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This assignment is to show what is meant by ‘marketing orientation’. I will also give examples of marketing oriented companies. According to Wikipedia.org marketing oriented firm (marketing orientation) is one that allows the needs and wants of customers and possible customers to push all the firm’s long-term crucial decisions. The firm’s corporate culture is systematically committed to creating customer value.
Marketing orientation is one of different types of business orientations. It is superior to other forms of business thinking. To understand why marketing orientation is to be the best way of business approach, it is crucial to know how lower levels of business orientations have developed since the 19th century. (Lancaster and Reynolds 1995)
In the nineteenth and early twentieth centuries, the primary purpose of all business and industrial activity was thought to be production. Firms concentrated on improving production efficiency in an attempt to bring down the costs. Generally, companies produced whatever they could produce well, expecting effective demand for their goods and services to present itself automatically. An understanding of customers’ requirements was of secondary importance. (Lancaster and Reynolds 1995)
The economic recession in the 1920s and 1930s brought business to the point where warehouses were full of unsold goods. Thousands of bankrupt businesses occurred. That made business people to concentrate their minds on finding out how to improve their sales volume. (Wikipedia.org 2001)
Gradually business people understood and appreciated that in order to make profit it was something more than just to produce goods.
The goods also had to be sold. The sales concept stated that effective demand had to be created through the art of persuasion using sales techniques. The sales department was thought to hold the key to the firm’s prosperity and survival. Scant attention was paid to the genuine needs and requirements of the final consumer, but at least it was understood that goods and services did not necessarily sell themselves. (Lancaster and Reynolds 1995)
The concept of marketing orientation was developed in the late 1960s and early 1970s at Harvard University. It replaced the previous sales orientation that was prevalent between the mid 1950s and the early 1970s (Wikipedia.org 2001)
The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets (customers) and delivering the desired satisfactions more effectively and efficiently than competitors do. (Kotler et al. 2005)
Peter Drucker stated: “Because the purpose of business is to create and keep customers, it has only two central functions- marketing and innovation. The basic function of marketing is to attract and retain customers at a profit” (Jobber 2004)
It is true because firm which does not keep developing its products and services is likely to start loosing customers (and profit as well) for its competitors or even struggle to keep its position on that particular market place.
How customers needs and wants can be recognized?
Marketing uses its tools to achieve that. Firstly, the market needs researching to acquire information with helping management team to make best decisions on (marketing mix):
– which product to make or modify;
– what type of communication with customers to choose in order to give them the most clarified view on the product (promotion, exhibition, advertising, personal selling, sponsorship);
– price research to better establish the price of product or service in the market place;
– corporate plan to better allocate duties and responsibilities through single company units;
– distribution research to effectively monitor different types of distribution channels and detect any regional variation;
Secondly, from the total market of product or service is being broken into distinct subgroups or segments. Each segment may conceivably represent a distinct target market to be reached with a distinct marketing mix (Product, Price, Promotion, Place). (Lancaster and Reynolds 1995)
How does marketing communication build and maintain strong brand?
The challenge for a lot of companies nowadays is to adapt their traditional functions and operations to the new world. They have to integrate marketing. Today, it is important to build a relationship with the customers. This is the key to finding, developing and having loyal customers, so marketing communication has got an important role. Global organisations have to organize around customers and prospects.
They do not only have to organize their operations and activities around products and services. Customers have more influence than ever before. They have access to more products, channels to buy and they have more sources of information. Companies have to communicate about their products or services because of the competition. Brands have to be unique and be different to the others to maintain a competitive advantage over the increasing competition. It is important to inform people about the new products, the change of them, the politics of the company.
Examples of successful marketing oriented firms and products
Nokia is winning the phone war. The company started its business near Nokia River in Finland in 1865 as a timber business. It was for decades a solid,
industrial company, selling even until the 1970s products ranging from toilet paper to rubber boots. It bought into the telephones business some 30 years ago to gain a slice of the promising technology markets, and follow the then fashionable trend for diversification. A decade later, after Ericsson installed a cellular network, Nokia, as an expert in radio telephones, stepped in to provide handsets. And when the collapse of the Soviet Union in the 1990s deprived Nokia’s traditional operations of important customers, the firm looked to its promising mobile phone unit for redemption. The strategy worked. In 1998, Nokia overtook Motorola to become the world’s biggest manufacturer of mobile phones and could be reasonably described as the Abba of Finland, accounting for one fifth of the country’s exports. (BBC.co.uk 2001)
What made Nokia to had its 35% market share in 2001 is that they develop and manufacture their phones with user friendly simplicity, keeping the design on the top trendy fashions. For its awards winning products all over the business world is also responsible great knowledge how to use the marketing tools. These are Pull versus Push Strategies- by increasing its brand loyalty in past few years, Nokia has become more of a pull brand. Customers have started going to Nokia showrooms and asking for latest handsets. Nokia’s communication strategy is planned as the sole activity of media-mix, structured by offline, online and below the line programs. Nokia’s marketing plan is mainly based on two essential elements: the rank of products and the needs of customers, belonging to the same category. (Nitin Kochhar, 2006)
In summary Nokia with its management decisions is now successfully providing market with third generation mobile phones, not forgetting to intensively develop and implement new technologies. That makes firm to keep their customers satisfied at all times.
Unilever was arguably the world’s first packaged goods manufacturer, and is still one of its biggest companies. “Meeting the everyday needs of people everywhere” is how the group describes itself. It is the world number 1 in personal wash, prestige fragrances and deodorants, with brands including Dove, Omo and Axe/Lynx. Following a series of high-profile acquisitions, including US-based Bestfoods, Unilever’s foods business is the world’s third largest after Nestle and Kraft. It is a global leader in culinary foods, ice cream, margarine and tea-based beverages. Brands include Knorr, Lipton and Magnum.
“Vitality is at the heart of Unilever. Our mission is to meet everyday needs for nutrition, home hygiene and personal care with brands that help people feel good, look good and get more out of life. And every day, around the world, 150 million people in over 150 countries choose our products for the vitality benefits they bring.” (www.unilever.co.uk 2006)
Dove is one of the fastest-growing products on the market. Silvia Lagnado, group vice-president at London-based Unilever: “Unilever is a strongly marketing-oriented company. When I ran the Dove brand for Unilever, we developed a vision that had to do with helping women feel beautiful. Core to our vision was widening the definition of feminine beauty and challenging stereotypes about what beauty looks like. We wanted to position the Dove brand as a way to help women feel greater self-esteem and appreciate the diversity of beauty. We spent a lot of time and effort on research and on talking with sociologists about girls’ and women’s body image.” (www.marketingprofs.com 2006)
For over a decade Packard Bell has been striving to bring the advantages of technology to life for its millions of customers worldwide. Packard Bell pioneered the use of the PC in the home, taking an unfriendly but useful office tool and turning it into a friendly, indispensable feature of today’s modern home. Today it is bringing its experience to bear on the home electronics market, and setting precedents in the process.
Today Packard Bell is number three in the European PC consumer market (all form factors) and in the top three in the region’s main markets, including the UK, France, Spain, Italy, the Netherlands and Belgium.
Packard Bell’s business model is built on optimising each step of the value chain. Its closeness to the market space enables it to anticipate customer needs, design appealing products, manage complexity and integrate services and products. Its supply chain and manufacturing base means Packard Bell’s can bring the right products to market quickly at the right price. The success of the Packard Bell brand has always depended on their ability to stay in tune and in touch with their customers, its unique relationship with Europe’s leading retailers makes it possible for customers to buy a trusted brand conveniently from a store they trust. (www.packardbell.com 2006)
Example of unsuccessful marketing oriented company
British Gas has around 11m gas customers and 6m electricity customers and is the largest domestic energy supplier in the UK. “The Academy of Customer Excellence was created in 2004 to bring together each of our site based customer service training teams into one. Customer service is a key differentiator within the competitive market place that we are a part of and this new academy is helping us to perform in this environment by supporting our drive to put the customer at the heart of everything we do.” ( www.britishgasnews.co.uk 2006)
British Gas generates more complaints from householders than all the other domestic suppliers put together, according to new figures. Energywatch received more than 15,400 complaints about British Gas in the six months to September! That figure has more than doubled compared to the same time last year, the gas and electricity watchdog said. By contrast, energywatch received fewer customer complaints about the five other major domestic energy suppliers over the same period. Inaccurate billing is the biggest problem for British Gas customers, energywatch said. A lack of response to customer enquiries was another source of complaints from British Gas customers. Energywatch has contacted the energy regulator Ofgem outlining its concerns about British Gas. (www.thisislondon.co.uk 2006)
Some opinions people say about British Gas customer service that it has rude staff- very unhelpful, unreliable, give false information as do not really know what to say, untrained, do not communicate with each other. It is lower than incompetent, it is dishonest and does not care one bit about its customers. In conclusion, no company that treats its customers this badly should be in business. Even my family and I have a bad experience with this firm. Once we moved to our new house and rang them up for arranging delivery of gas meter card (top-up card) they left us without any answer for four weeks. After four weeks waiting for delivery I rang them up once again to ask when was my card sent and they did not know what I was talking about! Same day I switched my energy supplier to one of their competing company.
Today’s world of business is very differentiated by the meaning of its markets and customers. Nevertheless, every consumer expects highest quality products and services, designed and delivered every time it is demanded by him. If there is company not realizing this simple need, because non-marketing orientation, there will be dozens more other firms instantly competing to cover its place on the market. Future of innovation and well-being of companies is in hands of their exacting customers.
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