THE MARKETING CONCEPT

- originated as a defined concept in 1946 at General Electric

- 3 major features

Customer Orientation - Key objective in business and government is to satisfy customer needs. The products and services themselves are means to this end. The first step is to identify and define customer/consumer needs. The customer is sovereign.

Integrated Programme - The right mix of inputs/resources/activities needs to be devised to satisfy needs and achieve financial objectives. Marketing activities are variables that must be individually weighed and selected in terms of their overall fit to satisfying customer needs. A key term is "the marketing mix". Organisational functions should be integrated to suit the marketing concept. All levels of the organisation should understand and be committed to the marketing concept, especially at the top-management level.

Profit Orientation - The integrated programme must culminate in a budget that achieves a minimum, predetermined "bottom line" result. This is usually "return on investment" (ROI) the programme must be based on financial objectives as well as sales objectives (eg. sales volume targets, market share objectives). Remember to qualify the likely costs/benefits throughout the planning stage, perhaps only crudely at first but in detail at the final budget stages. The aim is effective planning and control.

Marketing vs Selling

                                                 Selling               Marketing

Emphasis                                   Product              Customer Needs

First Step                                   Manufacture        Determine Customer Needs

Managment Orientation                Sales Volume     Profit

Planning                                     Short Term         Long and Short Term

In the early stages of growth an organisation may fall into a trap that many organisations found themselves in after World War II. The organisation is production oriented. The production and engineering managers are dominant and the sales people exist to sell the output at a price determined by those managers. Historically this approach worked well when demand exceeded supply.

In a selling oriented organisation the Sales Manager becomes more important and "hard sell" methods are used to push the products (and the salesmen) in the market-place. This approach is still well entrenched in Australia and immense opportunities exist for a professional marketing approach by organisations and individual managers.

These notes were compiled by Bill Wright B.Com MBA based on Kotler, Shaw, Fitzroy & Chandler MARKETING IN AUSTRALIA, Prentice Hall. 1st ed. 1983, 2nd ed. 1989