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发表于 2011-7-14 23:19:56
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Marketing Philosophy
Focus on:
1. Evolution and background of the marketing philosophy.
2. Difference between the marketing concept and the promotion concept.
3. Discuss the statement: the establishment of the marketing concept is a radical reform of the marketing idea.
4. Discuss the roles of the marketing concept to the firms in China.
Marketing concept refers to the guidelines and standards of conduct based on marketing activities of enterprises organized and planned by the business operators. Marketing concept is the attitudes and perceptions of the business operators to the activities of market, but also the business concept and the method of thinking.
The formation of the marketing concept is not people’s subjective imagination, but is gradually formed and developed with the development of social production and the changes of supply and demand conditions in the market. The certain marketing philosophy is a production of certain socio-economic development, which comes from business practice and develops from the practice. Looking at the history of the world commodity economy development, the evolution of the marketing concept has experienced generally six stages, which include production concept, product concept, selling concept, marketing concept, social marketing concept and mega-marketing concept.
2.1 Production Concept
2.1.1 Background of Production Concept
The production concept stemmed from the late 19th century to 1920s. In this stage, the capitalist production was still at a relatively low level because of the shortage of materials after experiencing the World War II, and their products could not fully meet the market demand. In the seller’s market conditions, the market demand can only passively submit to the production. What the consumers care about is whether they can buy goods, the price is cheap or not and the main features of products without paying attention to some small differences of products. Therefore enterprises will be able to profit from a large number of production and sales by delivering a single line of products in the market.
2.1.2 Meaning of Production Concept
Production concept is a marketing concept which centers on the production, and focuses on improving efficiency, increasing productivity, lowering costs (see Figure 2.1). Under the environment of undeveloped commodity economy and the product in short supply, the operators tend to guide corporate marketing activities with production ideas. The main task of enterprise management is to improve the production technology, labor organizations, labor productivity, reduce costs and increase sales.
Production concept is supported by the marketers who think that the market needs our products, consumers like those with low price they can buy at any moment. Therefore, the production concept is a kind of “basing sales on production” concept, which attaches importance to the production and quantity, but contempt the marketing and characteristics.
Production concept is one of the oldest ideas to guide the seller to act. The production concept is generally regarded as that the enterprise is able to sell out what it has produced.
Figure 2.1 Production Concept Diagram
2.1.3 Characteristics of Production Concept
(1) Enterprises mainly focus on the production of products, and pursue the high efficiency, high-volume, low-cost; single variety of products, long life-cycle.
(2) The enterprises mainly care the existence and the number of products in the market, rather than consumer’s demands to the market.
(3) The production sector is considered as the main sector in the management.
2.2 Product Concept
2.2.1 Background of Product Concept
The product concept comes from the 1920s to 1930s, which also was produced under the situation of “seller’s market” like the production concept. However, with the further development capitalism productivity, the market situation of short supply had been eased. Companies not only concerned about production, but also began to focus much more on improving the product, that is, to change their importance from “quantity” to “quality”.
2.2.2 Connotation of Product Concept
The product concept is based on enhancing products and improving the quality and functionality of existing products as the marketing concept. The basic assumption is that customers like the best quality and most powerful products.
The marketers holding the product concept think that consumers like the products with fine quality, complete functions and distinctive features. Therefore, companies should strive to improve the product’s quality, increase the product’s functionality, and constantly make the product better. At the same time, they insist on that they do not worry about sales as long as the product is good, only those with poor quality need to be marketed.
2.2.3 Characteristics of Product Concept
The product concept is also a kind of “basing sales on production” concept, which attaches importance to production and quality, but ignore product sales and customer’s demands. Its main features are as follows:
(1) Enterprises focus on improving and producing the products, pursuing high quality and multifunctional products;
(2) Enterprises neglect marketing, simply attract customers by the emphasis on the product itself, and completely reject other promotion methods;
(3) Enterprises still make the productive sector as the main sector, but they promote quality control in the production process.
2.3 Selling Concept
2.3.1 Background of Selling Concept
Selling concept arose during the late 20s to the early 50s in the 20th century, and was generated in the process which the capitalist economy changed from a “seller’s market” to “buyer’s market”. At that time, the production of products increased rapidly, and the supply and demand situation had changed. Also, a buyer’s market was not finally formed, but the competition among vendors became increasingly fierce. Marketing problems were exposed. And even more serious economic crisis in 1929 broke out and business failures occurred frequently. The selling of products became an issue of business survival and development. Such an objective situation made enterprises realize that it was not enough only to produce the products with fine quality and low price, and that the enterprises must pay attention to and strengthen the product selling efforts so as to obtain more profits in the competition.
2.3.2 Contents of Selling Concept
The selling concept is also known as marketing concept, which is centered on the production and sales of products in order to stimulate sales and promote the purchase. In the situation of products oversupplied, enterprises will consciously or unconsciously use the selling concept to guide the marketing activities of enterprises.
At this point, the primary task facing the company is no longer how to expand the production scale or improving producfivity, but how to market their products. So, enterprises begin to improve marketing systems and sales techniques to draw customers’ attention. And enterprises set up special selling agencies, increase sales staff, pay great efforts on advertising, and gradually form a merchandising-centered marketing concept.
The basic assumptions of selling concept suggest that consumers are generally not based on subjective desires when purchasing products, and can be induced only by selling so that their buying behaviors were produced. Whether the sale of products succeeds or not lies in the selling ability of enterprises. This concept can be summarized as “try to sell what has been produced, and then customers will buy them.”
2.3.3 Features of Selling Concept
The selling concept is still a “sales depends on production” marketing concept, its main features are as follows:
(1) Products are unchanged. Enterprises still decide the production direction and production as required according to their own conditions.
(2) Strengthen marketing. Focus on the sales of products, research and application of marketing and promotion methods and techniques.
(3) Begin to pay attention to the customers. Mainly look for potential customers, and study the ways and means to attract customers.
(4) Begin to set up the sales departments. But they are still in a subordinate position.
2.4 Marketing Concept
2.4.1 Background of Marketing Concept
Marketing concept came into being in the 50s of 20th century. After the World War II, because of capitalism’s rapid economic recovery and development, as well as science and technology’s wide range of applications in production, companies’ production efficiency was continuously improved, and market supply was greatly increased and market competition became more intense; on the other hand, due to economic prosperity, consumers had more income which could be used to select consumption, and this made consumers more demanding.
Faced with these circumstances, many entrepreneurs realized that the traditional marketing concepts could not adapt to the new economic environment. Only sale promotion could not fundamentally solve the contradictions of oversupply. And it was essential to put needs of the consumers first, take the initiative to understand and recognize the reality demands of consumers and potential demands, thereby to determine their own production.
2.4.2 Contents of Marketing Concept
Marketing concept is based on consumer-centric idea. The idea suggests that all plans and strategies of enterprises should center on customers, and correctly identify the needs and desires of target market. It is more effective than identifying what competitors supply to satisfy the target market. Marketing concept requires that enterprise implement the “customer first” principle in marketing management, be good at discovering and understanding the needs of target customers, and do everything possible to satisfy it, make customers satisfied so as to achieve business goals.
The emergence of the marketing concept is a real revolution in the history of business idea. It has the following differences when compared with the traditional marketing concepts: Firstly, the traditional orientation is based on the production and sales, while marketing concept is customer-centric; secondly, the traditional concept strengthens the functions of sales and achieves profits by selling products, while the marketing concept achieves profits through meeting customers’ needs; thirdly, the traditional marketing concepts are short-term marketing tools which can only gain profits from a large number of sales and have characteristics with the short-term, while the marketing concept is to satisfy customers’ needs comprehensively, to earn long-term and stable profits.
2.4.3 Four Pillars of Marketing Concept
Marketing concept has four pillars: target market, customers’ needs, integrated marketing and win-win profit model.
1. Identifying the Target Market
Marketing concept puts forward the idea that the enterprise must define its own target market. The so-called target market refers to the selected customer groups which the marketing firms will provide services to. The definition of the target market is to clear where the target market of a business is. It is the only way to better study the characters of the target market demands, and then better meet the needs of customers.
2. Driven by Customers’ Demands
Marketing concept also means that business activities should be customers’ demands-oriented. The correct understanding of customers’ needs and satisfaction is the focal point for all the work. In the modern market environment, the reasonableness of enterprises’ existence is their ability to meet the needs of the customers. A concept that the enterprise should “produce and operate what the customer wants” is to be established. Enterprises should not only see customers’ demands as the starting point of corporate marketing, but also meet the needs of customers throughout the entire process of corporate marketing. This idea should permeate all sectors of corporate marketing as the criteria for the work of various departments. The enterprises should understand and meet not only the customer’s actual demands, but also the potential needs, adjust the company’s marketing strategies according to market demand trends in order to adapt to market changes, and to determine the survival and development of enterprises.
3. Integrated Marketing Approach
All sectors in the enterprises will be integrated into customer interests, and this is called integrated marketing. The integrated marketing has two meanings: firstly, the integration of various marketing functions; secondly, the integration of the various departments.
The marketing concept requires enterprises base corporate marketing objectives on marketing, take advantage of products, prices, channels, promotion, public relations and other factors, and meet the customer’s overall demands from all aspects.
4. A Win-Win Profit Model
The marketing concept stresses that the marketing activities must achieve a win-win business of customers and marketing. Only in this way can marketing make the transactions between business and customers continue, otherwise, it can only be a short-term transaction.
The marketing concept requires enterprises to focus not only on current interest, but also on long-term ones of the enterprises. In marketing the enterprises should both meet customers’ needs and make customers satisfied to establish a good corporate image and win re-buyers through customer satisfaction. Therefore, the enterprises must pay attention to the production, sales, and the marketing services in marketing. The service runs through the entire process of production and operation. The end of a cycle is the beginning of another new cycle, thus promoting the improvement of the enterprise management.
2.5 Social Marketing Concept
2.5.1 Background of Social Marketing Concept
Social marketing concept came into being in the 70s in the 20th century when the new situation of energy shortages, inflation, rising unemployment, serious environmental pollution, consumer protection movement prevalently emerged in the western capitalist. The marketing concept evaded the reality that there is implied conflict among the consumer needs, consumer interests and long-term social welfare. The development of marketing, on the one hand brought enormous benefits to the community and the consumers, on the other hand caused environmental pollution, destruction of social ecological balance. There had been fake and shoddy products and deceptive advertising, which made the majority of consumers not satisfied, and set off a movement to protect consumer rights and protection of ecological balance movement, forcing the corporate marketing activities to take into account long-term interests of consumers and the community.
2.5.2 Contents of Social Marketing Concept
The basic view of the social marketing concept is as follows: enterprises should ensure customer satisfaction and the consumers’ and the public’s long-term benefits, looking them as their fundamental purpose and the responsibility for the social marketing decision-making. At the same time, the enterprises should also take into account the needs of consumers, consumer desire, consumer’s interests and social welfare (see Figure 2.2). On this premise, the enterprises can obtain profits.
Figure 2.2 Three Factors of the Social Marketing Concept
The social marketing concept required marketers to consider interests of three parties, namely, corporate profits, satisfaction of customers’ needs and social benefits in the development of making marketing policy.
As it is shown in the picture, the triangle diagram is a focus in business under the guidance of the social marketing concept. Therefore, the enterprises must do a good job in market research, not only to investigate and understand the reality of consumer practical and potential demand, but also to understand the satisfaction of consumers’ demands, so it can avoid the waste of social resources due to the repeat of introduction and production. The enterprises should both look into consumers’ demands and understand the effects of corporate marketing. Moreover, the enterprises ought to pay attention to the analysis of the competitor’s strengths and weaknesses, take their advantages to do a good job of marketing. At the same time they must concern the social benefits of corporate marketing analysis, consider the overall interest, develop services which are beneficial to social development and people’s physical and mental health, give up those services which are high energy consumption, high pollution, and harmful to people’s physical and mental health in order to contribute to the economic and social development and benefit the future generations.
2.5.3 Features of Social Marketing Concept
1. Concerns of Interests
The social marketing concept requires business managers to consider consumers’ needs and interests, business interests and social interests, immediate interests and the overall interests when making economic decisions and make the best marketing plan.
2. Tasks of the Business
The social marketing concept suggests that the task of business is to determine the needs, desires and interests of various target markets, to provide the target market products or services to meet their needs and demands, and to enhance consumer and social welfare in a more effective way than their competitors can.
3. Being the Changes and Additions of the Marketing Concept
The center of the marketing concept is to meet consumers’ needs and demands, and thus to achieve corporate profit targets. But often this phenomenon occurs: there is a conflict of interest between the individual needs and social public interests in the process of meeting the individual’s needs. The enterprise’s marketing efforts may be unconsciously cause social losses.
4. Stresses of the Social Marketing Concept
Although the marketing concept also stresses the interests of consumers, it believes the interests of consumers must be based on the premise of achieving corporate profit targets. When the two are in conflict with each other, protecting the profits of an enterprise should be in priority. Meanwhile, the social marketing concept sees achieving customer satisfaction as well as consumer’s and the public’s long-term benefits as their fundamental purpose and responsibilities.
5. Decision-Making
Under the guidance of the marketing concept, decision-making process is usually to decide profit targets first, and then possible ways to achieve profit targets will be explored; the social marketing concept requires the decision-making should first consider the interests of consumers and society, seek for effective ways to meet consumers’ demands and to promote the interests of consumers, and then consider the profit targets.
The proposal of the social marketing concept is another big step forward of the marketing concept. China’s state-owned enterprise marketing activities regard the interests of society as the fundamental purpose of business, reflecting the interests of enterprises and social interests with great consistency. Chinese enterprises should consciously use the social marketing concept as a guide, considering the organic combination of points of the market demands, business strengths and interests of society as bases for the business decisions; they should improve the marketing effectiveness of enterprises comprehensively, and implement the social responsibilities of enterprises in the process of seeking the marketing profits.
2.6 Mega-Marketing Concept
2.6.1 Rise of Mega-Marketing Concept
The mega-marketing concept was an entirely new marketing concept which was proposed by Professor Philip Kotler in United States in the 1980s. In his view, the commodity economy has been developed to the current stage when the protectionism in the world trade, trade barriers and trade frictions increasingly happen from time to time. If companies want to successfully enter into a particular market, and to engage in marketing activities, relying solely on traditional 4Ps of marketing is hard to work, but they must be accompanied by political, economic, psychological and public relations and other means to win the cooperation of a number of participants in order to enter the market.
Philip Kotler first extended E. J. McCarthy’s 4Ps theory (Product, Price, Place, Promotion) to 6Ps portfolio, which added 2Ps: Political Power and Public Relations. Later, he developed it into a 10Ps portfolio theory, in which he added a new combination of 4Ps on the basis of 6Ps portfolio, namely Probing, Partitioning, Prioritizing, and Positioning. Soon, Kotler added the 11th P on the basis of the above 10Ps combination, which was named People. It means understanding and providing services to people. The 11th P runs through the whole process of marketing activities, and it is the implementation guarantee of the success of the previous 10Ps. This P makes internal marketing theory incorporated into the mixture of the marketing theories and advocates that managers should understand and grasp the trends and patterns of staff needs to overcome the practical difficulties of workers and appropriately meet the material and spiritual needs of the workers in order to motivate employees’ enthusiasm for work. The mega-marketing concept is of great significance for its transformation from tactical marketing to strategic marketing, which is known as the “Second Revolution” of the marketing.
2.6.2 Connotation of Mega-Marketing Concept
The mega-marketing concept was a new development of the marketing concept since the 1980s. It is a new strategic marketing theory which can guide the business to conduct marketing in a closed market. The core content is to emphasis that it is necessary to effectively adapt to the external environment, but also it should be able to play in some respects a subjective dynamic role and to make the external environment favorable to the business direction.
The so-called mega-marketing means the process of activities that enterprises strategically use economic, psychological, and political and public relationship means in order to successfully enter a particular market, where they are engaged in business operations so as to win the support and cooperation of all parties concerned.
The mega-marketing idea suggests the marketing problems that enterprises are facing are no longer just how to meet the needs of the existing target markets since the trade protectionism and government intervention are strengthened. In the marketing, the first thing enterprises do is to obtain the support from the authorities, the legislative branch, executive decision makers with the use of political power and public relations, inspire and guide the specific market needs and establish a good corporate reputation and brand image among the consumers in the market in order to open the market and enter the market. Then the traditional 4Ps (Product, Price, Place, Promotion) portfolios are adopted to meet the needs of the market to further consolidate market position.
2.6.3 Features of Mega-Marketing Concept
Compared with the common marketing concepts, the mega-marketing concept has the following two characteristics:
(1) The mega-marketing idea breaks through the dividing line between the “control elements” and “non-control elements”, and stresses that corporate marketing activities can have an important impact on the environment to make the environment conducive to the direction of achieving business goals.
(2) The mega-marketing concept stresses the need of dealing with a lot of relationships in order to successfully carry out the regular marketing activities, thereby expanding the scope of the enterprise marketing. |
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