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From the production line to personalization. Marketing management orientations

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The word “marketing” is misunderstood and stereotyped by most people. Typically, the role of marketing comes down to sales support only. Properly understood marketing is much more – it is a philosophy of running a business.

The word “marketing” is misunderstood and stereotyped by most people (and often even by marketers themselves). Usually, the role of marketing is limited only to sales support and treats the term itself as a synonym for promotion and advertising. Meanwhile, properly understood marketing is much more – it is a philosophy of running a business in a particular way where the needs and expectations of customers are met in the very center. 

Marketing in modern terms is to meet customers’ needs in a profitable way for the company. Of course, this approach has not always been – and has not always been – the only possible approach. Hence, it is said about different orientations of marketing management.

What are Marketing Management Orientations?

To explain the difference between marketing management orientations, it is necessary to refer not so much to management theory as to the history of running a business. As trade markets have developed over the centuries, the possibilities of producing goods and participating in trade, the approach to business has changed as well. The turning point was certainly the nineteenth century and the great industrial revolution – the fundamental change was the possibility of launching production on a mass scale. And in fact, from that moment on, we can talk about marketing management orientations.

Orientation is, in other words, a general approach, a philosophy, a certain set of assumptions (or to use scientific terminology – a paradigm) about how a business should be run.

Over the last two centuries, four such orientations have developed successively: production, product, sales, and marketing. Nowadays, there is also a fifth one – the orientation of social marketing. Each of them is a sign of their times, pointing to what at that time had a key value for building a competitive advantage.

Production orientation

Product orientation was developed at the earliest. This approach is the “child” of the industrial revolution, as the key assumption here is that buyers value affordable and affordable goods the most.

Thus, the philosophy of operation was simple: it was necessary to produce a lot and cheaply. In unsaturated markets, such a strategy was enough to get a competitive advantage – the main goal was to create the product because finding buyers was not a problem at all. Thus, entrepreneurs invested in factories that produced goods on a mass scale. The more, the better. 

A flagship example of such an approach is the production line at the Ford factory, on which the legendary T model was mass-produced. As Henry Ford himself used to say, buyers could buy it in any color, as long as it was black – and the saying itself perfectly illustrates the orientation. Management, where the key was precisely the efficiency of production, not customer preferences.

While the manufacturing orientation is considered outdated today, there are still markets and situations where this approach can work – such as for Chinese factories that produce high and cheaply, thus attracting buyers worldwide. This strategy is also used by brands such as Lenovo and Haier in the local Chinese market, which is very price-sensitive.

Product orientation

As markets became saturated and consumers’ purchasing power grew, producers increasingly strived to differentiate their goods from their competitors.

The basic premise of product orientation is: customers will choose products that are of a higher quality.

The aim of the entrepreneurs has therefore become to improve the offered goods. Here, as an example, we can mention car manufacturers who constantly enrich the offered cars (not only in black) with new features and innovative functionalities.

The heyday of product orientation is also the moment when brands began to develop. The brand as a trademark and a certain set of features was to mark the products of a given manufacturer and distinguish them from the products of the competition.

At this point, the Łaciate brand can be used as an example. In International SEO Agency, in the early 1990s, the products of various producers on the commodity market were not marked in any characteristic way, i.e., sugar was simply sugar, and milk was milk. The breakthrough came in 1995 when the first milk brand on our market was created – it was Łaciate. And although many people did not believe that it was possible to create a brand for this type of product, the strategy adopted at that time by the Mlekpol Dairy Cooperative in Grajewo turned out to be a bull’s eye. Today, after more than two decades, Łaciate is one of the top dairy brands on the International user market, and it isn’t easy to find milk without its name and brand on the shelves in stores.

Sales orientation

Mass sales and wide promotion are the two basic pillars of another management orientation: sales orientation. It is based on the assumption that the greatest effort should be put into sales and promotional activities. Otherwise, buyers will not buy the appropriate (i.e., meeting our business expectations) quantity of products.

Still following the example of car manufacturers, the product approach could, of course, be effective, but only to a certain extent. First, product innovations are fairly easily copied by competitors and provide a competitive advantage only for the short term. Secondly – only theoretically can you improve the product endlessly. In practice, it is tough, and only some of the new features or functionalities are important for customers.

The consequence of the self-propelled spiral of continuous improvement is the loss of customers who, at some point, are not able to judge for themselves which product is better.

Entrepreneurs “help” them in making decisions by intensifying sales and promotional activities.

This type of approach is often used in ‘invisible’ goods and services, that is, goods and services that we rarely use, only when needed. An example given in textbooks is most often the services of… funeral homes. Usually, in such situations, we choose those suppliers who are easily available in terms of distribution location and promotional.

Marketing orientation – idea and assumptions

The marketing orientation is the most advanced in terms of evolution. The use of each of the previous approaches is associated with encountering barriers that prevent the further development of the company. Production orientation works as long as the markets are insatiable. Product orientation – as long as we can noticeably differentiate competing products from the customer. On the other hand, sales orientation is focused on single transactions, so it is associated with a constant struggle for a new customer while completely ignoring the benefits that may result from building long-term relationships with buyers.

The answer to these problems is marketing orientation, also known as customer orientation. Its basic assumption is to thoroughly understand customers’ needs and satisfy them in a profitable way for the company. Here, the way of thinking is completely reversed – it is not about finding buyers for the goods we produce. Still, about finding ways (products or services) that will effectively meet buyers’ expectations. Looking at the market from the company’s internal perspective changes to the customer’s point of view, which the company must adapt to survive.

The marketing orientation, which is undoubtedly the most commonly used today, puts the customer and his needs at the center. Business goals of enterprises can only be achieved when a given company can thoroughly understand buyers’ expectations and respond to them better than the competition.    

A marketing orientation has become the foundation for many classic marketing concepts today, such as segmentation, targeting and search engine optimization, or designing value propositions. Based on this approach, many powerful trends have developed, such as affiliate (relationship) marketing or marketing based on customer experience.

Marketing orientation – practical application

A customer-centric approach, of course, means much more than just meeting customer expectations. Many of the consumers’ needs are unaware, not to mention innovative solutions that people do not know – so they cannot know if they need them. Hence, the flourishing of marketing orientation contributed to the dynamic development of ​​marketing research – from quantitative market research to qualitative methods such as focus groups, in-depth individual interviews, or observational and ethnographic research. Their goal is to constantly discover insights, i.e., real motives of consumer behavior, which often turns out to be the key to its success. Insight allows me to enter the client’s world and understand his needs and everyday problems, limitations, or the context in which the consumer operates. Therefore, the ability to look at problems from the customer’s point of view becomes a source of business opportunities.

Of course, customer insight is only one side of the coin. Satisfying customers is a way to achieve the goal, but after all, every company must make money. Hence, customer needs must be met in a way that is profitable for the organization. This, in turn, requires designing the business model so that the exchange of value between the seller and the buyer takes place to the benefit of both parties. The customer must feel that the products they receive are worth the money they paid for them. The company must generate enough revenue for the value it offers to customers to make the business profitable.

A very topical example is multilateral platforms – a model prevalent in the digital age. For example, platforms for posting and searching advertisements about buying and renting real estate. Putting customers at the center, in this case, means focusing on two groups – two sides of the exchange: the clients who advertise and the clients looking for real estate. For the first group, the value will be the ability to reach the widest possible base of potential customers and the opportunity to present their offer attractively. For the latter – the largest possible number of ads from which they will be able to choose and extensive possibilities to facilitate searching and filtering offers. Therefore, platforms of this type must simultaneously ensure that the needs of both sides of the exchange are met because the outflow of users from one group can automatically lead to a decrease in the value for the other group. At the same time, the business model must define how the platform itself is to earn – will the costs be borne by both sides of the exchange, or maybe just one? Or maybe the source of income should be located elsewhere?

Putting the customer in the center is an unquestionable assumption in modern business. It is known that this is the only way to gain a competitive advantage in the long run. However, the example above shows that – although this is the dominant approach today – designing a customer-oriented business is a demanding and not easy task.

Social Marketing Orientation

There is more and more talk about the next fifth orientation in marketing management. We witness its development today – in times of many social and environmental crises and when consumers are becoming more and more aware.

The fifth approach is social marketing orientation. This is the development of a marketing orientation. The essence is still generating the company’s profit based on satisfying the needs of customers. Still, additionally, it should be done in a way that takes into account the common good. Although it may seem like an idealistic pipe dream, the importance of brands that run their business in a socially responsible manner has clearly been seen to grow in recent years. More and more often, this aspect also determines the competitive advantage of the company.

Conscious consumers choose food with a good composition, products from sustainable crops, reward organic brands that minimize their negative impact on the environment, or boycott those whose business is based on exploitation or child labor.

These clear trends mean that businesses must also increasingly take into account the common good. In the face of global problems such as the climate crisis, the lack of a broad vision can be deadly for companies. If business today is not seriously committed to tackling the negative effects of the greenhouse effect, its future profits will be seriously jeopardized – in a world where water and food may become scarce, and many landscapes become uninhabitable. Other global problems, such as the coronavirus pandemic, have also shown how connected we are in the world today. Downtime in a Chinese or Indian component factory means that a European citizen cannot buy a bicycle. The consequences go far beyond the fact that someone in Prague or Singapore will not have a new two-wheeler. Workers in factories are fired, and bicycle brands and shops have nothing to sell. Everyone is losing. Today’s global economy is a connected vessel, so adopting a social marketing orientation is not only a matter of ethics but is becoming a business imperative.

summary

  • Marketing management orientations are different approaches to running a business. They evolved in parallel with the development of the world economy.
  • The first orientation is the production orientation. It was born during the industrial revolution. This approach works well in insatiable markets where efficient production is the key to success.
  • Another orientation that has developed over the course of history is product orientation. As markets became saturated, a need arose to differentiate goods from different manufacturers. They began to improve their products, assuming that customers would choose those of higher quality.
  • The third approach is sales orientation. In a situation where it became more and more difficult to distinguish products through unique and important features for customers, manufacturers began to focus on intensive sales and promotion.
  • The most commonly used approach today is marketing orientation, which puts the customer and his needs at the center. The aim of enterprises is to meet these needs better than the competition and thus ensure a profit. Marketing orientation reverses the perspective – the point is not to look for buyers for the manufactured goods, but to create the value expected by customers.
  • Although marketing orientation has dominated modern business, it does not mean that previous orientations do not exist – they can still be effective under certain market conditions.
  • Nowadays, more and more often is said about the fifth orientation – the orientation of social marketing. Its essence is to generate profits not only by satisfying customers’ needs, but also in a socially responsible manner. Activities for the common good are increasingly becoming the interest of companies – for example in the context of counteracting climate change.

Summary

Marketing orientations are not only pure management theory. It is a certain attitude, a way of looking at the world and business. It is worth being aware of the conditions in which a given approach can be effective and what consequences its application has. Certainly, the earliest developed orientations – production, product, and sales – are quite short-sighted for today’s market realities. Therefore, adopting an attitude resulting from marketing orientation – customer orientation – is today widely regarded as the foundation of building a competitive advantage. It is possible, however, that it will not be enough in a moment. And to ensure future profits for your company, in addition to customer needs, you will also need to take into account the broadly understood social interest.


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