1. Introduction
As the development of economy, recently more and more people focus the importance of concept of Marketing because it has already improved the people’s viewpoint which how to deal the business. However, one of the most persistent conceptual problems in marketing is its definition. In the light of Philip Kotler, marketing definition consist of social definition and managerial definition. (Kotler, 2000, p7-8).
According to the British Chartered Institute of Marketing, Marketing is the management process responsible for identifying, anticipating and satisfying customers’ requirements profitably. (Adcock, Halborg & Ross, 2001, p3).
In addition, some others define marketing as all activities directed towards identifying and satisfying customer needs and wants through a process of exchange. (Assael, Reed & Patton, 1996, p4).
Regardless of the several definitions of marketing, what philosophy should guide these marketing efforts? Generally, the five philosophies of production concept, product concept, selling concept, and societal marketing concepts should be paid more attention in marketing management process. In the following, the five concepts will be alternatively discussed with theories and practice.
2. The brief meanings of marketing management philosophies
The production concept is one of the oldest concepts in business. It holds that consumers will favor products that are available and highly affordable. Therefore, management should focus on improving production and distribution efficiency. (Armstrong & Kotler, 2003, p19).
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Marketing Management is a business discipline which is focused on the practical application of marketing techniques and the management of a firm’s marketing resources and activities. Rapidly emerging forces of globalization have compelled firms to market beyond the borders of their home country making International marketing highly significant and an integral part of a firm’s marketing ...
For example, Henry Ford’s whole philosophy was to perfect the production of the Model T so that its cost could be reduced and more people could afford it.
The product concept holds that consumers will favor products that offer the most quality, performance and innovative feature. Thus, an organization should devote energy to making continuous product improvements. (Kotler, Armstrong, Brown & Adam, 1998, p16).
Nowadays, there are some oriental manufacturers adopt this concept.
The selling concept holds that customers will not buy enough of the organization’s products unless it undertakes a large-scale selling and promotion effort. (Kotler, Armstrong, Brown & Adam, 1998, p16).
The concept is typically practiced with unsought goods such as encyclopedias or insurance.
The marketing concept holds that the key to achieve its organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets. (Kotler, 2000, p19).
Many successful and well-known companies have adopted the marketing concept. Disney, Marriott, and McDonald follow it faithfully.
The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being. (Kotler, 2000, p25).
3. Delixi electronic company implemented the marketing concept
Delixi is one of the largest electronic companies in China. It was founded in January, 1989, located in Wenzhou City of Zhejiang province. The major products that Delixi provides are lights. Recently in China, this industry is a perfect competitive field, over 1,175 firms fight for the market shares and profits in this field. In order to achieve a great success, Delixi began to pursue the well-known companies’ way to carry out the marketing concept in 1998. Concretely, it followed the four pillars of marketing concept effectually: target market, customer needs, integrated marketing, and profitability.
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3.1. Target Market
A target market consists of a set of buyers sharing common needs or characteristics that the company decides to serve. (Kotler, Brown, Adam & Armstrong, 2001, p306).
Apparently, the company would do best when they choose their target markets carefully.
The management of Delixi recognized that the lights are considerable common merchandise at present. However, any type of light cannot satisfy all the customers although they are similar to need the light. In order to choose the proper markets and provide the goods well, Delixi pursued the marketing concept tightly to targets its markets in three activities: market segmentation, market targeting, and market positioning (see figure 1).
Figure 1 Steps in marketing segmentation, targeting, and positioning
Market Market Market
Segmentation Targeting Positioning
(Source: Armstrong & Kotler, 2003, p235)
First, according to their market research, they divided the lights market into two parts, namely, organization buyers and consumers. Concretely, organization buyers consist of factory buyers and public buyers; consumers involve family buyers and individuals. Figure 2 (next page) shows the segmentation of lights market.
Second, in light to Michael J. Baker, a critical decision is the selection of target market segments. (Baker, 2000, p188).
The management of Delixi noticed that organization buyers tend to purchase the lights of special function and high quality. In contrast, consumers usually enjoy the beautiful and quality lights. Especially the family buyers, they often focus on the appearance, quality, and coordination with the environment. To combine their producing implements and expected profitability, they determine family buyers as their target market.
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Successful marketing shall mean good sales of a product .The word product can mean a product or a service. The correct marketing mix of a product can be the difference between success and failure, it is therefore important to get the right mix. The marketing mix was first used by Neil Borden in 1964. Marketing mix refers to a set of marketing variables, a firm has to get the right mix of these ...
Figure 2 The segmentation of the lights market
Third, when Delixi obtained achievement in family buyers market, it began to add segment into individuals segment in the early of 2000. Eventually it established a powerful position among the lights industry and accounted for 12.7% of market shares.
3.2. Custom’s Need
Satisfied customers can become loyal customers. (Peter & Donnelly, 2001, p191).
Therefore, today’s most successful companies including Delixi embrace customer satisfaction carefully.
3. 2. 1. The family buyers’ need in lights industry
In order to master the customer’s need, Delixi founded a Customer’s Need Study Center (CNSC) in 1998. CNSC was responsible to study the customer’s stated needs, real needs, unstated needs, delight needs, and secret needs etc. As result, four kinds of customer’ needs are highlighted in their study. (1) Reasonable price. (2) High quality. (3) Nice appearance. (4) Various types.
3. 2. 2. The methods that Delixi satisfied customer’s need
Delixi held a steady principle that is customer-centered. To satisfy the customer’s need, firstly, Delixi began to implement the cost-leadership strategy and attempt to reduce the price of products from three aspects: choosing the best suppliers; reinforcing the internal control; reducing the middle-distributive sectors. Nowadays, the average price of their lights reduces about 7.5% of initial price.
Secondly, Delixi established the Invention Sector to explore and apply new technology in the producing process. The biggest benefit for customers was that Delixi’s lights cold save 9%-15% electricity if other things remained steady. In addition, at present, Delixi could provide 328 types of lights, which basically satisfy the different customer’s need.
Thirdly, in order to offer continuous services to their consumers, Delixi established the warranty service system. It mainly solved some problems that consumers maybe suffer after purchase. Noticeably, Delixi regarded the system as the leader step to meet the customer’s need.
3.3. Integrated Marketing
When all the company’s departments work together to serve the customer’s interests, the result is integrated marketing. (Kotler, 1997, p23).
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Delixi noticed the importance of integrated marketing and followed it.
First, Delixi modified the Sales Department to Sales Center in order to coordinate various marketing functions such as sales force, advertising, customer service, and product managers etc. As result, all these marketing functions must be harmonized from the customer’s point of view. The most advantage of the Sale Center was to reduce the conflict among the marketing functions.
Second, to achieve coordination in the operation process, Delixi centered the Sales Center throughout all departments. In Delixi, “think customer” was each department’s duty, and other departments must support the Sales Center. For example, Financial Department and HRM Department must depend on the requirement of Sales Center to operate.
In addition, there is a concept of the customer is the god in Delixi. They treat the customers as the top of the organization instead of top manager. Next in importance are the front-line people. Under them are the middle-managers, finally, at the base is top management. (See figure 3).
That is to say, all staff of Delixi must work around the customers.
Figure 3 Customer-oriented organization chart
(Source: Kotler, 1997, p24)
3.4. Profitability
The ultimate purpose of the marketing concept is to help organizations achieve their goal. (kotler, 2000, p23).
As for Delixi, the major objective is profit.
In 1998, its annual revenue was only 32.5 million RMB (US$ 3.93 million), and market share of Delixi is 3.9%. To compare the competitors in the industry, its situation of profitability was considerable unfavorable. In order to modify the negative situation, Delixi utilized the most positive manner which including extends advertising, improving the quality of products, persisting to create new product, and so forth. From early 1999, its condition began to increase gradually. Nowadays, its net profits are more than two times of 1998. (Figure 4 shows its financial situation).
To surprise, its market share reach about 12.7% and Delixi has ranked fifth in the electronic industry in China.
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Figure 4 Delixi’s financial situation (million in RMB)
1998 1999 2000 2001 2002
Revenues 32.5 46.1 62.6 83 105.8
Revenues increase 7.6% 41.8% 35.8% 32.6% 27.5%
Profits after tax 3.2 4.3 5.6 7 8.7
Profits after tax increase 5.4% 34.3% 30.2% 25% 24.3%
4. Conclusion
As has been noted, Delixi has achieved noticeable success from the market. Obviously, the success should attribute to the functions of marketing concept, which guided Delixi to follow the principle of integrated marketing, accurately choose the target market, satisfy the customer needs
at most extent. By doing so, Delixi grew to a strong competitive company and established considerable reputation in the electronic industry. Therefore, Delixi should continue to implement the marketing concept in order to achieve the greater success in future.
To combine the development of Delixi, marketing is therefore significant concept for the firms. Especially at present, globalization makes the competition more drastic than before. Consequently, market managers should learn more about the marketing concept and new marketing ideas in order to keep the competitive, so that their firms could survive for a long terms.
References
Adcock, D., Halborg, A. & Ross, C., (2001), Marketing: Principles and Practice, Prentice Hall, U. K.
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The Research paper on CASE STUDY ON STRATEGIES OF SALES AND MARKETING FOR BUDGET HOTELS
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