Review of marketing paradigms

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Table of Contents

Introduction
The Core Concepts of Marketing
Conclusion
References

Introduction

The American marketing association defines marketing as “the performance of business activities that direct the flow of goods and services from producer or seller to the consumer or user” (Ravald & Groenroos 1996, p. 23).

Kotler defines it as “the satisfaction of human needs and wants through exchange” (Kotler 1972, p. 48). Drucker says that “marketing comprises a system of business activities designed to plan, price, promote and distribute products and services to the present and potential consumer segments” (Achrol & Kotler 1999, p. 149). Drucker adds that “marketing is the whole business seen from the customer’s point of view” (Achrol & Kotler 1999, p. 150).

Organizations carry out marketing strategies, and they could do this with or without their knowledge. This can be seen in the police department of the U.S., which introduces a ‘win friends and influence people’ campaign in an effort to uplift their image. A marketing paradigm shows the way the marketing is conducted by a set of different procedures and attitudes (Achrol & Kotler 1999).

The Core Concepts of Marketing

According to Kotler (1979), the starting point for the discipline of marketing lies in humans’ needs and wants. This is fundamentally the foundation of realizing success in marketing.

Needs

A human need is a state of deprivation of some basic consumption. Examples include hunger, shelter and safety issues. These needs exist within our biological makeup.

Wants

The above-mentioned things should be satisfied as they are deeper needs. These wants are influenced by the environmental factors. Therefore, they are continually shaped and reshaped by social forces and institutions, such as churches, schools, families and business corporations. For example, different people can satisfy their need for transport differently because this may depend on where they are. Similarly, people from different environments satisfy the need for food differently.

Demands

When one wants something specific, this must always be coincide with his/her ability to afford it. Therefore, wants become demands when they are accompanied by purchasing power. Many people may want bread but some may appear unable to buy it. In marketing, companies “must measure not only how many people want their product, but also how many would actually be willing and able to buy it” (Kotler 2000, p. 6).

Marketers do not create needs but influence wants. For instance, marketers suggest that a Mercedes-Benz vehicle would satisfy our needs for social status. However, they do not create the desire to gain that social status. Marketers try to influence demand by making the products attractive, affordable and easily available (Andersen & Narus 1999).

Products

People satisfy their needs and wants through purchasing products. Therefore, a product is a thing that can be used to satisfy them. The product can be tangible (such as a TV-set, soap, car or pen) or intangible (such as transporting or cleaning). People buy physical product in order to derive benefits from it. Therefore, when a woman buys a tube of lipstick, she is ‘buying beauty’ or seeking to look better. When we choose to travel by bus, we are looking for certain benefits such as safety, comfort or speed.

Therefore, marketers should concentrate on the benefits of the product (Vargo & Lusch 2008). However, some marketers fall in love with their products and keep emphasizing the physical features of the product. They forget that people buy products for the sole reason of satisfying their needs (Kotler and Levy 1969). Such marketers are said to suffer from marketing myopia (Fox & Kotler 1980).

Utility, Value, Satisfaction

How do consumers choose a product to satisfy a given need? In such a case, utility is the guiding concept. This is an estimate of the ability of that thing to satisfy the specific desire. However, each alternative has a price. Therefore, in order to make a choice, the consumer must consider the product’s utility and price. One should then choose the product that gives the highest utility per price (the greatest value). Although one product may offer more utility to a consumer, it may represent less value in comparison to another product.

Exchange, Transactions and Relationships

The fact that people have needs and wants and can place value and utility on them does not fully explain marketing. However, this is applicable when the person decides to satisfy them. This usually occurs through exchange. This is the activity that involves obtaining a specific product in exchange for another.

For exchange to take place, some things are of a great importance. First of all, two parties are always involved. According to Kotler (2000), “each party has something that might be of value to the other party”(p. 6). Thus, they should be able to communicate with each other and deliver the product or service. Each party should feel free to accept or reject the offer, and each should feel comfortable running business with another party (Vargo & Lusch 2004).

For an exchange to take place, the parties must agree on the terms of exchange. Without the agreement, this would not be possible. If they make a deal, a transaction would take place. In other words, trade would occur between the two parties. Therefore, transactions are the basic units of exchange (Vargo & Lusch 2008).

Conclusion

Marketing paradigm, as discussed in the article by Kotler and Levy (1980), shows that the traditional marketing concepts apply in the modern marketing world. Nowadays, most strategic marketing decisions are driven by customer expectations, and this has led to the rapid change in marketing. These areas include marketing orientation, customer intimacy, customer focus and marketing philosophy (Hirschman 1983).

These changes led to a gradual evolution that resulted in a new marketing paradigm that focuses on relationship marketing, customer experience and network marketing. In this regard, marketing concepts and technologies need to be modified to fit a broader marketing sense that applies in today’s business world (Ravald & Groenroos 1996).

References

Achrol, RS & Kotler, P 1999, ‘Marketing in the Network Economy’, Journal of Marketing, vol. 63, special issue, pp. 146-163.

Andersen, JC & Narus JA 1999, Business Market Management, Understanding, Creating and Delivering Value, Prentice Hall, New Jersey.

Fox, K & Kotler P 1980, ‘The Marketing of Social Causes: The First Ten Years’, Journal of Marketing, vol. 44, pp.24-33.

Hirschman, EC 1983, ‘Aesthetics, ideologies and the limits of the marketing concept’, Journal of Marketing, vol. 47, pp. 45-55.

Kotler, P & Levy, SJ 1969, ‘Broadening the concept of marketing’, The Journal of Marketing, vol. 33, no. 1, pp. 10-15.

Kotler, P 1972, ‘A Generic Concept of Marketing’, Journal of Marketing, vol. 36, pp. 46-54.

Kotler, P 2000, Marketing management. Millennium edition, 10th edn, Prentice-Hall, Inc., New Jersey.

Ravald, A & Groenroos C 1996, ‘The value concept and relationship marketing’, European Journal of Marketing, vol. 30, no.2, pp.19-30.

Vargo SL & Lusch RF 2004, ‘Evolving to a New Dominant Logic for Marketing’, Journal of Marketing, vol. 68, pp. 1-17.

Vargo SL & Lusch RF 2008, ‘Service-dominant logic: Continuing the evolution’, Journal of the Academy of Marketing Science, vol. 36, pp. 1-10.

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