You will learn the different ways an organization can focus their internal strengths. You will understand the five main differences between a sales and market orientation.
The Organization's Focus
Have you ever wondered why the smartphone company RIM (the makers of the Blackberry smartphone) fell out of popularity and why Apple's iPhone success has grown? The answer is in the difference between a sales- and marketing-oriented company. The main differences between a sales-oriented company and a marketing-oriented company have to do with their overall view of the marketplace. A sales-oriented company is very internally focused and looks to sell products that the company is successful at making. A marketing-oriented company is externally focused on the consumer's wants and needs. Companies such as Southwest, Disney and Amazon all look to solve a customer need with an idea, product or service. A marketing-oriented firm looks to create customer value.
Customer value is the relationship between benefits and the sacrifice needed to obtain those benefits. Customer value can be applied to a Rolex watch and a jar of peanut butter. Customer value does not imply that a product or service has to be of high quality; good customer value means that a consumer must be getting a product of a quality that they expect with a price that they are happy with paying.
Southwest, Disney, and Amazon are examples of marketing-oriented companies
Elements of Customer Value
Marketing-oriented companies can follow some basic rules in order to provide customer value. First of all, companies should offer products that perform to the customer's satisfaction. For example, when a customer purchases a new laptop the product should meet their expectations.
Next, a company must earn trust from their customers. Trust is usually obtained when the product or service performs as promised, and loyalty occurs. If every day a consumer goes to a restaurant for a 12-inch sandwich and leaves satisfied with the quality, size and price, then the consumer will return again and again. Loyalty occurs.
The third rule is that companies must not price their product or service unrealistically. For example, you wouldn't want to have a new iPad be $2,000 or a new smartphone cost $1,000.
Next, the company must give the buyers the complete set of facts and information about the product or service. They have to make sure that they explain what is included with the product. Consumers want information regarding what they are purchasing! If a company sells a product with incomplete directions or the packages show pieces not included that will cause discontent with the buyer, the end result is a very unhappy customer.
In addition, a company must offer significant overall corporate commitment to the marketing strategy. The airline company Southwest does not offer the best seats (most flyers do not find out where they are sitting until they are actually in the plane), but they are known for excellent customer service. The free checked bag policy doesn't hurt either!
Lastly, some companies excel with involving their customers in the creation or editing of their product or service. Social media and the Internet have allowed minute-by-minute feedback and also have allowed companies to utilize crowdsourcing. Crowdsourcing is when the consumer votes or offers feedback in the actual creation and development of a product or service. One great example is the t-shirt company called Threadless. Threadless asks for t-shirt designs from their actual customers. The customers then vote on the t-shirts and the ones receiving the highest vote are the t-shirts that actually go into production. This way, they have a product line that has already been voted and wanted by their customers.
The end result of an effective marketing orientation strategy is customer satisfaction. Customer satisfaction occurs when the good or service has met the customer's needs and expectations. Many companies make the mistake of trying to increase profits by cutting corners or through the examples of marketing orientation we mentioned above. The result is dissatisfaction, or when the product or service does NOT reach consumers' expectations. Netflix is a perfect example. They instituted a new pricing and product policy with unrealistic pricing and did not provide the buyers with facts. They lost numerous clients and market share to Redbox. Redbox offers movie rental kiosks at drug stores and supermarkets for only $1 a day.
In the last decade, marketing oriented firms have adopted a relationship marketing strategy for their consumers. Relationship marketing is a strategy that focuses on keeping and improving relationships with current customers. A company that utilizes this strategy very effectively would be Amazon. As you know, each time you purchase from Amazon, they actually follow up with an email suggesting alternative products that they think you will like.
Companies that have been able to cultivate relationship marketing train their personnel to be very customer-oriented. Personnel are trained to know that their customers are never wrong and must be given the ultimate respect and service. In order to provide a strategy that focuses on continuing to improve customer relations, companies must train, empower and create an environment of teamwork for their employees. Employees are empowered when they are treated as part owners of the business through compensation, training and ownership. When employees are well-trained they know what is expected and will take care of customers. The end result is a very happy employee and customer! Customers will keep coming back if they have a positive environment and helpful employees.
The main differences between a sales-oriented company and a marketing-oriented company have to do with their overall view of the marketplace. A sales-oriented company is very internally focused and looks to sell products that the company is successful at making. A marketing-oriented firm is externally focused on the consumer's wants and needs. Customer value is the relationship between benefits and the sacrifice needed to obtain those benefits. There are basic rules of providing customer value. The rules are that the company must offer corporate-wide commitment, give the buyers facts about the product or service, avoid unrealistic pricing, earn consumer trust and offer products that perform. Customer satisfaction occurs when the good or service has met the customer's needs and expectations. Finally, relationship marketing is a strategy that focuses on keeping and improving relationships with current customers. After all, 80% of a company's business usually comes from only 20% of their customers.