Marketing Concepts

5 concepts which organizations conduct their marketing activities:
The concepts of marketing has changed and evolved over time.

Production Concept:
The idea that consumers will favor products that are available and highly affordable.
The business focuses on reducing cost by mass production.

The management may:
· Situation 1: Demand exceeds the supply - Increase the production to meet the demand of the market.
· Situation 2: The product cost is too high - Improve the productivity to lower the cost ultimately the sales price which consumer is could afford. Example: Ford “perfect the production” to lower the price that consumer could afford.

Product Concept:
The idea that consumers will favor products that offer the most quality, performance, and features. Example: Some manufacturers believe that if they can build a better mousestrp, the world will beat a path to their door. The organization then devotes its energy to making continuous product improvements, but overlooked the real needs of consumers.

This concept can lead to marketing myopia.
For example:
1. Railroad management once thought that the user wants “trains” rather than “transportation”, overlooked the challenge of airlines, buses, trucks, and automobiles.
2. Kodak assumed that consumers wanted photographic film rather than a way to capture and share memories and at first overlooked the challenge of digital cameras.

Selling Concept:
The idea that consumers will not buy enough of the organization’s products unless the organization undertakes a large-scale selling and promotion efforts. The organization focuses on the selling to the target market. However, the problem could be that the consumers do not like the good being sold to them.

Many organizations practice the selling concept when they face overcapacity. They 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 customer relationships.

Marketing Concept:
The marketing management philosophy that 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 competitors do.

Organization practices Marketing Concept leads to the path of sales and profits.

a.k.a Customer-centered “sense and respond” philosophy. Put the customer at the heart of the business.

Many successful and well-known companies have adopted the marketing concept. E.g. Disney, Wal-Mart, Marriott. The goal is to build customer satisfaction into the very fabric of the firm

Societal Marketing Concept: The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than do competitors in a way that maintains or improves the consumer’s and society’s well-being.

Example: Fast-food industry. Giant fast-food chain offers tasty and convenient food at reasonable price. However, these foods contain exceeding fat and salt that would harm to the health of the consumer. Packaging of the food leads to pollution to the environment.

Thus, in satisfying short-term consumer wants, the highly successful fast-food chains may be harming consumer health and causing environmental problems.