Modern Marketing Process: Market Pull vs. Technology Push

Posted on May 14, 2024 in Economy

B1) Modern Marketing Process and Differences from Traditional Approach

A modern marketing process, driven by the market pull principle, starts with market demands. Consumers define a need or problem, and producers respond by developing and delivering products or services to meet those needs.

Key Activities in the Market Pull Process:

  1. Create Value: This involves segmenting the market, analyzing customer needs within each segment, selecting target segments, and positioning the product based on its value proposition.
  2. Produce Value: This stage encompasses product development, manufacturing, bundling hybrid solutions, and pricing.
  3. Determine Value: Activities in this phase include advertising, sales and promotion, counseling, and configuration.
  4. Transfer Value: This involves distribution, warranty, customer service, and customer relationship marketing.

Technology Push vs. Market Pull

In contrast to the market pull approach, technology push starts with internal technological innovation. This innovation is then pushed to the market, moving from development to production and finally to marketing. A prime example is the emergence of smartphones, driven by advancements in technology.

The market pull approach, on the other hand, originates from expressed market needs. A classic example is the development of digital cameras. Two decades ago, there was a clear market demand for a camera that didn’t require film, allowed for countless photos, and offered instant viewing. This market pull ultimately led to the creation of digital cameras.

B2) Price Management and Pricing Strategies

Price Management

Price management encompasses all decisions related to ensuring consistent and accurate pricing across various channels, geographical locations, products, services, and customers. It focuses on the initial price setting and subsequent adjustments, price differentiation, design of payment terms (discounts, bonuses, payment schedules), and financing options (loans, leasing, etc.).

Pricing Strategies

  1. Penetration Pricing: This strategy involves setting a low initial price to penetrate a competitive market and subsequently raising it. For example, a television service might be offered for free for a limited period, followed by a significant price increase.
  2. Value-Added Pricing: This strategy focuses on attaching value-added features and services to differentiate a company’s offerings and justify higher prices. An example is incorporating eco-friendly features if the customer base values sustainability.
  3. Low Price Strategy: This strategy, often referred to as everyday low pricing, maintains consistently low prices. A prime example is a discount supermarket chain like Aldi.
  4. High Price Strategy: This strategy involves setting very high prices to convey a sense of high quality and exclusivity, creating value for specific segments. Luxury brands like Lamborghini exemplify this approach.
  5. Skimming Pricing: This strategy involves setting a high initial price and gradually lowering it as the market evolves. Apple’s iPhone is a classic example of skimming pricing.

B3) Organizational Involvement of Marketing and Conflicts

Forms of Organizational Involvement

  1. Marketing as a function
  2. Marketing as a product-oriented function
  3. Marketing as a leading function
  4. Marketing as a core function
  5. Marketing in a customer-centric organization – coordinating function

Advantages and Disadvantages

(5 points). Also, identify five important conflicts between marketing and other features of an Organization (5 points), and outline just one approach to solving them (5 points)

-Marketing as a function

-Marketing as a product orientation function

-Marketing as a leading function

-Mkt as a core function

-Marketing in a customer centric organization – coordinating function

Ad and dis:

–Excellent trade processes But … no overall customer-orientation

–Clear functional top-down targets But … no consistent picture for cross sales goals

–Optimization of functional partial results But … no optimization of the overall result, e.g. from a customer perspective

–Clear functional responsibility But … no overarching business responsibility (e.g., portfolio development, sales and marketing thrust, …)

–Optimization of functional partial results But … no optimization of the overall result, e.g. from a customer perspective

–High degree of specialization But … different standards, procedures and methods in marketing

Conflicts:

–Research and Development: R&D complain that mkt provide weak data, that they’re most useful in developing launch plans rather than in developing new products. Mkt perceive that R&D doesn’t involve mkt early enough in the products development process. R&D will take credit for successful products while blaming marketing when a product doesn’t sell.

Solution:  work together and create cross functional teams to discover unmet customer needs.

–Production: Production objective is manufacturing quality and creative goods to be offered for sales, which take time. And mkt wants to sell fast and much as possible goods that have been manufactured.

Solution: departments need to be in the feedback loop, and regular meetings with marketing and production managers to resolve conflicts before they fester into battles.

–Financial: Generate money and earn profit for survival and growth and mkt want to push the product with events, advertising, payed partnerships and funds are not provided.

Solution: Marketing personnel should involve finance personnel in planning process of marketing department whereas the finance personnel should invite marketing personnel input in formulating the marketing budget.

–Sales: The marketing group is under pressure to achieve revenue goals and wants the sales force to “sell the price” as opposed to “selling through price.” The salespeople usually favor lower prices because they can sell the product more easily and because low prices give them more room to negotiate.

Solutions: Establish a culture of open and constant communication between teams, Clarify the roles and functions of each department. Create a unified sales & marketing strategy

–HR: focus on the employee. They are in charge of job descriptions, sourcing strategies, employee orientations and conflict resolutions. MKT focus on the consumer. In charge with advertisement, social media, branding and etc.


Solution: work together and benefit from the collaboration. These benefits translate into benefits for employees, consumers, and potential employees.