Marketing Concepts
The marketing concept
is the strategy that firms implement to satisfy customers’ needs, increase
sales, maximize profit and beat the competition. There are 5 marketing concepts
that organizations adopt and execute.
There are five
alternative concepts under which organizations design and carry out their
marketing strategies.
5
Marketing Concepts are;
Production Concept,
Product Concept,
Selling Concept,
Marketing Concept,
Societal Marketing
Concept.
1.
Production Concept
The idea of
production concept – “Consumers will favor products that are available and
highly affordable”. This concept is one of the oldest Marketing management
orientations that guide sellers.
Companies adopting
this orientation run a major risk of focusing too narrowly on their operations
and losing sight of the real objective.
Most times; the production
concept can lead to marketing myopia. Management focuses on
improving production and distribution efficiency.
Although; in some
situations; the production concept is still a useful philosophy.
Production Concept
example:-
You see in Amazon or
retail stores; the market is flooded with cheap products from china. Everything
from the cheap plastic product from China is on your cart now.
The best example of
the production concept is Vivo, the Chinese smartphone brand. Their phones are
available in almost every corner of the Asian market. You can walk in any phone
shop in Asia and can walk out with the latest and greatest smartphone from
Vivo.
2.
Product Concept
The product concept
holds that the consumers will favor products that offer the most in quality,
performance and innovative features.
Marketing strategies
are focused on making continuous product improvements.
Product quality and
improvement are important parts of marketing strategies, sometimes the only
part. Targeting only on the company’s products could also lead to marketing
myopia.
For example;
Suppose a company
makes the best quality Floppy disk. But a customer does need a floppy disk?
She or he needs
something that can be used to store the data. It can be achieved by a USB Flash
drive, SD memory cards, portable hard disks, etc.
So that the company
should not look to make the best floppy disk. They should focus to meet the
customer’s data storage needs.
Product Concept
example:-
When you think of
high-quality products; Apple will be one of the top ones. Their products are so
good that they set industry trends and standards.
Logitech makes very
high-quality computer products such as keyboard, mouse, and webcams. These
high-quality products are priced higher but people still buy and they get
almost free advertisement from independent reviews.
3.
Selling Concept
The selling concept
holds the idea- “consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort”.
Here the management
focuses on creating sales transactions rather than on building long-term,
profitable customer relationships.
In other words;
The aim is to sell
what the company makes rather than making what the market wants. Such an
aggressive selling program carries very high risks.
In selling concept
the marketer assumes that customers will be coaxed into buying the product will
like it, if they don’t like it, they will possibly forget their disappointment
and buy it again later. This is usually a very poor and costly assumption.
Typically the selling
concept is practiced with unsought goods. Unsought goods are that buyers do not
normally think of buying, such as insurance or blood donations.
These industries must
be good at tracking down prospects and selling them on a product’s benefits.
Selling Concept
example:-
Every saw an ad
online or TV commercial that you almost can’t escape and hide from? The Selling
Concept is in play.
Almost all companies
eventually fall into this concept. “Mountain Dew” ads are hard to miss. If
people like Mountain Dew or not, that is debatable but you can see that PepsiCo
is pushing it hard using ads.
Almost all soft
drinks and soda drinks follow the selling concept. These drinks have no health
benefits ( actually harm your health more), you can easily replace them with
water ( the most available substances in the earth).
And the soft drink
companies know it, and they run ads 24×7, spending millions,
4.
Marketing Concept
The marketing concept
holds- “achieving organizational goals depends on knowing the needs and wants
of target markets and delivering the desired satisfactions better than competitors
do”.
Here marketing
management takes a “customer first” approach.
Under the marketing
concept, customer focus and value are the routes to achieve sales and profits.
The marketing concept
is a customer-centered “sense and responds” philosophy. The job is not to find
the right customers for your product but to find the right products for your
customers.
The marketing concept
and the selling concepts are two extreme concepts and different from each
other.
Marketing Concept
example:-
Restaurants and
startups do follow the marketing concept. They try to understand the consumer
and deliver the best product or service, which is better for the competition.
Dollar shave club is
the best example. They changed the Men’s grooming market. They have understood
that people are not happy with their previous grooming products and their
prices.
Where other company’s
grooming products will cost hundreds to buy for just one month. Dollar shave
club charges a couple of bucks a month with higher quality products and convenience
of home delivery.
5.
Societal Marketing Concept
Societal
marketing concept questions whether the pure marketing
concept overlooks possible conflicts between consumer short-run wants and
consumer long-run welfare.
The societal
marketing concept holds “marketing strategy should deliver value to customers
in a way that maintains or improves both the consumer’s and society’s
well-being”.
It calls for
sustainable marketing, socially and environmentally responsible marketing that
meets the present needs of consumers and businesses while also preserving or
enhancing the ability of future generations to meet their needs.
The Societal
Marketing Concept puts Human welfare on top before profits and satisfying the
wants.
The global warming
panic button is pushed and a revelation is required in the way we use our
resources. So companies are slowly either fully or partially trying to
implement the societal marketing concept.
Societal Marketing Concept
example:-
While large companies
sometimes launch programs or products that benefit society; it is hard to find
a company that is fully committed socially.
We can see Adidas
doing great as they continue to support Colin Kaepernick despite pressure from
various parties. Tesla is promising a big push for green energy with electric
cars and solar roof panels/tiles.
|
No. |
The
Selling Concept |
The
Marketing Concept |
|
1 |
undertakes
a large-scale selling and promotion effort |
undertakes
activities such as; market research, |
|
2 |
The
Selling Concept is suitable with unsought goods—those that buyers do not
normally think of buying, such as insurance or blood donations. |
The
Marketing Concept is suitable for almost any type of product and market. |
|
3 |
Focus
on the selling concept starts at the production level. |
Focus
on the marketing concept starts at understanding the market. |
|
4 |
Any
company following selling concept undertakes a high-risk |
Companies
that are following the marketing concept require to bare less risk and uncertainty. |
|
5 |
The
Selling Concept assumes –“customers who are coaxed into buying the product
will like it. Or, if they don’t like it, they will possibly forget their
disappointment and buy it again later.” |
Instead
of making an assumption, The marketing concept finds out what really the
consumer requires and acts accordingly to them. |
|
6 |
The
Selling Concept makes poor assumptions. |
The
marketing concept works on facts gathered by its “market and customer first”
approach. |
Importance
of Marketing
(1)
Marketing Helps in Transfer, Exchange and Movement of Goods:
Marketing is very
helpful in transfer, exchange and movement of goods. Goods and services are
made available to customers through various intermediaries’ viz., wholesalers
and retailers etc. Marketing is helpful to both producers and consumers.
(2)
Marketing Is Helpful In Raising And Maintaining The Standard Of Living Of The
Community:
By making available
the uninterrupted supply of goods and services to consumers at a reasonable
price, marketing has played an important role in raising and maintaining living
standards of the community. Community comprises of three classes of people
i.e., rich, middle and poor. Everything which is used by these different
classes of people is supplied by marketing.
(3)
Marketing Creates Employment:
Marketing is complex
mechanism involving many people in one form or the other. The major marketing
functions are buying, selling, financing, transport, warehousing, risk bearing
and standardisation, etc. In each such function different activities are
performed by a large number of individuals and bodies.
Thus, marketing gives
employment to many people.
(4)
Marketing as a Source of Income and Revenue:
Marketing does
provide many opportunities to earn profits in the process of buying and selling
the goods, by creating time, place and possession utilities. This income and
profit are reinvested in the concern, thereby earning more profits in future.
Marketing should be given the greatest importance, since the very survival
of the firm depends on the effectiveness of the
marketing function.
(5)
Marketing Acts as a Basis for Making Decisions:
A businessman is
confronted with many problems in the form of what, how, when, how much and for
whom to produce? In the past problems was less on account of local markets.
There was a direct link between producer and consumer.
In modern times
marketing has become a very complex and tedious task. Marketing has emerged as
new specialised activity along with production.
(6)
Marketing Acts as a Source of New Ideas:
Marketing as an
instrument of measurement, gives scope for understanding the new demand pattern
and thereby produce and make available the goods accordingly.
(7)
Marketing Is Helpful In Development Of An Economy:
Marketing is the
kingpin that sets the economy revolving. The marketing organisation, more
scientifically organised, makes the economy strong and stable, the lesser the
stress on the marketing function, the weaker will be the economy.
MARKET
IDENTIFICATION
The method used to
sort potential clients for sales and marketing campaigns, advertising and
promotions using income, demographic,
and lifestyle characteristics of a market and census information.
This method is managed in several ways, depending on the products and/or
services that are the main focus of a business.
How
Businesses Identify Target Markets
Target market
identification begins with a study of where sales and marketing efforts produce
the maximum results. For example, a law firm mainly offers legal services.
However, many law firms specialize in certain types of legal issues. It
presents the best picture of target market identification because it specifies
where potential clients exist. It is also true for products that are sold to
the public.
Another example of
this is a major food producer of food and beverages. Although the business may
have several products, its sales and marketing planning focuses on particular
target markets for each product. Thus, they may study
target markets for each product to finely hone the scope of their target market
identification.
Steps
to Identify Target Markets
The identification of
target markets include:
Defining sources
where products and/or services are most likely needed.
Researching the
volume of products and services sold and used over a broad demographic area.
Studying sources of
raw materials that are required to produce products or services.
Identifying major
competitors to determine the location of target markets.
Importance
Identifying the
target market is important for a company because doing so allows it to tailor
its advertising, pricing and promotions to appeal directly to the targeted
audience.
Basic
Components of a Market Research Survey
Components of market
research survey are: (1) introduction, (2) screener, (3) survey questions, and
(4) conclusion.
1.
Introduction
The introduction can
come in many forms. If we are sending a customer
survey through email we'll likely want to include the
introduction to the survey in the email invitation and reminder. This email
gives us an opportunity to explain what the survey is, why it is important, and
what will happen with the results. In this scenario, it is better fit it in the
email than the opening screen of the survey.
2.
Screening Questions
These screening
questions are the first few questions of customer survey. These questions
determine whether or not the respondent qualifies to take the survey. If we
only want to survey those 18 to 34, a screener question about age would
disqualify those under 18 and over 34.
Or perhaps we want to
survey only those who have purchased from particular company in the past 6
months? Include a screener question which asks frequency of purchase and
disqualifies those who purchased longer than 6 months ago.
These screener
questions are always asked at the beginning of the survey. This section may
include 1 or 2 questions or a handful more. Some surveys do not include any
screener questions which means all those interested are able to participate.
3.
Survey Questions
This section is the
core part of customer survey or any market research survey. Here we ask and
address the main objectives of the market research. These survey questions
might touch on areas such as Net
Promoter Score (NPS), customer
satisfaction (CSAT), customer effort score (CES), or
other areas of interest.
It always helps to
write a survey
outline before we jump into survey draft. Having an outline
ensures our survey follows a proper flow, our objectives are addressed in the
right order, and we can prioritize topics.
4.
Conclusion and Thank You
Even if it is just a
sentence or 2 at the end of survey, always thank the respondent for his or her
time. The thank you typically reads something like: "This completes our
survey, thank you for your time and responses." If the survey is not
blinded, you can also mention: "On behalf of Drive Research and Company
ABC, thank you for your time today."
Many surveys route
respondents to a follow-up thank you page. If we choose not to do so
respondents are often left wondering if their responses were submitted
properly. Taking them automatically off-site to a thank you page lets the
respondents know everything is finished.
Market
assessment
Market
assessment is a detailed and objective evaluation of the
potential of a new product, new business idea or new investment. It is a
comprehensive analysis of environment forces, market trends, entry
barriers, competition, risks, opportunities and the company's resources and
constraints.
Whether we are
thinking of venturing into a new market or launching a new product, conducting
a marketing assessment is the crucial first step in determining if there is a
need or a potential customer base for our product.
A well executed
market assessment will enable a company to decide where to use limited
resources and to go after markets and opportunities that will provide the best
returns on investments.
Failure to conduct
proper market assessment could result in wastage of resources, missed
opportunities, poor returns on investments and even substantial financial losses
which could be detrimental to the future of company.
Steps
in market assessment
An assessment of the
market should be done in a systematic manner. The process can be broken down
into the following steps.
First, understand
market conditions.
Gather basic
information about market – size, competition, potential customers and income
levels. We also need information about the business environment – political,
economic, social and technological.
Next, identify market
risks and opportunities.
Gather more targeted
information about potential risks or opportunities in the potential market.
Other information required includes data on market growth, trends,
opportunities, risks and key players in the market.
Finally, need to
analyze the overall picture.
Need to put together
all the information that have collected and determine if our business venture
is still viable. Once we are confident that we should proceed with the venture,
we can start developing your marketing plan.
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