The Production Concept:
The production concept holds that consumers will favor products that are available and highly affordable; therefore, management should focus on improving production and distribution efficiency. This concept is one of the oldest philosophies that guides sellers.
The production concept is still a useful philosophy in two types of situations: (1) When the demand for a product exceeds the supply, management should look for ways to increase production. (2) When the product’s cost is too high, improved productivity is needed to bring it down.
The Product concept:
Another major concept guiding sellers, the product concept, holds that consumers will favor products that offer the most quality, performance, and innovative features. Thus, an organization should devote energy to making continuous product improvements.
The product concept also can lead to marketing myopia. For instance, railroad management once though that users wanted trains rather than transportation and overlooked the growing challenge of airlines, busses, trucks, and automobiles. Many colleges have assumed that high school graduates want a liberal arts education and have thus overlooked the increasing challenge from vocational schools.
The Selling Concept:
Many organizations follow the selling concept, which holds that consumers will not buy enough of the organization’s products unless it undertakes a large-scale selling and promotion effort. The concept is practiced with unsought goods hose that buyers do not normally think of buying, such as encyclopedias or insurance. These industries must excel at tracking down prospects and selling them on product benefits.
Most firms practice he selling concept when they have overcapacity. Their am is to sell what they make rather than make what the market wants. Such marketing carries high risks. It focuses on creating sales transactions rather than on building long-term, profitable relationships with customers. It assumes that customers who are coaxed into buying the product will like it. Or, if they don’t like it, they will possibly forget their disappointment and buy it again later. These are usually poor assumptions to make about buyers.
The Marketing Concept:
The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than do competitors. JC Penny’s motto also summarizes the marketing concept: “To do all in our power to pack the customer’s dollar full of value, quality, and satisfaction.”
The selling concept and the marketing concept are sometimes confused. Figure compares the two concepts. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses heavily on customers conquest getting short-term sales with little concern about who buys or why. In contrast, the marketing concept takes an outside-in perspective. It starts with a well defined market, focuses on customer needs, coordinates all the marketing activities affecting customers, and makes profits by creating long-term customer relationships based on customer value and satisfaction. Under the marketing concept, companies produce what consumers want, thereby satisfying consumers and making profits.
Many successful an well-known companies have adopted the marketing concept. Procter & Gamble, Disney, Wal-Mart, Marriott, Nordstrom, and McDonald’s follow it faithfully. LL Bean, the highly successful catalog retailer of clothing and outdoor sporting equipment, was founded on the marketing concept.
A customer is the most important person ever in this company in person or by mail. A customer is not dependent on us, we are dependent on him. A customer is not an interruption of our work; he is the purpose of it. We are not doing a favor by serving him; he is doing us a favor by giving us the opportunity to do so. A customer is not someone to argue or match wits with nobody ever won an argument with a customer. A customer is a person who brings us his wants. It is our job to handle them profitably to him and to ourselves.
Many companies claim to practice the marketing concept but do not. They have the forms of marketing, such as a marketing vice president, product managers, marketing plans and marketing research, but this does not mean that they are market focused and customer driven companies. The question is whether they are finely tuned to changing customer needs and competitor strategies. Formerly great companies General Motors, IBM, Sears, Zenith all lost substantial market share because they failed to adjust their marketing strategies to the changing marketplace.
Several years of hard work are needed to turn a sales-oriented company into a marketing-oriented company. The goal is to build customer satisfaction into the vary fabric of the firm. Customer satisfaction is no longer a fad.
The Societal Marketing Concept:
The societal marketing concept holds that the organization should determine the needs, wants, and interests of target markets. It should then deliver superior value to customers in a way that maintains to improves the consumer’s and the society’s well-being. The societal marketing concept is the newest of the five marketing management philosophies.
The societal marketing concept questions whether the pure marketing concept is adequate in an age of environmental problems, resource shortages, rapid population growth, worldwide economic problems, and neglected social services. It asks if the firm that senses, serves, and satisfies individual wants is always doing what’s best for consumers and society in the long run. According to he societal marketing concept, the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare.
Th societal marketing concept calls on marketers to balance three considerations in setting their marketing policies: company profits, consumer wants and society’s interests. Originally, most companies based their marketing decisions largely on short-run company profit. Eventually, they began to recognize the long-run importance of satisfying consumer wants and he marketing concept emerged. Now many companies are beginning to think of society’s interests when making their marketing decisions.
