Profitability

The ultimate purpose of the marketing concept is to help organizations achieve their goals. For private firms, the major goal is profit; for nonprofit and public organizations, it is surviving and attracting enough funds to perform their work.

The key is not to aim for profits as such but to achieve them as byproduct of doing the job well. A well company makes money by satisfying customer needs better than competitors. Satisfying customers’ needs translates directly into greater profitability for the organizations. When managing for profitability, the firm is focusing on the value its products could create for customers in the competitive marketplace.

The companies focus on the customer and are organized to respond effectively to changing customer needs. Not only do they have well-staffed marketing departments, but their other departments – manufacturing, finance, research and development, personnel, purchasing - all accept the concept that the customer is king.

When marketing know the firm’s best customers are and what they want, the company can deliver top-notch service to those customers. The target customers respond by respond loyal devotees of the firm.

Declining profitability is a signal that the company’s product offering is becoming less effective, relative to substitutes and competitive product offerings, in delivering value and satisfying the customer needs.
Profitability