Marketing ConceptThe Competitive Philosophy For Reaching Goals

Ted Mitchell

This is a presentation

• The Things Marketing managers are held responsible for and rewarded for

• The goals to achieve• The Philosophy of Competition necessary to

achieve the goals

Marketing Managers are

• Held responsible for • 1) customer satisfaction• 2) the level of brand awareness among the potential customers• 3) the level of customer attitudes towards the firm’s products• 4) the amount of customer loyalty and level of retention rates• 5) the level of customer demand (number of customer transactions,

number of products purchased)• 6) the level of sales revenues• 7) the size of the firm’s market share• 8) the amount of profit generated by marketing expense• 9) the size of the return on sales• 10) the size of the return on marketing investment

Marketing Managers are often rewarded for

• 1) creating higher levels of customer satisfaction• 2) increasing levels of brand awareness among the potential

customers• 3) improving customer attitudes towards the firm’s products• 4) creating customer loyalty and retention rates• 5) increasing customer demand (number of customer transactions,

number of products purchased)• 6) creating sales revenues• 7) increasing the firm’s share of the total sales in the market• 8) increasing gross marketing profit• 9) increasing marketing profit• 10) increasing the return on marketing investment

The Goal of the Marketing Manager is

• 1) NOT maximizing customer satisfaction• 2) NOT maximizing levels of brand awareness among the potential

customers• 3) NOT maximizing customer attitudes towards the firm’s products• 4) NOT maximizing customer loyalty and retention rates• 5) NOT maximizing customer demand (number of customer

transactions, number of products purchased)• 6) NOT maximizing sales revenues• 7) NOT maximizing the firm’s share of the total sales in the market• 8)NOT maximizing the return on marketing investment

• 9) IS Maximizing Profit

Marketing Machine: Managers are Rewarded for Outputs

The Marketing Machine

Many Inputs to The Marketing Machine

InputsI am a

marketing manager

Value

InputsInputs

Inputs

Customer satisfaction

Market Share

DemandRevenue

ProfitsBrand Awareness

The Marketing Concept is

a philosophy of business competition.

Marketing Managers wanting to reach their assigned goals

need to know what it is, what it assumes, what it implies and how it is different

The Marketing Concept is a Philosophy of Competition

• It promises a competitive advantage to the firm that adopts its principles.

• The competitive advantage being promised• is to have desirable customers wanting to deal

with your firm rather than with your competitors.

The Marketing Concept

• Having an organization-wide customer orientation with the overarching objective of achieving long range, sustainable profits for the firm

• The marketing concept introduces the marketing man at the beginning rather than the end of the production cycle and integrates marketing into each phase of the business.

The Marketing ConceptKotler’s Definition is Best

The Marketing Concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than the competitors.

Know The Marketing Concept!As the alternative to other

competitive philosophies (i.e., product, production, and selling

concepts) This will be on The Exam!

THE FOUR KEY PARTS OF THE MARKETING CONCEPT ARE

1) GOALS OF THE FIRM

2) 2) CUSTOMER ORIENTATION

3) MARKET FOCUS (TARGET MARKETS)

4) INTEGRATED MARKETING EFFORT IN

THE SYSTEM

The Four Pillars of Marketing Management

• 1) Profit (organization’s goals)• 2) Customer Orientation• 3) Targeting Specific Market Segments and

Audiences• 4) An Integrated Marketing Mix Throughout

the entire organization and supply chain• What are the Pillars of Modern Marketing

Management?

A popular Exam Question

• What are the Pillars of Modern Marketing Management?

• Answer• 1) Profit (organization’s goals)• 2) Customer Orientation• 3) Targeting Specific Market Segments • 4) An Integrated Marketing Mix

The Marketing ConceptFIRST PART: PROFIT

• The Marketing Concept holds that the key to

achieving organizational goals....

• The goal of business is profit and profits are the result of competitive advantage.

THE FOUR KEY PARTS OF THE MARKETING CONCEPT ARE

1) GOALS OF THE FIRM

Sustainable COMPETITIVE ADVANTAGE, Profit

2) CUSTOMER ORIENTATION

3) MARKET FOCUS (TARGET MARKETS)

4) INTEGRATED MARKETING EFFORT IN

THE SYSTEM

The Marketing ConceptSECOND PART: CUSTOMER ORIENTATION

• The Marketing Concept holds that

the key ... consists in determining the needs and wants... of customers

• It is necessary to build and sell what the customer wants.

• First understand what the customer wants to buy, then build it and sell it.

Customer Orientation

MARKETING CONCEPT is About

• “SELLING MORE BY DESIGNING AND BUILDING WHAT PEOPLE WANT TO BUY”.

• IT IS NOT ABOUT • “SELLING MORE OF WHAT YOU

LIKE TO BUILD”.

MARKETING CONCEPT HOLDS

• THAT A CUSTOMER ORIENTATION IS KEY TO ACHIEVING A COMPETITIVE ADVANTAGE.

• SERVE THE CUSTOMER BETTER THAN THE COMPETITOR AND YOU WIN THE CUSTOMER’S BUSINESS.

Looking for a Customer FocusAsk this question!

What Are We Selling?

Customer Focus

What Are We Selling?

What Benefits Are They Buying?

Customer Focus

We Are Selling Drills

What Benefits Are They Buying?

Customer Focus

We Are Selling Drills

They Are Buying Holes.

Use a Customer Definition of a Market

A Market is People with needs and wants, money to spend, and the authority to spend it.

It is not the housing market, car market, the stock market.

Is The Customer Orientation a Better Orientation for Competitive

Advantage than Other Orientations?

• YES. It is much better than the Product Orientation.

• YES. It is much better than the Production Orientation.

• YES. It is much better than the Sales Orientation.

#1 The Product Orientation or

• The Product Concept as a Philosophy of competition• Give the buyers the best technology

and you will have a competitive advantage.• Build a better mousetrap and the

world will beat a path to your door.

#2 The Production Orientation or• Production Concept as a Philosophy

of Competition• Build the product with less cost than

your competitors and you have a competitive advantage• Make the same type of product as the

competitor and make it cheaper

#3 The Selling Orientation

• The Selling Concept as a Philosophy of Competition• Have a well trained sales force and you

have a competitive advantage.• Sell surplus inventory,• Sell surplus production capacity• Customer will not buy unless you close the

sale.

A firm should look to its customers for a sustainable competitive advantage. It should have Customer

Orientation... not a Product, Production or Sales Orientation.

The Marketing Concept

• Is a superior philosophy for achieving a sustainable competitive advantage

• It is more successful than • A Better Product Wins Philosophy• A More Efficient Production Line Wins

Philosophy• A More Effective Communication and Sales

Force strategy wins Philosophy• Because it Based upon a Customer Orientation

The Marketing ConceptTHIRD PART: TARGETED MARKET FOCUS

• The Marketing Concept holds that the key ... consists in determining the needs

and wants of target markets...

• Not all people have the same needs and wants.

Target Market

Target Market

• A firm can not make a single offering that will satisfy everybody’s different needs and wants.

• A firm must focus on a group of customers that it can PROFITABLY serve better than other sellers.

Target Market

• A firm chooses a target market and designs an offering for that group of customers.• A firm must accept the fact that it

can not be all things to all customers.

The Marketing ConceptFourth Part: Coordination

• The Marketing Concept holds that the

key ... Delivering Benefits... more effectively and efficiently than competitors

• is an integrated and coordinated marketing system.

Integrated and Coordinated Marketing System.

Means

Three Things

First

• Having the Four P’s of the Marketing Mix coordinated.–Price and Other Costs the Customer pays–Product and Service –Promotion and Communication–Place (Distribution Channels and Supply

Chain)

Second

• All departments and functional areas of the firm must be coordinated–The Marketing Mix and Target

Market must be understood and accepted by all departments

Third

•All organizations in the total vertical marketing system or Supply chain from the manufacturer to the retailer must be coordinated with the same target market

THE FOUR KEY PARTS OF THE MARKETING CONCEPT ARE:

1) GOALS OF THE FIRM

COMPETITIVE ADVANTAGE, PROFIT

2) CUSTOMER ORIENTATION

3) MARKET FOCUS (TARGET MARKETS)

4) INTEGRATED MARKETING EFFORT IN

THE SYSTEM

Know The Marketing Concept!As an alternative to other

competitive philosophies (i.e., product, production, selling)

Any question about the definition of

The Marketing Concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than the competitors.