the Marketing strategies concepts applied by Globally competitive firms
these are Marketing strategies concepts applied by Globally competitive firms.Give four examples of companies using different marketing strategies concepts
Marketing, more than any other business function, deals with customers. Understanding, creating, communicating, and delivering customer value and are at the very heart of modern marketing strategies thinking and practice. In short “Marketing strategies is the delivery of customer satisfaction at a profit”. Removing the word “profit” from the above definition leads to the definition of “charity”. The twofold goal of marketing strategies is to attract new strategies customers by promising superior value and to keep current customers by delivering satisfaction.
Wal-Mart has become the world’s largest retailer by delivering on its promise, “Always low prices-always”. FedEx dominates the U.S. small-package industry by consistently making good on its promise of fast, reliable small-package delivery. Ritz-Carlton promises and delivers truly “memorable experiences” for its hotel guests. Coca-Cola, long the world’s leading soft drink, delivers on the simple but enduring promise, “Always Coca-Cola”-always thirst-quenching, always good with food, always cool, always a part of your life. These and other highly successful companies know that if they take care of their customers, market share and profits will follow which will add to their respective baselines.
Marketing strategies concepts applied by globally competitive firms are:
1.) The Production Concept ‘Best Product’: The production concept holds thatconsumers will favor products that are available and highly affordable. Business concerned itself primarily with production, manufacturing, and efficiency issues. This viewpoint was encapsulated in Say's Law which states Supply creates its own demand. To put it another way, If a product is made, somebody will want to buy it or in other words “Anything that can be produced can be sold”. Therefore, management strategiesshould focus on improving production and distribution efficiency.
This concept is still useful in two situations:
a.) When the demand for a product exceeds the supply:- In this scenario, management strategiesshould look for ways to increase production.
b.) When the product’s cost is too high:- In this scenario, management strategiesshould look for ways to improve productivity to bring the cost down.
Example.1 Henry Ford’s whole philosophy was to perfect the production of the model T so that its cost could be reduced and more people could afford it.
Example.2 For many years, Texas Instruments (TI) followed a philosophy of increased production and lower costs in order to bring down prices. It won a major share of the American handheld calculator market using this approach. However, companies operating under a production concept run a major risk of focusing too narrowly on their own operations. For example, when TI used this strategy in the digital watch market, it failed. Although TI’s watches were priced low, customers did not find them very attractive. In its drive to bring down prices, TI lost sight of something else that its customers wanted-namely, affordable, attractive digital watches.
2.) The Selling Concept: This concept holds that consumers will not buy enough of the organization’s products unless it undertakes a large-scale selling and promotion effort. The concept is typically practiced with unsought goods-those that buyers do not normally think of buying, such as encyclopedias or insurance. These industries must be good at tracking down prospects and selling them on product benefits. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses primarily on customer conquest-getting short-term sales with little concern about who buys or why.
Most firms practice the selling concept when they have overcapacity. There is to sell what they make rather than make what the market wants. Such marketing strategies carries high risks. It focuses on creating sales transactions rather than on building long-term, profitable relationships with customers. It assumes that customers who are coaxed into buying the product will like it. Or, if they don’t like it, they will possibly forget their disappointment and buy it again later. These are usually poor assumptions to make about buyers. Most studies how that dissatisfied customers do not buy again. Worse yet, whereas the average satisfied customer tells three others about good experiences, the average dissatisfied customer tells ten others about his or her bad experiences.
3.) The Marketing strategies Concept: This concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. The marketing strategies concept has been stated in colorful ways, such as “we make it happen for you”(Marriott); “To fly, to serve”(British Airways); “we’re not satisfied until you are”(GE); and “Let us exceed your expectations”(Celebrity Cruise Lines). The marketing strategies concept takes an outside-in perspective. As Herb Kelleher, Southwest Airline’s colorful CEO, puts it, “We don’t have a Marketing strategies Department; we have a Customer Department”. The marketing strategies concept starts with a well-defined market, focuses on customer needs, coordinates all the marketing strategies activities affecting customers, and makes profits by creating long-term customer relationships based on customer value and satisfaction. Thus, under the marketing strategies concept, customer focus and value are the paths to sales and profits. In the words of one Ford executive, “If we’re not customer driven, our cars won’t be either”.
Example.3 L.L Bean, the highly successful catalog retailer, was founded on the marketing strategies concept. In 1912, in his first circulars, L.L. Bean included the following notice: “I do not consider a sale complete until goods are worn out and the customer still is satisfied. We will thank anyone to return goods that are not perfectly satisfactory….. Above all things we wish to avoid having a dissatisfied customer”.
Today, L.L. Bean dedicates itself to giving “perfect satisfaction in every way”. To inspire its employees to practice the marketing strategies concept, L.L Bean has for decades displayed posters around its offices that proclaim the following:
“What is a customer? A customer is the most important person ever in this company-in person or by mail. A customer is not dependent on us, we are dependent on him. A customer is not an interruption of our work, he is the purpose of it. We are not doing a favor by serving him, he is doing us a favor by giving us the opportunity to do so. A customer is not someone to argue or match wits with-nobody ever won an argument with a customer. A customer is a person who brings us his wants-it is our job to handle them profitably to him and to ourselves.”
Example.4 Another case is of Sony corporation, in this strategy they feel that “Customers are notoriously lacking in foresight”. Akio Morita, Sony’s visionary leader puts it: “Our plan is to lead the public with new strategies products rather than ask them what kind of products they want. The public does not know what is possible, but we do. So instead of doing a lot of market research, we refine our thinking on a product and its use and try to create a market for it by educating and communicating with the public”
4.) The Social Concept: This concept holds that the organization should determine theneeds, wants and interests of target markets. It should then deliver superior value to customers in a way that maintains or improves the customer’s and the society’s well being. The social marketing strategies concept is the newest of the four marketing strategies management strategiesphilosophies.
Consider the fast-food industry. Most people see today’s giant fast-food chains as offering tasty and convenient food at reasonable prices. Yet many consumer and environmental groups have voiced concerns. Critics point out that hamburgers, fried chicken, French fries, and most other foods sold by fast-food restaurants are high in fat and salt. The products are wrapped in convenient packaging, but this leads to waste and pollution. Thus in satisfying consumer wants, the highly successful fast-food chains may be harming consumer health and causing environmental problems.
