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Subject COMMERCE

Paper No and Title 7 Marketing Management

Module No and Title 2, Marketing Orientation and Evolution

Module Tag COM_P7_M2

COMMERCE 7 : MARKETING
2 : MARKETING ORIENTATION & EVOLUTION
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TABLE OF CONTENTS
1. Learning Outcomes
2. Introduction
3. Evolution of Marketing Orientation
3.1 Production Orientation
3.2 Product Orientation
3.3 Selling Orientation
3.4 Marketing Orientation
3.5 Holistic Marketing Orientation
4. Marketing Orientation
4.1 Concept
4.2 Pillars of marketing orientation
4.3 Benefits of marketing Orientation
5. Summary

COMMERCE 7 : MARKETING
2 : MARKETING ORIENTATION & EVOLUTION
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1. Learning Outcomes
After studying this module, you shall be able to

 Understand the concept of Marketing Orientation

 Identify the various stages involved in the evolution of marketing orientation
 Learn about the pillars of Marketing Orientation
 Know the benefits of doing marketing orientation

2. Introduction
Traditionally, the objective of marketing was to make the goods available at places where they
were needed. The emphasis then shifted from exchange to satisfaction of human wants. The scope
of marketing was enlarged due to technological progress and multiplication of human needs and
wants. In this process traditional ideas on marketing were replaced by modern concepts. Each
stage in the evolution of marketing have been explained in this module.

3. Evolution of Marketing Orientation

3.1 Production Orientation

It was held true in the 1950s when capitalism had created a growing number of affluent and
middle class people. During this stage, organizations believed that consumers are in favor of
those products that are available widely and are not much costly. They focused on production
efficiency by having a favorable input-output ratio that could be achieved through economies of
scale which are the cost advantages that an organization obtains due to expansion and mass
distribution.

The production orientation was based on Say’s Law which states that the “production of
commodities creates, and is the one and universal cause which creates, a market for the
commodities produced".

The main attributes of this orientation are

 It is company focused
 Lays stress on mass production and mass distribution
 Objective is to attain economies of scale
 Based on the concept “Supply creates its own demand”
 Ignores the needs and wants of consumers.

3.2 Product Orientation

The organizations employing product orientation are chiefly concerned with quality of products.
They assume that consumers prefer high quality products. Emphasis is laid on making superior
products and then improving them overtime. The organization stresses on R&D, innovation and
performance of the product. Continuous evolution during the life cycles of the product to
maintain the attention of the potential customers is the main focus of such organizations.

COMMERCE 7 : MARKETING
2 : MARKETING ORIENTATION & EVOLUTION
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Organizations following this orientation lay inadequate

consciousness to what customers really need and want.

The main attributes of this orientation are

 It is product focused
 Assumes that consumers are interested in product quality.
 Based on the belief that consumers choose amongst different products on the basis of best
quality for the price paid.

3.3 Selling orientation

The organizations that employ sales orientation focus on the selling and promotion of a specified
product. The selling orientation holds that if customers are not oriented properly, they will not
buy enough of an organizations product. Thus, it becomes important for organizations to
undertake an aggressive selling and promotion effort. It can be elaborated in the words of Sergio
Zyman, the former VP of marketing who said that “the purpose of marketing is to sell more stuff
to more people more often for more money in order to make more profits.”

This orientation is practiced most aggressively by organisations that have overcapacity or deal in
unsought goods i.e. goods that consumers do not think of buying such as encyclopaedias and
insurance policies. The aim of these organisations is to sell what they have made rather than make
what the target market wants.

The main features of this orientation are

 It is company focussed
 Lays prominence on sales volume
 Based on the belief that if customers are left alone they do not buy enough of
organizations product.
 Lays stress on aggressive selling tactics
 Used when organizations have over capacity or sell unsought goods.

3.4 Marketing Orientation

It is a consumer centered orientation that is based on the “sense-and-respond” philosophy. The

aim of organization following this orientation is to find right products for their customers rather
than right customers for their products. It is a coordinated campaign between a company and its
customers wherein the company tailors the product to meet the needs of the customers. The
organizations believe that organizational goals can be achieved by being more efficacious than
the rivals in consolidating and coordinating their marketing activities in ascertaining and
satisfying the needs and wants of the target market.

The main attributes of this orientation are

 It is consumer oriented
 Prominence is on attracting and maintaining customers by offering them those products
that satisfy their need and meet wants.
 Integrate all marketing activities in identifying and satisfying the needs of the consumers.
 Prominence is on selling satisfaction and not merely selling goods.

COMMERCE 7 : MARKETING
2 : MARKETING ORIENTATION & EVOLUTION
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3.5 Holistic Marketing Orientation

The organizations following holistic marketing orientation look at marketing as a complex
activity and recognize that “everything matters” in marketing and that a broad consolidated
perspective is essential in developing, designing and implementing marketing programs and
activities.

There are following components that characterize holistic marketing orientation

1. Relationship marketing: the goal of relationship marketing is to build mutually satisfying
long term rapport with key stakeholders to earn and perpetuate business. The key
stakeholders comprises of customers, employees, marketing partners such as suppliers,
distributors, dealers etc. and members of the financial community such as shareholders,
analysts, investors etc. In order to create sound rapport with each of the stakeholders
businesses need to understand their needs, goals and desires as well as their resources and
capabilities.
2. Internal marketing: is a process within an organization wherein the functional process
abeam, motivates and empowers employees at all the levels of management to provide a
satisfying customer experience. It is a process of ensuring that everyone in the
organization adopts relevant marketing principles.
3. Integrated marketing: is an approach of brand communications where different elements
of the marketing mix work together to provide seamless experience to the customers. The
brand communication is presented with similar tone and style so as to reinforce the
brand’s core message.
4. Socially responsive marketing: it states that the effect of marketing extends beyond the
organization and the customers to the society as a whole. Organization should take the
present as well as the long term best interest of the society in consideration while
formulating their marketing strategy. The organizations job is to ascertain the needs,
wants and interests of target market and furnish the intended satisfaction more
efficaciously and efficiently than the rivals in a way that consumers as well as society’s
long term well-being is enhanced. Firms such as Hewlett-Packard, McDonald’s and Body
Shop are using this concept to distinguish themselves from rivals, build consumer
preferences and profit gains.

The main characteristics of holistic marketing are:

 In marketing everything matters

 Lays importance on long term mutually satisfying rapport with all the stakeholders
 Employees at all levels in the organisations should aim to satisfy the customers
 All the marketing mix elements should reinforce the brands core message
 Due consideration should be given to society’s long term interest.

4. Marketing Orientation

4.1 Concept
COMMERCE 7 : MARKETING
2 : MARKETING ORIENTATION & EVOLUTION
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In today’s marketplace organizations can be successful only

when they understand their customers’ requirements best and
make sure that their expectations are met. This approach of doing business is known as marketing
orientation. It is a business philosophy in which the business revolves around the customers.
Emphasis is laid on determining the requirement of the potential customers and supplying them
those goods that can meet their requirements. Creation of customers and satisfying their wants is
considered to be the justification of business. The organizations create a product as per the needs
of the customers rather than according to the availability of machinery and material and technical
know-how. In short, customer is the fulcrum around which the business moves.

Philip Kotler has defined marketing orientation “as a management orientation that holds
that the key task of the organization is to determine the needs, wants and values of a target
market and to adopt the organization to delivering the desired satisfactions more effectively
and efficiently than its competitors

The companies following marketing orientation invest time in researching the current trends in a
given marketplace. The product strategy is then developed to cater to the wants and needs of the
target audience. The organization then advertises the product as an item that consumers want
rather than convincing them that the product is something that they should want.

4.2 Pillars of marketing orientation

There are three pillars on which marketing orientation is based

4.2.1 Customer focus

A business organization should take its direction from the customers. In this era, businesses
cannot survive if they ignore the wants and expectations of the customers. The customer is
supreme and he determines the product that the organization shall produce. A regular and
systematic marketing research program is needed to keep abeam with the market.

4.2.2 Integrated marketing

Marketing orientation requires internal consistency within the organization. When all the
departments of the organization work together to serve the customer interest, the result is
coordinated marketing or integrated marketing.

Integrated marketing works at two levels. The first level is the marketing department. All the sub
divisions of the marketing department such as brand development, marketing research, sales,
advertising, new product development etc. should work together. Many times the sales
department feels thinks that product development manager sets the prices or quotas too high or
the advertising manger and the brand manager may not agree on the same advertising campaign.
All these marketing functions need to be coordinated with focus on the customer.
COMMERCE 7 : MARKETING
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In the second level, marketing must be a part of other

departments such as finance, human resources, operations etc. All these departments must also
focus on the customers. This involves making use of internal marketing as well as external
marketing. External marketing is applied towards the people that lie outside the scope of an
organization whereas internal marketing involves the task of hiring, training and motivating
employees. Marketing orientation necessitates internal marketing to be aligned to external
marketing and the staff should be ready enough to provide excellent service to the customers.

4.2.3 Profitability

The ultimate aim of the marketing orientation is to help the organization achieve profitability
through satisfaction of the customers. In the scenario of private firms the major objective is long
run profitability. For non-profit organizations the goal is to survive and attract sufficient funds to
perform useful work. Organizations should not aim at profit as its only objective, but it should be
a consequence of creating superior customer value.

4.3 Benefits of marketing orientation

Adoption of marketing orientation leads to the following benefits

 Allows organizations to direct their activities towards broader and long range objectives
like sustained interaction with the customers and stability and growth of the business.
 Leads to integrated and coordinated marketing
 Focus on the needs and wants of the customers rather than product increases the
acceptability of the product and reduces the chances of the organization becoming a sick
unit.
 The organization can respond effectively to changes in the business environment.

5. Summary
 Focus of production orientation is on mass production and mass distribution
 Product orientation is based on the belief that consumers choose amongst different
products on the basis of best quality for the price paid.
 Selling orientation lays stress on aggressive selling tactics.
 Marketing orientation lays stress on satisfaction of the customers.
 Marketing orientation is based on three pillars: customer focus, integrated marketing and
profitability
 Under holistic marketing orientation in marketing everything matters
 Holistic marketing orientation lays its foundation on four components: relationship
marketing, internal marketing, integrated marketing and socially responsive marketing.

COMMERCE 7 : MARKETING
2 : MARKETING ORIENTATION & EVOLUTION
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COMMERCE 7 : MARKETING
2 : MARKETING ORIENTATION & EVOLUTION