What is the Marketing Concept?

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INTRODUCTION ON MARKETING CONCEPT

The marketing concept is the belief that companies must assess the needs of their consumers first and foremost. Based on those needs, companies can make decisions in order to satisfy their consumers’ needs, better than their competition. Companies that hold this philosophy believe that their consumers are the driving forces of their business. Nowadays, most companies have incorporated the marketing concept. So if you were a new company, how would you know what a customer would need and want?

First of all, let us define needs and wants. Needs are basic requirements for an individual to survive. Some examples are water, food, shelter, etc. Obviously, the needs of consumers are wide-ranging. Wants are the desire for something that an individual cannot live without. Some examples are a bigger home, a brand new car, an iPad, and the like. Even though consumers’ needs are broad, wants can be very particular.

Consumers decide to buy based on both their needs and wants. Case in point, if they were hungry, they would need food. If you base it simply on that, then any kind of food will do. Yet, the consumer would have particular food in mind. Even though they can get a burger from Burger King, what they might truly want is a half-pound grilled burger from a bar in their local neighborhood. It is at this point that marketers would come in. Marketers acknowledge the needs of consumers and use the consumers’ desire for what they want to steer them towards specific products and services.

The marketing concept underscores:

  • identifying the market or targeting consumers;
  • understanding the needs and wants of the consumers in the target market;
  • creating products or services based on the consumers’ needs and wants;
  • satisfying the needs of consumers better than competitors; and
  • accomplishing all of these while earning a profit.

The Difference between Marketing and Marketing Concepts.

Sometimes people blur the lines between marketing and marketing concepts. Marketing is promoting the products and services of a company for a particular target market. As a whole, marketing brings attention the offerings of a company. These may be goods for sale or services on offer. Typical examples of marketing on the ground are billboards on the road, television commercials, and magazine advertisements.

However, not all companies have the same approach towards marketing their goods and services. Actually, there are a couple of strategies on making marketing successful for any company. The approaches talked about are these marketing concepts. These approaches of a company peg what kind of marketing tools they can and will use in a business.

Marketing concepts are formed through a clear objective that incorporates cost efficiency, effectiveness, and social responsibilities in a target market.

The Difference between Marketing Concept versus Market Concept.

As previously described, the marketing concept is a business philosophy that keeps in mind that long run profitability is best accomplished through concentrating company activities towards satisfying the needs of a specific target market.

The market concept, on the other hand, creates suitable market intelligence as connected to present and future consumer needs, as well as the relative capabilities of the competition to satisfy those needs. This concept is the incorporation and distribution of market intelligence throughout departments and coordinated creation and implementation of a company’s response to opportunities in the market.

This article will highlight the types of marketing concepts, specifically the production concept, the product concept, the selling concept, the marketing concept, and the societal marketing concept. The discussion will show how concepts of marketing have evolved, leading to the marketing concept that is mostly used by all companies to date – at least those companies that want to survive and thrive in their industries.

A very basic, but good introduction to marketing management by Prof. Dr. Kirchgeorg.

THE EVOLUTION TOWARDS THE MARKETING CONCEPT

There are five distinctive marketing concept types or approaches to achieving effective marketing. Notably, not all these marketing concept types work for all industries, because they differ in function. Every marketing concept was created depending on the need of the market. As markets changed, so did the concepts.

The Production Concept

Companies that use the production concept have the belief that customers primarily want products that are affordable and accessible. The production concept is based on the approach that a company can increase supply as it decreases its costs. Moreover, the production concept highlights that a business can lower costs via mass production. A company oriented towards production believes in economies of scale (decreased production cost per unit), wherein mass production can decrease cost and maximize profits. As a whole, the production concept is oriented towards operations.

A working example of the production concept is a company that produces their goods overseas. Producing retail goods abroad lowers costs and the resulting savings can be passed on to the consumer. These lower prices could be a good incentive to attract new consumers.

However, the company may experience a decline in quality and gradually a decline in sales, if the process is not kept to a standard. Businesses oriented towards production are required to avoid production efficiency procedures that affect their product’s quality and design. By compromising product quality and design simply for production would probably lower the desirability of a product for customers.

The production concept actually came about in the early 1920s during the industrial revolution. During that time, the production concept was very popular because the goods produced back then were mainly basic necessities. Moreover, there was quite a high level of demand that was unfulfilled. Almost everything that was manufactured then were easily sold based on production costs. There were just two main concerns for a company before they produced a product back then—whether they could produce the product and if they could produce enough of it.

The use of the production concept is only effective when demand is greater than supply. The biggest disadvantage of this concept is that it is not always the case that your customer chooses to buy the most affordable and easily accessible product.

The Product Concept

Companies that focus on the product concept believe that the most significant priorities for a customer are quality and functional characteristics of a product. What this indicates is that a customer looks for innovative alternatives and always searches for the best of what is currently available in the market. In addition, within this concept, it is assumed that consumers stay loyal if they receive more product options and benefits.

Companies who keep this philosophy intact direct their marketing efforts in raising their product quality. With this in mind, it is not surprising that many companies in technology use the product concept. These companies always update and release their new products. It is then important for these technology companies to create strong decisions on how often they should release their new products.

By releasing too often, consumers can feel frustration due to minimal changes. Not releasing often enough would make consumers feel that the business is out of step. Companies that believe in the product concept always have to review consumer needs and execute those changes as efficiently and as quickly as possible.

The disadvantage of the product concept is that companies must recognize that superior quality of a product does not make it sell automatically. Superior products will sell only if they satisfy a consumer’s needs and wants. Moreover, consumers are not attracted to goods simply because of its quality. They also factor in other variables, such as a product’s price, availability, and the like. A quality product yet with a high price can dent the budget of a consumer.

The Selling Concept

The selling concept involves companies that are sales oriented. What this means is that they can make a product and then sell it to their target market without consideration of their consumers needs or wants. The selling concept highlights that customers would buy a company’s products only if the company were to sell these products aggressively.

This concept became very popular in the early 1930s. At this stage in time, mass production had become the norm, there was more competition, and most of customer demand had already been met. So, companies started to practice the selling concept. Companies would produce the product, but at the same time attempt to convince consumers to buy them through personal selling and advertising. The key considerations companies had for using the selling concept was whether they could sell the product and if they could charge sufficiently for it.

The selling concept pays little attention to whether or not a product was truly needed by consumers. The objective was to beat the competition merely in sales, with few regarding the satisfaction of a consumer. Nowadays, this is called “hard selling,” wherein goods are not bought – they are sold. This concept is based on the belief that consumers may be attracted; hence, companies can focus their efforts in attracting and educating consumers.

Although it may be effective for some time – that repeated efforts can sell anything – this cannot be sustained for a long period of time. If a company is able to entice a consumer once, he or she cannot be won each and every time. Actually, this may even damage the reputation of a business. Thus, this concept offers only short-term gains but not long-term benefits.

The Marketing Concept

A company that believes in the marketing concept places the consumer at the center of the organization. All activities are geared towards the consumer. A business, oriented towards the market, aims to understand the needs and wants of a customer and executes the marketing strategy according to market research beginning from product conception to sales. As sales begin, further research can be implemented to figure out what customers think about a product and whether improvements are needed. While markets change continuously, product development and market research is always ongoing for a company that concentrates on the market.

Learn how to create a customer centric business in the following video from Harvard Business Review.

By focusing on the needs and wants of a target market, a company can deliver value, more than its competitors. The marketing concept highlights the pull strategy, wherein a brand is so strong that customers would always prefer your brand to others’. The main concerns of a company that was focused on the marketing concept were the wants of consumers, if they could develop the product while the consumers still wanted it, and how they could keep customer satisfaction.

The marketing concept came about after the Second World War. There were more product variety and the selling concept could not be depended upon to generate sales. With raised discretionary income, consumers were also able to be selective. They could buy products that met their needs precisely but those needs were not patently obvious.

As companies started to use the marketing concept actively, they usually put up individual marketing departments in their organizations. Their goals were to satisfy the needs of their customers. Oftentimes, the departments were sales departments with extended responsibilities. Although these extended sales departments are still found in the companies of today, many companies have structured themselves to marketing organizations with more wide-ranging focus on the company.

Because the whole organization is in existence because it aims to satisfy the needs of a consumer, no one can neglect a consumer problem by just tagging it as a marketing challenge. The whole company must be concerned with consumer satisfaction.

Companies who believe in the marketing concept opine that they can be successful only through the satisfaction of their customers. This thinking is based on the belief that goods and services are only made available only if consumers need or want them. A small problem with the marketing concept is that there is no focus given towards societal welfare.

The Societal Marketing Concept

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

The societal marketing concept goes one step further than the marketing concept. Case in point, if a company creates a car that uses less fuel but has more pollution, this would merely increase customer satisfaction, but not societal welfare. Companies who believe in the societal marketing philosophy direct their marketing towards giving customer satisfaction and social welfare.

With this last concept of marketing, companies receive long-term profit, not only from the viewpoint of the consumer, but also of society.

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