Evolution of Marketing

Fundamental Reasons of why Market & Marketing Developed Scarcity of raw material
Specialization of labour Consumption Satiation

How Marketing Evolves

Barter Era Production Era Sales Era Marketing Era Relationship Marketing Era

Oneon-One Trading

Demand Exceeds Supply Good Products at affordable price will sell

Supply Exceeds Demand

To find customers for unsold inventories

Supply Exceeds Demand

Satisfying customer was the main role of company

Supply Exceeds Demand Customer oriented Marketing

Each of these eras varies with respect to the manner in which customer needs are researched and met, and the types of marketing efforts undertaken.

Marketing Basics Evolution of Marketing: Product-orientation Stage

1. Demand exceeds available supply. 2. All that is made can be sold. 3. Focus is on engineering and generating output, not the customer. 4. Epitomized between late 1800s and early 1930s.
The American public can have any color car it wants so long as its black. Henry Ford, referring to the Model T.

make all you can

Sales-orientation Stage

sell all you make

1. Supply frequently exceeds demand. 2. Focus is on promotion and pricing; objective is to sell all the inventory. 3. Hard-sell techniques create stereotype of pushy, annoying salesperson. 4. Epitomized between early 1930s and 1950s.

Marketing Basics Evolution of Marketing: Market-orientation Stage

make what you can sell

1. Variety in markets, variety in products. 2. Employs full marketing mix. 3. Focus is on customer needs and satisfaction; profitability over volume. 4. Most typical current orientation.

Evolution of Relationship Marketing:

Relationship-orientation Stage

make what Customer need

1. Variety in markets, variety in products. 2. Employs full marketing mix. 3. Focus is on customer needs, satisfaction, Loyalty, Relationship Building; profitability over volume. 4. Customer orientation.

Marketing Orientations / Concepts

The Production Concept The Product Concept The selling Concept The Marketing Concept

The Customer Concept

The Societal Marketing Concept

The Production Concept

This Concept Believes that consumer will favour products that are readily available at reasonable price. Focus of management Improvement in production & distribution efficiency. When demand exceed supply , manufacturer have to increase production

When the product cost is too high, management has to bring it down to affordable levels.
This concept is used when a company wants to expand the market. Companies following this concept focus too narrowly on their own activities & lose sight of the real objectives of customer satisfaction.

Examples Indian Telephone Industry was producing only black coloured telephone instruments

Household electrical appliances like fridge, washing machine, oven were available only in white colour ( Used to called White goods )

Some service organizations

Government agencies like Unemployment office & license Bureaus.

The Product Concept

This concept believes that consumers will favour products that offer the most in quality, Performance & innovative features. Continuous improvement in product & quality are essential for this concept following companies Focus on making superior product & improving them over the time.

They get little or no customer inputs & very often they will not even examine the competitors product. Product oriented companies often trust that their engineers can design exceptional products. E.g.- GM

It may leads to Marketing Myopia.

E.g. Coca cola only focused on soft drinks & missed out market for Coffee bars & fresh fruit juice. McDonald Over focusing on its hamburger business while many are turning to Pizza, Sandwiches, tacos & other fast food

The Selling Concept

This concept believes that consumers will not buy enough of the companys product unless it undertakes pressure selling tactics & heavy promotion efforts. Buyers are believed to have a buying inertia. Concept used for unsought goods which buyer normally do not think of buying.

When companies face excess production they follow this concept to sell what they make, without caring for customers needs / satisfaction.
ExampleInsurance Industry

Selling concept was used by Sergio Zyman, Coca Colas Former vice president of marketing.

The purpose was to sell more stuff to more people more often for more money in order to make more profit.

The Marketing Concept

This concept believes that achieving companys objective depends on - Understanding the needs & wants of target market - Delivering the desired satisfaction in better way than competitors - Focus on customer & value

E.g. Dell computers work on customer need basis All the companys department work together to serve the customers interest & result is Integrated marketing

Difference between Selling & Marketing Concept

Start
Factory

Focus
Existing Product

Means
Selling & Promoting

Ends
Profit through Sales Volume

Inside Out- Selling Concept

Market Customer Needs Integrated Marketing Profit through Customer Satisfaction

Outside IN- Marketing Concept

Sr. No
1 2 3 4 5 6

Selling
Starts with seller & concerned only with the sellers needs. Core of business activity is the seller. Saleable surplus important. Convert existing product into money. Business is a goods producing process Marketing mix planned as per sellers needs.

Marketing
Starts with the buyer & concerned with the Buyers needs. Core of business activity is the Buyer. Identification of market opportunity is important. Convert customer needs into products. Business is a customer satisfying process. Customer dictate the plan of marketing mix.

7
8 9

Cost determines the price

Different departments of the business act independently. Production is the central function of the business. Customer is the last link in business.

Marketer determines the price.

All departments work in an integrated way to satisfy customer. Marketing is the central function of the business. Customer is the very purpose of business.

10

The Customer Concept

Many companies are today moving beyond the marketing concept to the customer concept. These companies shape separate offers, services, & messages to individual customer, based on individual preferences. One to one marketing become possible through customized product.

They believe in achieving profitable growth through capturing a large share of each customers expenditures by - Building high customer loyalty - Focusing on customer lifetime value.

Customer Concept-

Starting Point- Individual Customer Focus Customer needs & Values Means One to one marketing integration & value chain Ends Profitable growth through capturing customer share, loyalty & lifetime value.

The Societal marketing Concept

Society ( Human Welfare, environment)

Societal Marketing Concept Consumers (Needs,Wants,Satisfaction) Company (Sales volume,Profit,Growth)

This concept is appropriate in the age of environmental detritions, resource shortage, explosive population growth, poverty & neglected social services. E.g. The fast food hamburger industry offers tasty but unhealthy food. Societal marketing concept calls upon marketers to build social & ethical considerations into their marketing practices.

No. of companies like J & J, Ben & Jerrys & Patagonia achieved notable sales & profit gains by adopting & practicing the societal marketing concept.

Customer Orientation

Traditional Organization chartTop Management Middle management Front line people

Customer

Modern Customer oriented organization chart-

Customer
Front line People Middle Management Top Management

A formal approach to this customer-focused marketing is known as SIVA[11] (Solution, Information, Value, Access).
Product Solution Promotion Information

Price Value Place Access