The Selling Concept: The selling concept is another common business orientation. The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products.
The organization must, therefore, undertake an aggressive selling and promotion effort. This concept one assumes that consumers typically show buying inertia or resistance and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and promotion tools to stimulate more buying.
The selling concept is practiced in the non-profit area by fund-raisers, college admission offices, and political parties. A political party vigorously sells its candidates to voters. After the election, the new official wants and a lot of selling to get the public to accept policies the politician or party wants. Most firms practice selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.
In modern industrial economies, productive capacity has been built up to a point where most marketers are buyer markets the buyers are dominant and sellers have to scramble for customers. Prospects are bombarded with TV commercials, newspaper ads, direct mails, and sales calls. At every turn, someone is trying to sell something. As a result, the public often identifies marketing with hard selling and advertising. But marketing based on hard selling carries high risks.
These are indefensible assumptions. One study showed that dissatisfied customers may bad-mouth the product to 10 or more acquaintances; bad news travels fast. The marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating customer values to its chosen target markets. The marketing concept rests on four pillars: target market, customer needs, integrated marketing and profitability. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the existing products, and calls for heavy selling and promoting to produce profitable sales.
The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produces profits by satisfying customers. Target market Companies do best when they select their target markets carefully and prepare tailored marketing programs. Understanding customer needs and wants is not always simple.
Some customers have needs of which they are not fully conscious. Or they cannot articulate these needs. Or they use words that require some interpretation.
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Consider a woman who enters a hardware store and asks for a sealant to seal glass windowpanes. This customer is stating a solution and not a need. The salesperson may suggest that tape would provide a better solution. The salesperson met the customers need, not her stated solution. A distinction needs to be drawn between responsive marketing, anticipative marketing, and creative marketing. A responsive marketer finds a stated need and fills it. Sony exemplifies a creative marketer because it has introduced many successful new products that customers never asked for or even thought were possible.
Why is it supremely important to satisfy target customers? One estimate is that attracting a new customer can cost five times as much as pleasing an existing one. And it might cost sixteen times as much as to bring the new customer to the same level of profitability as the lost customer.
Customer retention is thus more important than customer attraction. Unfortunately, not all employees are trained and motivated to work for the customer. Integrated marketing takes place on two levels.
First, the various marketing functions- sales force, advertising, customer service, product management, marketing research-must work together. Second, the other departments must embrace marketing; they must also think customer. Marketing is not a department so much as a company wide orientation. To foster teamwork among all departments, a company should carry out internal as well as external marketing. External marketing is marketing directed at people outside the company.
Internal marketing is the task of hiring, training, and motivating able employees who want to serve the customers well. In fact, internal marketing must precede external marketing. Master marketing companies invert the chart. Profitability The ultimate purpose of the marketing concept is to help organizations achieve their objectives. In the case of private firms, the major objective is profit; in the case of nonprofit and public organizations, it is surviving and attracting enough funds. A company makes money by satisfying customer needs better than its competitors. These are 1. Sales Decline: When Sales fall, companies panic and look for answers.
Today newspapers decline as people are more replying on Radio, TV and Internet for the news 2. Slow Growth: Slow sales growth leads companies to search for new markets. They realize they need marketing skills to identify and select new opportunities 3. Changing buying patterns: Many companies operate in markets characterized by rapidly changing customer wants.
These companies need more marketing knowhow if they are to track buyers changing values 4. Increasing Competition: Complacent industries may be suddenly attacked by powerful competitors. Companies in deregulated industries all find it necessary to build up marketing expertise 5.
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Increasing Marketing Expenditures: Companies may find their expenditures for advertising, Sales, Promotion, marketing Research and Customer Service to be poorly done. Management then decides to take a serious audit to improve its marketing Companies need to attract and retain customers through superior product offerings, which delivers the Customer satisfaction. Resistance is especially strong in the industries where Marketing is introduced for the first time-like law offices, colleges, deregulated industries and government offices.
But in spite of resistance the Company president establishes a Marketing department, marketing talents are hired and seminars conducted, Marketing budget increased and Marketing planning and Control systems introduced. It calls for social and Ethical considerations in marketing.
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They must balance the conflicting criteria of Company profits, consumer want satisfaction and Public Interest. How Businesses and Marketing are Changing? They perceive fewer Brand Loyalty and Product differences. They can obtain Extensive Product information from the Internet and other sources and shop intelligently. Brand manufacturers are facing intense competition from domestic and foreign brands, rising promotion costs and shrinking profits. Store based retailers are suffering from an over saturation of retailing.
Small retailers are succumbing to growing power of Giant retailers and category killers. Store based retailers are suffering from competition from catalog houses, Direct mail firms, TV direct to customer ads, Telemarketing, Tele-shopping etc. Company Response and Adjustments Here are some current trends 1.
Reengineering: Focusing on Functional departments to reorganize the key business processes, each managed by multidiscipline teams 2. Outsourcing: From making everything inside to buying more goods and services outside, to obtain them cheaper and better.
Few companies are outsourcing everything making them Virtual companies owning very few assets and therefore extraordinary rates of return 3. E-Commerce: Making all products available on the Internet.
Customers can now shop online from different vendors, have access to a lot of Pricing and Quality and Variety information. Benchmarking: Adopting the best practices of World Class performers 5. Alliances: Network of partners 6. Partner-Suppliers: From many suppliers to a few reliable suppliers who work more closely in Partnership relationships with the company 7. Market-Centred: From organized around the product to organized around the Market segment 8. Global and Local: From being local to being Globally local and locally Global 9.
Decentralized: More intrepreneurship at the local level Marketer responses and adjustments: 1.