Marketing Concepts

MARKETING CONCEPTS

INTRODUCTION

Marketing concepts are marketing ideas that lay emphasis on customer satisfaction. It urges organizations to focus on their customers’ needs, analyzing their needs and making such decisions that satisfy those needs in a better way than competitors. This business philosophy is regarded as very simple yet of utmost importance. This is because the concept strives to satisfy the customer’s needs and wants, while at the same time achieving the organization’s goals.

Kotler/Armstrong (2001) identified five competing concepts under which organizations can choose to conduct their marketing activities. These concepts are: production concept, product concept, selling or sales concept, marketing concept and societal marketing concept.

THE MARKETING CONCEPTS

THE PRODUCTION CONCEPT

This concept holds that consumers will favour those products that are widely available and low in cost. Management concentrates on achieving high production efficiency and wide distribution.

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 sales.

There are two major instances when the production concept is relevant. The first one is a situation where a particular commodity is in short supply and there is need to mass produce to satisfy the market. Secondly, convenience goods for example, toothpaste, toilet soap, soft drinks, etc. are by their nature in high demand. Producers of such goods are required to mass produce and secure wide distribution.

The production concept is criticized for its emphasis on mass production without taking quality into consideration.

PRODUCT CONCEPT

This concept holds that consumers will favour those products that offer the most quality performance, or innovative features. Managers in product-oriented organizations focus their attention and energy on making superior products and improving them over time. Managers assume that buyers admire well-made products and can appraise product quality and performance. Product oriented companies often design their products with little or no customer input.

The product concept is criticized for concentrating on product quality and not taking into consideration the purchasing power of consumers.

SELLING OR SALES CONCEPT

This concept holds that consumers if left alone people will ordinarily not buy enough of the organisation’s products. The organisation must therefore undertake an aggressive selling and promotion effort.

Sales oriented organisations spend a lot of money in the training of sales personnel. This is because they believe that consumers can be coerced into buying any product provided there are skilled men and women to persuade them.

The sales concept is criticized for attempting to stimulate demand rather than satisfy consumer needs using one-way selling messages.

Another criticism of the sales concept is that it deceives people and manipulates them into purchasing products they do not really need.

THE MARKETING CONCEPT

The marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities towards determining and satisfying the needs and wants of target markets.

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/services which the consumers want or desire should be made available 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.

The marketing concept is criticized for pandering to a diversity of perceived needs, thus creating wasteful unnecessary product features and adding to the price paid for products.

SOCIETAL MARKETING CONCEPT

This concept builds upon the notion of the marketing concept. In addition it advocates a concern for general societal welfare. For example, a business that is established to push cocaine in order to satisfy the needs of drug addicts is not in line with the marketing concept.

Moreover, it will be unethical to establish a factory with noise- making machines in a residential area because of the fact that the noise of machines will definitely disturb the residents.

Another aspect of societal marketing concept is its advocacy for compensation for damages done to individuals and society during the process of production. An example of this is pollution resulting from oil exploration. In Nigeria today host oil communities are crying foul for lack of adequate compensation for the use of their God- given resources.

CONSUMER ORIENTATION

The market today is characterised by a number of products, a variety of diverse customers and stiff competition. In such a scenario, marketing with consumer in mind has become a necessity. Marketing managers are shifting their focus from selling a product to creating something that is needed. Starting from product creation to selling and servicing, consumer focus is given the utmost priority. The focus group discussions, surveys and feedbacks done by companies to understand consumers are some examples to show how much importance is given to consumers.

INTEGRATED ORGANISATIONAL EFFORT

While an organization becomes larger and more complex, they tend to break functions into smaller units by assigning a group of staff to specialize in these activities. This allows the organization to manage the complexity of the organization. But with time, no decision maker can take good decisions with isolated information that they get from the information of the individual departments.

In today’s competitive world, an organization finds it difficult to operate and survive in the departmental information system and hence organizations have always attempted to remove these functional barriers that existed for decades. Hence is the significance of integrated information systems and Integrated Organizational Effort.

Integration can also happen across the firms, like the distributors, suppliers, manufacturers c and also across the departments like finance, accounting, manufacturing, human resource etc.

PROFIT ORIENTATION

The term ‘profit orientation’ is used to describe a business that operates under the primary objective of making money.

Profit oriented organization exists primarily to generate a profit, that is, to take in more money than it spends. The owners can decide to keep all the profit themselves, or they can spend some or all of it on the business itself. Or, they may decide to share some of it with employees through the use of various types of compensation plans, e.g., employee profit sharing.

A profit-oriented pricing strategy involves setting prices for your products that will guarantee you’ll make money on each sale. You determine your cost for manufacturing each product, and then add a percentage for profit.

A nonprofit organization on the other hand exists to provide a particular service to the community. The word “nonprofit” refers to a type of business which is organized under rules that forbid the distribution of profits to owners.

Most nonprofits businesses are organized into corporations formed under the corporation laws of a particular state. Every state has provisions for forming nonprofit corporations; some permit other forms, such as unincorporated associations, trusts, etc., which may operate as nonprofit businesses on slightly (but sometimes importantly) different terms.

SUMMARY

Marketing concepts help to outline a company’s goals that focus on the needs of a consumer. This includes desires, needs, and level of satisfaction.

Five competing concepts under which organizations can choose to conduct their marketing activities are identified. These concepts are: production concept, product concept, selling or sales concept, marketing concept and societal marketing concept.

The production concept holds that consumers will favour those products that are widely available and low in cost.

The product concept holds that consumers will favour those products that offer the most quality performance, or innovative features.

The selling or sales concept holds that consumers if left alone will ordinarily not buy enough of the organisation’s products. The organisation must therefore undertake an aggressive selling and promotion effort.

The marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities towards determining and satisfying the needs and wants of target markets.

The societal marketing concept builds upon the notion of the marketing concept. In addition it advocates a concern for general societal welfare.

Consumer orientation companies focus on the internal and external needs of their customers. Consumer orientation establishes and monitors standards of customer satisfaction and strives to meet the clientele’s needs and expectations related to the product or service sold by the business.

In today’s competitive world, an organization finds it difficult t6 operate arid survive in the departmental information system and hence organizations have always attempted to remove these functional barriers that existed for decades. Hence is the significance of integrated information systems and Integrated Organizational Effort.

The term ‘profit orientation’ is used to describe a business that operates under the primary objective of making money. A nonprofit organization on the other hand exists to provide a particular service to the community.