DO NOW ASSIGNMENT

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 LO

2

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, MicrosoftLO

2

Questions That Help Determine Marketing Philosophy

Production

Sales

Marketing

Societal

What can we make or do best?

How can we sell more aggressively?

What do customerswant and need?

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 FocusSales Orientation

Inward lookingWhat the firm makes

Market OrientationOutward 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 CostsValue = –

Value

• Benefits—examples– Convenience

• In delivery• In usage

– Reliability– Durability– Performance– Style/aesthetics– Prestige– Service component

• Costs—examples– Money– Time– Risk

COSTRECEIVED 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

Steps Toward Value Orientation

• Information sharing within the firm• Balance of cost and benefits (for the target

segment—different balances for different types of customers)

• Relationships with customers (as opposed to “one shot” transactions) which marketing management philosophy is one shot