The marketing concept is the strategy that firms implement to satisfy customers’ needs, increase sales, maximize profit, and beat the competition. There are 5 marketing concepts that organizations adopt and execute. These are; (1) production concept, (2) product concept, (3) selling concept, (4) marketing concept, and (5) societal marketing concept.
Marketing is a department of management that tries to design strategies that will build profitable relationships with target consumers.
Marketers must answer 2 important questions.
- What philosophy is the best for a company in setting marketing strategies?
- What will be the importance of the organization, customers, and society’s interests?
There are five alternative concepts under which organizations design and carry out their marketing strategies to answer these.
These 5 alternative marketing concepts are also called marketing management philosophies.
Marketing Management Philosophies or 5 Marketing Concepts are;
- Production Concept,
- Product Concept,
- Selling Concept,
- Marketing Concept,
- Societal Marketing Concept.
These concepts are described below;
The idea of production concept – “Consumers will favor products that are available and highly affordable.” This concept is one of the oldest Marketing management orientations that guide sellers.
Companies adopting this orientation run a major risk of focusing too narrowly on their operations and losing sight of the real objective.
Most times, the production concept can lead to marketing myopia. Management focuses on improving production and distribution efficiency. Although, in some situations, the production concept is still a useful philosophy.
If a firm decides to operate based on this concept, it will try to minimize production costs by making the production process efficient. Moreover, for its products to be favored by the consumers, it will try to make its distribution as extensive as possible.
This production concept is found to be applicable if two situations prevail.
- One, when the demand for a product exceeds supply. This is seen in markets that are highly price-sensitive and budget-conscious. Under such situations, consumers will basically be interested in owning the product, not the quality or features of it. Thus, producers will be interested in increasing their outputs.
- Two, if the production costs are very high, that discourages consumers from buying the product. Here, the company puts all of its efforts into building production volume and improving technology to bring down costs.
Reduction in production costs helps the firm to reduce, helping the market size to increase. A company can thus try to create a dominant position in the market where it operates.
The application of this concept is also seen in service firms such as hospitals. Application of this concept in service firms such as hospitals is also criticized because it may cause deterioration in the firm’s service.
Production Concept example:-
You see, in Amazon or retail stores, the market is flooded with cheap products from china. Everything from the cheap plastic product from China is on your cart now.
The best example of the production concept is Vivo, the Chinese smartphone brand. Their phones are available in almost every corner of the Asian market. You can walk into any phone shop in Asia and can walk out with the latest and greatest smartphone from Vivo.
The product concept holds that consumers will favor products that offer the most quality, performance, and innovative features. Here. Marketing strategies are focused on making continuous product improvements.
Product quality and improvement are important parts of marketing strategies, sometimes the only part. Targeting only on the company’s products could also lead to marketing myopia.
During the first three decades of the twentieth century, more and more industries were adopting mass production techniques. The supply of manufactured goods was exceeding demand by the early 1930s.
Manufacturers were facing excess production capacity and competition for customers. They started realizing that buyers will favor well-made products and are willing to pay more for product extras, and the product concept started taking place in the minds of many producers.
The product concept assumes that consumers will favor those products that are superior in quality, performance, innovative features, designs, and so on.
This marketing concept is thought to have been simple: he who offered a standard product at the lowest price was going to win. A firm pursuing this philosophy tries to improve its products in terms of quality, performance, and any other perceptible feature.
Followers of product concept philosophy keep on improving their products on a continuous basis.
Advocates of this concept are of the opinion that consumers favor well- made products, products that are superior to the competing products in the above-mentioned aspects.
Many of the product-oriented firms often design their products taking little or no suggestions from their target customers.
They are of the firm belief that product design or improvement aspects are better understood by their engineers or designers than the customers.
They also do not compare their products with that of competitors’ products to bring changes in their products. They sometimes caught up with “LOVE AFFAIR” with the quality of their product and behaved unrealistically as people do when they are in love with someone of the opposite sex.
A general motors executive said years ago: ”How can the public know what kind of car they want until they see what is available?”
Here engineers first design and develop the product, the manufacturing makes it, the finance department prices it, finally, marketing and sales try to sell it.
Many marketers still hold this concept, and this concept so influences some that they even forget that the market is going in another direction. Marketing has very little room in this concept.
The main emphasis here is on the product. Therefore, it is understood that in the product concept, the management fails to identify what business it is in, which leads to the marketing myopia – i.e., short-sightedness on the role of marketing.
Product Concept example:-
For example, suppose a company makes the best quality Floppy disk. But a customer does need a floppy disk?
She or he needs something that can be used to store the data. It can be achieved by a USB Flash drive, SD memory cards, portable hard disks, etc. So that the company should not look to make the best floppy disk, they should focus on meeting the customer’s data storage needs.
When you think of high-quality products, Apple will be one of the top ones. Their products are so good that they set industry trends and standards.
Logitech makes very high-quality computer products such as keyboard, mouse, and webcams. These high-quality products are priced higher, but people still buy, and they get almost free advertisement from independent reviews.
The selling concept holds the idea- “consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort.”
Here the management focuses on creating sales transactions rather than on building long-term, profitable customer relationships.
In other words, the aim is to sell what the company makes rather than making what the market wants. Such an aggressive selling program carries very high risks.
In selling concept, the marketer assumes that customers will be coaxed into buying the product will like it; if they don’t like it, they will possibly forget their disappointment and buy it again later. This is usually a very poor and costly assumption.
Typically the selling concept is practiced with unsought goods. Unsought goods are that buyers do not normally think of buying, such as insurance or blood donations.
These industries must be good at tracking down prospects and selling them on a product’s benefits.
The selling concept also developed at the same time, and the product concept developed and still predominant in many industries.
The great depression in America proved that producing enough goods or quality goods is no more a problem. The problem is to sell those products.
Producing quality products does not necessarily guarantee its sale. During this period, the vital role of selling, advertising, and other marketing functions was organized truly, and the selling concept came into existence.
As defined by Philip Kotler, it holds that consumers, if left alone, will ordinarily not buy enough of the organization’s products. Aggressive selling and promotion activities can guarantee sales.
According to him, consumers typically show buying inertia and sometimes resistant to buying and have to be influenced by different means so that they are agreed to buy. The company’s function is to influence consumers by using all possible sales techniques so that they are encouraged to buy more.
As Kotler says, the selling concept is practiced most aggressively with unsought goods, those goods that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots.
This concept is mostly used in the case of overcapacity, where a firm wants to sell what it makes. It starts with the point of production, which focuses on products, and its aim is to earn profit through increased sales volume, and the means used are selling and promoting.
Marketing, in its true sense, still does not get a strategic position in this concept. Marketing, here, indeed based on hard selling. In moving goods from producers to consumers, the function of personal selling is to push, and advertising plays a pull function.
These two strategies are used together and backed by marketing research, product development, improvement, pricing, dealer organization, cooperation, and the physical distribution of goods themselves.
To be effective, selling must be preceded by several marketing activities such as needs assessment, marketing research, product development, pricing, and distribution.
If the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these products will sell very easily.
Marketing based on hard-selling carries high risks since a consumer is not happy with the product will bad-mouth it to eleven acquaintances, and it will multiply to the same rate by those; bad news travels fast.
One interesting point to mention here is that emphasis is given on marketing research, not on market research. Besides its application in the tangible goods business, the selling concept is also practiced in nonprofit areas, such as fund-raisers, college admissions offices, and political parties.
Selling Concept example:-
Every saw an ad online or TV commercial that you almost can’t escape and hide from? The Selling Concept is in play.
Almost all companies eventually fall into this concept. “Mountain Dew” ads are hard to miss. If people like Mountain Dew or not, that is debatable, but you can see that PepsiCo is pushing it hard using ads.
Almost all soft drinks and soda drinks follow the selling concept. These drinks have no health benefits ( actually harm your health more); you can easily replace them with water ( the most available substances on the earth).
And the soft drink companies know it, and they run ads 24×7, spending millions,
The marketing concept holds- “achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.”
Here marketing management takes a “customer first” approach. Under the marketing concept, customer focus and value are the routes to achieve sales and profits.
The marketing concept is a customer-centered “sense and responds” philosophy. The job is not to find the right customers for your product but to find your customers’ right products.
The marketing concept and the selling concepts are two extreme concepts and different from each other.
When companies started achieving the capability to produce in excess of existing demand, executives started realizing the need to reappraise marketing in business operations. They also started recognizing the significant changes in the market, in the field of technology, and how to reach and communicate with markets. These changes had led to the evolution of the “marketing concept,” which, in essence, is a philosophy of management.
The marketing concept can be contrasted with earlier concepts in terms of the principles of orientation. In the earlier concepts, goods would be brought to the market in the hope of finding customers. On the contrary, the marketing concept suggests that marketing starts with the customers and works back to the production of desired products in the right amounts and with the right specifications.
As Joseph C. Seibert says, “marketing management does not have the objective of creating customers insofar as it is responsible for creating or building markets. The orientation is directed toward making markets rather than making products.”
According to Philip Kotler, 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, or determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.
This definition suggests that marketing starts with the market, focuses attention on customers’ needs, and attains profit through customer satisfaction with coordinated marketing.
Under this philosophy, the marketer’s first task is to identify the needs and wants of his prospect, then should work backward through the trade channel and physical distribution and continue this reverse course beyond the shipping door, past the production and assembly line, right to the drawing boards and research laboratories. Under this concept, all aspects of company operations are aimed at satisfying customers’ wants and desires.
One important point to be mentioned here is that a company’s operation is also influenced by the company’s overall target or objective. For example, a company might be aimed at satisfying consumers’ wants and desires, but its overall objective might be to increase the profit volume.
The above discussion suggests that the marketing concept is based on four main pillars,
- market focus,
- customer orientation,
- coordinated marketing, and
The above bases suggest another clear definition of the marketing concept put forward by W. J. Stanton. According to him, “in its fullest sense, the marketing concept is a business philosophy that states that customers’ want satisfaction is the economic and social justification of a company’s existence.
Consequently, all company activities in production, engineering, and finance, as well as in marketing, must be devoted first to determining what the customers’ wants are and then to satisfying those wants while still making a reasonable profit.”
Pillar- 1 of the Marketing Concept – Market Focus
The marketing concept suggests that a company should focus its attention on marketing rather than production and selling. In today’s diverse market, it is not feasible for a company to operate successfully in every market and satisfy its needs.
Therefore, it is ideal for a company to highlight its attention to a particular segment (s) of the total heterogeneous market.
Pillar – 2 of the Marketing Concept – Customer Orientation
Focusing on a particular market does not guarantee a company’s success in the marketplace. What is needed for success is customer orientation, i.e., carefully defining customer needs from customers’ points of view. A company can do this with market research, and hence, the role of market research plays a dominant role in marketing concept-oriented companies.
Customer orientation is important in the sense that a company’s future and progress depend on the customers. Customers can be new and old. A company must retain its old customers since attracting new customers is very difficult and costly.
A satisfied customer will buy again and again, and he/she will speak high about the company, which will increase the company’s image and help attract new customers.
Therefore, it is very important for a company to be customer-oriented, i.e., to identify their needs and wants and reasonably satisfy those.
To ensure customer satisfaction, a company should encourage customer complaints, since it is seen from different studies that 96% of unhappy customers never tell the company about their dissatisfaction. Hence, the company should take the initiative from its own to encourage customers to complain.
It is also vital for a company because criticism from a dissatisfied customer can cause the firm’s ruination. On the other hand, a company can get quite helpful innovative ideas from its customers’ complaints.
It can also improve its product quality and service level if it knows what customers actually want. Thus it may increase the number of loyal customers and profit volume.
Pillar – 3 of the Marketing Concept – Coordinated Marketing
The marketing concept is a total enterprise concept. To be successful, all marketing functions must be coordinated among themselves, and second, marketing itself must be well-coordinated with other departments. A company managed under the marketing concept must plan, organize, coordinate, and control its entire operation as one system directed toward achieving a single set of objectives applicable to the total organization.
There are obvious reasons behind coordinating marketing functions among themselves, and the main reason is to eliminate conflict. For example, if marketing functions are not coordinated among themselves, the salesforce might heavily criticize marketing people for setting a very high sales target.
The reason behind coordination with other departments is that marketing cannot work in isolation. If employees of other departments do not recognize how they impact customer satisfaction, the marketing department cannot alone provide it.
To be marketing oriented, a company is to carry out both internal and external marketing.
Internal marketing means successfully hiring, training, and motivating employees to serve the customers well and satisfy them.
Internal marketing is to be carried out first because unless a company is not ready to provide customer satisfaction, it cannot go for external marketing. Under the marketing concept, marketing becomes the basic motivating force for the entire firm.
The status of marketing people also changes, and marketing comes in the foreground of the company operation. The entire company works to develop, manufacture, and sell a product from the marketing perspective. Regarding what business we are in, the company, for example, says, “we sell beauty and hope instead of we sell cosmetics.”
The importance of different levels of management also changes with the adoption of the marketing concept. Customers come at the top of the organization and then come front line people who meet, serve, and satisfy customers.
Middle management is there to support front-line people so that they can better serve the customers, and top management stays at the base to support middle management so that they can effectively and efficiently provide support to the front line people.
Pillar- 4 of the Marketing Concept – Profitability
The end of the marketing concept is to make profits through customer satisfaction. This suggests that profit is to be made by satisfying customers’ needs.
As customers’ needs are changing day by day, a marketing concept-oriented company has to consider and modify its product, service, and activities with the change in needs and satisfy customers better than its competitors due to earn profit in the long run.
Marketing Concept example:-
Restaurants and startups do follow the marketing concept. They try to understand the consumer and deliver the best product or service, which is better for the competition.
‘Dollar shave club’ is the best example. They changed the Men’s grooming market. They have understood that people are not happy with their previous grooming products and their prices.
Where other company’s grooming products will cost hundreds to buy for just one month. ‘Dollar shave club’ charges a couple of bucks a month with higher quality products and home delivery convenience.
Difference between Selling Concept and Marketing Concept
Theodore Levitt of Harvard drew a perceptive contrast between the selling and marketing concepts. According to him, “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 customer utilizing the product and with the whole cluster of things associated with creating, delivering and finally consuming it.”
You know that the marketing concept is based on four pillars, viz., target market, customer needs, integrated marketing, and profitability. It takes an outside-inside view.
On the other hand, the selling concept takes an inside-outside perspective (see the figure below).
Selling concept-oriented companies start planning with the factory, focuses on the company’s existing products, and undertakes heavy selling and promoting to produce profitable sales.
The marketing concept starts with a well-defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produce profits by satisfying customers.
|No.||The Selling Concept||The Marketing Concept|
|1||undertakes a large-scale selling and promotion effort||undertakes activities such as; market research,|
|2||The Selling Concept is suitable with unsought goods—those that buyers do not normally think of buying, such as insurance or blood donations.||The Marketing Concept is suitable for almost any type of product and market.|
|3||Focus on the selling concept starts at the production level.||Focus on the marketing concept starts at understanding the market.|
|4||Any company following the selling concept undertakes a high-risk||Companies that are following the marketing concept require to bare less risk and uncertainty.|
|5||The Selling Concept assumes –“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.”||Instead of making an assumption, The marketing concept finds out what really the consumer requires and acts accordingly to them.|
|6||The Selling Concept makes poor assumptions.||The marketing concept works on facts gathered by its “market and customer first” approach.|
Societal Marketing Concept
Societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare.
The societal marketing concept holds “marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s well-being.”
It calls for sustainable marketing, socially and environmentally responsible marketing that meets consumers’ and businesses’ present needs while also preserving or enhancing future generations’ ability to meet their needs.
The Societal Marketing Concept puts human welfare on top before profits and satisfying the wants.
The global warming panic button is pushed, and a revelation is required to use our resources. So companies are slowly either fully or partially trying to implement the societal marketing concept.
This is basically a management orientation that holds that the key task of the firm is to determine the needs and wants of target markets and to adapt the organization to delivering the desired satisfactions more efficiently and effectively than its competitors in a way that preserves and enhances the well-being of the consumers in particular and the society in general.
It calls upon marketers to balance three considerations in setting their marketing policies: company profits, consumer want satisfaction and public interest.
Companies may adopt the societal marketing concept if it does not result in competitive disadvantage or loss in the company profits. It is because any contemporary company’s basic goal is to keep its customers happy and make profits through serving and satisfying customers.
Societal Marketing Concept example:-
While large companies sometimes launch programs or products that benefit society, it is hard to find a company that is fully committed socially.
We can see Adidas doing great as they continue to support Colin Kaepernick despite pressure from various parties. Tesla promises a big push for green energy with electric cars and solar roof panels/tiles.
Conclusion: Companies Follows a mix of Marketing Concepts in Real-world
Companies don’t follow a single marketing concept rigidly. They usually use a mix of marketing concepts or change it depending on the market situation, competition, and sales numbers.
Let’s overview the 5 basic marketing concepts with this infographic.