Scribd
Upload
267 views

Lesson 3. Marketing Origins, Exchange, and Value

Stage 1 of market maturity occurs when supply is less than demand, creating a seller's market. Producers focus on increasing production to capture as much of the hungry market as possible. In Stage 2, competition grows as more enter the market, leading companies to innovate their products to differentiate themselves. Stage 3 occurs when supply exceeds demand, intensifying competition, so companies rely more on sales teams to directly push products. Stage 4 sees the emergence of customer-centric strategies as firms realize prioritizing customer needs is key to competing in saturated markets with fierce competition.

Uploaded by

Aimelenne Jay Aninion
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
267 views

Lesson 3. Marketing Origins, Exchange, and Value

Stage 1 of market maturity occurs when supply is less than demand, creating a seller's market. Producers focus on increasing production to capture as much of the hungry market as possible. In Stage 2, competition grows as more enter the market, leading companies to innovate their products to differentiate themselves. Stage 3 occurs when supply exceeds demand, intensifying competition, so companies rely more on sales teams to directly push products. Stage 4 sees the emergence of customer-centric strategies as firms realize prioritizing customer needs is key to competing in saturated markets with fierce competition.

Uploaded by

Aimelenne Jay Aninion
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Lesson 3.

MARKETING ORIGINS, EXCHANGE, AND


VALUE
The Origins of Marketing
There is a proper way to sell.
Marketing as we know it today (or as you will know it through this course) is a fairly recent
development in the world of business. To fully appreciate how it came to being, it will be useful
to see how the stage in a market's maturity affects how the businesses can best sell to the
market
Stage 1.
Supply < Demand
Stage 1. Supply < Demand
When supply is less than demand, manufacturers generally have no problems selling whatever they
produce. This is what is typically called a seller's market and the sellers have the upper hand in these
situations. The market is hungry for the product and has the disposable income to pay for it.
Production Orientation is if your objective was to be the biggest and market dominant force, then you
would want to take advantage of such situation by scaling up your production as quickly as possible in
order to take as much of the market as you can.
Stage 2.
Supply < Demand,
Competition Growing
Stage 2. Supply < Demand, competition growing
The entry of competitors in a potentially huge market space generally leads to innovations as challengers
strive to make their offerings different enough. Improved quality, new and better features, better comfort,
and better design---all of which are undertaken with the hope that the product will speak for itself and that
consumers will choose your products based on the merits of your wares. This mindset is called product
orientation and it is often colloquially referred to as "building a better mousetrap."
Stage 3.
Supply > Demand
Stage 3. Supply > Demand
When business begin to crowd into a limited market space, then competition can get quite fierce.
Especially if the businesses are not particularly savvy in either offering least cost options or in
differentiating their products.
In such cases, it is the sales force that may best come to the rescue. The sales force becomes the front
liners who take matters into their hands and push the products directly to the customers. Using sales
organizations to push your product is called sales orientation.
Stage 4.
Supply > Demand,
Customer-centric Strategies Emerge
Stage 1. Supply > Demand, Customer-centric strategies emerge
As competition becomes fierce, firms soon realize that a better way to compete would be by prioritizing
customer needs more than their own. When the mindset moves to this sphere, then this is the starting
point for a marketing orientation.
Products are then designed according to what could best fit the needs of the target market, priced
according to their typical budgets, sold where it is most convenient for them, and promoted in a way that
best catches their attention.
A well thought-out marketing strategy could (hopefully) lead to products that delight customers,
leading them to become loyal patrons who will buy products from your company again and
again. Happy customers are asset, they will tell an average of five people about their delightful
experience. (Gitomer 2011)
Exchange
What this implies is that the only reason you would want to exchange one thing for another is if that other
thing offers more value to you than the item that you currently have.
Marketing is all about fostering such positive exchanges. It is imperative that the customers feel better off
after a transaction because otherwise they may feel that they should have spent their money elsewhere---
a feeling which will prevent them from becoming loyal customers.
There is of course the literal value that refers to, say, the suggested retail price of goods and services in
the market.
Value is also a very personal thing. It can be very subjective or a function of your personal condition (such
as hunger), experiences, personal history, social interactions, perceptions, education, and so much more.
What is Value?
Value
So what gives value to a product?
Consumer generally value a product or service when it provides them with utility.There are five kinds of
economic utility that can be offered by products and services.

 Form Utility
 Place Utility
 Time Utility
 Possession Utility
 Information Utility

Form Utility
A product, by its very form, saves the consumer from the effort of having to make the product
himself. A person will value vegetables sold in a market because it saves her the effort of
having to grow the vegetables herself.
Form Utility
Place utility
Place Utility
The convenience offered by making a product available around the proximity of the customer is
also valued. Between buying Product X from Store Y, that is located 1 kilometer away, and from
Store Z, that is located just next door, a customer will perceive more value in the service of
Store Z and will be willing to pay a little bit more for this convenience.
Time utility
If a firm can offer a product or service far quicker than alternative providers, the customer will also value
this speed of service. This is why express couriers such as DHL or Federal Express are able to charge
delivery rates that are several times more expensive than regular mail.
Time Utility
possession utility
For some products, mere ownership is already valued by the customer . This is especially true for
branded items that command a premium over commodity substitutes. This is also most evident in
auctions where bids are raised based on how valuable ownership is deemed to be by the respective
bidders.
Possession Utility
Information utility
Knowing certain things about the product can already imbue it with value. For instance, a recognized
brand can instantly generate trust while advertising helps build the assurance of the product. On the other
hand, quality packaging can also generate information or inferences among consumers about the quality
of the product inside.
Information Utility

You might also like