The development of modern marketing philosophy

Marketing scholars have identified four main approaches to business: product orientation, sales orientation, marketing orientation and societal marketing orientation. Product and sales orientation do not place the customer at the center of an organization's strategy. Although certain firms still use these two approaches, they are viewed often primarily as historical phenomena.

Product Orientation: Make What You Know How to Make. Exchan­ge has taken place ever since humans agreed to satisfy their ne­eds by means other than brute force, but it was not until the mid-eighteenth century that labor specialization and mass-pro­duction techniques brought about massive increases in producti­vity and lower prices for goods. Prom the industrial revolution until the 1920s and 1930s - the product orientation came into full flow. In this period, demand generally exceeded supply; producers could expect to sell whatever they could make.

According to the product orientation, consumers have little product choice. If a product is available and if consumers can afford it, they will purchase it. As philosophy of business, product orientation focuses primarily on a firm's own resources and products. Management strives to improve production efficien­cy and to lower prices in the belief that profits result from lowered manufacturing costs. One of the most famous disciples of product orientation was carmaker Henry Ford. Ford initially pro­duced only one model in one color - the black Model T - thereby reducing hie unit price and putting the customer's price within reach of many U.S. families.

More recently, makers of television sets, air conditioners, food processors, and digital watches have adopted a product orientation. These manufacturers lowered production costs - and, in turn, prices to appeal to a wide range of consumers. Texas Instruments, for example, succeeded for a time in garnering a large share of the market for small electronic calculators by using rapidly advancing technology to lower costs and prices. However, few firms followed a pure product orientation in the 1980s. Initially, demand exceeded supply for the product mentioned above, but clever later entries in these markets quickly expanded consumers' choices and forced the original producers to shift to a sales orientation.

Sales Orientation: Get Rid Of What You Have. A sales orientation focuses primarily on how a firm promotes and sells its products. If management is sales-oriented, it assumes that cus­tomers will not buy a product (or will not buy enough of it) unless intensive persuasive promotional efforts induce them to buy. The sales orientation had its heyday between the 1930s and 1950s, a period known as the "sales era". Except for the years during and immediately after World War II, supply generally ex­ceeded demand during this period. Many firms developed large sales staffs and concentrated their efforts on advertising and promotion, although management continued to focus on the product rather than on consumers.

Certain industries still favor the sales approach, among them encyclopedia publishing, life insurance, and magazine sub­scriptions. Companies using hard-sell techniques argue that their methods "help" consumers to discover unrealized wants and needs. These firms insist that their central concern is the con­sumer's welfare, but the truth of this claim varies widely.

Marketing Orientation: Have What You Can Get Rid Of. As an important step forward from the sales orientation, a marketing orientation focuses primarily on satisfying consumers' needs. This is the heart of the marketing concept: identifying and of­fering products that will satisfy customers. Indeed, the purpose of marketing is to make selling superfluous. According to this ideal, you should not need to persuade consumers that they want and need your product. If your marketing efforts have been on target, you will have exactly what the consumer want, and they will take the goods away from you.

Of course, this ideal is easier to write in a textbook than to put into practice in the competitive world of business. Marketers must correctly identify their target markets (the spe­cific group of consumers that they propose to serve). Then they must correctly describe what is wanted to the design and produc­tion departments, and see to it that what is produced is actual­ly what is wanted. All these steps are essential in applying a marketing orientation and satisfying the needs of consumers.

Societal Marketing Orientation: Have What You Can Get Rid Of - Responsibly. A societal marketing orientation adds an ad­ditional consideration to the marketing concept: the impact of a firm's activities on society's well-being. Products (and espe­cially the by-products of manufacturing or processing) may not always take the long-term interests of consumers even though they satisfy immediate wants. No-return bottles consume resourc­es and intensify litter problems; refinery by-products may pol­lute the atmosphere; certain processed foods have little nutri­tional value.

The last two decades have seen wide and sometimes intense debate regarding the possible negative effects of marketing on society as a whole and on individuals. It is unfortunate but true that socially responsible marketing can be costly. Automo­bile pollution controls, for example, are expensive to manufac­ture. Additional production costs lead to higher prices for consumers and lower profits for manufactureres. Moreover, compa­nies may find it difficult to compete in the marketplace if they fail to produce popular (but possibly harmful) goods. Many con­sumers want no-return bottles and processed foods with little nutrition. If firms reduce their profit goals, they may endanger their survival and thus cause harm to their stockholders (who are also consumers).

Some firms have attempted to implement the societal mar­keting concept by considering the needs of all their "stake­holders" - that is, all persons who have a stake in the business

Among these stakeholders are consumers, owners, the public, and the firm's employees. These companies recognize the need to co­pe with all four groups.

Perhaps, the best hope for an acceptable compromise bet­ween the goal of social responsibility and the need for profits lies in the combined efforts.of businesses and consumers. For their part, consumers must learn to think realistically about the difficulties of making and selling products that have no negative side effects. When the public wants and is ready to pay for air bags to protect automobile passengers during accidents, automakers will undoubtedly produce cars with air bags. However, marketers must learn to regard societal concerns as opportuni­ties rather than problems. In the future, some innovative marke­ters may reap handsome profits by offering new and improved pro­ducts that enhance societal well-being while satisfying the im­mediate needs of consumers.

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