Fundamentals of New Marketing Concept
To implement a new marketing concept, we must focus on target market focus, customer orientation, integrated marketing, and profitability or objective achievement which are popularly known as fundamental principles of the new marketing concept. These principles are also called the four pillars of new marketing concepts. These four pillars are explained below:
Target Market
No marketers can satisfy the needs of all customers by offering single products Thus, market segmentation is essential to implement new marketing concepts. Market segmentation is customer-oriented philosophy where the total heterogeneous market is divided into common homogeneous small groups under specific criteria. A selected market segment is called the target market. Companies do best when they choose their target market(s) carefully and prepare tailored marketing programs. Examples are junior Horlicks for Children, Lux soap for beauty, Liril soap for freshness, Pepsodent for strong teeth, Close up for fresh breath, etc.
Customer Needs
A company can carefully define its target market yet fails to correctly understand the customers’ needs. Clearly, understanding customer needs and wants is not always simple. Some customers have needs of which they are not fully conscious; some cannot articulate these needs or use words that require some interpretation. Needs can be distinguished into five types: (1) stated needs, (2) real needs, (3) unstated needs, (4) delight needs, and (5) secret needs.
Responding only to the stated need may short-change the customer, For example, if a customer enters a cosmetics shop and asks for a lipstick, she is not asking for lip color or chemicals, she is going to buy beauty. If the salesperson suggests another alternative product that would provide a better solution, the customer may appreciate that the salesperson met her need and not her stated solution.
A distinction needs to be drawn between responsive marketing, anticipative marketing, and creative marketing. A responsive marketer finds a stated need and fills it, while an anticipative marketer looks ahead to the needs that customers may have in the near future. In contrast, a creative marketer discovers and produces solutions that customers did not ask for but to which they enthusiastically respond. Sony exemplifies a creative marketer because it has introduced many successful new products that customers never asked for or even thought were possible: Walkmans, VCRs, and so on. Sony goes beyond customer-led marketing: It is a market-driving firm, not just a market-driven firn-t. Akio Morita, its founder, proclaimed that he doesn’t serve markets; he creates markets.
It is supremely important to satisfy the needs of target customers. Because a company’s sales come from two groups: new customers and repeat customers. One estimate is that attracting a new customer can cost five times as much as pleasing an existing one. And it might cost 16 times as much to bring the new customer to the same level of profitability as that of the lost customer. Customer retention is thus more important than customer attraction.
Integrated Marketing
When all of the company’s departments work together to serve the customers’ interests, the
result is integrated marketing. Integrated marketing takes place on two levels. First, the various marketing functions—sales force, advertising, customer service, product management, and marketing research— must work together. All Of these functions must be coordinated from the customer’s point of view.
Second, marketing must be embraced by the other departments. According to David Packard of Hewlett-Packard: “Marketing is far too important to be left only to the marketing department!” Marketing is not a department so much as a company-wide orientation.
To foster teamwork among all departments, the company must carry out internal marketing as well as external marketing. External marketing is marketing directed at people outside the company. Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well. In fact, internal marketing must precede external marketing. It makes no sense to promise excellent service before the company’s staff is ready to provide it.
Managers who believe the customer is the company’s only true “profit center” consider the traditional organization chart—a pyramid with the CEO at the top, management in the middle, and front-line people and customers at the bottom— obsolete. Master marketing companies invert the chart, putting customers at the top. Next in importance are the front-line people who meet, serve, and satisfy the customers; under them are the middle managers, who support the front-line people so they can serve the customers; and at the base is top management, whose job is to hire and support good middle managers.
Profitability
The ultimate purpose of the marketing concept is to help organizations achieve their objectives. In the case of private firms, the major objective is profit; in the case of non-profit and public organizations, it is surviving’ and attracting enough funds to perform useful work. Private firms should aim to achieve profits as a consequence of creating superior customer value, by satisfying customer needs better than competitors.
How many companies actually practice the marketing concept? Unfortunately, too few. Only a handful of companies stand out as master marketers: Procter & Gamble, Disney, Wal-Mart, Milliken & Company, McDonald’s, Marriott Hotels, American Airlines, and several Japanese (Sony, Toyota, Canon) and European companies (IKEA, Club Med, ABB, Marks & Spencer) These companies focus on the customer and are organized to respond effectively to changing customer needs. They all have well-staffed marketing departments, and all of their other departments —manufacturing, finance, research and development, personnel, and purchasing— accept the customer as king. (Kotler, 2012)
Most companies do not embrace the marketing concept until driven to it by circumstances. Various developments pressurized them to take the marketing concept to heart, including sales declines, slow growth, changing buying patterns, more competition, and higher expenses. Despite the benefits, firms face three hurdles in converting to a marketing orientation: organized resistance, slow learning, and fast forgetting.
Some company departments (often manufacturing, finance, and research and development) believe a stronger marketing function threatens their power in the organization. Resistance is especially strong in industries in which marketing is being introduced for the first time—for instance, in law offices, colleges, deregulated industries, and government agencies. In spite of the resistance, many companies manage to introduce some marketing thinking into their organization, Over time, marketing emerges as the major function. Ultimately, the customer becomes the controlling function, and with that view, marketing can emerge as the integrative function within the organization.
