Marketing Concept The 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 Inputs I am a marketing manager Value Inputs Customer satisfaction Market Share Demand Revenue Profits Brand 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 Concept Kotler’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 Concept FIRST 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 Concept SECOND 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 Focus Ask 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 Concept THIRD 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

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 Concept Fourth 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.