Everything you need to know about the core concepts of Marketing. In the process of marketing concept or philosophies companies adopt different approaches in relation to marketing of their products and services.
Some claim that they are customer oriented and others say they offer value to their customers. Still others say that they treat their customers as kings.
The concept of marketing is a wide term. The early stages of the growth of this discipline marketing was considered as selling and no distinction was made between the two terms ‘Marketing’ and ‘Selling’.
Thinkers and even some business managers would say that marketing was advertising. It is true that selling and advertising are parts of marketing.
In this article we will discuss about the concepts of marketing. Learn about: 1. The Exchange Concept 2. The Production Concept 3. The Product Concept 4. Marketing Myopia Concept 5. The Sales Concept 6. Modern Marketing Concept 7. Societal Marketing Concept 8. Holistic Marketing Concept.
Concepts of Marketing: Core and Modern Concepts of Marketing
Core Concepts of Marketing – 5 Core Concepts: Exchange, Production, Product, Marketing Myopia and Sales Concept
We shall discuss the five distinct concepts of marketing.
1. The Exchange Concept:
The Exchange concept of marketing, as the very name indicates, holds that the exchange of a product between the seller and the buyer is the central idea of marketing. While exchange does form a significant part of marketing, to view marketing as a mere exchange process would amount to a gross undermining of the essence of marketing.
A proper scrutiny of the marketing process would readily reveal that marketing is much broader than exchange. Exchange, at best, covers the distribution aspect and the price mechanism involved in marketing. The other important aspects of marketing, such as concern for the customer, generation of value satisfactions, creative selling and integrated action for serving the customer, get completely overshadowed in the exchange concept of marketing.
2. The Production Concept:
According to the Production Concept, marketing is a mere appendage to production. In organisations that practice this concept, production and technology dominate the thinking process of the key people. They believe that marketing can be managed by managing production. The concept holds that consumers would, as a rule, support those products that are produced in great volume at a low unit cost.
Naturally, in such organisations all effort gets focused on production. Organisations voting for this concept are impelled by a drive to produce all that they can. They do achieve efficiency in production. But their thinking is guided by the assumption that the steep decline in unit costs arising from the maximisation of output would automatically bring them all the patronage.
Customers, and all the profits that they need. But, they do not get the best of customer patronage. Customers, after all, are motivated by a variety of considerations in their purchases. As a result, the production concept fails to serve as the right marketing philosophy for the enterprise.
3. The Product Concept:
The Product Concept is somewhat different from the Production Concept. Whereas the Production concept seeks to win markers and profits via high volume of production and low unit costs, the Product concept seeks to achieve the some result via product excellence- improved products, new products and ideally designed and engineered products.
It also places the emphasis on quality assurance. In general, it tries to accomplish the marketing task through the product attributes. Organisation that subscribe to the Product concept of marketing believe that the consumers would automatically vote for products of high quality. They concentrate on achieving product excellence. Many of them also spend considerable energy, time and money on research & development and bring in a variety of new products.
Yet in many cases, these organisations fail in the market. They do not bother to study the market and the consumer in depth. They get totally engrossed with the product and almost forget the consumer for whom the product is actually meant; they fail to find out what the consumers actually need and what they would gladly accept.
Professor Theodore Levitt describes eloquently their obsession with the product and their neglect of the customers when he says, “They don’t get as excited about their customers in their own backyard as about the oil in the distant Sahara desert.
4. Marketing Myopia Concept:
At this stage, it would be appropriate to explain the phenomenon of ‘marketing myopia’ is to be credited to Professor Theodore Levitt. In one of his classic articles bearing the some title, in the Harvard Business Review, Professor Levitt has explained the disadvantages of excessive preoccupation with product or production or selling, the customer in the process.
Stated in simple terms, ‘marketing myopia’ coloured or crooked perception of marketing and a short- sightedness about business. Excessive attention to production or product or selling aspects at the cost of the customer and his actual needs, creates this myopia. It leads to a wrong or inadequate understanding of the market and hence failure in the market place.
The myopia even leads to a wrong or inadequate understanding of the very nature of the business in which a given organisation is engaged and thereby affects the future of the business as well. Levitt explained further that while businesses keep changing with the times, there is some fundamental characteristic in each business that maintains itself through the changing times.
And the fundamental characteristic invariably relates to the basic human need which the business seeks to serve and satisfy through its products. A wise entrepreneur or marketing man would understand this important fact and define his business in terms of this fundamental characteristic of the business rather than in terms of the products and services manufactured and marketing by him at a given point in time.
For example, the Railways should define their business as transportation, the movie makers should define their business as entertainment and the beverage marketers should define their business as nutrition.
5. The Sales Concept:
As more and more markets became buyers markets and the entrepreneurial problem became one of solving the shortage of customers rather than that of goods, the Sales Concept became the dominant idea guiding marketing. The sales concept maintains that a company cannot expect its products to get picked up automatically by the customers. The company has to consciously push its products.
Aggressive advertising high-power personal selling, large-scale sales promotion, heavy price discounts and strong publicity and public relations are the normal tools used by organizations that rely on this concept. In actual practice, these organizations tool do not enjoy the best of customer patronage.
Evidently, the Sales concept too suffers from marketing myopia just as the Exchange Concept, the Production concept and the Product concept do. Companies practicing the Sales Concept assume that selling is synonymous with marketing. In reality, there is a great deal of difference between selling and marketing. It would be useful to analyst the difference between ‘selling’ and ‘marketing’ at some length before we discuss the marketing concept.
Core Concepts of Marketing – Exchange, Production, Product, Marketing Myopia and Sales Concept
The concept of markets finally brings us full circle to the concept of marketing. Marketing means managing markets to bring about exchange and relationships for the purpose of creating value and satisfying needs and wants.
Thus, we return to our definition of marketing as a process by which individuals and groups obtain what they need and want by creating and exchanging products and value with others.
Exchange processes involve work. Sellers must search for buyers, identify their needs, design good products and services, set prices for them, promote them, and store and deliver them. Activities such as product development, research, communication, distribution, pricing, and service are core marketing activities.
Although we normally think of marketing as being carried on by sellers, buyers also carry on marketing activities. Consumers do “Marketing” when they search for the goods they need at prices they can afford. Company purchasing agents do “marketing” when they track down sellers and bargain for good terms.
In the usual situation, marketing involves serving a market of end users in the face of competitors. The company and the competitors sent their respective products and messages, to consumers either directly or through marketing intermediaries. All of the actors in the system are affected by major environmental forces (demographic, economic, physical, technological, political/legal, and social/cultural).
Each party in the system adds value for the next level. Thus, a company’s success depends not only on its own actions, but also on how well the entire system serves the needs of final consumers.
We shall now discuss each of the five distinct concepts of marketing in brief:
(i) The Exchange Concept:
The Exchange Concept of marketing, as the very name indicates, holds that the exchange of products between the seller and the buyer is the central idea of marketing. While exchange does form a significant part of marketing, to view marketing as a mere exchange process would amount to a gross undermining of the essence of marketing. A proper scrutiny of the marketing process would readily reveal that marketing is very broader than exchange.
Exchange, at best, covers the distribution aspect and the price mechanism involved in marketing. The other important aspects of marketing, such as concern for the customer, the generation of value satisfaction, the creative selling and integrated action for serving the customer get completely overshadowed in the Exchange concept of marketing.
(ii) The Production Concept:
According to the Production Concept, marketing is a mere appendage to production; production and technology denominate the thinking process of the key people in the business. They believe that marketing can be managed by managing production. The concept holds that consumers would, as a rule, support those products that are produced in great volume at a low unit cost.
Organisations voting for this concept are impelled by a drive to produce all that they can. They do achieve high production efficiency as a substantial reduction in the unit cost of production; and in quite a few cases they also do well with the distribution task and make the products widely available.
Yet, they often do not get customers as they expected. Customers, after all, are motivated by a variety of considerations in their purchases. Easy availability and low cost are not the only parameters governing the customers’ buying action. And the production concept thus fails to serve as the right marketing philosophy for the enterprise.
(iii) The Product Concept:
The Product Concept is somewhat different from the Production Concept. Whereas the Production Concept seeks to win markets and profits via high volume of production and low unit costs of production, the Product Concept seeks to achieve the same result via product excellence improved products, new products and ideally designed and engineered products.
It also places the emphasis on quality assurance. In general, it tries to take care of the marketing task through the claims regarding product.
Organisations that subscribe to the Product Concept of marketing believe that the consumers would automatically vote for products of high quality. They concentrate on achieving product excellence.
In addition, many of them also spend considerable energy, time and money on research and development and bring in a variety of new products. Yet, in many cases, these organisations fail in the market.
They do not bother to study the market and the consumer in depth. They get totally engrossed with the product and almost forget the consumer for whom the product is actually meant; they fail to find out what the consumers actually need and what they would gladly accept.
(iv) Marketing Myopia:
At this stage, it would be appropriate to explain the phenomenon of ‘marketing myopia’. The term ‘marketing myopia’ is to be credited to Prof. Theodore Levitt. Prof. Levitt had explained in one of his papers with the same title, the disadvantages of excessive preoccupation with product or production or selling, ignoring the customer in the whole process.
Stated in simple terms, marketing myopia’ means a coloured or crooked perception and understanding of marketing and a general short-sightedness about the business.
Overwhelming attention to the production or products aspect or the selling aspect as the cost of the customer and his actual needs creates this myopia. It leads to a wrong or inadequate understanding of the market and consequently a total failure in the market-place.
The myopia even leads to a wrong or inadequate understanding of the very nature of the business in which a given organisation is engaged and thereby affects the future of the business a well.
In his essay, Prof Levitt called upon the industrial and business organisations to raise and answer the fundamental questions-
(i) Do we define our business correctly?
(ii) Do we understand the real nature of our business?
(iii) What business are we in?
(iv) Will our definition cover the nature of our business in the context of tomorrow?
Levitt explained that while every business keeps changing with the times, there are some fundamental characteristics in each business that maintains itself through the changing times. And the fundamental characteristics invariably relates to the basic human need which the business seeks to serve and satisfy through its products.
A wise entrepreneur or marketing man would understand this important fact and define his business in terms of the fundamental characteristic of the business rather than in terms of the products and services manufactured and marketed by him at a given point in time. In other words, the definition has to be in terms of the human need which the business seeks to serve and satisfy.
(v) The Sales Concept:
The Sales Concept became the dominant idea guiding marketing as more and more markets became buyers markets and as the problem became one of solving the shortage of customers rather than the shortage of goods. The Sales Concept maintains that a company cannot expect its product to get picked up automatically by the customers.
The company has to consciously promote a push its products. Heavy advertising, high-power personal selling, large-scale sales promotion, heavy price discounts and strong publicity and public relations are the normal tools used by the organisations that rely on this concept.
Evidently, the Sales Concept too generates marketing myopia just as the Exchange Concept, the Production Concept and the Product Concept do. But only a few marketing executives realise this position. The majority feel that the Sales Concept is a flawless idea. They think selling is synonymous with marketing.
The general public too perceives marketing from the standpoint of the Sales concept the majority of business firms practice only selling. But in reality, there is a great deal of difference between selling and marketing. And that explains the evolution of the Marketing Concept as a totally distinct idea from the Sales Concept.
Concepts of Marketing – Core Concepts: Production, Product, Selling, Marketing and Societal Concept
In the process of marketing concept or philosophies companies adopt different approaches in relation to marketing of their products and services. Some claim that they are customer oriented and others say they offer value to their customers. Still others say that they treat their customers as kings.
Whatever be the guiding philosophy of marketing for a company, it should be carried out effectively, efficiently and in a socially responsible manner. Certainly a philosophy should guide a company’s marketing efforts but the philosophy must strike a balance between the interests of the company the interests of the customers who patronage the company’s products and services and the interests of the public and society.
There are five core concepts in marketing management (also known as philosophies or orientation) and organisations can choose any one of them for conducting marketing activities which are as follows- 1. Production Concept, 2. Product Concept, 3. Selling Concept, 4. Marketing Concept, 5. Societal Marketing Concept.
Core Concept # 1. Production Concept:
Under production concept production of goods is carried out without taking any consideration about the choices or tastes of the customers. An old marketing concepts where goods were just produced on the belief that they will be sold because consumers are in need of them.
The production concept is the management philosophy, which is being operated with the guiding force that the consumer will prefer those products which are conveniently available in adequate quantity and are affordable.
Thus, the management should make all efforts to produce adequate quantities of products with acceptable quality and properly distribute them to the users. This concept presumes that production so offered to the consumers would generally be acceptable and sold out.
The prominent features of production concept are:
1. According to this philosophy, marketers believe that customer satisfaction can be attained through reasonable quality and reasonably priced product.
2. There is fair amount of competition and competing products are sold with complete knowledge of the products available in the market.
3. The emphasis of the marketer is on continuous availability of product in sufficient quantity and consistency in quality.
This concept is considered as one of the oldest philosophies that guide sellers.
The production concept is still a useful philosophy in two types of situations given below:
1. In case the demand for a product exceeds the supply, management should look for ways to increase production.
2. In case the product’s cost is too high, improved productivity is needed to bring down the price to consumers.
Core Concept # 2. Product Concept:
The product concept is management philosophy that consumers generally prefer those products in the market which offer the best in terms of quality and price and essentially all organisations in marketing business try to produce and provide sustainable improved quality products.
The product concept emerged later as a management philosophy based on which marketing programmes and efforts were developed.
The product concept is somewhat different from the production concept. Whereas the production concept seeks to win markets and profits via. High volume of production and low unit costs of production, the product concept seeks to achieve the same result via product excellence—improved products, new products and ideally designed and engineered products.
It also places the emphasis on quality assurance. In general, it tries to take care of the marketing task through the claims regarding product. This concept suggests that consumers look for products which are affordable as well as quality wise their requirement. The emphasis is on quality of the product that is available in the market.
The concept is primarily based on following premises:
Consumers usually examine and prefer quality of the product.
Consumers purchase products to meet their overall needs and not specific needs.
Consumers compare quality of products to competing product or brand on offer.
Consumers’ rating of manufacturers is based on their quality products and reliability and brand loyalty is also based on quality perception.
Consumers are aware of the product quality differences between competing brands and they choose the quality which comes closest to their preference and their affordable price.
Core Concept # 3. Selling Concept:
The selling concept is a management philosophy based on the premises that consumers usually do not buy products that are not important or do not buy in sufficient quantity unless the organisation itself puts efforts to generate awareness and interest of the consumer in its products and makes them inclined positively to buy these products.
The selling concept is followed by many organisation, which holds that consumers will not buy enough of the organisation’s products unless it undertakes a large-scale selling and promotion effort. The concept is typically practiced with unsought goods those that buyers do not normally think of buying, such as Encyclopaedias or Insurance.
These industries must excel at tracking down prospects and selling them on product benefits. The selling concept gives enough importance to selling Selling Concept efforts and techniques used in selling. It also keeps a balance between products and services, however good in quality and affordable, may not sell on its own unless this is pushed by selling vigorously.
It also emphasizes that selling efforts and selling techniques vary from product to product and service-to-service. Selling an ordinary land telephone may require display and small promotion but selling a mobile phone would require aggressive selling efforts and promotional activity.
The selling concept is based on the following premises:
1. Products/things that are not essential to be consumed are usually considered as a wasteful expenditure if bought or bought in excess quantity than required.
2. Use of selling efforts by organisations for motivating consumers to make purchases is preferred by them.
3. Good salesmanship, selling techniques and efforts are appreciated by consumers as against ill behave salesmanship.
4. Wherever an organised and effective selling effort is made, consumer rating of organisation and retail outlets is high.
Core Concept # 4. Modern Marketing Concept:
The marketing concept underlines the importance of customers and their needs and wants and finds solution to satisfy these needs. The focus is on determining the customers’ requirements and then finds solutions to satisfy these requirements.
The marketing concept can be defined as, “The marketing concept is a management philosophy that focuses on the needs and wants of the customers of the target markets and the organisation would need to find products and services that will prove to be a useful solution to solve the requirement of such needs and wants and deriving the satisfaction of the customers.”
The marketing concept as the management philosophy emerged in 1950s and early 1960s, when the organisations started working out in different segments of the market and found that market characteristics and their needs are not similar, they are not static and changing with time and place. The needs of the customers gradually took the centre stage of the marketing plans and programmes.
Modern concept of marketing is a customer oriented concept. Centring on the assumption that a business and industrial enterprises can achieve its object of maximising the profits only when it considers the needs and wants of its consumers and makes efforts for the satisfaction of these needs and wants. Therefore, according to this concept, marketing starts with the discovery of needs and wants of consumers and ends with the satisfaction of these needs and wants.
The marketing concept says to achieving organisational goals depends on determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than do competitors. J.C. Penny’s motto also summarises the marketing concept— “To do all in our power to pack the customer’s rupee full of value, quality, and satisfaction.”
Starting with a well-defined market, focusing on customer needs, coordinating all the marketing activities affecting customers, and marketing profits by creating long-term customer relationships based on customer value and satisfaction. Here, companies produce what consumers want, thereby satisfying consumers and making profits. Many successful and well-known companies have adopted the marketing concept.
The market concept treats customers as the pivotal point in the entire marketing plan. The customers’ needs and wants are supreme. The customer is the boss. Henry Ford said, “No dissatisfied customers.”
There is an old saying “it takes months to find a customer and seconds to lose one.” Therefore, finding and retaining a satisfied customer is the objective and not finding a customer and selling the product.
The main premises on which the modern marketing concept is based are:
1. The marketer must understand the varied needs to diverse customers and then offer products to satisfy such requirements.
2. The market consists of different segments and these segments can be grouped as per the customers’ characteristics.
3. Be it any market the consumers look for products and services which carry attributes that are perceived closest to solving their needs and wants and consumers’ preference will be for such products and services.
4. If the consumers of any market feel that a particular product may not satisfy their needs, they may not buy such products.
5. The success of marketing concept as defined by proper analysis of market research, segmenting the market and offering products specific to the segments, along with proper marketing programmes.
Various factors influencing Modern Marketing Concept are discussed below:
1. Increasing Households – The growth of demand for household products is more than it is to the total population at any time. Joint family system has become unpopular because of many reasons. Most of the families are subdivided and this increases the number of families and their demands. For example, Automobiles, Refrigerators, Electrical Appliances, Television sets, etc.
2. Population Growth – The increase in population naturally increases the demand too. Markets are made up of people. Increase in population perpetuates increasing the markets, increasing the consumer, who have increased demand for goods, in kinds, varieties, preferences, etc. Thus the producers have to meet the changing demands of people.
3. Disposal Income – Births of many new firms automation in industries, etc., paved the way for the employment. Thus, people have increased their income and in turn aim for more satisfaction and more comforts. When the income continues to increase, propensity to purchase also increases.
4. Credit Purchases – Through hire-purchase schemes and instalment schemes credit purchases are common today. Credit purchase pushes sales. The customers can enjoy the facilities and this widens the market.
5. Technological Development – Innovation in science and technology happens every day. People always prefer to have the latest model. A number of new products, in the place of old ones, are being introduced into the market often. Consumers are at liberty to choose from the new products. Therefore, consumer-oriented marketing system is essential.
6. Surplus Income (Discretionary Income) – The people have surplus income left after meeting the expenses on essential items. This surplus amount will be spent on non-necessary products or luxury goods.
7. Mass Communication Media – The growth of mass communication media; Newspapers, magazines, radio, television, etc.; facilitates the buyers to learn about the new products available for sale. The buyers get information faster and more effectively before the new products are introduced to the market.
Limitations of Marketing Concept:
There are several limitations that come in the way of the marketing concept.
Some are as follows:
1. Societal Constraints:
Many products such as tobacco, alcohol etc. which are harmful for the health of the individual are usually restricted as regards production and consumption, with the aim of social welfare. Restrictions on such production and consumption limits the marketing practices of the firm.
2. Marketing Concept as an Ideology:
The attention of marketers should be focused not only on propagation of the ideology but also on its integration with the demands of other core business functions in order to achieve a balance between the satisfaction of consumers and the achievement of other company requirements.
3. Organisational Constraints:
A single company cannot satisfy all the needs of customer. All needs of customers cannot be satisfied by a company. It produces only those products for which it has sufficient human and technical resources and capabilities. There are many cases when company’s product need modifications, but company is not able to modify the product because of lack of competency and heavy cost.
4. Marketing as a Constraint on Innovation:
It is a common believe that relying on customers to guide the development of new products has severe limitations. This is because customers have difficulty articulating needs beyond the realm of their own experience. The effective exploitation and utilisation of technology in developing new products is a serious limitation and requires far wider market needs analysis.
5. Marketing and Society:
Since many individuals weigh heavily their personal benefits while discounting the societal impact of their purchases, the adoption of the marketing concept will result in the production of goods and services which do not have adequate consideration for societal welfare.
6. Conflicting Objectives:
Profit guidelines and Marketing objectives are often not consistent with the consumer-orientation or the integration of functions of the marketing concept. Since, companies place more emphasis on stability and the avoidance of risk, which may limit their willingness to adopt a strong consumer orientation. Too much emphasis on rapid growth can adversely affect the product quality and service for which the consumers suffer.
7. Internal Disagreement:
Executives may be sometime unwilling to adopt the marketing concept. In many cases, managers with financial, production or engineering background often see the marketing concept as a threat to their influence within the organisation.
Core Concept # 5. Societal Marketing Concept:
The societal marketing concept is the newest of the five marketing management philosophies. It is an enlightened marketing concept that says a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, and society’s long-term interests. It is closely linked with the principles of corporate social responsibility and of sustainable development.
This marketing concept suggests that the organisation should determine the needs, wants, and interests of target markets. It should then deliver superior value to customers in a way that maintains or improves the consumer’s and the society’s well-being As per the societal marketing concept, the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare.
Marketers are alerted by the social marketing concept to balance three considerations in setting their marketing policies first the company profits, second the consumer wants, and third the society’s interests. Originally, most companies based their marketing decisions largely on short-run company profit.
Eventually, they began to recognise the long-run importance of satisfying consumer wants, and the marketing concept emerged. Now many companies are beginning to think of social welfare when making their marketing decisions.
Following are the social marketing objectives:
1. Along with the objective of attaining customer satisfaction, the firm also aims at satisfying the long-term interests of the society.
2. Marketing companies focuses on environmental problems and safety, which are major concerns for the consumers.
3. The marketing activity should be harmonised to offer products which will satisfy consumers’ needs and society’s long-term interests.
Societal marketing stresses on the long-term well-being of society as a whole, incorporating this goal into the overall marketing plan of a company. While product and service marketing is still a key function of this type of marketing plan the focal point of societal marketing is society. It is a combination of consumer wants or needs, company requirements, and the long-term good or society.
Core Concept # 6. Holistic Marketing Concept:
Holistic marketing concept is a latest set of beliefs and practices adopted by leading business firms of 21st century. It is centered upon the development, design, and implementation of marketing programmes, processes, and activities that recognise their breadth and interdependencies. Therefore, it is an approach to marketing that attempts to recognise and reconcile the scope and complexities of marketing activities.
1. Relationship Marketing:
A key goal of marketing is to develop an enduring relationships with people and organisations that could directly or indirectly leads to the success of the firm’s marketing activities. Relationship marketing aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business.
The final outcome of relationship marketing is a unique company asset called a marketing network. A marketing network consists of the company and its supporting stakeholders—customers, employees, suppliers, distributors, retailers, ad agencies, university scientists, and others with whom it has built mutually profitable business relationships. The operating principle is simple “build an effective network of relationships with key stakeholders, and profits will follow.”
In order to create prosperity a marketer must respect the need among all these constituents and develop policies and strategies to balance the returns to all key stakeholders. To develop strong relationships with these constituents requires an understanding of their capabilities and resources, as well as their needs, goals, and desires.
2. Integrated Marketing:
In Integrated marketing, the marketer’s task is to devise marketing activities, and assemble fully integrated marketing programmes to create, communicate, and deliver value for consumers. Marketing activities come in all forms. McCarthy classified these activities as marketing-mix tools of four broad kinds, which he called the four Ps of marketing— product, price, place, and promotion.
3. Performance Marketing:
Holistic marketing includes performance marketing, and understanding the returns to the business from marketing activities and programmes, as well as addressing broader concerns and their legal, ethical, social, and environmental effects. Top management goes beyond sales revenue to examine the marketing scorecard, and interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures.
Social Responsibility Marketing:
The effects of marketing clearly extend beyond the company and the customer to society as a whole. Marketers must carefully consider their role in broader terms, and the ethical, environmental, legal, and social context of their activities, increasingly, consumers demand such behaviour.
Therefore, marketers are asked to justify their investments to senior management in financial and profitability terms, as well as in terms of building the brand and growing the customer base. Consequently, they are employing a broader variety of financial measures to assess the direct and indirect value their marketing efforts create.
4. Internal Marketing:
Internal marketing is a continuous process that happens strictly within a company or organisation whereby the functional process is to align, motivate and empower employees at all management levels to consistently deliver a satisfying customer experience. Internal marketing comes from the basic understanding of marketing.
The term internal marketing is defined as viewing employees as internal customers, viewing jobs as internal products that satisfy the needs and wants of these internal customers while addressing the objectives of the firm.
Fundamental Concepts of Marketing – as Adopted by Big Business Companies
The marketing activity must be undertaken with a full sense of responsibility and a clear-cut concept.
There are four concepts under which business concerns conduct their marketing activity these are:
1. The Product Concept;
2. The Selling Concept;
3. The Marketing Concept;
4. The Societal Marketing Concept.
1. The Product Concept:
This is the oldest concept guiding producers. Under this concept, producers believe that if the product is good and reasonably priced, it will be quite popular among consumers even if no special marketing efforts are made. They are of the opinion that it is the quality of the product that attracts the consumers. No publicity is required; the quality of the product alone will yield satisfactory sales and profits.
This concept assumes the following premises:
(i) The company should produce only quality products and the prices of such products should be reasonable-
(ii) The consumers will buy only such products;
(iii) The consumers are aware of other brands competing in the market;
(iv) Consumers, while buying, pay attention to the quality and price of the product.
It should, however, be remembered that though this concept appears to be very sound at the very outset, it has failed in operation. Leading companies having produced quality products but have not been able to push up the sales, unless they have taken positive steps to design, package and price the products attractively, place them in proper distribution channels, bring them to the notice of the persons concerned and convince them that the products have superior qualities. No wise businessman can follow this concept under this competitive world.
2. The Selling Concept:
Under this concept, the company assumes that its products are sold and not bought. In other words, the consumer’s satisfaction is considered secondary; selling the product is the primary consideration. The seller in the long run is likely to lose his customers, who would not trust him anymore. It is also presumed that customers, are aware of the tactics of sellers and are confident enough to tackle the situation while making their purchases.
Dissatisfied customers do not act on their dissatisfaction, with the result that they do not recommend this seller to any other customers, nor do they complain to consumer organisations. Since there are many potential customers, the company is not particular about repeat sales. In the words of kotler, “there is little measurement of what the public wants and a lot of selling effort to get the public to accept policies that a few want.”
3. The Marketing Concept:
Under this concept, the organisation tries its best to determine the needs, wants and valued of the buyer’s market and finally takes all steps to deliver the desired satisfaction more effectively and efficiently than its competitors do. Every attempt is made to satisfy the wants of customers; and to achieve this objective, a special programme of market research is undertaken.
Thus organisation fully believes that it can win the loyalty of its customers and their appreciation of its services by only giving them satisfactory services in respect of their needs and wants. Winning the confidence of customers is as good as fulfilling the goals of organisation.
However, the selling concept and marketing concept are very often confused by the public and by businessmen. In fact, selling focuses on the needs of the seller, whereas marketing pays attention to the needs of the buyer. In selling, the main idea is to convert the product into cash. But marketing deals with the satisfaction of customers with the product that is supplied, the creation of higher demand, the delivery of the goods, packaging, etc., thus, the selling concept is mainly concerned with existing products and their sale to make ultimate profits.
The marketing concept deals with the existing as well as the potential customers and their needs. It chalks out a programme to serve these needs and reap profits out of customer satisfaction. This concept has been extensively adopted, for it benefits the organisation while looks upon customer satisfaction as its own satisfaction.
It gives, due importance to consumers and produces the goods that are required. If fully believes in the theory known as consumer sovereignty and ensures the maximum welfare of consumers, thereby earning a good amount of profit for itself.
4. Societal Marketing Concept:
Under the marketing concept, individual satisfaction and public interest are both ignored; and this limitation can be removed by introducing the societal marketing concept. This concept aims at giving individual satisfaction so far the customer is concerned and maintains public welfare as its goal and responsibility in the long run. It involves the creation of a healthy life for its customers by providing quality products and maintaining customer interest at the top level.
It does not hesitate to drop products that are not liked by customers. This attitude on the part of the organisation encourages customers to patronise it. This is the current concept which has been extensively adopted and widely accepted in the interest of the organisation, the consumer and society.
Concept of Marketing – New Concepts: Network Marketing, Relationship Marketing and Direct Marketing
The concept of marketing is a wide term. The early stages of the growth of this discipline marketing was considered as selling and no distinction was made between the two terms ‘Marketing’ and ‘Selling’. Thinkers and even some business managers would say that marketing was advertising. It is true that selling and advertising are parts of marketing.
Marketing is much more than selling and advertising. Today the term ‘marketing’ has been clearly defined. Many organisations are involved in developing marketing activities to satisfy the needs of various groups of customers. This division of consumers has helped the development of new products and services and even specialisation in selling is being attained.
Many new concepts like Network marketing, Relationship marketing, Direct marketing are developed and are implemented to reach as many consumers as possible, through them. Satisfying the consumer is the main mantra in today’s marketing activity. With the development of new markets and new avenues of selling, a wide variety of consumer and producer goods have been designed and developed and for many marketing has become a good profession.
Particularly in developing countries like India, marketing is occupying a vital place in business activity. Market driven economies are gaining power at the global level. Even the socialist countries have started studying the marketing concepts in a scientific way, to introduce them actively in their internal distribution system.
What is included in marketing can be better explained by analysing a product or service. For example a tooth paste. Tooth paste is used by people all over the world. Most of us were not born with a tooth brush with tooth paste on it in our mouth. We do not manufacture our own tooth paste.
Instead companies like the Colgate-Palmolive, Hindustan Lever etc. manufacture them. All tooth pastes look alike and perform the same job cleaning the teeth. But a consumer can choose from a wide variety of tooth pastes. They have different colours, sizes, tastes, weights and attractive packings. Price also varies. You can purchase in any range you want.
This variation in size, price etc. complicates the production and sales of tooth paste.
The following aspects show as to what has to be done before and after a firm decides to produce a tooth paste:
(a) Analyse the requirements of users of tooth paste and decide whether they want more of the same ones or different tooth paste.
(b) Visualize the type of tooth paste – size, colour, price and taste – the different consumers want and decide how many of these people, the firm can satisfy.
(c) Estimate how many of these people will use that particular tooth paste in the next few years and what quantity they will buy.
(d) Estimate the price at which they purchase their paste and find out whether the firm can make profit out of it.
(e) Find out where these users will be and how to get the firm’s paste to them.
(f) Think of the type of promotion to be adopted to sell the product to the potential customers.
(g) Estimate the competitor’s position in the market where you sell. The estimate should be in terms of the quantity they produce, price they fix for each size, packaging they make, promotion strategy they adopt etc.
All these activities are not part of production. But they are part of a big process called Marketing. Marketing provides a required direction and helps make sure that the right products are produced and find their way to consumers. The tooth paste example will illustrate that marketing includes much more than selling and advertising. It plays an essential role in providing consumers with need satisfying goods and services.
Marketing activities started from the days of ‘Barter Economy’ or even earlier. But it still looks new and attracts many people to involve themselves in this activity in one form or the other. But the marketing activity was recognised properly after the Industrial Revolution. Commercial Revolution provides an impetus to marketing activities. Although, the subject matter of economics discussed wide variety of marketing activities, marketing ideas were not brought to the lime light by this discipline.
Only in twentieth century, marketing activities had a new look and started developing as a separate discipline. In the last hundred years, it went through many phases and today it has emerged as a key discipline in the business world, assuming newer heights.
The goods and services which were once considered luxury have become essential commodities today because of the development of marketing. Thousands of innovative consumer products have entered the offices and households all over the world due to the marketing effort.