August 13, 2016

Marketing Concepts

Marketing concepts: Product, Production, Selling, Marketing and Societal

Every company can have different ideas or philosophy. For example, a particular company can have its idea or philosophy that if the production is done on a large scale, the cost would be less and the product would be sold automatically. In this way, such a company will concentrate mainly on the large scale production of goods. Similarly, some other company can have a different idea. It may have an idea that if the quality of the product is improved, there will be no difficulty in selling the product.

Under the marketing management philosophy, we shall study the following five concepts:

(1) Production Concept

(2) Product Concept

(3) Selling Concept

(4) Marketing Concept

(5) Societal Marketing Concept

  1. Production Concept

Those companies who believe in this philosophy think that if the goods/services are cheap and they can be made available at many places, there cannot be any problem regarding sale.

Keeping in mind the same philosophy these companies put in all their marketing efforts in reducing the cost of production and strengthening their distribution system. In order to reduce the cost of production and to bring it down to the minimum level, these companies indulge in large scale production.

This helps them in effecting the economics of the large scale production. Consequently, the cost of production per unit is reduced.

The utility of this philosophy is apparent only when demand exceeds supply. Its greatest drawback is that it is not always necessary that the customer every time purchases the cheap and easily available goods or services.

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 orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features.

  1. Product Concept

Those companies who believe in this philosophy are of the opinion that if the quality of goods or services is of good standard, the customers can be easily attracted. The basis of this thinking is that the customers get attracted towards the products of good quality. On the basis of this philosophy or idea these companies direct their marketing efforts to increasing the quality of their product.

It is a firm belief of the followers of the product concept that the customers get attracted to the products of good quality. This is not the absolute truth because it is not the only basis of buying goods.

The customers do take care of the price of the products, its availability, etc. A good quality product and high price can upset the budget of a customer. Therefore, it can be said that only the quality of the product is not the only way to the success of marketing. This orientation holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers focusing on this concept concentrate on making superior products and improving them over time. They assume that buyers admire well-made products and can appraise quality and performance. However, these managers are sometimes caught up in a love affair with their product and do not realize what the market needs. Management might commit the better-mousetrap fallacy, believing that a better mousetrap will lead people to beat a path to its door.

  1. Selling Concept

Those companies who believe in this concept think that leaving alone the customers will not help. Instead there is a need to attract the customers towards them. They think that goods are not bought but they have to be sold.

The basis of this thinking is that the customers can be attracted. Keeping in view this concept these companies concentrate their marketing efforts towards educating and attracting the customers. In such a case their main thinking is selling what you have.

This concept offers the idea that by repeated efforts one can sell-anything to the customers. This may be right for some time, but you cannot do it for a long-time. If you succeed in enticing the customer once, he cannot be won over every time.

On the contrary, he will work for damaging your reputation. Therefore, it can be asserted that this philosophy offers only a short-term advantage and is not for long-term gains. This is another common business orientation. It holds that consumers and businesses, if left alone, will ordinarily not buy enough of the selling company’s products. The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers typically show buying inertia or resistance and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and promotional tools to stimulate more buying. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.

  1. Marketing Concept

Those companies who believe in this concept are of the opinion that success can be achieved only through consumer satisfaction. The basis of this thinking is that only those goods/service should be made available which the consumers want or desire and not the things which you can do.

In other words, they do not sell what they can make but they make what they can sell. Keeping in mind this idea, these companies direct their marketing efforts to achieve consumer satisfaction.

In short, it can be said that it is a modern concept and by adopting it profit can be earned on a long-term basis. The drawback of this concept is that no attention is paid to social welfare. This is a business philosophy that challenges the above three business orientations. Its central tenets crystallized in the 1950. It holds that the key to achieving its organizational goals (goals of the selling company) consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its selected target customers. The marketing concept rests on four pillars: target market, customer needs, integrated marketing and profitability.

 

Distinctions between the Sales Concept and the Marketing Concept:

  1. The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses on the needs of the buyer.
  2. The Sales Concept is preoccupied with the sellers need to convert his/her product into cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the customer by means of the product as a solution to the customers problem (needs).

The Marketing Concept represents the major change in today’s company orientation that provides the foundation to achievecompetitive advantage. This philosophy is the foundation ofconsultative selling.

The Marketing Concept has evolved into a fifth and more refined company orientation: The Societal Marketing Concept. This concept is more theoretical and will undoubtedly influence future forms of marketing and selling approaches.

This concept holds that the organizations task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors (this is the original Marketing Concept). Additionally, it holds that this all must be done in a way that preserves or enhances the consumers and the society well-being.

 

This orientation arose as some questioned whether the Marketing Concept is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services.

Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best long-run interests of consumers and society?

The marketing concept possibly sidesteps the potential conflicts among consumer wants, consumer interests, and long-run societal welfare. Just consider:

The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high fat content, and the restaurants promote fries and pies, two products high in starch and fat. The products are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems.

 

  1. Societal Marketing Concept

This concept stresses not only the customer satisfaction but also gives importance to Consumer Welfare/Societal Welfare. This concept is almost a step further than the marketing concept. Under this concept, it is believed that mere satisfaction of the consumers would not help and the welfare of the whole society has to be kept in mind.

For example, if a company produces a vehicle which consumes less petrol but spreads pollution, it will result in only consumer satisfaction and not the social welfare.

Primarily two elements are included under social welfare-high-level of human life and pollution free atmosphere. Therefore, the companies believing in this concept direct all their marketing efforts towards the achievement of consumer satisfaction and social welfare.

In short, it can be said that this is the latest concept of marketing. The companies adopting this concept can achieve long-term profit.

Marketing

Sales

Approach Broader range of activities to sell product/service, client relationship etc.; determine future needs and has a strategy in place to meet those needs for the long term relationship. makes customer demand match the products the company currently offers.
Focus Overall picture to promote, distribute, price products/services; fulfill customer’s wants and needs through products and/or services the company can offer. fulfill sales volume objectives
Process Analysis of market, distribution channels, competitive products and services; Pricing strategies; Sales tracking and market share analysis; Budget Usually one to one
Scope Market research;advertising; Sales; Public relations; Customer service and satisfaction . Once a product has been created for a customer need, persuade the customer to purchase the product to fulfill her needs
Horizon Longer term Short term
Strategy pull push
Priority Marketingshows how to reach to the Customers and build long lasting relationship Selling is the ultimate result of marketing.
Identity Marketing targets the construction of a brand identity so that it becomes easily associated with need fulfillment. Sales is the strategy of meeting needs in an opportunistic, individual method, driven by human interaction. There’s no premise of brand identity, longevity or continuity. It’s simply the ability to meet a need at the right time.

 

New concepts in marketing

  • Relationship marketing : Relationship marketingwas first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions. As a practice, relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages.
  • Mass marketing : Mass marketingis a market coverage strategy in which a firm decides to ignore market segment differences and appeal the whole market with one offer or one strategy. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the media used to reach this broad audience. By reaching the largest audience possible exposure to the product is maximized. In theory this would directly correlate with a larger number of sales or buys into the product.
  • Niche marketing : Aniche marketis the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment. For example, sports channels like STAR Sports,ESPN,STAR Cricket, and Fox Sports target a niche of sports enthusiasts.
  • Synchromarketing : Synchro Marketing is marketing process whichsolves the problem of irregular demand patternof a product. For example a Beach side hotel is overcrowded during evening time, whereas it is almost like desert during morning hours. A cotton shop is crowded during summer season whereas during winter it is not. So, Synchro Marketing finds a way to solve the problem of inconsistent demand pattern by the following methods:-
    • Keeping high price during season
    • Offers lucrative options during off-seasons
    • Using the stores with many varieties of item
    • Promotion and incentives
  • Demarketing :
    • Efforts aimed at discouraging (not destroying) the demand for a product which
      • A firm cannot supply in large-enough quantities, or
      • Does not want to supply in a certain region where the high costs of distribution or promotion allow only a too little profit margin.
      • Common demarketing strategies include higher prices, scaled-down advertising, and product redesign.
  • Remarketing : Techniques, strategies and often the automated email systems used by marketers and online merchants to follow up with website visitors who do not make a desired action on the web site usually it is when they abandon their shopping cart.
    • Eg : Advertisers use marketing to bring a visitor to your website, and if he or she doesn’t make a purchase, you then use remarketing tactics to bring the visitor back to your website and convert him or her in to a paying customer.

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