The key elements of marketing concept and marketing orientation
Traditionally, marketing played an important role in a commercial success of any company but nowadays marketing management acquires new characteristics and new trends progress rapidly. At this respect, marketing gets to be focused on customer s interests, or to put it more precisely, on customer s’ experience and habits and one of the main goals of different of not to say all the companies operating in the market is to attract possibly higher number of customer s and develop their experience and habits to certain brands, company’s products, etc. In such a situation, such notions as marketing orientation, or marketing concept, which are actually closely related to one another becomes not simply a theoretical assumption but rather important part of a company’s strategic planning and marketing.
Speaking about these two notions, it should be said that often they are treated as synonymous. Nonetheless, marketing orientation of companies may be briefly defined as “one that allows the wants and needs of customer s and potential customer s to drive all the firm’s strategic decisions” (Viardot 2001, p.125). As for the marketing concept it is rather assumption concerning the practical implementation of marketing strategy. It should be pointed out that it can be done with the help of marketing since according to marketing concept it is customer who is in the focus of attention of a company’s marketing and management. This is why it is necessarily to briefly define the notion of customer experience, which actually may have different interpretations Nonetheless it is quite possible to single out some universal interpretation of the notion of marketing. For instance, the definition given by B. Schmitt may be treated as a universal one. So, according to him Marketing is “the process of strategically managing a customer’s entire experience with a product or a company” (Schmitt 2003, p.17).
At the same time, it is necessary to mention that the marketing concept is very important for companies since “the firm’s corporate culture is systemically committed to creating customer value” (Blanchard& Bowles 1993, p.255), consequently, it is a part of the traditional corporative culture to apply the marketing concept.
It is obvious that in the marketing concept it is especially important to manage a customer’s experience with a brand and it would permit to achieve a truly management concept focused on the customer. This needs a clear understanding of goals that have to be achieved and consequently it is necessary to define them and constantly work on their achievement.
Traditionally several, namely five, steps are singled out and these steps are considered to be essential for managers since they should help them to understand and manage the customer experience.
The first step is analyzing the experiential world of the customer. This step implies the analysis of socio-cultural context of the customer. It means that it is necessary to analyze the customer’s needs, wishes, habits, and lifestyle in general. Also the manager has to analyze concept that includes current requirements and possible solutions.
The second step is building the experiential platform. At this point it is necessary to take into consideration such fact as the connection between strategy and implementation, which specifies the value that the customer can expect from the product. In literature it is traditionally called EVP, i.e. experiential promise value.
It should be underlined that the first two steps mentioned above form the basis for Marketing while the following three steps are rather focused on its implementation in practice.
So, the third step is designing the brand experience. This step implies the development of the brand experiential features, product aesthetics, a so-called ‘look and feel’. An example of such experiential features may be logos. It is obviously a very important step since it is extremely significant for the prospective development of the brand and its promotion in the market.
The fourth step includes the structuring of the customer interface. What is meant here is the development of all sorts of “dynamic exchanges, and contract points with customer s intangible elements, among which may be emphasized such elements as customer’s values, attitude, behavior and others” (Newel 2001, p.104).
The final, the fifth step, is traditionally defined as engaging in continuous experiential innovation. Obviously this step is oriented on a long-term prospective relations between the customer and the company and its basic aim is to improve customers’ personal lives and customers’ working lives, or at least it is necessary to make customer s to feel like their lives are changing for better if they buy the company’s product or service.
Finally it should be said that it is impossible to use all five elements separately, on the contrary, it is vitally important for the general success of the company, and it is probably the cornerstone of the Marketing, that all five elements were combined and supported each other since all of them are really essential. At this respect it may be said that, to bring all five pieces together, “a holistic approach is required that provides a linkage between the different steps and connects them with the organization” (Schmitt and Simonson 1997, p.254). Thus, effective customer experience and consequently marketing concept, being oriented on customers as the definition of marketing orientation reads, imply not only the knowledge of objectives but also the five steps, which, in combination, would lead to the achievement of these goals.
The relevance of the marketing concept nowadays
It is obvious that marketing concept is not new and often it is criticized, especially for its focusing on customers, their experience and habits. Nonetheless, it is still possible to estimate that this concept may be applied and is applied nowadays because the role of customers is still very important. At first glance, one may estimate that there is a number of companies that possesses brands recognizable throughout the world and they do not need any additional development of their market position, or promote their marketing in order to realize the basic principles of marketing concept. But in actuality, customers are to a significant extent unpredictable if “their experience and preferences are not learned and not regulated by the companies by means of proper market and management policy” (Pine and Gilmore 1997, p.240).
Nonetheless, in order to state that marketing concept is still relevant it is necessarily briefly dwell upon main points which demonstrate its positive aspects that make it still applicable in the contemporary market situation.
First of all, it is necessary to realize that the existing marketing model is not perfect too and marketing concept focused on customers’ experience and preferences modifies it to a certain extent and probably, under certain circumstances, improves it especially if it is used effectively.
So, marketing concept, taken at large has started to be discussed over and over again. Since the 1970s there has been a gradual shift from a product-, technology- and sales-focused orientation toward a customer – and market-oriented approach by “determining the wants and needs of customers and satisfying them more efficiently or effectively as compared to competitors” (Hesselbein et al 1997, p.177). In other words, the role of customers and their needs, inclinations and finally habits eventually has become extremely important and, in perspective, it could define the future of the marketing and management development. Consequently, marketing concept was suggested as more perspective approach and more customer-oriented one.
However, the approach is still functional, with similarities and differences between the competitors being defined mostly by product features and customer benefits. In addition, the customer is perceived as being rational, which is traditionally not a case, as some of the theories have proven, for instance, Kahneman and Tversky’s Prospect theory.
Also, it is supposed that the market research is mostly analytical leaving little room for qualitative assessment of customer relationships toward products, services or brands. Some specialists, including Shultz, estimate that “traditional marketing, in practice, takes an inside-out approach (starting with internal variables like production capabilities and available capital than moving to external variables like customer needs), rather than taking an outside-in approach as marketing theory requires” (Pine and Gilmore 1999, p.238).
Furthermore, a customer is said to be satisfied when a product’s performance is above the customer’s expectations. Thus, traditional “customer satisfaction techniques are deficient if they do not help companies to understand and manage customers’ experiences” (Hesselbein et al 1997, p.91) that naturally “lead to the following equation: good experience = satisfaction” (Hesselbein et al 1996, p.365).
Furthermore, the marketing concept is still very important. It is very important that it stresses four aspects of marketing management.
Firstly, it is the fact that the marketing concept focuses on all sorts of customer related issues. Secondly, it is analytical and creative that provides its high effectiveness since on the basis of careful and thorough analysis managers are supposed to build a structure engendered by their creative abilities in such a way the more gifted, or creative a manager is the more effective his/her work would be that is particularly important in the age of great technological and informational progress.
Also, the concept takes into consideration both, strategy and implementation. Consequently, it is possible to say that it is not simply a theoretical or strategic management that defines the general policy of a company. It is obviously more important since it is, being strategically important, is practically implemented that means that has a direct and it is even possible to say quite effect. For instance, the marketing concept-oriented on customers may provide the combination of strategic goals and their practical achievement as essential components of the company’s policy.
Finally, the fourth aspect that is quite important is the basic principle of the marketing concept. This principle is the realization of the idea that, on focusing on customers, it is necessary to operate both internally and externally. Consequently, it influences not only customers but the company as well. As a result, the effect of the concept turns to be dubious or it would be better to say mutual and it proportionally influences both sides this is why if the effect is positive normally it is positive for the customers and the company, or vice versa.
At this respect, it is necessary to underline the role of the Marketing which, being one of the main means of realization of the concept, influences or even changes the basic principles of marketing, it also influences other branches of marketing and management. In fact, it is impossible to speak about Marketing as absolutely independent branch separated from all the others. Such idea is obviously erroneous because it involves other branches and some specialists even estimate that “it appears as if Marketing might be following Customer Relationship Management as one of the leading concepts for the years to come” (Schmitt 2001, p.201). Despite the fact that this statement sounds a bit too optimistic, it is quite reasonable regardless the criticism that often is directed against such attitude to Marketing and considers it as not so important and prospective as one might think. But still, its role and importance, as a part of the general market concept, in contemporary market are undeniable.
It is necessary to underline that marketers estimate that “becoming marketing oriented, if done correctly, will provide the company with a sustainable competitive advantage” (Cooper 2000, p. 277).
Some examples and statistic may be used as other arguments in favor of marketing concept focused on customers. Recent marketing research has shown that about 70 to 80% of all products are perceived as commodities, that is seen as being more or less the same as competing products. Naturally, this makes marketing the product extremely difficult. This is why marketers have taken various approaches to this problem. Among them were used such approaches as branding product differentiation, market segmentation, relationship marketing and some others. Remarkably, the attention to customer experience has turned to be one of the most effective tools especially for the companies that just started their business.
In such a situation the importance of customer experience and the marketing concept is obvious because along with other methods and approaches it may have a positive influence on the development of company-customer relations. Moreover, such a marketing policy gradually involves customers in a sort of dependence on the company’s brand, products or services.
However, it is the general role of the marketing concept, but speaking in details, it is necessary to underline its role in the aspect of marketing from the point of view of four aspects of marketing management mentioned above, namely: its linkage to customer related issues, the combination of the analytical and the creative, as well as the combination of strategy and implementation, and its internal and external impact.
Regarding this aspect of marketing management it is possible to make a clear conclusion about the significance of the marketing concept for marketing at large and for the aspects just listed above in particular, because its first concern is undoubtedly customers, their attitude to the company, its brand, products and services and what is probably more important it is the research of customers’ experience and further corresponding development of relations between company and customers.
Also, it is possible to find out some more advantages of implementation of the marketing concept. Notably, some specialists estimate that “the more a company understands and meets the real needs of its consumers, the more likely it is to have happy customers who come back for more and tell friends” (Cooper 2000, p.327). In such a way, it can produce a positive impact on the company’s image and brand popularity. Though it is necessary to remember that this process “can entail the fostering of long-term relationships with customers” (Cooper 2000, p.354) that naturally contributes to customer’s experience and faithfulness to a definite company or brand.
Finally, the implementation of the marketing concept makes the company and its employees, working in this direction, progress since it provokes their analytical and creative abilities, provides an implementation of strategic decisions in practical life.
The recent economic trends and its impact on implementation of marketing at different organizations
Speaking about the recent trends in the economy, it is necessary to point out that they affect dramatically marketing and the marketing concept. From the beginning, it should be pointed out that marketing and the marketing concept are limited and they cannot overcome marketing borders while the contemporary economy shows its susceptibility from the influence of other factors that define the economic life of the whole world and particular countries in recent years.
So, first of all, it should be said that, as it has been just mentioned above, recent economic trends tend to overcome marketing borders and moreover it seems as if it interferes in other spheres of life. What is meant here is the fact that, being based on customers experience, the marketing concept is focused on customers needs, wants, habits, etc. However, customer experience may be treated in a wider sense and, as a result, it may be formed by “factors which are not related to some economic conditions or the current situation in the market” (Schein 1999, p.216).
Probably some explanations are needed here. In fact, it is simply necessary to realize that there may be economic or market factors shaping customers needs and experience at large but there are also so to say external factors that derive from other spheres of life, for instance, cultural or political. There may be found a variety of such factors, for instance, cultural traditions of some communities may limit their consumption. Consequently, the company that is “out of the limits would be unable to develop a desirable customer experience” (Newel 2001, p.304) the only thing it would be possible to do is “to assess the market and its perspectives” (Newel 2001, p.305). If a food industry and food consumption were taken in terms of example it would be possible to say that for some cultures there are some limitation on consumption of certain types of food, for instance, Jewish community, which members cannot eat any food forbidden by their religious laws. Naturally, they do not have any experience in consumption of any sort food and they would hardly develop it if only they do not change their lifestyle at large.
It is also possible to speak about political aspect as a factor influencing the development of Marketing and overcoming borders of the marketing aspect. For instance, political conflicts may influence the situation in the market because some quotas or embargos may be implemented in relation to some products or services of some countries. As a result, the companies operating in such countries would hardly be able to work in the markets ‘closed’ for their products or services and naturally even perfect marketing would be of no use since as a rule in such a situation there is practically “total lack of the experience of consumption” (Howard 2000, p.146). An example of such country may be Iraq which used to suffer from international sanctions and many companies which could and really wanted to operate in this market have failed to do it because of economic sanctions which made the local population inexperienced in the consumption of the products and services suggested by these companies because did not have practically contacts with customers. So, there was neither experience nor perspective of its development that means that in such a country marketing focused on customer experience would have a limited, if not to say no effect.
Thus, it is obvious that approaches oriented on customers have their limitations related to the marketing aspect, which in fact may be the result of external, i.e. not economic, factors but influencing the situation in the market at large.
Despite the relative popularity of the marketing concept, it is still quite arguable whether it is good or bad or more precisely whether it has more advantages than disadvantages. This is why it is necessary to analyze its positive and negative sides and find out what are the pros and contras of Marketing and only after that it would be possible to make some concrete conclusions.
Basically, primary advantages of the marketing concept have been already mentioned now it is necessary only summarize and critically evaluate them. Ideally, marketing has to analyze firstly customer experience, needs and wants. So the customer’s interests seem to be the primary concern of marketing but, unfortunately, in actuality, the only real reason the most of the companies are so concerned about their customers is their own well being since it is the customers the companies are interested in but not their needs and wants. Viewed from this angle the marketing concept is not so good as one may believe because it turns to be quite pragmatic and cruel in a way since the companies’ focus on customers is “the result of the current situations in the market” (Howard 2000, p.293) because, otherwise, the company that does not care about its customer s experience would probably fail to succeed.
Furthermore, it is obviously positive fact that marketing aims at “the development of companies brand, based on high quality and reliability and the formation of stable interests of customer s to this brand and its products and services” (Mohrman 1998, p.250). But it is also necessary to realize that such ‘brand-addiction’ is crucial for new companies which just start their business and have problems with the promotion of their own brands and the more developed Marketing is the more difficult the position of new companies will be because even nowadays brand is one of the most important contributors to the company’s image and value.
Also, it should be pointed out that the fact that marketing concept reformulated some basic economic principles is treated by many specialists as a “pro” of this concept. And really it is very hard to argue that the focus on customer related issues, a combination of the analytical and the creative, strategy and implementation, both external and internal effect are not advantages of the marketing concept. However, on the other hand, it is also important to realize that certain negation of other approaches can have a rather negative effect because they are also very important, for instance, customer relationship management or the concept of customer satisfaction.
Thus, it is obvious that the marketing concept, having a number of positive features, can face a strong opposition of those who are against such a revolution in marketing since other concepts that were used before were and obviously remain quite effective. As a result it is possible to say that marketing is a dubious phenomenon, on the one hand, it has a lot of supporters who believe in its effectiveness and they really have their reasons, on the other hand, there are a lot of those who are against it because it is probably too innovative and revolutionizing and speaking objectively it is to a certain extent too focused on customers’ needs and experience that sometimes it is difficult to be applied in marketing aspect only and hypothetically it may “undergo a shift into socio-cultural sphere” (Schein 1999, p.269), rather than economic one.
On analyzing a theoretical aspect of the marketing, it would be logical to draw some examples of the companies which use it in their practice in the context of the recent economic trends. The marketing concept is quite popular and widely used but still, it is not a one hundred percent guarantee of commercial success but, on the other hand, made a significant progress due to the use of the marketing concept.
One of such companies is Jamba Juice. In fact, this company is particularly successful in experiential positioning. Jamba Juice has managed to create a positive image and developed its brand due to a wise promotion and positioning. In the current situation, its “ideology of fun and health experience could not fail to succeed” (Mohrman 1998, p.392), especially in developed countries where the problem of health becomes probably the most important.
Another example of successful implementation of the marketing concept-oriented on customers is Red Bull. The company also is extremely successful in its experiential positioning and has gained the world recognition. The motto ‘Energy in the bottle’ has eventually become a very effective and stimulating customer s to consume the company’s products that naturally led to the development of customer habits, experience, and tolerance to the brand and made Red Bull quite popular in many countries of the world.
The examples described above may serve as a good illustration of the rational and effective implementation of the marketing concept, but still, it is necessary to remember that it is the company that defines its future but not the methods it uses only. Anyway, it is obvious that the marketing concept is still relevant and marketing at large is still a very important part and essential condition of the commercial success of any company.
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