Chapter 01
Marketing in
the modern
organization
The Marketing Concept
Marketing concept
The achievement of corporate goals
through meeting and exceeding customer
needs and expectations better than the
competition
Customer orientation Integrated effort Goal achievement
Corporate activities All staff accept the The belief that
are focused upon responsibility for corporate goals can
providing customer creating customer be achieved through
satisfaction satisfaction customer satisfaction
2
Evolution of the Marketing Concept
3
Production Orientation
Production
capabilities
Manufacture
product
Aggressive
sales effort
Customers
4
Marketing Orientation
Customer
needs
Potential
market
opportunities
Marketing
products and
services
Customers
5
Toyota
The Toyota Yaris
‘Gadget Guy’
advert displays
how customer
benefits are used
to communicate
with customers
6
Marketing Orientated Businesses
Market-driven businesses Internally orientated businesses
Customer concern throughout business Convenience comes first
Know customer choice criteria and match marketing mix Assume price and product performance key to most sales
Segment by customer differences Segment by product
Invest in market research(MR) and track market changes Rely on anecdotes and received wisdom
Welcome Change Cherish status quo
Try to understand competition Ignore competition
Marketing spend regarded as an investment Marketing spend regarded as a luxury
Innovation rewarded Innovation punished
Search for latent markets Stick with the same
Being fast Why rush ?
Strive for competitive advantage Happy to be me-too
Efficient and effective Efficient
7
Efficiency and Effectiveness
8
Limitations of the Marketing Concept
• The marketing concept as an ideology.
• Marketing and society.
• Marketing as a constraint on innovation.
• Marketing as a source of dullness.
9
Creating Customer Value
Positive Customer Negative
value
Perceived Perceived
benefits Sacrifice
Product benefits Monetary costs
Service benefits Time costs
Relational benefits Energy costs
Image benefits Psychological costs
10
Creating Customer Value
Product Service Monetary Time
benefits benefits costs costs
Positive Negative
Perceived Customer Perceived
benefits value sacrifice
Relational Image Energy Psychological
benefits benefits costs costs
11
Creating Customer Satisfaction
Delight
Customer Satisfaction
‘Delighters’
‘More is better’
Neutral
‘Must be’
Dissatisfaction
Absent Fulfilled
Presence of the characteristic
12
The Marketing Mix
• Product
• Price
• Promotion
• Place
13
Cobra Beer
Traditional Indian Beer adapted
for contemporary tastes
14
An Effective Marketing Mix
Matches customer
needs
Creates a Effective
Well
competitive marketing balanced
advantage mix
Matches corporate
resources
15
Marketing Mix and Customer Needs
Key customer
Customer needs
requirements
Economic Psychological
Performance Self-image Marketing Mix
Availability Quiet Life
Reliability Pleasure Product
Durability Convenience Price
Productivity Risk reduction
Promotion
Place
Competitive
advantage
16
The Relationship Between Market
Orientation and Profitability
Figure 1.9 The relationship between market orientation and profitability
Commodity business Non-commodity business
Profitability
Profitability
Low Medium High Low Medium High
Market orientation Market orientation
17
