Chapter 3.

Emerging Marketing Philosophies

INTRODUCTION

We have already discovered that marketing is changing and we need to adapt our marketing behaviour to today’s
environment. This chapter looks at some of the emerging marketing themes and trends.
The chapter starts with a look at the impact of marketing on society. It considers the growing environmental lobby
and how power has shifted towards the consumer. It discusses why marketers need to respond positively to these
changes.
Next we examine some of the contemporary concepts of marketing. We examine the various business orientations
and the importance of having an outward-looking customer-centred view as a bridge between the market and the
organisation. We consider briefly societal/green marketing, relationship marketing, internal marketing, direct
marketing and electronic marketing, and we differentiate between customers and consumers.
Having looked at the interface between the organisation and the customer, we turn our attention to the relationship
with the other stakeholders. We will examine the concepts of shareholder value, value-based marketing and
consider the importance of sustainable competitive advantage.
Next we consider some of the ethical issues in marketing and the role of corporate social responsibility and
sustainability.
The final section of this chapter considers internal marketing and the internal marketing plan.
Again at the end of the chapter there are a number of review questions to test your knowledge and understanding of
the main issues under consideration here, and also a past examination question which relates to this area of the
syllabus. Answers are provided for the review questions, but you should look at the ABE website for a suggested
answer to the past examination question.

A. IMPACT OF MARKETING ON SOCIETY

Today, society expects marketers to provide quality, service, value, safety and honesty, to act legally and to take all
reasonable steps to protect the planet for future generations. Society becomes concerned when marketers’ activities
have questionable or negative consequences. Many consumers are expressing concern over today’s quality of life
and are prepared to take action if they feel that their needs are not being fully met. Examples of these concerns are
illustrated in Figure 3.1 below.

Figure 3.1: Consumer concerns that marketing must address

Specific concerns include such activities as waste disposal, the so-called “greenhouse” effect, animal
testing, the development of GM foods, tobacco, the use of plastic bags, vehicle pollution, energy
conservation, intensive farming (such as battery egg production) and health and dietary issues related to
the levels of salt, sugar and fat in foodstuffs.
Given this situation, if organisations are to be successful, they need to do more than have an exchange
relationship with customers, and deliver products. They need to work for the benefits of the consumer and
society. This concept is generally known as societal marketing.

Societal Marketing
The societal marketing concept can be defined as:
‘...................that the task of the organisation is to determine the needs and wants of target
markets and to adapt the organisation to delivering the desired satisfactions more effectively than its
competitors in a way that preserves or enhances the consumer’s and society’s well being’.

It is important that all marketers fully understand the rising importance of the environmental lobby and
take this into account when developing marketing strategies. Today, the consumer movement is powerful
and involves a diverse collection of individuals, groups and organisations who seek to protect the rights of
consumers – some of the best known of which are Greenpeace, Friends of the Earth, and the “Which”
consumer magazine.
Today, marketers face a dynamic external environment and it is essential that they continually monitor,
assess, anticipate and respond effectively to general consumerism trends, as well as specific externally
led activities aimed at protecting or improving consumer rights. Marketers clearly have a responsibility to
help provide members of society with what they want and, if they do not do this, it is likely that their
competitors will.
Many consumer groups take it upon themselves to seek to protect the rights of consumers. They band
together into consumer organisations, either voluntarily or under government sponsorship. When they are
not happy, they often seek protective legislation or may encourage consumers to boycott products or
businesses.
Educating the consumer to buy wisely is an important aspect of the consumer movement. This was, for
example, the motivation for the creation of the Fair Trade movement. Today, consumerism has even
become part of the school curriculum in many countries and children often now put pressure on their
parents to act ethically and responsible.
If marketers do not react to the needs of consumers, governments around the world are likely to affect
legislation to protect consumer’s rights and consumers will find alternative products, services and
organisations to meet their needs. If marketers can match their needs closely, however, then this can be
a powerful weapon to help gain sustainable competitive advantage and create shareholder value.

B. BASIC CONCEPTS OF MARKETING

The Marketing Orientation

The way in which an organisation approaches its business and markets may vary according to the views,
beliefs or ethics of the executive body involved.
There are basically four different types of orientation or concepts.
 Production – This assumes that customers are interested in the availability of products and low
prices. Manufacturers concentrate on mass production, believing that little or no marketing is necessary.
The company makes what it is good at.
 Product – Manufacturers believe that the customers can recognise, and will favour, a good product
when it is offered. They concentrate on offering their own idea of a "good product" and then are mystified
when the customers do not take to it immediately.
 Selling – The belief is that customers will only buy enough if they are "coaxed".
This involves heavy activity on the personal selling front and can mean massive promotional campaigns
to move stock. Companies which adopt the selling concept are aiming to sell what they make, rather than
make what they can sell.
 Marketing – The belief is that the customer is the key to successful business. It can be defined as
the presence of a culture within an organisation, which is focused towards the understanding of
customers and competitors, and so can create superior value for consumers.

For an organization to follow the marketing concept, it must show three characteristics.
(a) Customer orientation
The organisation must define customer needs from the point of view of the customer and not its own. It
will need to seek information actively from the marketplace, in order to assess whether the offerings are
meeting customer requirements and, if not, why not.
(b) Organisational integration
All functions, sections or departments of the organisation must work together to meet the overall
objectives of the organisation – which must be to satisfy customer requirements. When individual sections
of a company do not fit in with the total effort, there may be friction or problems which can result in lost
opportunities or dissatisfied customers.
(c) Mutually profitable exchange
The organisation is entitled to a reasonable profit for a reasonable product.
The customer is entitled to a reasonable product for a reasonable price. In other words
– both should be satisfied. This satisfaction may well be the result of negotiation, where the customer has
accepted an alternative product or where the organisation has had to accept a lower profit – but they must
be satisfied with the exchange. If it is not a mutually accepted exchange, it is not marketing.

Widening of the Concept of Marketing

In many definitions of marketing, there is a preponderance of concern with "customer" and "profit". This is
because marketing has developed from a sales orientation, when the leading exponents of modern
marketing were the multinational FMCG (fast-moving consumer goods) companies, such as Proctor &
Gamble and General Foods.
As you can see from the definitions discussed in Chapter 2, the concept has widened to include all forms
of organization that wish to enter into a form of exchange. Thus, product or service, profit or non-profit,
commercial or charity, can all use the marketing function to mutually benefit their clients (customers) and
themselves. For example, a charity has to market itself into two broad marketplaces – it has to secure the
funds needed for useful survival, and it has to attract recipients worthy of its help. The two needs are not
mutually exclusive. In fact, many of the messages addressed to potential donors will be read by
recipients, and vice versa.
The concept of organizations having an outward-looking, customer-centred view underpins the ability of
marketing to function as a bridge between the market and the organization.
Careful marketing planning is essential and this must be based upon corporate strategies that are
concerned with the interaction with the marketplaces.
(a) Societal/Green marketing orientation. This adds to the marketing concept; the impact of the
organization’s activities on society. Today, there is concern that organizations are seen to be "good
citizens". Corporate social responsibility, societal and ethical marketing have now moved up the
agenda substantially. As we discussed earlier in this chapter, consumer-driven society requires a
responsible approach to be taken by organizations and marketers.
(b) Relationship marketing. This is the process of establishing long-term stable relationships with
stakeholders. It is creating and building mutually beneficial relationships by bringing together the
necessary stakeholders and resources to deliver the best possible perceived value proposition for
the customer. A relationship should intensify as the number of successful transactions increases; it is
 the aim of relationship marketing to ensure that it does.
(c) Internal marketing. This refers to the application of marketing internally within the organization, with
programmes of communication and two-way dialogue targeted at internal audiences, to develop a
unified sense of purpose throughout the organization. Unless staff are aware of developments and
have "bought into them" (i.e. accepted them enthusiastically), they will be unable or unlikely to
implement the necessary actions to ensure that marketing and corporate objectives are met. Equally,
it is important to solicit feedback internally, since much valuable information can be accessed and
internal staff made to feel properly valued.
(d) Direct marketing. Direct marketing involves selling to customers primarily through mass
communications media. It includes advertisements in newspapers and magazines, and radio and TV,
mobile and landline telephone selling, the Internet, mail and catalogues. If the buyer places an order
(by phone, letter, the Internet or TV), the seller sends the goods by mail, carrier or maybe by Internet
download.
(e) Electronic marketing. This can be defined as the strategic process of creating, distributing,
promoting and pricing products for targeted customers in the virtual environment of the Internet. E-
marketing is emerging as a very powerful means of communication and marketers are increasingly
adopting it as part of their promotional activity. Marketers welcome e-marketing because of the ability
to target individuals rather than using mass media approaches. Technology in this area is developing
rapidly, as more and more users get connected, as bandwidth increases and technologies become
more integrated, whether they are TV, computer or mobile based. All this provides exciting
opportunities and challenges for marketers.
(f) "Customers"
"Customers" is often used as a blanket description of the buyer/user of the offering. As a general
description, "customer" is valid, but, in many cases, a term such as "client" is more appropriate.
Marketing is concerned, functionally, to distinguish between a customer (who buys) and a
consumer (who uses). In many cases, the customer is influenced by the consumer. In some
cases, the consumer decides and the customer (perhaps a professional buyer) acts merely as a
purchase agent. Consider, for example, the common type of request: "When you're in the chemist
please get me a bottle of 50 soluble aspirin." Whoever is going to the chemist has no discretion
about either the product (it must be aspirin and it must be soluble) or the quantity (it must be 50).
The customer can, however, choose brand – to that extent he or she has discretion.
Exactly the same principle applies, however complex a potential transaction. A major function of
marketing is to identify target markets, and within them, to identify specific customers and
consumers.