MARKETING CONCEPTS IN BUSINESS

 

The Marketing Concept

The marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets.
The marketing concept rests on four pillars: target market, customer needs, integrated marketing, and profitability.

Target market

No company can operate in every market and satisfy every need. Nor can it always do a good job within one broad market.

Customer needs

Marketing is about meeting needs of target markets profitably.

The key to professional marketing is to understand their customers’ real needs and meet them better than any competitor can.

Some marketers draw a distinction between responsive marketing and creative marketing. A responsive marketer finds a stated need and fills it. A creative marketer discovers latent needs (needs not stated but observed or inferred) and produces solutions that customer did not ask for but to which they enthusiastically respond.

Integrated Marketing

When all the company’s departments work together to serve the customer’s interests, the result is integrated marketing.

Integrated marketing takes on two levels. First, the various marketing functions-sales force, advertising, product management, marketing research, and so on – must work together. Second, marketing department must be well coordinated with other company departments.

The company is doing proper marketing only when all employees appreciate their impact on customer satisfaction. To foster teamwork among all departments, the company carries out internal marketing as well as external marketing. External marketing is marketing directed at people outside the company. Internal marketing is the task of successfully hiring, training, and motivating employees who want to serve the customers well. In fact internal marketing must precede external marketing. It makes no sense to promise excellent service before the company’s staff is ready to provide excellent service.

Profitability

The ultimate purpose of the marketing concept is to help organizations achieve their goals. In the case of private firms, the major goal is profit. Marketing managers have to provide value to the customer and profits to the organization. Marketing managers have to evaluate the profitability of all alternative marketing strategies and decisions and choose most profitable decisions for long-term survival and growth of the firm.

The five marketing concepts

The five marketing concepts are:

1. Production concept
2. Product
3. Selling concept
4. Marketing concept
5. Societal marketing concept

 

 

The production concept

When the production concept was defined, a production oriented business dominated the market. This was from the beginning of capitalism to the mid 1950’s.

During the era of the production concept, businesses were concerned primarily with production, manufacturing, and efficiency issues.Companies that use the production concept have the belief that customers primarily want products that are affordable and accessible.

The production concept is based on the approach that a company can increase supply as it decreases its costs.Moreover, the production concept highlights that a business can lower costs via mass production.

A company oriented towards production believes in economies of scale (decreased production cost per unit), wherein mass production can decrease cost and maximize profits. As a whole, the production concept is oriented towards operations.

The product concept

This concept works on an assumption that customers prefer products of greater quality and price and availability doesn’t influence their purchase decision. And so company develops a product of greater quality which usually turns out to be expensive.

One of the best modern examples would be IT companies, who are always improving and updating their products, to differentiate themselves from the competition.Since the main focus of the marketers is the product quality, they often lose or fail to appeal to customers whose demands are driven by other factors like price, availability, usability, etc.

The selling concept

Production and product concept both focus on production but selling concept focuses on making an actual sale of the product.Selling concept focuses on making every possible sale of the product, regardless of the quality of the product or the need of the customer.

The selling concept highlights that customers would buy a company’s products only if the company were to sell these products aggressively.This philosophy doesn’t include building relations with the customers. This means that repeated sales are rare, and customer satisfaction is not great.

The marketing concept

A company that believes in the marketing concept places the consumer at the center of the organization. All activities are geared towards the consumer.A business,aims to understand the needs and wants of a customer. It executes the marketing strategy according to market research beginning from product conception to sales.

By focusing on the needs and wants of a target market, a company can deliver more value than its competitors. The marketing concept emphasizes the “pull” strategy”. This means that  a brand is so strong that customers would always prefer your brand to others’.

The societal marketing concept

This is a relatively new marketing concept. While the societal marketing concept highlights the needs and wants of a target market and the delivery of better value than its competitors, it also emphasizes the importance of the well-being of customers and society as a whole (consumer welfare or societal welfare).

The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. They must balance and juggle the often conflicting criteria of company profits, consumer want satisfaction, and public interest.

Source: Marketing Management by Sir Kotler