspect of the marketing process. An Overview of a Marketing-based Business Philosophy The points below describe marketing and its role in a marketing based business philosophy. The satisfaction of the needs will require the supplier to provide benefits . a company has to be marketing orientated if it is to be successful.Unit I rdi selling. where marketing has a key role in defining the long-term objectives and mission of the company. . This requires planning . o Truly market-driven companies adopt strategic level marketing. We shall then consider the evolution of the marketing concept and look at how marketing orientation has influenced organisational structures in business.

Now. Marketing philosophy Attitude to customers: Market Research: Sales Strategy: Product-based philosophy Sell what we make. Marketing is sometimes referred to as a 'pull strategy'. ldentify customers needs. through manufacturing efficiency. Thuy turned their attention away from mass production at lowest unit cost to try to anticipate the specific needs of customers and produce products/services whose benefits would satisfy those needs. and that includes charities and government bodies. Credit Services: Stock Levels: Prof t / Distribution: Profit long term from customer relationshios. Marketing & sales aid.rdi o Marketing is not just for profit-making companies. Push products. Determined by customers needs. which meet those needs through specific benefits. whose focus was on efficient production. Very many selling jobs in fact are in non-profit-making organisations. which contrasts the characteristics of Marketing Orientation and Product Orientation.L. Customer Benefits. Product Features Advertising: Table l. Pull customers. To meet customer demands effectively. See Table I.l: Marketing Orientation and Product Orientation. Packaging: Product protection. Expensive but necessary service. Transport At lowest cost. The principle is that we understand customer needs and produce products or services. the process responsible for anticipating. The marketing philosophy developed out of the need by producer manufacturers. although very often the people who have those jobs would not think of themselves as salespeople! Unit I Marketing is a business philosophy. Customers will want to purchase products or services. Customer convenience. Advanced Certificate in Sales and Marketing . Part of the product offer. Measure customer reactrons. identifying and satisfying customer current and future needs. Set by Production. to compete more effectively in their markets. which they perceive as meeting their needs and wants. Marketing is for any organisation that has customers. Set by market / sales analysis.

It worked. What has changed is the fact that whereas in Ford's day. Advanced Certificate in Sales and Marketing . This is a view that if you make something cheap enough.the customer had needs and the supplier met them. Production Orientation The Industrial Revolution and the subsequent mass-production techniques introduced by Henry Ford and others changed all that. of course. for example. These people provided the villagers with what they wanted. today the situation is reversed and now the customer is king! There are still situations where a production focus is required. An engineering company producing components to specification. was quoted as being available itt "anty colour you wanted providing it was black".s quite modern. because the demand for cars was huge and customers would buy what was available. demand exceeded supply. Ford's idea was to make a simple model and produce it in large volumes to reduce costs. Sales Orientation \Atrhilst production orientation orientation is still found occasionally in is not as common today. the idea of customer orientation is as old as trade itself. though. the choice in cars is huge and Henry Ford's ideas would seem laughable. we would see a number of trades-people such as the blacksmith at work. The Evolution of the Marketing Concept Marketing is basically about anticipating and serving customer needs. but where does the concept come from? In fact.Unit I rdi KEY POINT Marketing is a business philosophy. Everything was made to order . For example. There was no question of producing large volumes of goods and assuming that people would take them. sales today's business environment. That was certainly the thinking behind Henry Ford's Model that. the process responsible for anticipating. Today. rather famously. if we looked at a pre-Industrial Revolution village. even though the term "marketing" . people will buy it. identifying and satisfring customer current and future needs. This period gave rise to what is generally called "production orientation".

the modern sales oriented organisation uses techniques that are based upon marketing principles: - Unit I o Identify the customer needs. Of course. Today. Product Orientation Product orientation is another view that has many problems and is also very common. This novel approach has replaced the more traditional toolkit of hooks. This 'company centred' approach changed over time. A good example of this was the Digital Equipment Company (now part of HP). It takes the view that if it makes a better quality or better specified item. face to face skills and selling techniques. it is a key part of your job to find out what customers want and ensure that the products and services that your organisation is offering really meet customer needs. . they continued to do so long after the demand for minicomputers had been replaced by the use of personal computers. . ls your organisation really meeting customer needs or are you being asked to sell what the organisation offers? lf you are a practising Now let us turn our attention to marketing orientation when organisations adopt a marketing-based philosophy. . It is very easy for an organisation to forget that it is in business to serve customers. Fit product benefits to customer needs. Product oriented organisations essentially push their products without focus on the customer requirement or business need. ACTIVITY salesperson. think about your orSanisation's products or seryices. Advanced Certificate in Sales and Marketing . the item must sell. lines and closes.rdi Originally sales orientation was associated with scripted presentations and closing techniques. as a salesperson. Use customer orientation. Unfortunately.that is. This non-manipulative selling strategy means that a sales presentation becomes a joint venture of mutual benefit where buyer and seller both win. which developed and perfected the minicomputer.

"Marketing is too important to be left to the Marketing Department!" You do need a marketing department. but Packard's point is the whole comPany must be market-oriented. Marketing Strategy Marketing strategy follows a firm's understanding of its purpose and objectives. Philip Kotler. Advanced Certificate in Sales and Marketing . is able to satisfy every need in the best possible way. Its mission statement will describe what it does to get there. well looked after by the marketing department and sales force. Customer Orientation The company has to meet customer needs from the customer's on a market but still omers to ensure that market research and in many companies an important part of the customer feedback comes from the salesperson. One of the great writers on marketing. however.It is for every organisation that has customers. Achieving a profit is an aim of marketing. Profitability Professor Kotler lists this as a further aspect of marketing. Co-ordinated Marketing As David Packard of Hewlett Packard said. no organisation. whether profit-making or not. Orders are lost because a customer. Everyone in the company must work towards customer satisfaction at every level. and from these itwill derive its vision of what (and where) it wants to be. no matter how big. The basis of marketing is to focus on those areas of the market that a company can serve to a very high standard. or despatch. marketing is not just for profit-making commercial organisations. suggests that there are four main features of marketing: Market Focus Marketing is all about satisfying needs. The customer is king.Unit I rdi Marketing Orientation Market-oriented companies put the customer first. is offended by bad treatment from the accounts department.

differ. however.rdi The strategic plan will be almost entirely based on how can make best use of its comp serve customer needs and wants process. #ieestyt"s of the French and British. r size and ?ff'J. tactics and operations. o Market focus. the customer is clearl execution of strategy. o Co-ordinated o A profitability. marketing-based organisation is customer-centric. Marketing and Impact of Societal Factors ::: ACTIVITY be economic rvith similar characteristics.: Can you think of an example of a consumer product which is more successful in Britain than in France (or vice versa). The customer is the focus of all planning and execurion of strategy. Here is one rerating to consumer kitchen appliances. due to life-style differences between the countries. Customer orientation. ACTIVITY FEEDBACK There are many sets of exampres. Advanced Certificate in Sales and Marketing . and this impacts marketing strategy. tactics anc a Unit I business KEY POINT The main features of a marketing-based organisation are: . marketing.

how many employees? o Its location .. beliefs and norms are very important in sales and marketing. social. The factors which affect organisational structure are:- o Its business philosophy . Large Companies businesses in the nineteenth and early twentieth centuries simply adopted the organisational structure of the only sizeabl-e organisations which existed before the industrial revolution Government Administration and the Army. ACflVtry List as many economic. Power was derived from position and the legitimate authority of rank determined process. where all employees need to be focused on achieving business objectives.product-based? marketing-based?. services. procedures and systems.. Feelings and perceptions about the worth of goods or services are acquired through a process of social and cultural development from childhood. o Its size . manufacturing. KEY POINT Attitudes.Unit I rdi The differences in attitudes to food may be the key factor in determining that microwave cookers are less prevalent in French homes than British. cultural and psychological influences on buying behaviour as you can. Organisational Structure and Relationships in Marketing-oriented Companies with a product or sales philosophy tend to have hierarchical structures or functional organisations.extractive. whilst dishwashers are more common in France than Britain. This is often not suitable in today's market-oriented world. retailing.how many different locations? o Its nature . other? Advanced Certificate in Sales and Marketing .

Modern Flatter structures A need to get closer to customers and to improve competitiveness by reducing costs and becoming more efficient caused many firms Advanced Certificate in Sales and Marketing .1 depicts a hierarchical or functional organisational structure. Figure l. through directives and orders with little or no feedback. Unit I .rdi Its history needs. other departments have little or no market rocus. l: Hierarchical organisational structure.number and type of customers. Following army practice. current structure. Figure 1. most managers had a limited span of control with on average only 6 subordinates reporting to them. Apart from the sales and marketing function. future Its customers . The communication process was normally from the CEO downwards. H ierarchical Structu res Hierarchical structures had many layers of management between the CEO and the customer. consumer / commercial. that is.past shape.

The controlled hierarchical process of everything passing upwards to the manager before dissemination was swept away. Matrix Structures In some cases. As such.rr aimrnistration to sales/marketing. flat structures. -arger spans of control and computerised communicahon sr-stems to co-ordinate the functions. MBN Computer Manufacturers. communication travelled not only from the CEO don-nu-ard but also from customers upwards. and horizontaLlr-behr-een different departments at the same level. Matrix structures are common place today.2: Matrix Organisation lllustration. each product has its own'organisation'including sales and marketing 0 Advanced Certificate in Sales and Marketing .2 is a simplified illustration of a matrix organisation for a company. horizontal structures overlaid the remnants of the vertical hierarchical organisation to better focus on customer satisfaction. Project staff Project Manager -1 Marketing Person -i--------' I Figure 1. In these ne\\-er organisations. as they strike a good balance between some of the merits of functional structures vs. The result rr-dS slimmer companies with fewer layers of management. Figure 1. The organisation is structured along the lines of the products it markets.Unit I rdi to rationalise =e:: orgaxrsational structures and change the focus from produCi.

the (dotted lines). integrated to focus on the customer' the organisation's marketing fun L Marketing as an equal function 2.Production .The customer as the controlling function P F 5.3: Koder's 5 Circles' Advanced Certificate in Sales and Marketing ll .nfi product functions. as the controlling function Marketing as the integrative function Customer .Finance M . Marketing as the main function 4.Customer Figure 1.Marketing HR . to the director as well ur.ion's Sales and' Marketing Managers' and eventually Sales and Marketing Directors' Unit I of functions senior Managers/Directors still have direct control butarenowmuchmoreapartofaseriesofinter-connectedteams. a matrix Tuhction offii"u. The sales and marketing Persons report-to. ir. Marketing as a more important function 3.Human Resources C .

appears to have a product focus. Could his views of production and sales be the basis of internal dissension.Unit I rdi ACTIVITY Charles Revlon. why could this be so? ACTIVITY FEEDBACK Revlon are clearly market-oriented and customer focused in their stores. To be truly market-oriented. Refer to Figure L. Market Management and the lmportance of Market Segmentation Market Management Marketing oriented organisations place a high emphasis on a process that is termed market management. is reputed to have said: "ln the factory we make cosmetics. the whole company must work towards satisfying the customer. It is on-going process carried out throughout the development and lifetime of the market offering to ensure that the company strategy is in tune with the marketplace. not just the sales staff in the stores. and respond to new market needs.4. Charles Revlon's statement is a clear indication of customer focus and market orientation. Market management is thebroad discipline that continually analyses the marketplace in order to influence an organisation's strategy. In the store we sell hope". CEO of the cosmetics company. however. t2 Advanced Certificate in Sales and Marketing . The factory.

o Step Step 4: Develop market segment strategies and plans. . It consists of 6 steps as follows: and o Step 1: Understand the marketplace. Step 5: Align business plans. o Step 2: Carry out market segmentation.rdi Step I Unit I Step 2 Understand the marketplace Carry out market segmentation Marketplace Step 6 Manage market and Step 3 seSment Customer wants and needs Carry out portfolio analysis Step plans 5 Step 4 Develop market segment strategies and plans Align business Figure 1. Step 6: Manage market segment. Typical questions addressed are: Advanced Certificate in Sales and Marketing t3 . 3: Carry out portfolio analysis. Let us briefly consider the steps in market management: Understanding the Marketplace The vital input to understanding the marketplace is market research. Marketing research attempts to answer many important questions before an organisation commits to entering and investing in a market segment. . .4: Market management. At the heart of market management is the marketplace customer needs and wants. We shall consider this in more detail later in this unit.

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