Study unit 5 The marketing process Flashcards
Evolution of Marketing
Operation-oriented management
Sales-oriented management
Marketing-oriented management
Operation-oriented management
In the production era the belief was that products would sell themselves, so the major concern of businesses was production, and not marketing, and the needs of consumers were largely ignored.
Sales-oriented management
In this era the focus was on selling as much as possible by whatever means. Whether the consumer really needed the product, or whether it really met his or her needs was not important. This sometimes led to unethical sales practices, false claims, false promises, and so on, in order to persuade the consumer to buy. There are still companies today that are basically sales-oriented. Many mail-order businesses advertise products that are not readily available or are not worth the quoted price. Someone once ordered a beautiful pair of gold earrings from a mail-order catalogue. When they arrived, the earrings were so small that she could hardly see them.
Marketing-oriented management
In this phase the focus was still on selling, but in a more integrated way. It was a far broader concept than just selling. Consumers developed more sophisticated needs and were financially in a better position to satisfy their needs. There was also a wide variety of competing products from which they could choose. This led management to realise the importance of the marketing function. The packaging, distribution, quality, advertising, and so forth, all had to be integrated to create a certain “image” of the product. The focus was placed mainly on the effectiveness and efficiency of the marketing tasks, and marketing management came to realise that marketing tasks should be performed ac- cording to an ethical code or management philosophy.
The essence of this marketing concept lies in the four principles discussed below.
Profit orientation
Consumer orientation
Social responsibility
Organisational integration
- Profit orientation
The first principle of the marketing concept is profit orientation. The marketing concept views customer orientation as a means to achieve profit. By providing market offerings that satisfy customer needs, the business will achieve its own objectives too. These objectives can be expressed in many ways. Overall, the objective can be seen as an attempt to survive and grow.
- Consumer orientation
The second principle is that of consumer orientation. This means that the customer’s needs become a top priority, and that the products and the services offered by the business are based on customer needs. This is often lacking in South African companies.
Customer-oriented businesses do not consider the marketing task complete once a sale has been made. Such enterprises provide after-sales service. They check up on how satisfied customers are with the product/service and what can be done to enhance that satisfaction.
- Social responsibility
The third principle is that of social responsibility. This covers a fairly wide field and is becoming increasingly important in the modern business world.
Social responsibility primarily implies that a business should make a contribution to the community with whom it does business. Companies donate funds for community projects such as schools, conservation programmes, welfare activities, and so on.
But social responsibility goes further than merely contributing financially to the community. It also requires a business to be law abiding. This can range from absolute openness and honesty in its business operations (eg not taking or offering any bribes) to taking care not to harm the environment (eg by polluting the atmosphere with smoke, or dumping waste material in rivers).
When a business adheres to the principle of social responsibility it will try not to offend the morals, values and religious beliefs of the community.
- Organisational integration
The fourth principle is that of organisational integration. This implies that every function, department and individual need to be marketing oriented – that is, they must continually be aware of how their actions will affect the image of the business.
Organisational integration is particularly important when it comes to cooperation between departments. Imagine the chaos if Daimler Chrysler’s marketing department promises a customer that she will receive the ordered vehicles by a certain date, and the production department does not bother to manufacture those vehicles on time. Internal conflict, poor service, and even loss of sales, may be the result.
Consumer-oriented management
The focus of this approach shifted away from marketing, and went one step back – to the consumer. It started with product design. What were the needs of the consumer? How should the product, quality, distribution, and so on, be designed to meet the needs of the consumer? Mecer, for instance, first determine the needs of their different target markets and then design their computers accordingly. This approach includes the marketing orientation, but broadens it considerably.
Strategic approach to marketing
The focus here is an extension of the consumer-oriented approach, but places even more emphasis on the long-term relationships with the consumer, supplier and even competitor. It extends into the field of public relations where a positive relationship with the community itself is fostered. Note that relationship marketing is not a separate approach; it is part of the strategic approach to marketing.
Relationship marketing
In order to survive in a changing environment, it is important to maintain long-term relationships with individuals, businesses and other institutions. An insurance salesperson or an estate agent who maintains contact with a client after a transaction has taken place increases his or her chances of doing business with the client again at a later stage.
Determinants of consumer behaviour
Individual factors
- Motivation.
- Attitudes.
- Perceptions.
- Learning ability.
- Personality.
- Lifestyle.
Motivation
The consumer has specific needs that will motivate his or her purchasing behaviour. For instance, in order to be pretty and to be loved by her boyfriend, the young girl buys Estée Lauder cosmetics.
Attitudes
Attitudes may be positive, neutral or negative, depending on the consumer’s experience of the product. For instance, the teetotaller has a negative attitude to liq- uor. He does not even read advertisements for brandy and never considers buying it.
