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August 08, 2012

Marketing versus Selling


Part 1: Selling Versus Marketing.

"While selling revolves around the needs and interest of the manufacturer or marketer, marketing revolves around that of consumer. It is the whole process of meeting and satisfying the requirements of the consumer." - Marketing91.

The following is adapted from Marketing91.

SELLING ORIENTED BUSINESS:

1. Focus is on sales volume and the needs of the seller.

2. Different departments work in highly separate water tight compartments.

3. Selling views the customer as a "source of revenue" and there is only a superficial focus on customer requirements.


The selling based business approach is obsession with profit/sales maximisation.

Indianblogger writes on Selling versus Marketing:

•Start and End of the Activities: Selling activities start after the product has been developed while marketing activities start much before the product is produced and continue even after the product has been sold.

•Difference in the Emphasis: In selling, the emphasis is on bending the customer according to the product while in marketing, the attempt is to develop the product and other strategies as per the customer needs.

•Difference in the Strategies: Selling involves efforts like promotion and persuasion while marketing uses integrated marketing efforts involving strategies in respect of product, promotion, pricing and physical distribution.

The following is adapted from Marketing91.:

MARKETING ORIENTED BUSINESS:

1. Focus is on consumer requirements and satisfaction.

2. Company first determines consumer requirements/wishes and then designs the product/service.

3. Views business as a consumer satisfying process.

4. Consumer determines price, price determines cost/investment.


Selling merely concerns itself with the tricks and techniques of getting the customers to exchange their cash for the company’s products, it does not bother about the value satisfaction that the exchange is all about." - Prof. Theodore Levitt.

The following is adapted from The Economist: Theodore Levitt

Born in Germany where his father was a cobbler, Theodore Levitt (1925-2006) emigrated to the United States with his parents at the age of ten. Levitt is famous for two things in particular: an article published in 1960 (“Marketing Myopia”); and his resignation almost 30 years later from the editorship of the publication in which that article first appeared—Harvard Business Review. The article, written only a year after he had joined the Harvard Business School faculty, can be seen as a turning point in the acceptance and respectability of marketing. It argued that companies had paid too much attention to producing products and too little to satisfying customers.

Quote “Marketing Myopia” by Theodore Levitt, Harvard Business Review, July–August 1960. :

"The failure is at the top. The executives responsible for it, in the last analysis, are those who deal with broad aims and policies.
Thus: • The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they deļ¬ned their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented.


"

THE MARKET IS MUCH MORE INTELLIGENT THAN ALL HUMANS PUT TOGETHER

THE MARKET IS BIGGER THAN
ALL CORPORATIONS PUT TOGETHER
ALL CARTELS PUT TOGETHER
AND
ALL REGULATORY BODIES PUT TOGETHER


A quote by Theodore Levitt:
The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller's need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.


A passage from Theodore Levitt's 'Marketing Myopia'.


Lag in Detroit

This may sound like an elementary rule of business, but that does not keep it from being violated wholesale. It is certainly more violated than honored. Take the automobile industry: Here mass production is most famous, most honored, and has the greatest impact on the entire society. The industry has hitched its fortune to the relentless requirements of the annual model change, a policy that makes customer orientation an especially urgent necessity. Consequently the auto companies annually spend millions of dollars on consumer research. But the fact that the new compact cars are selling so well in their first year indicates that Detroit's vast researchers have for a long time failed to reveal what the customer really wanted. Detroit was not persuaded that he wanted anything different from what he had been getting until it lost millions of customers to other small car manufacturers.

How could this unbelievable lag behind consumer wants have been perpetuated so long? Why did not research reveal consumer preferences before consumers' buying decisions themselves revealed the facts? Is that not what consumer research is for - to find out before the fact what is going to happen? The answer is that Detroit never really researched the customer's wants. It only researched his preferences between the kinds of things, which it had already decided to offer him. For Detroit is mainly product - oriented, not customer - oriented. To the extent that the customer is recognized as having needs that the manufacturer should try to satisfy, Detroit usually acts as if the job can be done entirely by product changes. Occasionally attention gets paid to financing, too ' but that is done more in order to sell than to enable the customer to buy.

Lastly a short video by Harvard Business Review that explains Marketing and Selling, by Theodore Levitt, Marketing Guru. His concepts are explained at the end of this blog entry.

 
 

1 comment:

  1. six sigma originated as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes as well.

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