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Latest market trend has changed, so has the way the company deals with the
marketplace. The company orientation towards marketplace deals with the concepts
which a company may apply while targeting a market. As per Kotler, five different
orientations which a company takes towards the marketplace.
Production Concept – In this concept the company mainly tries to increase production
irrespective of demands of the customer. The production concept is almost extinct now
with companies paying more and more attention to the customer. Consumers will favor
those products that are widely available and low in cost. Production concept is
application in below scenarios.
Selling Concept – The selling concept believes that customers will not buy products
unless persuaded to do so. As we know, this is true even today in case of certain
products such as insurance. Although the customer should use it, they rarely do. Hence,
focus is on aggressive selling & promotion.
Assumptions:
Used When:
Goods that buyers normally do not think of buying. E.g., Insurance, Credit cards.
Companies have over capacity.
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In the present world, many markets are buyer markets. Hence, producers need to sell
aggressively. This gives rise to a feeling that selling is all or most important part of
marketing.
Product Concept – The product concept says that customers will always buy products
which are better in terms of quality performance and features. Thus, an organization
should devote energy to making continuous product improvements. Some
manufacturers believe that if they can build a better mousetrap, the world will beat a
path to their door. But they are often rudely shocked. Buyers may well be looking for a
better mousetrap. The solution might be a chemical spray, an exterminating service, or
something that works better than a mousetrap. Furthermore, a better mousetrap will not
sell unless the manufacturer designs, packages, and prices it attractively; places if in
convenient distribution channels; brings it to the attention of people who need it; and
convinces buyers that it is a better product.
The product concept also can lead to marketing myopia. For instance, railroad
management once thought that users wanted trains rather than transportation and
overlooked the growing challenge of airlines, buses, trucks, and automobiles. Many
colleges have assumed that high school graduates want a liberal arts education and
have thus overlooked the increasing challenge of vocational schools.
The concept is especially applicable in terms of electronics and other techno gadgets
nowadays.
Marketing Concept – For selling any product branding and marketing are a necessary.
The marketing concept proposes that the success of a firm depends on the marketing
efforts of the company in delivering a value proposition. To Integrate marketing activities
towards determining & satisfying needs, wants of target market more effectively than
competition.
Marketing Activities: Activities to create, deliver, consume the product to satisfy, identify
need or want.
1. Target market.
2. Customer needs.
3. Integrated market.
4. Profitability.
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1. Target market: Generally, any company may not be able to operate in every
market to satisfy every need.
4. Profitability:
Ultimate purpose: Achieve organizational goals(profits).
Key : Do job well and achieve profits.
Doing job well : Satisfy customer needs better than competition.
Declining sales.
Slow growth.
Changing buying pattern.
Increase in competition.
Increase in marketing expenditure.
While converting to a marketing oriented organization, a company
faces/ may face internal hurdles.
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These could be,
– Organized Resistance – Perception of erosion of power of outer
Departments such as production/ finance/ R & D.
– Slow Learning – Resistance to change/ old habits die hard.
– Fast Forgetting – Small success leading to forgetting key success factors.
Organization’s task is
Environmental deterioration.
Resource shortage.
Consciousness of social services or social awareness.
Eg.- Chemical companies – Effluent management systems.
The company orientation towards the market place thus depends on the application of
the above 5 concepts. Some of these concepts are not applicable in today’s market
whereas others are applicable sector by sector.
References:
Kotler, P. and Keller, K. (2012) A Framework for Marketing Management (5th ed.). Upper Saddle River,
NJ: Prentice-Hall.
Philip T. Kotler (Author), Gary Armstrong (Author) (2013) Principles of Marketing 15th Edition by Prentice
Hall .
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