Page 29 - Marketing the Basics 2nd

Marketing as a corporate Function 21
THE SELLING CONCEPT
Companies operating with the selling concept believe unless there is large-scale effort promoting a product, customers will not buy a sufficient volume to achieve a desired level of profitability. Most firms resort to the selling concept when they have a surplus in their inventory and they need to dump their product on the market. An unfortunate consequence of this approach is that it assumed that all that is required to make a sale is to execute a marketing campaign; the customer doesn’t have to like the product. Research has shown that companies with short-term orientations are not as profitable as those that seek to build long-term relationships by continually satisfying with a mindset to satisfy customer needs. Worse still, while the average satisfied customer tells three others about good experiences, the average dissatisfied customer tells ten others about a negative experience. Market forces eventually eliminate the ‘sell now before they figure it out’ companies.
THE MARKETING CONCEPT
The marketing concept holds that companies must determine the needs of their consumers, and offer products in a more efficient and superior manner than the competition. To employ effectively the marketing concept, there must be a well-defined market already in existence and the needs of the customer must be well defined. All operations of the business are directed to creating and delivering the desired product to the target market. The marketing approach creates a symbiotic relationship between consumers and suppliers, where businesses tie their survival to their customers, and their customers are bound to the company to satisfy their needs. Loyalty and trust form the basis of the relationship.
When the market is ill defined or the customer is unsure of what their needs are, a situation arising from a lack of understanding of a technology’s potential, the firm must take the lead in the relationship by offering products they think the customer needs. Once the product is introduced, a market will emerge, and in turn reveal the customer’s true needs. In this type of market, customer and producer engage in a practice called co-creation. Customer feedback directly influences the evolution of the product as it