Page 15 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes The concept of marketing orientation was developed in the late 1960s and early 1970s at Harvard
University and at a handful of forward thinking companies. It replaced the previous sales
orientation that was prevalent between the mid 1950s and the early 1970s, and the production
orientation that predominated prior to the mid 1950s.

1.2.1 Production Concept

This concept, viewed as one of the oldest of managerial orientations, typically aimed at achieving
as high an output as possible. This philosophy assumed that customers would be more interested
in acquiring conveniently available, reasonably priced, and well-made products. Keeping in
view the market behaviour prevailing in times when customers did not have much choice, it
was a sound approach. The focus of managers, generally having backgrounds in manufacturing
and engineering, was to concentrate on achieving increasingly higher efficiency in production,
lower production costs, and more intensive distribution. Even today, this approach seems to be
quite sensible in relatively underdeveloped and developing economies because customers are
more interested in owning a product and not overly concerned about finer features and aesthetic
appeal. In general, one important condition seems to be favourable to adopt production
orientation: when the masses look for a cheaper product and demand far exceeds production.

Example: In India, The National Textile Corporation (NTC) and all its subsidiaries are
sticking to this philosophy while producing textiles for the huge, poverty-stricken population
in this country. Their philosophy and positioning is reflected in their ad, "Clothiers of the nation
with affordable prices." In the global scenario, for nearly three decades Intel Corporation focused
on achieving increasingly high production output of its successive generations of processors so
as to bring down the prices of each improved version.

The production concept is unlikely to get discarded for a very long time to come, because there
would always be products and populations of such a nature that some companies would feel
comfortable with this philosophy.

1.2.2 Product Concept

The Product Concept has the proposition that consumers will favor those products that offer
attributes like quality, performance and other innovative features. Managers focus on developing
superior products and improving the existing product lines over a period of time. Innovations
in the scientific laboratory are commercialized and consumers get an opportunity to know and
use these products. This is called "Technology Push Model". The problem with this orientation is
that managers forget to read the customer's mind and launch products based on their own
technological research and scientific innovations. Many times it is observed that innovations
enter in the market before the market is ready for the product. Innovative products are launched
without educating the customers about them and the probable benefit or value that the customer
is likely to get by using the new products.

Example: The Golden Eye Technology was brought to the Indian market by the television
major Onida but the market could not perceive the benefit of this advantage. Subsequently, as
the customers became aware of the various brands and technology related to televisions, LG
brought the new technology to the market and achieved marketing success.

1.2.3 Selling Concept

Sales concept seems to be based on a lurking apprehension that customers will not buy the
product in sufficient quantities unless aggressively pressurised. The selling concept was the

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