Nsanje Hills Training Institute [Duly registered with TEVETA: No.

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Sales and Marketing Training Course

“The best idea for any organization is the idea of how to serve customers better”

Training Module Notes

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other person, without the express written permission of Nsanje Hills Training Institute (NHTI)
UNIT 1: FUNDAMENTAL CONCEPTS OF MARKETING

Good marketing makes the company look smart. Great marketing makes the customer feel
smart." - Joe Chernov

THE MARKETING CONCEPT

This section will help you to develop an understanding of the concept of marketing. This
includes how marketing has evolved and how it fits into today’s business.

Marketing is a word we are all familiar with, but how much do we know about this core business
function? How is marketing related to a brand's customer? The first word that comes to your
mind when you hear marketing is probably advertising. But did you know that marketing is
much more complex, and advertising is just a small (but significant) part of marketing

What philosophy should guide a company marketing and selling efforts? What relative weights
should be given to the interests of the organization, the customers, and society? These interest
often clash, however, an organization’s marketing and selling activities should be carried out
under a well-thought-out philosophy of efficiency, effectiveness, and socially responsibility.

EVOLUTION OF MARKETING

To understand how marketing has evolved it is also necessary to understand a little about the
history of markets. This chart gives a very brief overview and students would benefit from
conducting research to learn about this in more detail.

Early human history People lived in family and tribal units. They were mainly self-sufficient
and only limited trading took place.

System of bartering People started to specialize and trade their skills. For example, a
toolmaker may have traded tools for food.

Development of markets The invention of money meant that people no longer needed to barter
and early advertising directly for what they needed.

Advertising through Agricultural and industrial revolutions led to the development of

billboards, newspapers, technology and techniques that in turn led to mass production.
television, etc
Developing products that Marketing techniques developed as completion and consumer choice
meet the needs of increased.
consumers
Use of the Internet to New technologies and the use of social media have led to developments in
engage with consumers marketing techniques.

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Marketing as we know it is relatively new discipline and emerged around the 1960s. This
coincided with increases in the range of products available, increased competition, greater
consumer choice and more disposable income.

No longer could business manufacture their products hoping that they would sell. This led to a
change in approach where business tried to identify the requirements of customers and to
manufacture products and services to meet those requirements. This fits well with the definition
of Chartered Institute of Marketing which defines Marketing as the management process which
identifies, anticipates and supplies customer requirements profitably.

It is not enough for a company to simply make lots of what it is good at-if the customers do not
want the product it is a waste of resources and is likely to end in financial ruins.

BUSINESS CONCEPTS OR ORIENTATIONS

There are five types of business concepts or orientation to consider.

1. The Production Concept

2. The Product Concept

3. The Selling Concept

4. The Marketing Concept

5. The Societal Marketing Concept

THE FIVE CONCEPTS DESCRIBED

The Production Concept: This concept is the oldest of the concepts in business. It holds that
consumers will prefer products that are widely available and inexpensive. Managers focusing on
this concept concentrate on achieving high production efficiency, low costs, and mass
distribution. They assume that consumers are primarily interested in product availability and low
prices. This orientation makes sense in developing countries, where consumers are more
interested in obtaining the product than in its features.

The Product Concept: This orientation holds that consumers will favor those products that offer
the most quality, performance, or innovative features. Managers focusing on this concept
concentrate on making superior products and improving them over time. They assume that
buyers admire well-made products and can appraise quality and performance. However, these
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managers are sometimes caught up in a love affair with their product and do not realize what the
market needs. Management might commit the “better-mousetrap” fallacy, believing that a better
mousetrap will lead people to beat a path to its door.

The Selling Concept: This is another common business orientation. It holds that consumers and
businesses, if left alone, will ordinarily not buy enough of the selling company’s products. The
organization must, therefore, undertake an aggressive selling and promotion effort. This concept
assumes that consumers typically show buying inertia or resistance and must be coaxed into
buying. It also assumes that the company has a whole battery of effective selling and
promotional tools to stimulate more buying. Most firms practice the selling concept when they
have overcapacity. Their aim is to sell what they make rather than make what the market wants.

The Marketing Concept. This is a business philosophy that challenges the above three business
orientations. Its central tenets crystallized in the 1950s. It holds that the key to achieving its
organizational goals (goals of the selling company) consists of the company being more effective
than competitors in creating, delivering, and communicating customer value to its selected target
customers. The marketing concept rests on four pillars: target market, customer needs,
integrated marketing and profitability.

Distinctions between the Sales Concept and the Marketing Concept:

1. The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses on
the needs of the buyer. ‘Selling focuses on the needs of the seller; marketing on the
needs of the buyer.’

2. The Sales Concept is preoccupied with the seller’s need to convert his/her product into
cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the
customer by means of the product as a solution to the customer’s problem (needs).

The Marketing Concept represents the major change in today’s company orientation that
provides the foundation to achieve competitive advantage. This philosophy is the foundation of
consultative selling.

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The Marketing Concept has evolved into a fifth and more refined company orientation: The
Societal Marketing Concept. This concept is more theoretical and will undoubtedly influence
future forms of marketing and selling approaches.

The Societal Marketing Concept. This concept holds that the organization’s task is to
determine the needs, wants, and interests of target markets and to deliver the desired satisfactions
more effectively and efficiently than competitors (this is the original Marketing Concept).
Additionally, it holds that this all must be done in a way that preserves or enhances the
consumer’s and the society’s well-being.

This orientation arose as some questioned whether the Marketing Concept is an appropriate
philosophy in an age of environmental deterioration, resource shortages, explosive population
growth, world hunger and poverty, and neglected social services.

Are companies that do an excellent job of satisfying consumer wants necessarily acting in the
best long-run interests of consumers and society?

The marketing concept possibly sidesteps the potential conflicts among consumer wants,
consumer interests, and long-run societal welfare.

CUSTOMER AND COMPETITOR ORIENTATION

Customer Oriented
Marketing is customer orientated. In theory this means that there is less need for expensive
selling because the needs of customers are being identified and met.

CUSTOMERS  The marketing concept means putting the customer first

 Customer orientation is part of the culture of the business
 The aim is to satisfy customer requirements at a profit.
 Products and services are produced to meet customer requirements.

Competitor Orientation
The philosophy behind a true competitor orientation is to ‘beat your competitors’. The danger
with this is that it can be at the exclusion of everything else including profits. However, without
going to these extremes, it is sensible to keep an eye on competitors and to take account of them
in any marketing campaign.
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COMPETITORS  What choices are available to customers?
 What is the size and strength of competitors?
 What substitute products and services exist?
 What supply and demand exists?
 How many competitors exist in the market?
 Are there any changes in competitor attitudes?

It is also important to consider how competitors are likely to react to any marketing campaigns
you are proposing to contact.

SOCIETAL ISSUES AND EMERGENT PHILOSOPHIES

Critics of the marketing concepts say that it encourages people to want things they don’t need. It
is also possible that it may create a desire for products that are bad for customers or society as a
whole. Examples may include:

 Cigarettes and alcohol which have the potential to cause health problems
 Instant win scratch cards which can appeal to poorer members of society who can’t really
afford to buy them
 Motor vehicles with high fuel consumption can have a bad effect on the environment.

Many firms now understand the importance of corporate social responsibility and have a
marketing orientation to support this (Societal Marketing Concept). This makes sense because
many potential customers are influenced by the way in which business behaves.

A good example is the environment. Many consumers want to buy environmentally friendly
products and businesses that meet these requirements can be very successful. There are many
examples of this. Here are just a few that have been influenced by consumers.

 Reduction in packaging used for food products in supermarkets

 Use of sustainable materials in manufacturing processes
 Use of recycled materials in manufacturing
 Fuel efficient vehicles developed by car manufacturers
 Responsible disposal of waste

Many modern consumers are also concerned with the ethics of the business. For example, they
may not be willing to buy from firms who exploit low paid workers in third world countries.

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EFFICIENCY AND EFFECTIVENESS

An effective marketing strategy must be linked to all of the functions of the business. In fact,
they must be interdependent. A key reason for this is that all marketing efforts and activities
across the organisation align with its goals.

It is worth noting that efficient and effectiveness are not the same things. For example sending
letters to a thousand customers to tell them about a new product may be efficient but is not
effective if the wrong customers are targeted and it does not result in any sales.

One way of achieving effectiveness is to pay attention to the marketing mix. Originally there are
four elements to the marketing mix. These are commonly known as 4 Ps.

Product
Promotion
What are the features and apperance
of your product and how does it benefit How are customers informed about
your product?
potential customers?

The 4 Ps

Price
Place
How much will customers pay for your
where will you sell your product and
product and service and will it be
how will you get it to your customers?
profitable at this price?

THE SERVICE SECTOR

In recent years there has been a huge growth in the service sector which offers no tangible
products. This has led to three more elements being added to the marketing mix for service
products, giving 7 Ps in total:

Process: Are the systems for buying and selling the service efficient, effective and user-friendly?

Physical Evidence: As services are intangible products there needs to be some way of creating
and maintaining the desire of customers to buy the service. How will you do this? For example,
could you use regular newsletter, customer’s testimonials, etc.?

People: Your staff provides the service to your customers? Are they well motivated and trained
to do this well.

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LIMITATIONS OF THE MARKETING CONCEPT

Although there are many reasons to adopt the marketing concept it also has a number of
disadvantages that need to be considered. These include:

 Identifying the needs/wants of customers and this requires extensive market research.
 There can be delays bringing products to market because the marketing approach can be
expensive and time consuming.
 To avoid carrying out their own research and development competitors may copy your
products and undercut your costs.
 Consumer behaviour is not always consistent. This means that market research is not
always right by the product comes to market. This is a particular problem in markets
where trends and fashions are changeable.
 There is a danger of market research leading to a narrow focus and missed opportunities
as result.