mim1 week one - concept & stages.ppt

7/30/2019 MIM1 week one - concept & stages.ppt

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Music Industry Marketing 1The Marketing Concept and the 3 stages of

Marketing

Music Industry Marketing 1 (DJ2P 34) 1


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Marketing concept is:the philosophy that an organisation should try

to provide products that satisfy customers'

needs through a co-ordinated set of activitiesthat also allows the organisation to achieve its

goals.

2Music Industry Marketing 1 (DJ2P 34)


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How is it done? Companies that research their customers needs &

wants and respond to this data to offer better

products and / or services are said to be marketingoriented.

Ultimately these companies will undertake a series of

marketing research process in order to gain a

competitive advantage over their rivals in the

marketplace. This is The Marketing Concept.



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Product Orientation (stage 1)The Industrial Revolution began in the mid -18th century

fuelled by steam technology and the development of the

railways, electricity, scientific management principlesand the division of labour, automation and factory

processes.



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A limited form of mass production was possible for thefirst time.

This was an age of inventors, engineers and innovativeproduction processes.

It was also a time when the levels of goods demandedexceeded their supply.

The consumers were those who had moved to the newtowns and cities looking for employment in the new millsand factories.

It was commercially possible for manufacturers toconcentrate first and foremost on increasing production

and doing so as efficiently as possible, making more to sellat low prices.

Firms relied on selling whatever they could manufacture.



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Cities & towns began to expand.

Greenock had been a small fishing village but with the

transatlantic trade in goods arriving in the newly built

harbours factories and mills soon flourished

manufacturing goods such as: Shipbuilding

Paper

Pottery

Glass

Barrel making

Sugar refining



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As a strategy, a purely production-orientation can be successfulduring periods of shortage and/or limited competition. It can workonly if the company is so technically advanced that customers have to

buy from them or not at all, or where the aim is to produce at thelowest possible cost.

So the production-oriented period is characterised as an era wheredemand outstripped supply.

Companies aimed to benefit from the economies of scale thatresulted from buying raw materials and component parts in bulkquantities and using the new mechanised processes to keep labourcosts down.

he company bosses themselves could afford to ignore those people

who did not want what they made; the level of demand for mostgoods was so high that they knew that someone would buy.

The attitude that prevailed at the time can be summed up as a Takeit or leave it! approach to business.



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The period dominated by a Production

Orientation focused on: manufacturing processes

supply arrangements

maintaining low unit costs achieving productivity

profit through volume

It de-emphasised:

customer needs

market requirements



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The Production Orientation stage,dominated by a focus on

production, lasted until around the1930s in Britain.



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Sales Orientation

Improvements in mass production technology meant that an evengreater range of products (from cars to household equipment) could

be produced relatively cheaply, but by an increasing number of

competing suppliers.

Eventually supply began to match and exceed demand, as thenumber of manufacturers grew. The Great Depression of the 1930s

did not help; money was very scarce and demand needed to be

fuelled by a more active approach. Selling activities proliferated.

When production levels overtook demand, there was a change of

emphasis towards sales. Promotional effort was marshalled to move

the goods that the factories were making. Products were to be

pushed in the marketplace, using a Hard Sell approach.



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Arguably, for the first time, customers were being offered a real

choice in the marketplace. Production levels in many sectors

continued to exceed sales. At the same time, consumers

themselves were wealthier and more knowledgeable about the

products they wanted, and they exercised the power that this

choice gave them.

There was an increasing need to employ salespeople who

would move the volume necessary to retain production

efficiencies.

These salespeople in their turn were heavyweights,

concentrating on selling rather than on discovering what

people were prepared to buy. Companies spent huge amounts

of money in an often failed attempt to hold onto sales levels.



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This was the time in commercial history when thecommercial traveller and sales representatives

emerged - many of them unscrupulous. They werepeople paid on a commission basis, designed to getresults in the form of sales at any cost!

The variety of Hard Sell methods used included anassortment of financial incentives to increase saleslevels, discounting, money-off offers, aggressive(sometimes fraudulent) sales techniques, and theemergence of credit arrangements to spread the cost

of purchasing. Advertising was widespread.

The dogma of this period can be summarised in thephrase: Sell what you can make!



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This era saw the early development of many of the

marketing functions - advertising, promotion, and selling -

while not embracing the marketing concept itself.

The development of these functions can largely be

attributed to the fact that consumers did not value the

products on offer and were not prepared to commit tothem in the longer term.

Sales-oriented techniques were (and still are to an extent)

used extensively in the sale of one-off purchases such as

encyclopaedias and insurance; their purpose in such casesis to break down the clients resistance and most

consumers are naturally wary of such practices.



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Marketing Orientation

Following on from the 1960s, we again saw a shift in emphasis

The overall aim of all companies has remained the same: to

make profit and to increase that profitability over time.

But in this final evolutionary stage, companies began torecognise that it is seldom possible to maximise profit and

volume simultaneously.

The 1960s were characterised as a time of higher standards of

living than ever before, higher levels of income, spendingpower, and consumption. In the 1960s, with the advent of more

and more luxury goods, and greater levels of competing

companies vying to supply them, the American principles of

marketing reached Britain.14Music Industry Marketing 1 (DJ2P 34)


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They began to accept that it made sense to first of all

determine what customers wanted.

Production could then be geared up to produce goods for

which there was a demand, rather than waste time and

money in producing goods without reference to

customers, or spend scarce resources trying to persuadethem against their will that they should buy.

A more sophisticated approach to managing the exchange

process had arrived! It was one which recognised that,

although price is an important determinant of demand formany products, it is seldom the only one and often not the

most important.



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Consumers had grown up.

Manufacturers relied on retailers to sell their goods for them,

resulting in long chains of distribution which separatedmanufacturers from the ultimate buyers of the goods they produced.

Market research techniques developed to bridge that gap, to allowthe manufacturers to speak to and consult with consumers, tomaintain relevance in their product ranges.

These same large companies saw themselves operating in a time ofaccelerated change.

Constant reference to consumers and their needs was essential if thecompanies were to survive in a highly competitive businessenvironment.

Consumers themselves were then, and are now, faced with a hugeselection of products, both goods and services. Most consumers,however, cannot buy everything they might want - they must makechoices.



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Marketing-oriented companies MANAGE THE RISK of

trading in highly sophisticated markets. They do this by:

paying attention to and reviewing all aspects of product policy, frombranding, packaging, and new product development to productwithdrawal when needs change (PRODUCT)

pricing according to market knowledge, earning profit through

reducing risk and ACTIVE competition (PRICE) distributing goods by the most appropriate channel(s) to match end

user need (PLACE)

selling and promoting products in a way which emphasises thebenefits of ownership for the consumer and avoiding manipulationand hard sell approaches (PROMOTION)

co-ordinating all these activities in a way that shapes the companyfocus, and maximises its ability to respond to the forces of themarketplace



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The evidence is clear - if customers

needs are ignored, the business will

very likely fail!

End of presentation

18M i I d t M k ti 1 (DJ2P 34)

mim1 week one - concept & stages.ppt

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