unit 2: evolution of marketing

what are the evolutions of marketing philosophy?

production orientation

product orientation

sales orientation

marketing orientation

societal marketing orientation

production orientation

produce more at a lower cost

• Producing goods efficiently

• Making large quantities of products

• Reducing production costs

• Making products affordable for customers

when is production orientation useful

when demand > supply

product’s cost is too high & improved productivity can bring it down

what is a result of production oritentation

consumers will favor products that are available & highly affordable

management should focus on improving production & distribution efficiency

how can production orientation be more efficient?

economies of scale: produce the same product over & over → increase efficiency → lower cost

conveyor belt system: can increase efficiency of labor → can achieve economies of scale

cost leadership strategy

lower the cost, can charge low price → dominate industry & revenue is increased

may not work for fashion industry because trends change

product orientation

company focuses on making products high quality, performance & features because customers will favor them

“best product” from producer pov → most of time not what consumers are looking for

sales orientation

believe that consumers do not want to buy without selling or promotion effort from the orientation

good when demand < supply

marketing orientation

knowing the needs & wants of target markets and satisfying customers more effectively & efficiently compared to competitors

sales vs. marketing orientations

selling: “inside-out perspective” - what the COMPANY produces & focuses on ways to sell products to customers

marketing: “outside-in perspective” - understanding what CUSTOMERS want & then creates products to satisfy their needs

technology push vs. marketing pull strategy

technology push: what the company makes

marketing pull: makes what customers want

technology push (selling concept)

starts with the factory & focuses on existing products. uses selling & promotion to increase sales volume & profits

marketing pull (marketing concept)

starts with the market & focuses on customer needs. uses integrated marketing to achieve customer satisfaction & profits

societal marketing orientation

balance consumer needs, company profits, and society's long-term interests

corporate social responsibility (CSR)

a company takes responsibility for how its actions affect its employees, customers, stakeholders, & society