CONCEPT OF MARKETING

The marketing concept is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition. Today most firms have adopted the marketing concept, but this has not always been the case.

In 1776 in The Wealth of Nations, Adam Smith wrote that the needs of producers should be considered only with regard to meeting the needs of consumers. While this philosophy is consistent with the marketing concept, it would not be adopted widely until nearly 200 years later.

To better understand the marketing concept, it is worthwhile to put it in perspective by reviewing other philosophies that once were predominant. While these alternative concepts prevailed during different historical time frames, they are not restricted to those periods and are still practiced by some firms today.

The Production Concept:

The production concept prevailed from the time of the industrial revolution until the early 1920's. The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself create the demand for the products. The key questions that a firm would ask before producing a product were:

* Can we produce the product?

* Can we produce enough of it?

At the time, the production concept worked fairly well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually everything that could be produced was sold easily by a sales team whose job it was simply to execute transactions at a price determined by the cost of production. The production concept prevailed into the late 1920's.

The Sales Concept

By the early 1930's however, mass production had become commonplace, competition had increased, and there was little unfulfilled demand. Around this time, firms began to practice the sales concept (or selling concept), under which companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. Before producing a product, the key questions were:

• Can we sell the product?
• Can we charge enough for it?

The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word "marketing" when they really mean sales.

The Marketing Concept

After World War II, the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs, and these needs were not immediately obvious. The key questions became:

* What do customers want?

* Can we develop it while they still want it?

* How can we keep our customers satisfied?

In response to these discerning customers, firms began to adopt the marketing concept, which involves:

* Focusing on customer needs before developing the product

* Aligning all functions of the company to focus on those needs

* Realizing a profit by successfully satisfying customer needs over the long-term

When firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was to satisfy customer needs. Often these departments were sales departments with expanded responsibilities. While this expanded sales department structure can be found in some companies today, many firms have structured themselves into marketing organizations having a company-wide customer focus. Since the entire organization exists to satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing problem" - everybody must be concerned with customer satisfaction.

The marketing concept relies upon marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing team makes decisions about the controllable parameters of the marketing mix.


The major differences between selling concept and marketing concept

 1. The selling concept starts with the seller and its focus is on existing products, it  being seller-oriented. The company believes in aggressive selling and other promotions. Customer value and satisfaction are no concern for the seller. The firm produces the products first and then figures out ways to sell and make profits. Different company departments operate without coordination.

2. Marketing orientation starts with the customer and the company strives to learn  customer needs and wants, develops appropriate products or services to satisfy the customer. Business is viewed as a customer need satisfying activity. All departments coordinate their activities and the focus is on customer needs. Profits are an outcome of doing the job well by the company. It requires reliable company wide  information system and maintains it. All departments are responsive to informational inputs. Everybody understands the critical role played by marketing, a fact visibly demonstrable when the head of marketing is part of top management.

THE SOCIETAL MARKETING CONCEPT

Marketing concept was accepted widely among companies in developed and some developing countries and continued to evolve and take on new meanings. Not long after this, criticism started about the nature of its social responsibility. The emphasis shifted to how marketing affected society as a whole in an age of depleting and increasingly scarce resources, environmental deterioration, etc. It was good enough to produce what customers needed or wanted, and for achieving organisational objectives, but in certain cases the concept could be in conflict with customers’ and society’s best long-run interests. Societal marketing concept is a management philosophy that takes into account the welfare of society, the organisation, and its customers.

Adoption of this concept requires that marketing decisions be made in an ethical and socially responsible manner. Companies must pay attention not only to the short-term needs of customers but also to their long-term well being. This includes, for instance, excess fat content in ready-to-eat foods, toxic wastes, and environmental issues.

The need is to strike a balance between the interest of customers, the company itself, and the society in which operations are conducted. Some responsible firms have started using recyclable packaging materials and products that do not harm the environment. Among the marketing tasks, demarketing is an approach that reflects the societal marketing philosophy.

Many companies encounter several hurdles in adopting the marketing concept. For some firms, it is simply too difficult to understand the underlying philosophy and they fail to implement it. Other companies face a conflict between short-term and long-term objectives and have no inclination to sacrifice short-term gains for the sake of customer satisfaction, simply because the customer is not the major priority of top management.

HOLISTIC MARKETING APPROACH

There have been major changes in almost every sphere of human activity over the last decade, like implication being that this requires fresh marketing thinking, a fresh approach to business, and this calls for a holistic marketing approach. This new thinking relies upon marketing research to define market segments, their size, and their needs. To more completely satisfy those needs, marketers need to have a more complete and cohesive approach to internal marketing, targeted marketing, relationship marketing, be visibly socially responsible, and make decisions about the controllable elements of the marketing mix.