Concepts of Marketing - BBA BBS MBA MBS note TU-Bikram Adhikari

Since  the  later  part  of  the  19th  century,  marketing  has  gradually  evolved  through  various  marketing orientations. These stages in marketing evolution present a generalized picture and a sufficiently significant number of companies have adopted the most modern marketing concept or philosophy.

A  marketing  orientation  (also  called  the  marketing  concept,  or  consumer  focus)  is  one  that  allows the wants and needs of customers and potential customers to drive all the firm's strategic decisions. The firm's corporate culture is systematically committed to creating customer value. In  order  to  determine  customer  wants,  the  company  usually  needs  to  conduct  marketing  research.  The  marketer  expects  that  this  process,  if  done  correctly,  will  provide  the  company  with a sustainable competitive advantage.

This consumer focus can be seen as a process that involves three steps. First customer wants are researched,  then  the  information  is  disseminated  though  out  the  firm  and  products  are  developed, then finally customer satisfaction is monitored, and adjustments made if necessary.

The  concept  of  marketing  orientation  was  developed  in  the  late  1960s  and  early  1970s  at  Harvard  University  and  at  a  handful  of  forward  thinking  companies.  It  replaced  the  previous  sales  orientation  that  was  prevalent  between  the  mid-1950s  and  the  early  1970s,  and  the  production orientation that predominated prior to the mid-1950s. 

The Production Concept  

The  production  concept  was  popular  in  1920  A.D.  The  production  concept  is  one  of  the  oldest  concepts in business. It holds that consumers will prefer products that are widely available and cheaper  in  price.  Managers  of  production-oriented  business  concentrate  on  achieving  high  production  efficiency,  low  cost  and  mass  distribution.  This  concept  is  one  of  the  oldest  philosophies  that  guides  sellers  to  produce  in  mass  scale.  The  production  concept  is  still  a  useful  philosophy  in  two  types  of  situations.  The  first  occurs  when  the  demand  for  a  product  exceeds  the  supply.  Here,  management  should  look  for  ways  to  increase  for  production.  The  second  situation  occurs  when  the  product’s  cost  is  too  high  and  improved  productivity  is  needed  to  bring  it  down.  This  concept  ignores  consumers’  needs.  Although  it  is  one  of  the  oldest  concepts  of  marketing,  Chinese  companies  are  still  implementing  this  concept.  Chinese  products are cheaper in price and widely available in market. 

The Product Concept  

The product concept was popular in 1920 - 1930 A.D. The product concept holds that consumers will  favour  those  products  that  offer  the  most  quality,  performance  or  innovative  features.  Under  product  concept,  finding  customers  is  viewed  as  a  relatively  minor  function.  Managers  in  these  organizations  focus  on  making  superior  products  and  improving  them  overtime.  However,  these  managers  are  sometimes  caught  up  in  a  love  affair  with  their  products.  They  might commit the “better mousetrap” fallacy believing that a better mousetrap will lead people to beat a path to their door. A new or improved product will not necessarily be successful unless the product is priced, distributed, advertised and sold properly. 

The  product  concept  also  can  lead  to  marketing  myopia.  German  motors  are  examples  of  product concept.

The Selling Concept  

The  selling  concept  was  very  popular  since  1930  -  1950  A.D.  Selling  concept  holds  that  consumers  and  businesses,  if  left  alone,  will  ordinarily  not  buy  enough  of  the  organization’s  products   unless   it   undertakes   a   large-scale   selling   and   promotion   effort.   Therefore,   the   organization must undertake an aggressive selling and promotion effort. The selling concept is practiced  most  aggressively  with  unsought  products,  products  that  buyers  normally  do  not  think buying, such as insurance policy and encyclopedia. Most firms practice the selling concept when  they  have  overcapacity.  Their  aim  is  to  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  profitable  relationships  with  customers.  It  assumes  that  consumers  who  are  coaxed into buying the product will like it. Or if they don’t like it, they will possibly forget their dissatisfaction and buy it again later. These are usually poor assumptions to make about buyers. Most  studies  show  that  dissatisfied  customers  do  not  buy  it  again.  Worse  yet,  whereas  the  average  satisfied  customer  tells  three  others  about  good  experiences,  the  average  dissatisfied  customer tells ten others about his or her bad experiences.

Modern Marketing Concept  

This  concept  of  marketing  was  very  popular  since  1950  –  1970  A.D.    The  marketing  concept,  based   on   central   doctrines   crystallized   in   the   mid-1950s,   challenges   the   three   business   orientations   we   just   discussed.   The   marketing   concept   holds   that   the   key   to   achieve   organizational  goals  consists  of  the  company  being  more  effective  than  its  competitors  in  creating, delivering, and communicating customer value to its chosen target markets.

The   marketing   concept   starts   with   a   well-defined   market,   focuses   on   customer   needs,   coordinates all marketing activities affecting customers, and makes profit by creating long term customer relationship based on customer value and satisfaction. 

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