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DO NOW ASSIGNMENT• DO NOW ACTIVITIES do until class
lesson begins directly on line and go to the print option and print for class credit follow on line directions.
• Today finish chapter and review for test tomorrow
There are four marketing
management philosophies
Marketing Management Philosophies
LO2
•Production•Sales•Market •Societal marketing
Production Orientation
• Field of Dreams orientation– “If you build it, they will come.”– Doesn’t consider if what is produced
meets market needs– Can you think of a company today that
uses this form of marketing concept very successfully?
• Apple-iPod• 3M’s Post-it-Notes
LO2
Sales Orientation• Marketing = Selling Things/Collecting
Money– Disregards market needs and consumer
demand.– Often find that, despite the quality of their
sales force, they cannot convince people to buy goods or services that are neither wanted nor needed.
• Toyota recalled millions of vehicles due to acceleration problems and then the company to bring customers back used aggressive sales incentives to lure people back, low Apr, lease amts
• Free Service packages• Dot com businessLO
2
Market Orientation Focusing on customer wants and
needs to distinguish products from competitors’ offerings
Integrating all the organization’s activities to satisfy these wants
Achieving the organization’s long-term goals by satisfying customer wants and needs legally and responsibly
Deliver superior customer value
LO2
HOW to Achieve a Marketing Orientation
Obtain information about customers, competitors, and markets
Examine the information from a total business perspective
Determine how to deliver superior customer value
Implement actions to provide value to customers
Examples: LL Bean, Overstock.com, Zappos.com, Amazon,com, QVC are the top5 US retailers for customers service
Voted among the best in customer service Apple, Four Season’s Hotel and Resorts
LO2
Societal Marketing Orientation
An organization exists not only to satisfy customer wants but also to preserve or enhance individuals’ and society’s long-term best interests.
For example: • Less toxic products• More durable products• Products with reusable or
recyclable materials- Coca-cola, Microsoft
LO2
Questions That Help Determine Marketing Philosophy
ProductionProduction
SalesSales
MarketingMarketing
SocietalSocietal
What can we make or do best?What can we make or do best?
How can we sell more aggressively?
How can we sell more aggressively?
What do customerswant and need?
What do customerswant and need?
What do customers want/need, and how can we benefit society?
What do customers want/need, and how can we benefit society?
Orientation Focus
LO2
Sales
Market
Societal
Production internal capabilities of the firm
satisfying customer needs and wants while meeting objectives
satisfying customer needs and wants while enhancing individual and societal well-being
aggressive sales techniques and belief that high sales result in high profits
Orientation Focus is on…
The Four Marketing Management Philosophies
LO2
Satisfy customers-not
what management thinks should be
produced or sold
Discuss the differences
between sales and market orientations
Differences between Sales and Market Orientations
LO3
Market isFocusing on customer wants and needs
Sales Disregards market needs and consumer demand.
Comparing the Sales and Market Orientations
Compare through 5 characteristics:• Organization’s focus• Firm’s business• Those to whom the product is directed• Firm’s primary goal• Tools the organization uses to achieve its
goals
LO3
The Organization’s Focus
Sales Orientation
Inward looking
What the firm makes
Market Orientation
Outward looking
What the market wants
LO3
Customer Value
The relationship between benefits and the sacrifice necessary to obtain those benefits.
LO3
• California based mattress company ES Kluft incorporates luxurious fibers such as cashmere and silk into its mattresses to entice customers to buy it for $33,000
• Barnes & Noble upscale bookstore adding more value to its book offerings than its competitors
Sales vs. Market Orientations
Sales Orientation
Market Orientation
Organization’sFocus
Firm’sBusiness that is delivered
ForWhom?
Primary Profit Goal?
Tools to Achieve
Selling goods and services
Everybody Maximum sales volume
Primarily promotion
Inward-Company
Outward-customer
Coordinated use of all marketing activities
Customer satisfaction
Specific groups of people
CustomerSatisfaction
LO3
Value-Driven Marketing• Value? Formula
– a customer’s subjective (influenced by personal feelings, tastes, or opinions) assessment of the product benefits relative to costs in determining the worth of a product.
Customer Benefits
Customer Costs
Value = –
Value
• Benefits—examples– Convenience
• In delivery• In usage
– Reliability– Durability– Performance– Style/aesthetics– Prestige– Service component
• Costs—examples– Money– Time– Risk
COST
RECEIVED BENEFITSVALUE
Customer Value• Value is the ratio of the
benefits received (usually goods or services) to what is given up (usually money)
• For a transaction to take place, the benefits received must usually be greater than the sacrifice
• Note that a high price product may be a good value to the customer even if a high price is paid if the perceived benefits received are higher
Value: Implications• A low quality, low price
product represents poor value for many customers
• A very high benefit product at a high price can represent value for some segments
• Customer segments differ in what they find valuable
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