Some of the most essential and effective concepts of marketing are as follows:
1. Distinct Marketing Concepts 2. Exchange Orientation 3. Product Orientation 4. Sales Orientation 5. Production Orientation 6. Marketing Concept 7. Holistic Marketing Concept 8. Examples of Marketing Concept by Philip Kotler 9. Societal Marketing Concept 10. Modern Marketing Concepts.
Marketing Concepts used in Marketing Management (includes concept developed by Philip Kotler)
What is Marketing Concept?
The marketing concept is the philosophy that the firms follow after analysing the needs and wants of their customers and then try to make appropriate decisions to satisfy those needs better than the competitors.
Nowadays most firms make and adopt their marketing concept/philosophy. The focal point of marketing philosophy is satisfaction of the needs and wants of the target market. It aims at delivering value to the customers better than the competitors.
This concept believes in the pull strategy and helps the firm in making its brand very strong. Marketing concept came into existence after the Second World War when the variety of products increased in the market and hard selling no longer could be relied upon to generate sales.
With increased income, customers could afford to be selective and buy only those products that precisely met their changing needs. Hence marketers started focusing on the needs and wants of the customers.
They began to align all functions of the company to focus on those needs of the customers which were unmet. The main goal of the marketing philosophy is to earn profit through customer satisfaction. Firms are following this philosophy usually in setting up their own marketing departments.
The main objective of such departments is to satisfy the needs and wants of the customers. The marketing concept relies upon marketing research and planning to define market segments, their size and their needs.
To satisfy such needs, the marketing team makes decisions about the controllable parameters of the marketing mix. Thus it can be concluded that marketing concept or philosophy is a management philosophy according to which, a firm’s goals can be best achieved through identification and satisfaction of the customers’ stated and unstated needs and wants.
i. The Production Concept – Consumers prefer products that are widely available and are inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs and mass distribution. This orientation makes sense in developing countries. For example, Chinese products.
ii. The Product Concept – Consumers favour those products that offer the best quality, performance, or have innovative features. Managers in these organisations focus on making superior products and keep improving them over time, assuming that buyers can appraise quality and performance. For example, Maruti’s swift Dzire.
iii. The Selling Concept – Consumers and businesses, if left alone, will ordinarily not buy enough of the organisations products. The organisation must, therefore, undertake an aggressive selling and promotion effort. Their aim is to sell what they make rather than make what the market wants. For example – Insurance schemes, ULIPs.
iv. The Marketing Concept – The key to achieving organisational goals consists of the company being more effective than its competitors in creating, delivering and communicating customer value to its chosen target markets.
The marketing concept rests on four pillars:
(a) Target market – Companies do their best when they choose their target market(s) carefully and prepare tailored marketing programmes.
(b) Customer needs – A company can carefully define its target market, yet fail to correctly understand the customers’ needs. Clearly understanding customer needs and wants is not always simple.
(c) Integrated marketing – When all of the company’s departments work together to serve the customers’ interests, the result is integrated marketing.
(d) Profitability – The major objective of any business is to earn profit. In the case of non-profit and public organisations, the aim is survival and attracting enough funds to be able to continue performing useful work.
v. Societal Marketing Concept holds that the organisations task is to determine the needs, wants and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumers’ and the society’s well-being.
vi. Modern Marketing Concept – It is consumer oriented, backed by integrated marketing and is aimed at generating customer satisfaction to achieve the organisational goals.
It has the following features:
(a) Customer Orientation – All business activities should be directed towards customers’ needs, wants and demands.
(b) Marketing Research – Marketers should keep themselves abreast with the requirements and reactions of customers.
(c) Marketing Planning – The overall objective of the firm should be earning of profit through satisfaction of customers rather than maximizing the sales volume and profits. On the basis of this goal, all the objectives and policies of marketing must be framed.
(d) Integrated Marketing – The activities of all the departments are directed towards the single objective of the organisation of profit through customer satisfaction.
(e) System Approach – The concept of system approach requires an intelligent coordination of the four Ps, viz., Product, Price, Place and Promotion.
(f) Long-Term View Point – The aim should be to be able to achieve this goal over a long period of time.
This article will further help you to learn about:
- Concepts of Marketing (3 Distinct Marketing Concepts)
- Selling Concept of Marketing
- Marketing Concepts
- Holistic Marketing Concept by Philip Kotler
- Societal Marketing Concept
- What are the Five Marketing Concepts?
- Examples of Marketing Concept
- What is Marketing Concept?
- Modern Marketing Concept
- Core Concepts of Marketing
- Concepts of Marketing Management
Also Learn About:
- List of Marketing Concepts
- Selling Concept Of Marketing
- Societal Marketing Concept
- Evolution of Marketing Concept with Example
- Core Concepts of Marketing
- Selling Concept Example
- Production Concept Example
Concepts of Marketing (3 Distinct Marketing Concepts):
Over the years, three distinct marketing philosophies/concepts have emerged focusing attention on how the products and services to customers need to be delivered.
These are presented below:
1. Production Orientation:
The production concept was a brainchild of Industrial Revolution and prevailed until the early 1920s. According to this philosophy, a firm should produce items in an efficient way. That concept simply suggested that customers prefer inexpensive products that are readily available. You just have to make the products and services available in a cost effective mariner. This kind of production led to an ugly situation where every producer came out with products with more or less similar features. No one bought the so called me-too products after a while.
2. Product Concept:
According to the product concept, customers will buy products that are superior. This superiority may be achieved through higher levels of quality, performance or innovation. Manufacturers are obsessed with the product—the quality and features of the product—more than with the customer and his needs.
The product concept seeks to a win markets and profit through high volumes and low unit cost. The only difference (between the product concept and the production concept) is the change in the emphasis—through product excellence—improved products, new products and ideally designed and engineered products. It seeks to achieve business success through product attributes.
The thinking is that consumers would automatically buy products of high quality. It is a technique that is still widely used today, with the use of comparative advertising and market leaders who introduce new inventions. Firms primarily focus on developing a product and fine tuning its features.
Other marketing strategies, such as pricing, distribution and promotion are after thoughts. The product concept, thus, makes one believe that the purpose of business is to make high quality products. This is clearly a wrong definition of business. Unfortunately, the fact of the matter is that people buy benefits/services/solutions/value satisfactions—not products.
3. Selling Concept:
The reason for the selling philosophy was the ever-rising number of goods available after the Industrial Revolution. Businesses became progressively more efficient in production, which increased the volume of goods. With the increased supply, competition also entered the picture. These two events eventually led to the end of product shortages and the creation of surpluses.
It was because of the surpluses that companies turned to the use of advertising and personal selling to reduce their stocks and to sell their products. Selling is pushy. You need aggressive salesmen to convince the customer somehow. You also need obnoxious advertising to support selling effort. The focus is always on selling somehow—taking the customer for a ride.
4. Marketing Concept:
The marketing concept focuses on discovering and responding to consumer needs. Firms produce what the market demands, rather than expecting potential customers to purchase whatever they make. Research and development methods uncover consumer perceptions and needs. Firms design products that will specifically meet those needs. Rather than distributing to the masses, companies focus on market segments with distinct sets of needs and preferences.
The idea behind the marketing concept is to build a long term relationship between the firm’s products and its customers. The marketing concept is founded on the belief that profitable sales and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires.
The key features of the marketing concept may be stated thus:
i. Consumer is sovereign. Consumer is the centre of attraction, the focal point of attention. According to Sam Walton, the founder of Wal Mart, “there is only one boss—the customer”.
ii. Each department, every worker and manager should think customer and act customer. All players must put their act together and deliver value (price is what you pay and value is what you get) to customer through well-coordinated and integrated efforts.
iii. The aim of business is to serve the needs of customers profitably. Consumer orientation, integrated marketing and coordinated efforts are meant to deliver consumer satisfaction ensuring survival and growth of business. The aim of marketing is to create, communicate and deliver value to consumers.
What are the Five Marketing Concepts?
Since the industrial revolution, the concept of marketing has undergone significant changes.
Marketing does involve exchange of a product between a seller and a buyer, usually based on money. But modern marketing is not merely an exchange operation. Marketing has now a much wider connotation. It covers search of unmet customer wants, formulation of marketing strategies, marketing-mix, creative selling and advertising, serving the customer and so on. All these other vital ingredients of marketing are conveniently forgotten in exchange- oriented marketing approach.
Management firmly believes that, if the product has excellent features, quality and performance, customer response is bound to be favourable and all promotional efforts are needless. This was the marketing philosophy till 1930. Over-emphasis on product excellence may lead a marketer to ignore many other aspects of customer needs and desires. Consumer for whom the product is meant may be ignored. This is called the phenomenon of marketing myopia or short-sightedness.
Company sells what it can make. The focus is on performance and cost. The product costs line is usually narrow. The price is based on production and distribution costs. Technical research enables product improvement and cost-cutting in the production process. Packaging is expected to protect the product and minimise costs.
Credit is regarded as a necessary evil. The producer is interested only to minimise bad-debt losses. Promotion is adopted only to give emphasis on product features, quality, and price. This concept can work only in a sellers’ market. In a buyers’ market it fails to retain market under keen competition. Example- American luxury car market was captured by Japanese and European cars around 1980.
Buyers’ market for many commodities brought about sales-orientation in marketing. It points out that a company cannot secure enough customer response to its products without high-pressure salesmanship, aggressive advertising and intensive sales promotion. Sales orientation gives emphasis on increasing sales volume even at the cost of consumer satisfaction and service.
Many marketers adopt this approach in selling unsought or unwanted goods. Examples- The selling concept is found in the sale of books, insurance and also in auto sales. We also have selling concept at the time of elections faithfully followed by all political parties. Sales orientation also exhibit marketing myopia.
When a marketer adopts a market-oriented business philosophy the guiding principle becomes “it is more effective to make what customer wants to buy than to sell them what a marketer wants to make or sell.” Thus, planning and co-ordination of all company activities rotate around the primary goal of satisfying customer needs.
The marketing concept is defined as a customer-oriented philosophy duly integrated and implemented through the entire organisation in order to serve customers better than competitors and thereby ensuring sustained growth and prosperity. It was introduced as marketing philosophy and objectives only after 1950.
Customer-oriented marketing approach points out that the primary task of a business enterprise is to study needs, desires and values of the potential customers, and on the basis of latest and accurate knowledge of market demand, the enterprise must produce and offer the products which will give the desired satisfaction and services to the customers (much better than its competitors).
The entire marketing mix will be formulated on the basis of marketing information and research.
Two radical changes were brought about when the marketing concept was introduced after 1950 in the process of marketing:
1. We have a steady shift from producer-oriented or sales-oriented business enterprise to the customer-oriented business enterprise. Marketing and innovation are now the distinguishing features of a business organisation from those of other types of social institutions.
2. We have also a gradual shift from caveat emptor (buyer beware)-to caveat vendor (seller beware). This has clearly emphasised the social responsibility of business toward consumer and the need for consumer protection in the market place. Marketing concept as a customer-oriented marketing philosophy of the entire business organisation has four premises.
(a) Customer Orientation:
The essence of modern marketing concept is “the firm must take its marching orders from the market and it must produce what the market needs.” All elements of business should be geared towards the customer satisfaction. Corporate plans, programmes and operations must be focused around customer needs and desires.
(b) Marketing Information System:
The marketing concept also emphasises the role of information as the key to both customer satisfaction and profitability. Customer demand can never be satisfied without integrated marketing programmes based upon adequate and accurate information about customer, customer needs and competition. Information is a vital resource in planning-action-control process of management.
(c) Integrated Marketing Activities:
Systems approach adopts a unified view of the study of marketing. All marketing activities must be properly integrated and coordinated to accomplish a set of objectives.
(d) Dual Objectives:
The dual objectives are- (a) Customer satisfaction and (b) Maximising profits, of course by serving the customers.
A company adopting the marketing concept has three distinguishing features- (1) It has market or customer-oriented approach in business planning, (2) Corporate goals are given top priority, and (3) It has a systems approach in planning, organising, controlling and coordinating its entire business as one system to achieve the overall corporate objectives.
We have corporate strategic plan as well as corporate operating plan. Then there are departmental plans such as production plans, marketing plans, financial and other plans. All these functional plans are integrated and coordinated. When these plans are implemented, they are expected to fulfill market needs as well as attain the corporate goals as per corporate strategic plan. In this way, under the marketing concept, we have comprehensive customer-oriented business planning leading to customer satisfaction and profits.
The Concepts of Marketing (Top 5 Concepts):
As far as the company orientation towards the marketplace is concerned, it has gone through various stages with the development.
On the whole, it can be divided into five concepts:
In the beginning, after the industrial revolution took place; the manufacturers were selling, whatever they could produce; as there was shortage of different products. It led to the stage where businesses adopted the Production Concept. Production concept is the oldest concept in the business and is based on the philosophy that consumers prefer products, which are widely available and inexpensive.
For the business to be successful, maintaining high production efficiency, mass distribution and low costs was essential. The companies in China like Haier, TCL etc. follow the same philosophy, based on the huge and inexpensive labour availability.
The emphasis on production concept led to the difficulty in selling the products, which eventually forced the businesses to go for product differentiation. It was also found out that customers prefer those products that offer the most quality, performance or innovative features. This kind of business orientation led to the Product Concept. But a new and better product may not be always successful, unless it is marketed properly.
Product concept further led to Selling Concept; when selling became difficult even after having a good product at a cheaper price. Emphasizing upon the selling concept, Sergio Zymen, Coca-Cola’s former VP of Marketing has said, ‘The purpose of Marketing is to sell more stuff to more people more often for more money in order to make more profits.’
Selling concept holds that every product needs aggressive marketing to be sold. It happens mostly with the unsought goods like Insurance, Mediclaim policies, Demat accounts, Encyclopedias etc. and when there is overcapacity.
With the increasing competition, the businesses started to discover that it is useful to produce what the customers want; rather than what can be produced by the company. This philosophy is known as Marketing Concept. It emerged in the 1950s with an objective of providing right products for the customers.
Famous direct marketer Lester Wunderman has said, ‘The chant of the Industrial Revolution was that of the manufacturer who said, ‘This is what I make, won’t you please buy it.’
The call of the Information Age is the consumer asking, ‘This is what I want, won’t you please make it.”
Theodre Levitt has said ‘Selling focuses on the needs of the seller; marketing on the needs of the buyer- Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customers by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.’
It has also been found through research that companies have achieved better performance by imbibing this philosophy. For example, Dell Computers has achieved success through mass customization of the computers, notebooks and netbooks, based on the individual customers’ requirements.
In the 21st century, the marketing concept is further strengthened with the term called Holistic Marketing Concept. Holistic marketing concept takes into account a broad, integrated perspective. It is based on integrated marketing, internal marketing, relationship marketing and performance marketing. It includes the development and implementation of marketing programs within the organisation as well as outside the organisation.
Integrated marketing tries to build synergy among the product and services, channels of distribution and communications. It tries to integrate the marketing mix i.e. McCarthy’s 4P’s – Product, Price, Place and Promotion Whereas internal marketing deals with the relationship and the coordination among the marketing department with the senior management and other departments like finance, accounts, human resources, information technology etc.
Relationship marketing deals with effective implementation of CRM (Customer Relationship Management) and PRM (Partner Relationship Management); while performance marketing calls for marketing activities as well as broader concerns of the society. It contains financial accountability, brand and customer equity on the one hand and ethics, environmental, legal and community concerns on the other in the form of social responsible marketing.
Socially responsible marketing calls for marketing beyond the objective of just making profits. It talks about fulfilling the need of a customer in such a way that will help to preserve the ecology and enhance the customers and society welfare. With the growing concern, the concept ‘Green Marketing’ is gaining popularity day by day.
Nokia’s ‘Take Back’ campaign for recycling old mobile phones, HP’s ‘Power to Change’ campaign to save electricity and Panasonic’s ‘Eco Ideas’ to produce energy efficient products, to reduce CO2 emissions across all their manufacturing sites and to spread awareness about the environmental activities through celebrity endorsers in India and all across the world, are examples of being an environment friendly, socially responsible company.
Examples of Marketing Concept (Explained by Philip Kotler and Others):
Example of Marketing Concept # 1. Holistic Marketing Concept by Philip Kotler:
Holistic marketing concept is a new approach to Marketing and one of the latest business concepts. It originated as a response to fundamental changes in the current marketing environment like Internet development, Emergence of Corporate Social Responsibility, Hyper-competition, Globalisation etc.
According to Philip Kotler and Kevin Lane Keller, A holistic marketing concept is based on the development, design and implementation of marketing programmes, processes and activities that recognise the breadth and interdependencies.
Holistic marketing recognises that ‘everything matters’ with marketing and that a broad, integrated perspective is necessary to attain the best solution’. It implies that holistic marketing concept is developed by thinking about the business as a whole.
A business utilising a holistic marketing approach operates under the strong belief that all aspects of its marketing strategy are interrelated. Under this concept, development of marketing programmes like marketing mix, the design of marketing campaigns and the implementation of marketing processes are not isolated business functions. Instead the business makes marketing campaigns based on reaching a common organisational objective.
The holistic marketing approach or concept takes into account the considerations of stakeholders, customers, employees, suppliers and the community as a whole when creating and implementing marketing strategies.
Under this approach all the departments of the business like R&D, Marketing, Finance, HR, etc., are integrated and work collectively towards the marketing and sale of the product. This approach welcomes ideas and suggestions from everyone who are directly or indirectly related to the business in order to match up with the changing marketing trends.
Holistic approach can be understood with the help of a simple example:
Usually the research teams from R&D department check the performance of the product and seek suggestions from the sales persons to bring about a positive change in the product. In doing so, the Finance department is consulted for the approval of the budget.
The type of individual required for sale or marketing purposes is informed to the HR department. HR department has the responsibility to recruit the suitable candidates. Hence, the holistic approach is being followed here, where everyone is working together to create a brand image in the minds of the customers and compete with the other brands in the market.
Societal marketing concept emphasises on determining the needs, wants and interests of target markets and delivering the desired satisfaction more effectively and efficiently than the competitors in a way that preserves or enhances the consumer’s and the society’s well-being.
In today’s marketing scenario customer is treated as a king. Companies now-a-days take into consideration the needs and wants of the customers before designing and developing their products. This requires gathering and analysing market information followed by market planning.
The societal marketing concept insists on honoring social values which ensures long term social welfare. But quite often, in order to please their customers, companies can create problems for the society. For example – there has been a rise in demand for sports utility vehicles that run on diesel engine.
Various big automobile manufacturers have produced different models of diesel cars to satisfy the needs and wants of the customers. Due to increase in the number of heavy diesel cars on the roads, the air and noise pollution level has drastically gone up. This has raised environmental issues and concerns. Thus there have been situations where following the customer concept has created trouble for the society.
Concepts of Marketing (Major Modern Marketing Concepts):
New ideas always confront people. This leads to development and refinement in the original concepts. Marketing, has also witnessed changes, in the light of changing scenario of the world. Marketing concepts, ideas and discipline have been refined over a period of time, which has given a new dynamism to this field.
Some of the major modern marketing concepts are:
Originally used by Prof. Kelly E.J. the word ‘Meta’ means “more comprehensive.” “Meta-marketing is to designate a new, although related discipline which deals critically with marketing as a discipline” according to Prof. Kelly. Accordingly, the concept of meta marketing is to bring the whole of scientific, social, ethical and managerial experience to bear on marketing.
Thus through, this concept attempts are made to widen the horizons of marketing and include non-business organisations also within its purview. Temples, Churches, Universities, Schools and Colleges, hospitals, clubs etc. all are included here. The marketing practices adopted for the purpose of family planning measures, prohibition practices in the society are some of the examples of meta marketing.
The term ‘Demarketing’ is associated with underdeveloped countries where demand exceeds supply. Here, attempts are made to match the excess demand to the available supply, without affecting the interest of the consumers. Demarketing concept, supports the fact that the task of marketing is not only to manage excess supply but also excess demand by using appropriate marketing tools.
In underdeveloped countries, excess demand is a major problem. Demarketing talks about reducing the total demand to the level of existing supply without injuring the interest of buyers.
Over marketing is concerned with the efforts made by the companies to increase the sales, by all possible means. However, in doing so it neglects the quality control and efficiencies in production process. A case of ‘down trading’, over marketing only emphasis the objective of increasing the sales. This may be useful where the demand much exceeds the supply and other factors like quality are not important. Thus, this concept ignores the social responsibility of the organisation and only tries to achieve increasing sales volume.
Remarketing concept is a one which talks about extending further the life cycle of a product. It tries to find out alternative uses for the existing product and also new markets and new users, for these products. Through remarketing firms try to have optimum utilisation of the resources and greater satisfaction to the customers. Form, features and structure of the products are changed to add more value to the existing product.
Synchro Marketing is concerned with maintenance of balance between demand and supply of seasonal goods. These goods are such that they are demanded only during certain seasons of the year. Like raincoats, umbrellas and others water proof items which are demanded in rainy season and woollen clothes which are demanded in winter season.
To cover this demand gap, firms spent more on the promotion, give price incentive, speak of fresh arrival etc. Synchro marketing, thus, tries to reduce the gap between seasonal demand and supply through effective promotion mix, and thereby reduce the losses to the firm.
Counter marketing concept talks about the society’s welfare and protection and promotion of its short term and long-term interest. Here, attempts are made to kill the demand of those goods and services which injure the interest of the society, and supply safe alternatives in place of them.
These products not only harm the consumers, but also its supplies and people producing it. For example, supply of eco-friendly drugs, fertilizers, hot drinks, garments, electrical appliances etc. Thus, Business ethics forms a base for counter marketing.
Green marketing, also called as eco-marketing is a much talked about concept in recent times. This is because of the fact that there has been a huge loss to the environment by way of depleting natural resources, decreasing forest cover, increasing pollution, global warming, endangered species of plants and animals and such other factors.
These have caused environmental imbalance, leading to more natural calamities. Efforts should be made to protect the eco-system. Marketing should emphasize use of environment friendly products which are bio-degradable.
Core Concepts of Marketing: Production concept, Product concept, Selling concept, Marketing concept, Societal marketing concept
Marketing involves exchange of values between the marketer and the customer. But marketing efforts of different firms may be guided by different philosophies or concepts.
(1) Production concept;
(2) Product concept,
(3) Selling concept,
(4) Marketing concept; and
(5) Societal marketing concept.
An overview of these core concepts is given below:
(1) The Production Concept:
This philosophy is based on the belief that high production efficiency and mass distribution would sell the product offered to the market. The high production efficiency means that the input-output ratio is favourable. It will lead to economies of scale and decline in the cost per unit. Thus, the production concept holds that customer favours products that are offered at lower prices and are easily available. In short, mass production and distribution are the essence of the production concept.
This concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution. They assume that consumers are primarily interested in product availability and low prices.
This marketing orientation is mostly practiced in situations where demand exceeds supply or product cost is high that can be brought down by mass production. It is followed by the companies producing products for the masses and not for any specific class or niche market. However, the production concept can’t be applied where customers demand wide variety of products or customized products, i.e., as per their choice and taste.
(2) The Product Concept:
The companies following this philosophy believe that by producing superior products and improving their feature over time, they would be able to attract more customers. The underlying assumption is that customer favours product quality, performance, innovative features, etc.
Under the product concept, superior products are always welcomed by the customer. But product is only one element of the total marketing-mix. A better product at higher price (because improvement in quality might be at a cost) might disturb the customer budget and so he may compromise with the lower quality.
Product oriented companies concentrate on making superior products and improving them over time. This orientation is followed by technology driven companies which feel that the only effective marketing strategy to ward off competition is to kill one’s own products and make them redundant.
Every improvement in technology would defeat competitors and even check duplication of its product by the imitators. This philosophy, therefore, is followed by companies that are technology driven.
But, mere concentration on the product, without adapting to the market situation, would imply failure to appreciate that the market might be less receptive of the new product that is with high price tag, not easily available, or the customer does not know about it. Thus, marketing philosophy based on product concept is short sighted in nature.
(3) The Selling Concept:
This concept is based on the adoption of aggressive selling and promotional efforts because of customer buying inertia and resistance. The assumption is that customer, if left alone, would not buy enough of the firm’s product. The firm must push its products through aggressive selling and promotional efforts. The firms following the selling concept rely upon the power of advertising and other promotional techniques to maximise their sales.
The selling concept emphasizes on promotional activities to push up the sales. The essence of sales orientation is ‘Goods are not bought, but sold’. So the emphasis is on powerful personal selling and other pressure tactics and also on aggressive advertising and sales promotion.
(4) The Marketing Concept:
Consumer oriented marketing has given rise to a business philosophy known as “marketing concept”. The marketing concept emphasises the determination of the requirements of potential customers and supplying products to satisfy their requirements. The firms following customer orientation regard the creation of customer and satisfaction of his needs and wants as the justification of business.
Determination of wants of the customers takes precedence over production of goods and services. In other words, products are produced and sold to satisfy the needs and wants of the customers. Thus, the emphasis under the marketing concept is on selling satisfaction. All the business activities are integrated to develop and market products to satisfy customer needs and wants.
(5) The Societal Marketing Concept:
The critics of the marketing concept argue that blindly following the goal of identifying customers’ needs and satisfying them has led to some social and environmental problems such as pollution, ecological imbalance, wastage of natural resources, drug abuse, etc.
Therefore, social objectives must be considered as an integral part of the process of consumer satisfaction. In other words, performance of marketing activities should also enhance social well-being. Thus, the business firms need to be concerned about the ecological and ethical aspects of marketing besides customer satisfaction and company’s profitability.
The societal marketing concept goes beyond understanding the customer needs and matching the products accordingly. This philosophy cares for not only customer satisfaction but also for social welfare. Such social welfare speaks of pollution-free environment and quality of human life.
Thus, an auto firm must produce the car that is not only fuel efficient but also less pollutant one. In other words, the firm must discharge its social responsibilities. Thus, social welfare has become the added dimension for the marketers.
The assumptions of social marketing orientation or philosophy are:
(a) The firm is to produce only those products as are wanted by the consumers.
(b) The firm is to be guided by long-term profit objective rather than quick sales.
(c) The firm is to discharge its social responsibilities.
(d) The management is to integrate the firm’s resources and activities to develop marketing program to meet the individual customer and social needs.
Concept of Marketing (Four Pillars):
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:
1. Target market,
2. Customer needs,
3. Integrated marketing, and
1. Target Market:
No company can operate in every market and serve every need. To be effective, it must choose the profitable segments it wants to serve better than its rivals. It is tempting to choose a very large segment of the market for this purpose. But this would require lot of resources and competencies.
So it is always wise to know beforehand what a company cannot do and focus on things that it can do better than rivals—consistently. If you are good in serving the lower end of the market (Bata shoes) better to remain there. It gives a chance to know the mind of the customers better and serve their needs well.
2. Customer is the King:
The marketing concept places the customer on top of every business. He is the pivot around which organisational activities revolve. Research is used to aid the organisation find the mind of the customer—his needs, concerns, expectations etc. Appropriate processes are developed to make sure information from customers is fed back into the heart of the organisation. In essence all activities in the organisation are based around the customer. The customer is truly king! In this economic jungle, there is room for only customer-focused, customer-centric and customer-maniac organisations.
Marketers should focus attention on customer needs and deliver desired satisfactions more effectively and more efficiently than competitors. 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 and produces solutions that customer did not ask for but to which they enthusiastically respond.
A satisfied customer:
a. Buys more
b. Remains loyal to the firm
c. Buys other products of the company
d. Talks about the company products favourably
e. Pays less attention to competing brands
f. Is less price sensitive?
g. Offers valuable feedback and ideas to the company.
3. Integrated Marketing:
When all the company’s department’s 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 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.
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 marketing concept compels firms to make a positive and indelible impression on the customers by delivering outstanding value—surpassing all their expectations. Making the customer feel happy about the company’s offer is one thing. More importantly, it advocates the importance of going beyond the book. The journey from customer attraction to customer satisfaction is undertaken by every firm that wants to be a long distance runner.
But if the firm wants to stay ahead of competition, it must try to cross this point as well and indulge in what is known as customer delight. Delighted customers are those where you anticipate their needs, provide solutions to them before they ask and where you are observing to see if new and/or additional expectations are about ready to be required. Customer delight brings customers coming back for more. It causes new customers to come. You are, in a way, creating customers for life.
Concepts of Marketing (Production, Product, Selling, Marketing & Societal Concept):
The definition and meaning of marketing management implies that businesses need to follow certain philosophies that can guide them towards implementing and conducting marketing processes. These philosophies are competing concepts that attempt to provide weightage to the interests of the organisation, customers and the overall society.
The production concept is the philosophy that focuses on the internal capabilities of a business rather than the desires or needs of a marketplace. Managers of production-oriented businesses focus on achieving high production, efficiency, low costs and mass distribution.
The production concept is based on the belief that businesses would focus on cost-effective products through mass production and customers would prefer their products that were widely and easily available and are inexpensive. Most production businesses in China related to industries like electronics, textiles, etc., follow the production concept.
The product concept is based on the philosophy that customers will prefer products that offer quality, performance, or innovation-related features. Product-oriented businesses focus on creative and innovative products that are new or improved versions of existing products.
For example, Apple Inc.’s iPod was an innovative and improved version of portable music system against Sony’s Walkman. Innovative and creative products are sometimes expensive but should be distributed, advertised and sold appropriately to select customers who are willing to and able to purchase such products/ services.
The selling or the sales concept can be considered as an extension to the production concept that is based on the belief that consumers and businesses, if left isolated, will not buy or sell the organisations’ products/services. Organisations usually undertake aggressive promotional and selling activities that enable sale of products/services.
All FMCG products like shampoos, soaps (like Lux), etc., are aggressively promoted on television, newspapers and social media networks through short-term offers, freebies and so on leading immediate sales that can result in high profits. In sales-oriented businesses, marketing means selling and making money. This concept however may disregard the requirements of the marketplace and quality of sales-related services that could possibly create wastage in market place.
The marketing concept is based on the philosophy that sale depends on a customer’s decision regarding a product rather than excessive sales, unlike the sales philosophy. This concept can be considered as an opposite to product concept, which emphasises on finding the right products for the customers rather than finding the right customers for the products.
Continuing with the Apple’s iPod example, portable music was extended and improvised by installing music systems into mobile phones today (by Samsung) that not only enabled communication but also became a means to entertainment.
As the word suggests, societal encompasses all aspects of marketing including customer satisfaction, research, product planning and development, building internal and external relationships with stakeholders and safeguarding the interests of the society. The societal concept aims at building mutually satisfying and long-term relationships between stakeholders such as customers, suppliers, distributors and other marketing partners through an integrated marketing program. This program consists of an integrated system in the market place considered for decision-making on value- enhancing marketing activities.
A marketing mix is one of the types of an integrated marketing system consisting of 4Ps-Price, Place, Product and Promotion. Societal market also incorporates social responsibility marketing by understanding concerns on ethical, environmental, legal, and social context of marketing activities and programs. For example, anti-smoking campaigns displayed on television, movie theatres, etc., are associated with cause-related and ethical marketing.
Concept of Marketing (Traditional and Modern Concepts)
To understand the meaning of marketing let us consider both the concepts of marketing i.e.-
(i) Traditional Concept, and
(ii) Modern Concept.
(i) Traditional Concept:
The traditional concept of marketing is focused mainly on providing the physical delivery of goods to the customer in exchange for money for earning profits. Thus, we can say traditional marketing was the process by which goods were made available to the consumers by the producers, i.e., process of marketing started after the goods were produced, and ended when those goods were sold.
To sell the goods, different methods of sales promotion were adopted. Therefore, the traditional concept of marketing was product oriented.
(ii) Modern Concept:
With the entry of more competitors in the seller’s market, consumers had options to choose from various available alternatives. This made consumer the ultimate king of the market and consequently the producers had to- develop the product according to the needs and wants of the consumers and to their satisfaction.
Thus, according to the modern concept, marketing consists of identification, promotion, servicing and satisfaction of the needs and wants of present and prospective consumers or customers more effectively and efficiently than competitors. Hence marketing is a never ending process which begins much before the goods are produced.
Concepts of Marketing Management (Top 3 Concepts)
1. Old (Traditional) Marketing Concept:
The old or traditional meaning of marketing exclusively concentrated on the physical process of distribution of goods from producer to consumer and it was sales-oriented, i.e., emphasizing the role of aggressive salesmanship, advertising and sales promotion for securing maximum sales and maximum profits. It was also called selling concept. It was assumed that goods are not bought but they have to be sold with the help of high pressure salesmanship and advertising. The selling concept was popular in many commodities and services, e.g., automobiles, insurance, etc.
2. Modern Marketing Concept:
Since 1950, in the world of business we are witnessing a gradual but steady change from the selling to the marketing concept. The modern marketing concept considers marketing not merely a group of business activities connected with the exchange of goods for profit maximisation.
i. Instead of sales-oriented approach, we have now customer- oriented approach in marketing. It means that customer needs become the centre of all marketing activities and customer satisfaction becomes the primary task of every marketing function.
ii. Selling concept focuses our attention on the selling function, i.e., maximum sales volume. The marketing concept aims at determination of customer needs and their maximum satisfaction.
iii. Selling concept is primarily interested in seller’s needs to maximise profits, i.e., seller’s need to convert product into cash. Marketing concept centres around the ways and means to satisfy the needs of the customer and serve the consumer demand. Profit through service and satisfaction to customer is welcome under the marketing concept. Thus profit is the result or consequence of consumer satisfaction under the modern marketing concept.
The essence of modern marketing concept is: “The business organisation must take its marching orders from the market and it must produce what the market (customers) needs.” All marketing functions and activities should aim at customer satisfaction. All business plans, policies, programmes and operations must be focused around customer needs and their satisfaction.
Marketing concept advocates serving the consumers and maximising profits at the same time. These objectives need not conflict. They can be reconciled. Guaranteed route to profits is through customer satisfaction. Profit should be a by-product of supplying what the customer wants.
Benefits of Marketing Concept:
A business enterprise adopting the market-oriented business approach can enjoy the following advantages:
i. Long-term success is assured to an enterprise only if it recognises that the needs of the market are paramount.
ii. It enables the firm to move more quickly to capitalise ‘ on market opportunities. Marketing risks can be reduced only by knowing and understanding the market.
iii. Customer needs, wants and desires receive top consideration in all business activities.
iv. Greater attention is given to the product planning and development so that merchandising can become more effective.
v. Demand side of the equation of exchange is honoured more and supply is adjusted to changing demand. Hence, more emphasis is given to research and innovation.
vi. Marketing system based on the marketing concept assures integrated view of business operations and indicates interdependence of different departments of a business organisation.
vii. Interests of the enterprise and society can be harmonised as profit through service is emphasized.
viii. Marketing information and research is now an integral part of the marketing process and it is a managerial tool in decision-making in the field of marketing.
Consequences of the Marketing Concept:
Marketing concept will have an appreciable effect on the company whose management is customer-oriented and whose organisation is customer-centred. The general management of the company will be market-oriented and its marketing management will become the corner-stone. The organisation of the entire enterprise will become market-oriented. The marketing plan as well as the business plan of such a company will have customer-oriented approach.
3. Social Orientation (Societal Marketing Concept):
It is a broadened marketing concept. Environmental trends like public welfare, concern for better living environment or quality of life, etc., indicate that organisations would have to adopt socially responsible marketing policies and plans in order to assure social welfare in addition to consumer welfare.
The socially responsible marketing concept is based on the following premises:
1. The mission of an organisation is to create satisfied and healthy customers and contribute to the quality of life (not merely to the quantity of life).
2. The organisation shall not offer a product to consumers if it is not in the best interests of consumer.
3. The organisation will offer long-run consumer and public welfare.
4. Marketing plans and programmes shall duly consider consumer wants, consumer interest, social welfare and corporate needs, e.g., long-run profitable sales to assure survival and growth.