Marketing and Sales 1
Week 1:
Chapter 1: An Overview of Marketing
Learning outcomes:
Define the term marketing.
Describe four marketing management philosophies.
Discuss the differences between sales and market orientations.
Describe several reasons for studying marketing.
1.1 What is marketing?
Marketing:
The activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners and society at large.
Marketing has two facets:
1. It is a philosophy, an attitude, a perspective, or a management orientation that stresses
customer satisfaction.
2. It is an organizational function and a set of processes used to implement this philosophy.
Marketing does the following:
1. Entails processes that focus on delivering value and benefits to customers.
2. Uses communication, distribution and pricing strategies to provide customers and
other stakeholders with the goods, services, ideas, values and benefits they desire
when and where they want them.
3. Involves building long-term, mutually rewarding relationships when these benefit all
parties concerned.
4. Entails an understanding that organizations have many connected “partners,”
including employees, suppliers, stockholders, distributors and others.
Exchange:
People giving up something in order to receive something else they would rather have.
An exchange can take place only if the following five conditions exist:
1. There must be at least two parties
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with the other party.
1.2 Marketing Management Philosophies
,The following philosophies influence an organization’s marketing processes:
1. Production orientation
2. Sales orientation
3. Market orientation
4. Societal marketing orientation
Production orientation:
A philosophy that focuses on the internal capabilities of the firm rather than on the desires
and needs of the marketplace.
A production orientation can fall short if it does not consider whether the goods and services
that the firm produces most efficiently also meet the needs of the marketplace.
Sales orientation:
The belief that people will buy more good and services if aggressive sales techniques are
used and that high sales result in high profits.
The fundamental problem with a sales orientation is a lack of understanding of the needs
and wants of the marketplace.
Market orientation:
The idea that social and economic justification for an organization’s existence is the
satisfaction of customer wants and needs while meeting organizational objectives.
The marketing concept includes the following:
1. Focusing on customer wants and needs so that the organization can distinguish its
product(s) from competitors’ offerings.
2. Integrating al the organization’s activities, including production, to satisfy customer
wants.
3. Achieving long-term goals for the organization by satisfying customer wants and
needs legally and responsibly.
Market oriented:
A philosophy that assumes that a sale does not depend on an aggressive sales force but
rather on a customer’s decision to purchase a product; it is synonymous with the marketing
concept.
Achieving a market orientation involves:
1. Obtaining information about customers, competitors and markets.
2. Examining the information from a total business perspective.
3. Determining how to deliver superior customer value.
4. Implementing actions to provide value to customers.
Understanding your competitive arena and competitors strengths and weaknesses is a
critical component of a market orientation.
Societal marketing orientation:
,The idea that an organization exists not only to satisfy customer wants and needs and to
meet organizational objectives but also to preserve or enhance individuals’ and society’s
long-term best interests.
Who Is in charge?
The internet and the widespread use of social media have accelerated the shift in power
from manufacturers and retailers to consumers and business users. The customer is boss.
1.3 Differences Between Sales and Market Orientations
Sales and market orientations can be compared in terms of five characteristics:
1. The organization’s focus
2. The firm’s business
3. Those to whom the product is directed
4. The firm’s primary goal
5. The tools used to achieve the organization’s goals
The organization’s focus:
Many of the historic sources of competitive advantage allowed sales-orientated companies
to focus their efforts internally and prosper. Today, many successful firms derive their
competitive advantage from an external, market-orientated focus.
Customer Value
Definition: The relationship between benefits and the sacrifice necessary to obtain those
benefits.
Customers value goods and services that are of the quality they expect and that are sold at
prices they are willing to pay.
Customer Satisfaction
Definition: Customers’ evaluation of a good or service in terms of whether it has met their
needs and expectations.
Building relationships
Relationship marketing:
A strategy that focuses on keeping and improving relationships with current customers.
Most successful relationship marketing strategies depend on:
, 1. Customer-orientated personnel
For an organization to be focused on building relationships with customers,
employees’ attitudes and actions must be customer oriented.
Any person that is not customer oriented weakens the positive image of the entire
organization.
2. Effective training programs
Leading marketers recognize the role of employee training in customer service and
relationship building.
3. Employees with the authority to make decisions and solve problems
Empowerment: Delegation of authority to solve customers’ problems quickly –
usually by the first person the customer notifies regarding the problem.
Empower employees: Manage themselves, are more likely to work hard, account for
their own performance and that of the company and take prudent risks to build a
stronger business and sustain the company’s success.
4. Teamwork
Collaborative efforts of people to accomplish common objectives
Teamwork improves: Job performance, Company performance, Product value and
Customer satisfaction.
The Firm’s Business
A sales-oriented firm defines its business (or mission) in terms of goods and services
A market-oriented firm defines its business in terms of the benefits its customers seek.
People who spend their money, time and energy expect to receive benefits, not just goods
and services.
Answering the questions “What is this firm’s business?” in terms of the benefits customers
seek, instead of goods and services, offers at least the important advantages:
1. It ensures that the firm keeps focusing on customers and avoids becoming preoccupied
with goods, services, or the organization’s internal needs.
2. It encourages innovation and creativity by reminding people that there are many ways to
satisfy customer wants.
3. It stimulates an awareness of changes in customer desires and preferences so that
product offerings are my likely to remain relevant.
Those to Whom the Product Is Directed
