Marketing and Production Oriented Companies - Coursework Example

Marketing- and Production-Oriented Companies and Ethics BY YOU YOUR ACADEMIC ORGANISATION HERE HERE Marketing- and Production-Oriented Companiesand Ethics Introduction There are many different verities of business models which focus around specific company strengths. For instance, there are service-oriented companies which emphasise superior customer value and customer relationships as top priority. There are also the marketing-oriented company and the production-oriented company which each have their own, distinct characteristics. This paper compares and contrasts the marketing- and production-oriented companies to determine the specific characteristics which drive their successes. Additionally, the topic of whether marketing practices can be considered unethical will be approached. The various business varieties Friedman (2000) states a very practical definition of the production-oriented company as one in which the primary business function is physical production. This type of organisation, as described by the author, either executes the production in-house or contracts the activity to an external organisation or production facility. In this type of company, the main focus of all business activities remain centred around the tangible product as the most paramount tool to reaching higher profitability; outside of all other business activities. A relevant example of a production-oriented company could best be described by various automakers and their individual business models from the 1970’s and 1980’s. The automakers considered the product to be in such high demand by consumers that, in essence, the product simply sold itself out of a need for improvements in auto design and personal mobility. Of course this focus appears to have changed today, however the traditional model which suggests that product, alone, maintains the ability to further profit potential is the foundation of a production-oriented company. Flink (1988) described Ford Motor Company with a leadership philosophy that mass production fed the need for personal consumption by a society that remained focused on the importance of the worker and the work ethic. Ford linked the product with social issues, almost as if the product were an application toward a cure for the human psyche. Though this is only speculation, it does tend to illustrate a common theme in the production-oriented company where the product must be the focus of all business activities and even internal culture. Allen and Higgins (2006) describe the production-oriented company as one which attempts to predict trends and demands a business structure which conforms to specific, detailed plans. This is taken from a technical viewpoint where the production-oriented company is more like a mechanised system where the entire business staff and production centres should respond accordingly to rigid schedules and production expectations. In essence, this view of the production-oriented company appears to be that of inflexibility where predictions based on data alone drives the production efforts. The Pizza Hut Company once ran a production-oriented business as its ownership simply felt that they “ran pizza restaurants” (Stanton and George, 1999: 27). This suggested a business which did not rely on extensive advertising and promotional material, brand sponsorships or other marketing activities to assist in running a highly profitable business. No, in this scenario, it was the pizza and the function of tangibly serving pizza which drove the business model. This is the essence of production-oriented companies. Having introduced the essence of marketing, it is important to compare the marketing-oriented company to the production-based business. A marketing-oriented business does not focus only around the product itself, it incorporates the elements of human psychology based on consumer motivations and behaviours. Additionally, marketing-oriented companies consider elements of packaging, presentation, logo design and other brand-building exercises to make the product speak a variety of messages to the general public or specific consumer audiences. The marketing concept consists of maintaining more than just product focus but also understanding customer philosophy, the ability to achieve goals both internally and externally as a cohesive organisation, and determining the best methods by which to satisfy the company’s customer base (Tse, Sin, Yau, Lee and Chow, 2004). This suggests a business model where the company has a variety of integrated components which constantly work on issues of staff improvement, product redevelopment, customer service and relationship-building, and getting people to correlate an image with a total company philosophy. One reputable marketing publication states it plainly: “Any good CEO is marketing-oriented” (Brand Strategy, 2004: 18). The author moves further to suggest that it is vital to the success of the business to put the needs of the consumer first by making them the central focus of all business and product-related activities. Shifting the entire business towards the customer, under this view of the marketing-oriented company, is what creates a successful business model. Marketing Week (2008) might agree with this definition of the marketing-oriented company as the publication describes the results of a recent survey in which 80 percent of all consumers surveyed believed that many brands attempt to create a consumer need which doesn’t even exist. The fact that the business would devote so much time to understanding what the buyer ultimately desires and thinks about various products really shows the differences between the production- and the marketing-oriented company. Performing various marketing research to understand the motivations and feelings of customers as a means to enhance product sales and improve the company image is what a marketing-oriented company is comprised of. Even the most bureaucratic organisations can take a marketing-oriented approach to doing business. Papasolomou (2006) describes a series of business decisions in which the buying community is considered as a group in which transactions are negotiated through a variety of organisational representatives. It would appear that even in a business where there is a highly centralised authority hierarchy where the consumers are considered in a formal, mechanistic fashion that marketing-oriented exists. The fact that the bureaucratic organisation even considers the individual buyer as an element of business strategy points toward a marketing-focused business. The ethics of marketing Marketing utilises a variety of principles and theories such as product positioning, brand loyalty and advertisement. Tactics such as putting focus on a product’s quality as a means to distract the consumer from identifying that it is virtually indistinguishable from competitor products through creative advertisements and promotions is one strategy. Using a variety of celebrities to declare the laurels of the product is yet another strategy to build higher sales volumes and to create connection with the consumer. However, can these tactics be considered unethical? One marketing expert offers that the very essence of marketing is to “highlight meaningful differences for one’s product or service” (Pinnell, 2008: 27). This surely sounds innocent enough as it would be important for one company to identify what specific aspects of their own product are superior to others on the market. If one product maintains a stainless steel exterior whilst another supports a copper surface (as two possible examples), these factors should, somehow, be identified through various promotional literature. What happens, however, when the differences between the products are so miniscule that it would be virtually impossible for customers to even notice them? How does the marketing company lure customers to a product that is, virtually, 100 percent similar to another competing product? Product positioning is often the strategy of choice as a means to distract away from the similarities and attach the product to personal lifestyle choices and preferences in order to make them prefer one product over that of competition. Depending on how the company decides to undertake its positioning strategy will depend on whether the marketing efforts are unethical. For example, if one business portrays the product as a family staple, illustrating happy consumers who eat it, this is an attempt to make the product appeal to those who value family-oriented activities. A second company, however, which might make claims of a product fixing marital disputes (or something similar) could easily be considered unethical as there is no evidence in this situation of its relationship-building merits. Though the situation described is somewhat outlandish, it does tend to illustrate the line in which marketing-orientation and marketing efforts become unethical. If the business begins to describe, even through subtle presentation, that a specific product can perform a function of satisfying complicated aspects of the human condition the business has crossed the line of ethical reasoning and ethical consumer relationships. There might be many other situations in which marketing might be considered unethical, however it is when there are deliberate attempts to mislead in any variety of advertising and promotional materials. If the business is merely pointing out differences in products as a means to illustrate unique vision and creativity, the business has performed a competent marketing activity which will likely bring the business considerable profit and contented consumers. Positioning a bar of chocolate with a variety of sleek and abstract wrappers is a means of positioning the product to appear like a gourmet snack. This is not unacceptable, however the consumer will be deciding whether to buy it again if they taste the product and find it to be of inferior quality. If the business knows that the chocolate bar has been made with ingredients unworthy of a higher, gourmet price tag but decides to position it in this fashion, the line of ethical marketing practices has been crossed. The marketing-oriented company recognises the consumer as the main focus, relying on their unique needs and perceptions as a means of steering the company toward producing a product which will satisfy the general public. This shows the importance of the consumer in most of the business’ decision-making efforts as being quite significant. If the business publicly presents itself as one of high community values and illustrates its generosity through various community brand sponsorships, it has performed two functions of marketing-orientation. If the business’ internal culture really does not share these values but continues with the sponsorship, it is stepping over the line of acceptable and ethical business practices. Many consumers might disagree about this definition of what makes an unethical marketing activity whilst others might suggest a more fine line between acceptable business practice and deception. Company leaders and various organisational professionals might have an entirely different version of when marketing-orientation has led to unethical behaviours and situations. Despite the likelihood of differing opinions, any known attempts to suggest something which is not present in the product or promotion has breached (to some degree) the consumer trust and can be deemed unethical. Conclusion Clearly, there are a wide variety of differences between the production-oriented company and the marketing-oriented business organisation. Marketing-focused businesses are aware of the consumer and their individual needs and make the majority of business decisions based around how best to develop, present, and enhance the product. The production-focused company does not recognise the complicated model of marketing but maintains its focus on the product as a means toward higher profitability. Both of these company types have their own merits, which can be proven with the historical success of Ford Motor Company and Pizza Hut even before adopting a marketing-orientation. However, it is likely that Pizza Hut extended its profit-margin once it adopted the concept of brand sponsorships and partnerships as a means to help the business expand into international territory. There is the suggestion, then, that the marketing-oriented business model is the one with the most promise for long-term success whilst the production-oriented business often tends to forget the consumers’ psychology as a path toward success. In regards to ethics in marketing, businesses must try to be truthful and credible in all of their product-related promotion and advertising materials. Any deviation from truthful brand presentation breaches ethical conduct codes, despite the difficulties of competition and the need to position products into different categories. The majority of companies today appear to be truthful in the majority of their advertising and promotion. Bibliography Allen, P. and Higgins, S. (2006). Service Orientation: Winning Strategies and Best Practices, Cambridge UK, Cambridge University Press. Brand Strategy. (2004). “Concern for creature comforts”. London, May 2004. Friedman, Jack P. (2000). Dictionary of Business Terms, New York, Barron’s Publishing. Flink, James J. (1988). The Automobile Age, Cambridge, MIT Press. Marketing Week. (2008). “Global brands: Forcing the ethical issue”. London, 10 Jul 2008. Papasolomou, Ioanna. (2006). “Can internal marketing be implemented within bureaucratic organisations?”, The International Journal of Bank Marketing, Bradford. 24(3). Pinnell, Raoul. (2008). “Ethical partnerships: All in a good cause”. Marketing Week, London. 6 Mar 2008. Stanton, J. and George, R. (1999). Success Leaves Clues: Practical Tools for Effective Sales and Marketing, Silver Lake Publishing. Tse, A., Sin, L., Yau, O., Lee, J. and Chow, R. (2004). “A firm’s role in the marketplace and the relative importance of market orientation and relationship marketing orientation”. European Journal of Marketing, Bradford. 38(9/10). Read More