The Production Concept:
The production concept is the oldest concept in business. The production concept holds that consumers will prefer products that are widely available and inexpensive.
Managers of production-oriented business 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 its features. It is also used when a company wants to expand the market.
Some service organizations also operate on the production concept. Many medical and dental practices are organized on assembly-line principles, as are some government agencies (such as unemployment offices and license bureaus). Although this management orientation ca handle many cases per hour, it is open to charges of impersonal and poor quality service.
The Product Concept:
Other businesses are guided by the product concept.
The product concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.
Managers in these organizations focus 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. Such was the case when WebTV was launched during Christmas 1996 to disappointing results.
The Selling Concept:
The selling concept is another common business orientation. The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort.
This concept one 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 promotion tools to stimulate more buying.
The selling concept is practiced in the non-profit area by fund-raisers, college admission offices, and political parties. A political party vigorously sells its candidates to voters. The candidates’ flaws are concealed from the public because the aim is to make a sale and not worry about post purchase satisfaction. After the election, the new official wants and a lot of selling to get the public to accept policies the politician or party wants.
THE MARKETING CONCEPT
The marketing concept is a business philosophy that challenges the three business orientations we just discussed.
The marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating customer values to its chosen target markets.
The marketing concept rests on four pillars: target market, customer needs, integrated marketing and profitability. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the existing products, and calls for heavy selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produces profits by satisfying customers.
Target market
Companies do best when they select their target markets carefully and prepare tailored marketing programs.
Customer needs
A company can define its target market but fail to correctly understand the customers’ needs.
Understanding customer needs and wants is not always simple. Some customers have needs of which they are not fully conscious. Or they cannot articulate these needs. Or they use words that require some interpretation.
We can distinguish among five types of needs:
1. Stated needs
2. Real needs
3. Unstated needs
4. Delight needs
5. Secret needs
Responding only to the stated need may shortchange the customer. Consider a woman who enters a hardware store and asks for a sealant to seal glass windowpanes. This customer is stating a solution and not a need. The salesperson may suggest that tape would provide a better solution. The salesperson met the customers need, not her stated solution.
Integrated marketing:
When all the company’s departments work together to serve the customer’s interests, the result is integrated marketing. Unfortunately, not all employees are trained and motivated to work for the customer. Integrated marketing takes place on two levels. First, the various marketing functions-sales force, advertising, customer service, product management, marketing research-must work together.
Second, the other departments must embrace marketing; they must also think customer. Marketing is not a department so much as a company wide orientation.
To foster teamwork among all departments, a company should carry out internal as well as external marketing. External marketing is marketing directed at people outside the company. Internal marketing is the task of hiring, training, and motivating able 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 it.
Managers who believe the customer is the company’s only true profit center consider the traditional organization chart- a pyramid with the president at the top, management in the middle, and front-line people and customers at the bottom-obsolete. Master marketing companies invert the chart.
Profitability
The ultimate purpose of the marketing concept is to help organizations achieve their objectives. In the case of private firms, the major objective is profit; in the case of nonprofit and public organizations, it is surviving and attracting enough funds. A company makes money by satisfying customer needs better than its competitors.
Most companies do not embrace the marketing concept until driven by circumstances. These are
Sales Decline: When Sales fall, companies panic and look for answers. Today newspapers decline as people are more replying on Radio, TV and Internet for the news
Slow Growth: Slow sales growth leads companies to search for new markets. They realize they need marketing skills to identify and select new opportunities
Changing buying patterns: Many companies operate in markets characterized by rapidly changing customer wants. These companies need more marketing know-how if they are to track buyers changing values
Increasing Competition: Complacent industries may be suddenly attacked by powerful competitors. AT&T was quite complacent in a regulated market-naïve Telephone Company until government allowed other companies to sell Telephone equipments. Companies in deregulated industries all find it necessary to build up marketing expertise
Increasing Marketing Expenditures: Companies may find their expenditures for advertising, Sales, Promotion, marketing Research and Customer Service to be poorly done. Management then decides to take a serious audit to improve its marketing
Companies need to attract and retain customers through superior product offerings, which deliver the Customer satisfaction. This is also influenced by other departments who must cooperate in delivering this Customer Satisfaction
In the course to converting into marketing orientation, a company faces 3 hurdles
1. Organized Resistance
2. Slow Learning
3. Fast forgetting
Some company departments like R&D, Manufacturing, and Finance etc. believe a stronger Marketing department threatens their power in the organisation. Resistance is especially strong in the industries where Marketing is introduced for the first time-like law offices, colleges, deregulated industries and government offices. But in spite of resistance the Company president establishes a Marketing department, marketing talents are hired and seminars conducted, Marketing budget increased and Marketing planning and Control systems introduced. Companies face a difficult task in adapting ad slogans to International markets, many of which are interpreted wrongly
SOCIETAL MARKETING CONCEPT:
The Societal Marketing Concept holds that the Organizations 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 and enhances the consumers and the societies well being.
It calls for social and Ethical considerations in marketing. They must balance the conflicting criteria of Company profits, consumer want satisfaction and Public Interest. In an age of environmental deterioration, resource shortage, explosive population growth, world hunger and poverty and lack of Social Services Marketers needs to be sensitive on these issues
Quote : Marketing Management by Philip Kotler 10th Edition
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