The marketing concept and market orientation

Résumé du document

So the real question, assuming that marketing does matter would be, according to me: how does it matter, taking into account today's changes in the western economies?

And to answer that question, I will first try to redefine, what is, to my mind, the ultimate goal of marketing. To achieve this work, I will rely upon Theodore Levitt's article Marketing Myopia, from the Harvard Business Review.

Then in a second part, I will try to apply those theories to some events in the business and marketing environment that has taken place a few weeks ago. This to show how marketing concepts are relevant for global companies today, how misusing them can lead to failures, and using them properly can lead to successes. I will use one main example to illustrate my thoughts: the new strategy of Pepsico and the way it now deals with its various brands, recently emphasized by the rumour that Pepsico would take over the French company Danone. This example will help to show how using properly marketing concepts can make the difference in a [...]

Extraits

[...] Pepsico decided three years ago to apply the marketing concept in its strategy and to become customer-orientated. Therefore it created new SBUs that better fit customer needs. And following the market trends, that is to say the customer desires, it now decides to reinforce the unit with the highest growth prospect. We still don't know if Pepsico will really take over Danone. On July 24th, Pepsico deny having any intention of doing it, but the game isn't over. As a conclusion, let's speak about Coke, Pepsi's main competitor. [...]

[...] But the most striking information of the article is that the growth is closely linked with a huge growth in its products “good for you”. Thus, during the last semester, the sales of non-soda drinks in North America increased by whereas there was a decrease in the sales of Pepsi on this same North American market. Aquafina, Tropicana and Gatorade are obviously now the second driving force behind the company. These figures are very important to understand why Pepsico now want to take over Danone. [...]

[...] What's the marketing concept and why does it matter? First, we must find what we will call the marketing concept. The marketing concept, as it is traditionally defined is the coordination of all company activities around the primary goal of satisfying customer needs. Applying the marketing concept in the company's strategy would be the most effective mean to sustain a competitive advantage, and achieve company objectives over time. Many authors have written about the marketing concept, and why companies should implement it. [...]

[...] We have already said that the marketing concept was about trying to satisfy customer needs. Then, relying upon Levitt's work in Marketing Myopia, we saw what being customer-oriented was about, and useful it was for companies to keep on growing even when the industry decays. Or, being customer-orientated, it's precisely about answering customer needs, at variance with being only focused on your product. So being customer-orientated is all about using the marketing concept in its business strategy. Thanks to Levitt's work, we are now able to answer our first question: if the marketing concept matters, it is because using it leads to a customer-orientated position, that is the key towards business success when growth slows down in your original industry. [...]

[...] Another argument to prove that yes, marketing does matter, and that implementing the marketing concept in its strategy can be the recipe for future growth. Levitt, Theodore (1960), “Marketing Myopia,” Harvard Business Review, July-August, p. 45-56. David Barroux “PepsiCo en pleine forme grâce à l'international et aux jus de fruits”. [...]