In the marketing-oriented company, planning and decision making centre on customer needs having due regard to competitors and distributors. It is vital to satisfy customer needs through a co-ordinated set of activities including the actions and functions of all employees of the organization, irrespective of the area of the business in which they work. In other words, a marketing orientation requires everyone in an organization to become customer oriented and not just people who work in marketing. An increasing awareness of this need to co-ordinate and integrate all the various functional areas of a business in delivering customer satisfaction has led to the growth of internal marketing. We consider the nature and importance of internal marketing later in this chapter and again in Chapter 9 when we consider customer care and relationship marketing.
Lancaster and Massingham10 identify the marketing-oriented firm as follows: ‘A marketing oriented firm produces goods and services that consumers want to buy rather than what the firm wants to make.’ When a company moves from a sales to a marketing oriented approach it is not just a case of changing the job title of Sales Director to Marketing Director; it requires a revolu tion in how a company practises its business activities. When shown in diagrammatic form from Jobber and Lancaster,11 this fact is clarified. This also illustrates the importance of the consumer movement during transition from a sales to a marketing based approach, in that marketing orientation stems from customer needs. For a business to be successful, consumers and their needs must be placed at the very centre of business planning.
There is some confusion as to the difference between selling and marketing and they are sometimes thought to be similar. This is a fallacy. Theodore Levitt,12 in his classic article ‘Marketing Myopia’, sums up this distinction between selling and marketing orientation: ‘Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer.
. . .’ A philosophy of marketing, even as an important first step, is not the same as putting the philosophy into practice. Once the framework of the marketing concept has been established, the organ ization must implement it. Doubt has been expressed as to the extent to which the philosophy has been implemented. The practical manifestations of this philosophy are not well known, and this prompts the question: how can marketing orientation be recognized?
The following constitutes a list of requirements that must be met if a move towards marketing orientation within an organization is to be effective:
The distinction between sales and market orientations
Developing marketing orientation is a long-term process and needs to be thought of as a form of investment that can change the organization’s culture, so common values relating to the need to highlight service to customers and a concern for quality in all activities are shared throughout the organization. This cannot be provided by a ‘quick fix’; it must permeate the entire culture of the organization.
A variety of steps can be taken to enhance the degree of marketing orientation of an enterprise:
performance to ensure inertia does not set in. Progress towards improved marketing orientation can be measured by regularly asking questions like: ‘Are we easy to do business with?’ ‘Do we keep our promises?’ ‘Do we meet the standards we set?’ and ‘Do we all work together towards a common goal?’
On 22 February 2008 Northern Rock, for nearly twenty years one of the UK’s fastest growing and apparently most successful building societies, which became a bank in 1997, was taken into public ownership. The cause was a major liquidity crisis prompted by the world wide credit crunch.
As if this was not bad enough for Northern Rock customers, by March 2009 over 17,000 mortgage accounts were in arrears; an increase of nearly 400 per cent in just over 12 months .Some of these arrears were due to borrowers losing their jobs as a result of the recession. Others were due to illness or changed family circumstances. In other words, reasons that could be considered a normal part of the mortgage business or at least outside of the control of Northern Rock. However, the major reason for default was borrowers who had borrowed more than was prudent.
During the good times Northern Rock developed a mortgage product which allowed customers to take out a personal loan on top of their mortgage loan, in some cases enabling borrowing of upwards of five times earnings. In a period when house prices were rocketing this product had tremendous appeal to borrowers who otherwise were not able to get on the housing ladder. As a result sales of this product soared and Northern Rock expanded its sales and market share quicker than virtually than other company in the industry. At first glance it might appear that Northern Rock was being customer oriented in developing this product; after all, if sales were anything to go by there was a real customer need. However, with the benefit of hindsight, for many customers this was an inappropriate mortgage product.
Far from being market oriented, Northern Rock was very much sales driven. Certainly there was a strong demand, but for many customers the product was unsuitable. Marketing this product to these customers was not in the spirit of the marketing concept.
Standard Life, a major financial services organization in the UK, has been the target of an attempt to demutualize the company. After a long and at times bitter campaign, the management of the company secured victory in their attempt to persuade policyholders to reject the demutualization proposal. In the course of fighting this campaign, Standard Life realized that one of the reasons many investors were considering voting for demutualization was that over time the company had, through sheer inertia, begun to lose contact with its customers e.g. often only communicating with members when policies matured.
The challenge of demutualizers alerted an otherwise excellent company to the need to pay more attention to the needs of its customers and for this to be a company-wide effort backed by senior management commitment and resources.
Marketing Management Related Tutorials
|Consumer Behaviour Tutorial||Marketing Strategy Tutorial|
|Marketing Research Tutorial||Principles of service marketing management Tutorial|
|Advertising Management Tutorial|
Marketing Management Related Interview Questions
|Consumer Behaviour Interview Questions||Marketing Strategy Interview Questions|
|Marketing Concepts Interview Questions||Marketing Research Interview Questions|
|Principles of service marketing management Interview Questions||Advertising Management Interview Questions|
|Brand Management Interview Questions||Marketing Interview Questions|
Marketing Management Related Practice Tests
|Consumer Behaviour Practice Tests||Marketing Strategy Practice Tests|
|Marketing Concepts Practice Tests||Marketing Research Practice Tests|
|Principles of service marketing management Practice Tests||Advertising Management Practice Tests|
|Brand Management Practice Tests|
Marketing Management Tutorial
Development Of A Strategic Approach To Marketing: Its Culture; Internal Macro- And External Micro-environmental Issues
Markets And Customers: Consumer And Organizational Buyer Behaviour And Marketing Strategy
Markets And Customers: Market Boundaries; Target Marketing
Product And Innovation Strategies
Channels Of Distribution And Logistics
Customer Care And Relationship Marketing
Marketing Information Systems And Research
Analysing The Environment: (opportunities And Threats) And Appraising Resources (strengths And Weaknesses)
Evaluating And Controlling Strategic Marketing
Strategic Marketing Planning Tools
Services Marketing And Not-for-profit Marketing
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