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International Marketing Orientation of Firms


International Marketing Orientation of Firms

A company’s orientation towards the market:

A company can have one of the following five types of orientations towards its markets;

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 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

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 sho9w buyi8ng 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
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.
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
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.

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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 longrun
interests of consumers and society?
The marketing concept possibly sidesteps the potential conflicts among consumer wants,
consumer interests, and long-run societal welfare. Just consider:
The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high fat
content, and the restaurants promote fries and pies, two products high in starch and fat. The products
are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these
restaurants may be hurting consumer health and causing environmental problems.

Some examples of the ‘marketing concept’:

The marketing concept has been expressed in many colorful ways:
“Meeting needs profitably.”
“Find wants and fill them.”
“Love the customers, not the product.”
“Have it your way.” (Burger King)
“You are the boss.” (United Airlines)
“Putting people first.” (British Airways)
“Partners for profit.” (Milliken Company)
“Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied
with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of
the customers by means of the product and the whole cluster of things associated with creating,
delivering and finally consuming it”

The international marketing concept rests on four pillars:

target market (The potential customers)
customer needs
integrated marketing (Approaching customers through product offers, marketing communication,
distribution and pricing)

Types of customer needs:

Although marketing is about meeting needs profitably, understanding customer needs and wants is not
always a simple task. Some customers have needs of which they are not fully conscious. Or they cannot
articulate these needs. Or they use words that require more interpretation
Consider the customer who says he wants an “inexpensive car. The marketer must probe further. Five
types of needs can be identified:
Stated needs (the customer wants an inexpensive car)

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Real needs (the customer wants a car whose operating cost, not its initial price, is low)
Unstated needs (the customer expects good service from the dealer)
Delight needs (the customer buys the car and receives a complimentary gift)
Secret needs (the customer wants to be seen by friends as a value-oriented savvy consumer)

Importance of customer retention:

Attracting a new customer can cost much more than pleasing an existing customer - it may cost even
much more to bring an existing customer to the same level of profitability as the lost customer -
customer retention is thus more important than customer attraction.
The key to customer retention is customer satisfaction. A highly satisfied customer:
– Stays loyal longer
– Buys more as the company introduces new products and upgrades existing products
– Talks favorably about the company and its products
– Pays less attention to competing brands and advertising and is less sensitive to price
– Offers product/service idea to the company
– Costs less to serve than new customers because transactions are routinized

International marketing value chain:

‘Value Chain’ is tool for identifying ways to create more customer value. Every firm is a collection of
activities that are performed to design, produce, market, deliver, and support its products. Just like a
metal chain, the strength of a business value chain is the strength of its weakest link. In order to improve
the delivery of final customer value, the business value chain needs to first improve its weakest links
The business value chain identifies nine strategically relevant activities that create value and cost in
specific business:
• Primary activities (through which a product / services passes during various stages of
manufacturing and delivery)
– Inbound logistics
– Operations
– Outbound logistics
– Marketing and sales
– Service
• Support activities (that are not directly involved in manufacturing and delivery of a product or
service, but support such activities)
– Firm infrastructure
– Human resource management
– Technology development
– Procurement

Five different levels of company investment in customer-relationship building:

The customer-relationship building is a process involved in attracting and keeping customers involves.
The objective is to move the customer from just a suspect (in terms of a potential to become a buyer) to
an advocate for other for the company and its brands. The various stages of customer loyalty are in the

– Suspects -- prospects -- first-time customers -- repeat customers -- advocates
A company can opt to adopt a simple selling orientation towards its customers or may work to develop
an active partnership with them. The five different levels of a company’s investment in customer
relationship building are;
– Basic marketing
• Simply selling
– Reactive marketing
• In addition to selling encourage the customer to contact for any question, comments,
– Accountable marketing
• After-sales calls to check if the customer is satisfied
– Proactive marketing
• Contact customer from time to time to seek inputs for future improvements in products
– Partnership marketing
• Work continuously with customers to discover ways to effect customer savings or help the
customer perform better
A customer that becomes a partner with a firm buys more of the firm’s products, the transaction and
advertising cots are lower, becomes forgiving, gives higher profits margins and also advocates others to
buy the firm’s products.

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