Marketing Management : What are Marketing Philosophies? Elaborate with example.
INTRODUCTION???????????????????????????????????????????????????????????????
Marketing philosophy is an important topic to investigate in Marketing Management. When we start a business, develop a business unit, or begin to scale our business, we need a marketing strategy in addition to other plans. Marketing strategy must be founded on an appropriate marketing philosophy. In this assignment, we will talk about marketing philosophy, its purpose, different types, and so on.
Marketing is referred to as the process of creating, communicating and delivering products for the customers in order to satisfy their needs and wants. The purpose of a marketing philosophy is to identify those needs and fulfil them.
Philosophy of marketing is defined as a strategy in which we focus exclusively on the needs of the customer in order to maintain the profitability of the company. Everything that is not related to the target audience will be relegated to the background.
What is the relevance of Marketing Philosophies?
The fundamental issues in starting a business arise from market needs and desires. When an entrepreneur/businessman attempts to answer a critical set of fundamental business questions, it becomes the basic foundation of that business. Let us consider what those questions are-?
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When we want to market our business organization and its products and services, we have to question another set of fundamental questions to formulate the marketing strategy.
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We must first identify the needs and desires of the targeted customer group. The following step is to implement a marketing strategy based on a Marketing philosophy for the process of developing, communicating, and delivering products to customers in order to meet their needs and desires. The marketing philosophy will undoubtedly identify the customer's needs and desires.?
The implication of the marketing concept is very important for management. It is not something that the marketing department administers, nor is it the sole domain of the marketing department. Rather, it is adopted by the entire organization. From top management to the lowest levels and across all departments of the organization, it is a philosophy or way of doing business.?
The customers' needs, wants, and satisfaction should always be foremost in every manager and employees' mind. Wal-Mart's motto of "satisfaction guaranteed" is an example of the marketing concept. Whether the Wal-Mart employee is an accountant or a cashier, the customer is always first.
DIFFERENT TYPES OF MARKETING PHILOSOPHIES
Currently, we have 5 different orientations that are usually applied in companies depending on the objectives that have been set. Even though each philosophy has a particular time when it was dominant, a philosophy did not die with the end of its era of dominance.
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1.??????? Production
2.????? Product orientation
3.????? Sales orientation
4.????? Marketing orientation
5.????? Holistic marketing orientation
01. Marketing Philosophy - Production Concept?
The production concept is the oldest of marketing concepts which believes that more production, more sales, and more profits. What it says, produce products as far as possible the market will be automatically created. It assumes that consumers will favor those products which are available and affordable.?
The industrial revolution (1770-1820 AD) centered on the specialization of labor and improved production technologies and was the backbone of this concept. It appeared in greater productivity which minimized the costs of products dramatically. This work lasted till the 1930s.?
The production concept is appeared to follow Says Law, which means excess supply creates demand itself. And when demand exceeds supply consumers have little product choice. The underlying implicit premises of this marketing concept are:?
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Customers do not give more emphasis on no-price factors such as service, guarantee, quality, etc.
The production concept is slowly losing its significance especially in developed countries where cheap products do not lead to sales.?
In other words, the main focus of this concept is on large-scale production so as to reduce costs. However, this concept is not that useful, as it has its limitation in that the customers don’t always go for inexpensive and easily available products. It is because a low-price product may attract customers towards it, but since the main focus of the company was on production and not on the quality of the product, it can decrease the sales of the product if it does not meet up to the standards of the consumer.?
The production concept works best when the demand for a product is more than its supply. However, a consumer does not always buy inexpensive products, there are other factors also which influence their decision regarding the purchase of a product. For example, Ford Motor Company – Ford’s Model T followed the production concept.
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Example for Production Concept: -
Apple is primarily product-driven in its approach, in that it develops the product first, and then seeking out the market for it. This worked thanks, in large part, to the high quality and unique products that Apple has churned out. It did not take long for Apple to become established as a global market.
?Ford Motor Company – Ford’s Model-T
The whole philosophy on Henry Ford was to perfect the production process of Ford Model-T. The initial cost of the Ford Model-T vehicle was roundabout 800 US dollars, and it was high at the beginning of the 20th century. The company followed the production concept and developed its assembly line and other manufacturing processes. The price jumped from $800 to $300 and $300 was an affordable price to many Americans at that time.
?02. Marketing Philosophy – Product Orientation
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Product orientation is a marketing management concept that emphasizes the promotion of high-quality items to increase sales. The corporation considers product quality to be a determinant of market demand. A product-oriented corporation focuses on creating high-quality articles and pricing them appropriately so that customers can recognize and acquire the company’s products.?
Product orientation was relatively standard until the mid-twentieth century, mainly because consumers didn’t have many options for specific things.?
The emphasis was on the product itself during the end of the nineteenth and early twentieth centuries. As a result, companies developed high-quality, competitive goods with various characteristics.?
Customers have long placed a premium on quality, but the flaw in this approach was that the items didn’t always meet their needs.?
Because product orientation emphasizes design and is frequently associated with research and development, it’s no surprise that many product-oriented businesses are technology firms.?
The product has to sell itself, with a strong emphasis on research and development. As a result, it is only essential in a small market situation and is frequently paired with market orientation to appeal to a broad market.??
Examples for Product Orientation: -
Netflix
Though technically a service, Netflix made companies such as Blockbuster obsolete by giving consumers easy access to movies and television shows. The company capitalized on faster data speeds and recommendation algorithms to provide something consumers would not have thought possible.?
Netflix produces own films, documentaries, web series and other content types, then sell to customers on demand.
?Ferrari
Ferrari produces excellent, well designed, quality products (custom-made sports cars) which are great value for money. In a company like Ferrari they need to concentrate on their products, because over the years Ferrari managed to satisfy its customers through its superiority in quality and performance by delivering speed, style, luxury in their products.
?Cartier
Cartier International SNC, or simply Cartier, is a French luxury goods conglomerate that designs, manufactures, distributes, and sells jewellery, leather goods, and watches. Cartier's brand strategy revolves around excellence, craftsmanship (savoir-faire), luxury and heritage – themes which are rather typical of the entire luxury category. The attributes differentiating Cartier from other prestigious brands, according to the company itself, are its “open-mindedness and curiosity”.
?03. Marketing Philosophy - Sales orientation?
The selling era has the shortest period of dominance of the three philosophies. It began to be dominant around 1930 and stayed in widespread use until about 1950. The selling philosophy holds that an organization can sell any product it produces with the use of marketing techniques, such as advertising and personal selling. Organizations could create marketing departments that would be concerned with selling the goods, and the rest of the organization could be left to concentrate on producing the goods.?
The reason for the emergence of the selling philosophy was the ever-rising number of goods available after the Industrial Revolution. Organizations became progressively more efficient in production, which increased the volume of goods. With the increased supply, competition also entered production. These two events eventually led to the end of product shortages and the creation of surpluses. It was because of the surpluses that organizations turned to the use of advertising and personal selling to reduce their inventories and sell their goods. The selling philosophy also enabled part of the organization to keep focusing on the product, via the product philosophy. In addition, the selling philosophy held that a sales or marketing department could sell whatever the company produced.
?The selling concept believes that only quality products do not make consumers buy instead company should persuade customers to do so. In order words, the idea of this concept is that people will buy more goods and services if aggressive selling methods are used. Ordinarily, people will not buy the organization’s products unless they are persuaded to buy them.?
The selling concept underlying implicit premises are,?
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This is the marketing concept that gave rise to various promotional tools. The starting point of the selling concept is factory, the focus point is a product of seller’s choice, means through aggressive selling & heavy promotion, and last profit is through high sales volumes.
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Examples for Sales Orientation: -
Insurance Providers
Insurance is a good example of a sales orientation business because policies aren't created based on consumer needs, but on providing the best coverage compared to competitors. That's why this is a highly competitive industry.?
Additionally, depending on the type of insurance, this is a product that consumers don't typically seek out. One of the biggest hurdles for a salesperson of an insurance company is that they might have to convince people that they need insurance to begin with.?
This is why insurance providers might use aggressive sales tactics and promotions to make a sale.
?Retailers
The retail industry is generally known for having a short sales cycle that usually sells people products they don't need.?
Additionally, this industry relies on using promotions, deals, and discounts to make money. Retailers don't usually create products based on consumer need, but on making the best product on the market. Think Apple versus Samsung. Plus, since customers don't need to have the latest trends, aggressive promotional tactics are used to convince customers to buy products.
Car Dealerships
Car sales people are generally known to use aggressive sales tactics and promotions to drive sales.
The entire industry is based on a sales orientation approach because they have to persuade customers that they need their car instead of a competitor. While these industries might use a combination of market and sales orientation strategies, their approach is sales oriented if they use aggressive sales and promotional tactics without considering the wants or needs of the customer.
?04. Marketing Philosophy - Marketing orientation
The marketing era started to dominate around 1950, and it continues to the present. The marketing concept recognizes that the company's knowledge and skill in designing products may not always be meeting the needs of customers. It also recognizes that even a good sales department cannot sell every product that does not meet consumers' needs. When customers have many choices, they will choose the one that best meets their needs.?
A market orientated organization looks at the market and its target audience first, before any production or sales activities takes place, to learn what potential customers want from organizations. The product or service offering is therefore created with the customer in mind, resulting in a true customer-first approach.?
Market orientation, in marketing strategy terms, commonly revolves around culture, values and other internal behaviors focused on satisfying customer needs that are usually well-researched prior.
?Although this clearly has its benefits, it can also come at a cost to organizations as it usually puts organizations on the back foot, always reacting to customer demands rather than predicting or shaping them with innovative products and services. This said, most markets are moving more towards a market-orientated approach as customers have more and more access to information about what they are looking to buy.?
The marketing concept assumes that unless and until the products and services are designed on the basis of customers’ needs and wants, no marketing objectives can be achieved by the organization.?
As per the marketing concept, the success of the organization depends on knowing the target customers’ needs and wants and delivering them. It is a new approach of thinking that integrates customer orientation and marketing activities to achieve the goal of the organization.?
The starting point of the marketing concept is the target market, the focus is on customer need & want, means is an integrated marketing, and last profit is through customer satisfaction.
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Example of Marketing orientation: -
?Amazon
Amazon is an example of a market-oriented company. As it has grown and developed, it has consistently added processes and features that clearly address concerns and desires expressed by consumers. For example, many consumers, especially city dwellers, worry about getting packages delivered when they're not at home.
?IKEA
Furniture retailer IKEA provides stylish home and office furniture and decorations that customers like. In addition, IKEA offers its customers value-for-money meals in its restaurant, grocery store, adult-supervised play areas for young children allowing their parents to shop freely, changing rooms, bathrooms and free car parking.
Starbucks
In addition to selling several different types of coffee, multi-national coffee chain Starbucks also sells other products that customers prefer to eat while enjoying a cup of coffee such as cakes and cookies, sandwiches, etc.?
05. Marketing Philosophy – Holistic Marketing orientation?
A holistic marketing approach looks at a business with all its connected components as a whole. Customers, employees, suppliers and the community at large are carefully considered.? The strategy comprises of integrated activities with a focus on one common goal.? Below are four components of an effective holistic marketing orientation.?
A holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies. Holistic marketing recognizes that ‘everything matters’ with marketing and that a broad, integrated perspective is necessary to attain the best solution.?
But how does a business achieve a holistic marketing strategy? There are 4 components, or marketing forms, to this process:?
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Relationship Marketing
The goal of relationship marketing is to build strong, long-lasting relationships. The focus is steered away from selling products and focused more on customer satisfaction and retention, as well as building customer loyalty.?
Customers, suppliers, vendors, and firms are all necessary partners for a business to have and keep. Each has a significant impact on the success or failure of the company.
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Integrated Marketing
This component is related to the unified message that the business sends to their customers. This strategy assures that all marketing parts of a business work together towards a purpose and a mission that is seen.?
All media activities including advertising, public relations, and online communications work in sync with one another to ensure the company's message and perception of the company is clear and positive.
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Internal Marketing
Internal marketing is all about caring for the business's employees, freelancers, contractors, and partners. It ensures that employees are satisfied with their work as well as the philosophy and direction of the organization as a whole. Greater satisfaction among employees leads to increased customer satisfaction over time, making internal marketing a key aspect of the holistic approach
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Societal Marketing
The last component of holistic marketing is societal or socially responsible marketing. This aims to attract customers who want to make a difference with their purchase. Think of products where a part of proceeds goes to a good cause, or products that are made responsibly.?
Societal marketing is aimed at creating marketing initiatives that are based on ethically sound business practices, which provide another method for businesses to build long-lasting relationships.
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Example for Holistic Marketing Orientation: -
Coca-Cola
It is one of the best examples of holistic marketing concept. They have recently refreshed their entire global identity to “Real Magic”. The idea behind this strategy is to showcase the brand’s goal to refresh the world and make a difference. They did not just market their product, but they marketed Happiness. Based on that one goal, Coca-Cola wanted to promote Happiness. The strategy was very smart, Happiness is one of the most cherished of all. They added ‘Taste the Feeling’ with that brand. They showcased in a way, whenever you are happy, have a Coke. This marketing strategy was bang on. It resulted in the massive growth of the company since then.
Marketing Concept Advantages?
When you give top priority to the needs and wishes of customers, then it gives you a competitive and customers would prefer your business or brand. It is a form of strategy that is beneficial both for the customers and the business. However, it allows businesses and companies to evaluate their performance like sales and marketing, analyzing data and results, the efficiency of the processes, and collaboration among various departments.
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Creates Jobs
Marketing concept helps businesses and companies to amplify their growth, create their demands in the market, and attract new customers. When companies start growing and producing more products and services, then they would workforce to finish the work on time and meet the demands of customers. Ultimately, the marketing concept creates employment opportunities and puts everyone to work.
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Accepting Customers
The welfare of society depends on the welfare and prosperity of its citizens. When customers are doing well, then it means that the whole society is doing fine. A company has to make sure that it is prioritizing the needs and wishes of customers outside of its service domain by improving the efficiency of its production and operational processes.?
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Follows Scientific Research
The focus of businesses and companies is to find creative ways to meet the needs of the customer with the efficiency of supplies and resources, and that is good for customers and society. In order to achieve their goal, they employ scientific methods and approaches to come up with new ideas and innovative ways of developing the product or service.
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Higher Production Quality
Marketers conduct thorough customer market research to determine the needs and wishes of customers and what they actually want. After knowing their demands, they improve their production and operational processes to meet the demands and wishes of customers. Ultimately, it improves the quality of the product or service.
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Gives You A Reason
Let’s say there is no marketing concept, and companies don’t have any idea what customers want and what type of products they should produce. In such a case, businesses and companies would develop products and services based on guesswork. In short, the marketing concept gives businesses and companies a reason to effectively run their business and meet the demands of customers.
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Healthy Competition
A market comprises various demographic of people and they all have different needs and wishes. One company can’t meet the needs and wishes of all types of customers. Different businesses and companies target various segments of customers. However, it creates a healthy competitive environment for all businesses and companies to participate and do their business.
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Better Status of Customers
When companies start developing efficient and sophisticated products and services, then customers would buy them and keep them in their collections. Along with purchasing new designs and charming products, it improves the product selection taste and status of customers of buying such products that suits them well.
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Meeting Business & Social Goals
The effective and smooth running of an organization requires collaboration among various departments and units. The marketing concept helps you to develop cooperation and coordination among various units in order to meet the goals and objectives of the company.
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Marketing Strategies
When we talk about creating a marketing strategy, then it depends on customer market research and the knowledge demands of customers. The marketing concept allows you to know your customers and target them based on their needs and wants.
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Good for Society
The ultimate goal of the marketing concept is to satisfy the needs and demands of customers. When customers are happy with their satisfied needs, then the whole of society would be happy.?
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Business Promotion
When a specific company produces quality products and establishes a reputation of trust; then it is promoting its business name which would be highly useful in creating its brand name in the long term.
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Brand Recognition
Marketing concept differentiates your business and people would recognize your brand. People would recognize your business and products with your brand logo, colour scheme, and unique style.
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Higher Business Profit
Businesses and companies invest a significant amount of money in marketing and advertisement in order to create demand among customers. It pays them off well and increases the sales and conversion rate.?
REFERENCES?
Philosophy of Marketing. The New Realist Approach, by Matteo Giannasi and Francesco Casarin
Marketing Management, by S Jayachadran
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