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CH 17] Business 101 17-9

that is still functioning along with the added personnel who actually create the web
pages and take customer orders.

When manufacturers discover that their supply is catching up with consumer
demand and in some cases an overabundance of goods are being produced, then a
rethinking of production in relation to consumer demand needs to take place.
Overabundance was especially prevalent after World War I, when European producers
were able to begin production which affected and competed with United States
production. Needing to sell their products where consumers had increasing choices and
their demand was declining, business had to change their emphasis from production
(as it was mastered) to a sales emphasis. Companies began using sophisticated
advertising and sales techniques to increase demand for existing products.
The shift from a seller's market to a buyer's market occurred in the immediate post-
World War II era. Industry shifted from wartime production to consumer goods to
meet pent up demand because supplies were directed to war efforts and consumers
increased savings. This required a change in the way firms conducted their business.
Firms began to develop a consumer orientation and the marketing concept had started
to evolve.
In the 1950’s, General Electric was one of the first companies to state a policy of
customer satisfaction. In its 1952 annual report of that year they gave one of the
clearest statements of the new approach to focus on customer satisfaction being
integrated into each phase of business:
[The concept] introduces the marketing man at the beginning rather than at
the end of the production cycle, and integrates marketing into each phase of
the business. Thus, marketing, through its studies and research, will establish
for the engineer, the design and manufacturing man, what the consumer wants
in a given product, what price he is willing to pay, and where and when it will
be wanted. Marketing will have authority in product planning, production,
scheduling, and inventory control, as well as in sales, distribution, and
servicing of the product.

The policy of customer satisfaction has become known as the marketing concept. marketing concept
The marketing concept can be defined as an organization-wide consumer orientation Organizationwide consumer
with the objective of achieving long-run success. Both profit-oriented and nonprofit orientation with the
objective of achieving
organizations have adopted the marketing concept as a guide to operating their long-run success.
enterprises. The basic goal is to target all of the organization's efforts by satisfying
consumer needs. 17
How did the marketing concept evolve? Originally, most organizations are
production oriented; their primary concern is just being able to supply their product or
service. This situation is known as a seller's market: one characterized by shortages
and prices are higher (under supply with a constant demand, causes a price shift). seller's market
Later, as production meets and exceeds buyer’s needs, a buyer's market evolves; this Market situation
characterized by shortages.
situation is characterized by adequate or even excess supplies. Again, this is an issue
of supply and demand, whereby excess supply yields a lowering of prices to the buyer's market
consumer to move the supply. Market situation
characterized by adequate
Marketing in Nonprofit Organizations or even excess supplies.

Adopting the marketing concept has become as important to nonprofit
organizations as it has to profit-seeking businesses. Increased competition and
cutbacks in funding prompt many nonprofit groups to conduct marketing research and
study their consumer behavior. Fund-raising groups such as United Way of America
have studied the giving habits, people born between 1946 and 1964, because this
group represents a significant source of charitable giving. Now, the research emphasis
is with people born between 1970 and 1990 as significant source for charitable giving
in the next two decades. Research indicates older givers prefer to support causes
related to individual needs, such as homelessness and battered women, and want to

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