Development of the Marketing Concept

The system of thinking and studying for the success of business is called marketing concept. The concept of marketing is found to have developed along with the development of business principle and management thoughts. Marketing should be customer oriented and an effective coordination among individuals, departmental relations and objectives should be maintained.
Marketing should be result oriented. So, the maxim – ‘Work hard but don’t expect fruit’ – does not apply in marketing. Marketing activities are conducted for achievement of certain result. So, it is necessary to have the elements such as targeted consumers’ satisfaction for the application of the concept of marketing. Many concepts of marketing have been developed from long experience, studies and researches and are being applied in actual practice. They are as follows:-

1. Production concept

This is an old concept of marketing. This concept gives emphasis on huge production and sale. It believes that the customers are conscious and sensitive towards goods and brand, they are well-informed about substitute goods and are attracted towards cheap (less prices) goods. So, the managers believing in production concept want to extend market by producing huge quantity and reducing price. During 1960-70, many Japanese companies had adopted this concept. Many of the Nepalese companies are operating with the same concept even today. Production concept is based on following assumptions:
  • To produce goods in huge quantity and make available in the places at the right time as desired by the customers.
  • Customers are sensitive, remain conscious of goods and brand and are well-informed about goods for substitution.
  • Demand for cheap goods (having fewer prices) becomes high in markets. So, production cost should be minimized by using advanced technology and machinery and increasing work efficiency.
In conclusion, production concept of marketing is the oldest concept. It gives emphasis on huge production, reduction of production cost by using advanced technology, machinery and efficiency and should control market providing goods in a large quantity at the places and time as desired by customers.

2. The product concept

Product concept is the improved form of production concept. Production concept gives emphasis on the price of product, but product concept gives emphasis on the quality and other features of product including price of products. This concept advocates that higher quality goods should be produced at lower cost using efficient management, high skill and modern technology. The manufacturers accepting this concept produce high quality goods, and give warranty for certain time. As the goods last long and if they are spoiled or they become unable to work or get damaged within the warranty period, they are changed or repaired free of charge by the concerned company, the customers like to buy such goods. So, the conclusion of this concept is to produce quality goods in huge quantity at lower cost, and collect maximum profit by selling large amount. Production concept is based on the following assumptions:
  • Customers like quality, long lasting and newer goods,
  • Regular improvement should be made to produce goods to meet the demand market,
  • Goods should be made long lasting by improving their quality,
  • Customers select goods of lower price and higher quality among competitive goods,
  • Besides lower cost quality of goods should be improved to attract customers,
  • Skilled management as well as high efficiency is needed to bring improvement in quality of goods.
Under product concept, managers pay more attention to produce quality goods but they do not care for the interest, wants and customers’ priority. So, the changes in technology, customers’ interest, want, desire, fashion, etc. are the major threats to the concept.

3. The selling concept

Selling concept believes that the customers can be attracted toward goods or services by conducting promotional activities and mass selling. Many business organizations adopt this concept of marketing. Whatever high quality of goods or service may be, the customers do not become ready to buy them without making efforts to sell them. So, after producing goods or services, customers should be informed about them through different selling and promotional activities. The essence of this concept is that success can be achieved in business if the customers are positively impressed by selling and promotional activities. This concept is very useful in life insurance, membership/subscription of newspaper, encyclopedia etc. For example, nobody becomes ready to pay for life insurance without being clear about it. Only after being clear about the importance of life insurance, they become ready to pay for it. This concept is more useful for the goods or services which have to face tough competition in markets. Nowadays, most of the managers of business organizations believe in selling concept. They believe that sale of goods can be increased through attractive, exciting and interesting promotional activities. But the promotional activities should be based on good faith, goodwill, business ethics and marketing principle. The selling concept of marketing is based on the following assumptions:
  • Confidential, attractive, exciting, sensitive promotion attracts customers towards goods or services,
  • This concept does not care for wants of customers; it only cares to meet the needs of sellers,
  • The customers do not buy goods or services unless attractive promotional activities are conducted,
  • This concept of marketing applies to the unsought things like encyclopedia, insurance etc.
The managers adopting selling concept believe that sale of goods or services can be increased through advertisement, sales, promotion, public contact, publicity, personal selling and different promotional activities.

4. The marketing concept

Marketing concept gives emphasis on achievement of organizational goal rather than on increase in sales volume. This concept is different from the above mentioned concepts of marketing. The aforementioned concepts believe in –‘we sell what we make’ but the marketing concept believes in –‘we make what we can sell.’ So, market should be studied and researched, goods or services should be produced according to the wants and interest of the customers and give more satisfaction than competitors. Philip Kotler has said about marketing concept as –“Customer centered integrated market system making customers’ satisfaction as a key objective to achieve organizational goal is the marketing concept.” This concept is very useful to get organizational success on the following assumptions:
  • Organizational goal can be achieved by fully satisfying customers,
  • As the customers are the king of market, customer centered integrated market system should be adopted,
  • Targeted market should be clearly defined and goods or services should be produced only by identifying customers’ need and wants,
  • Goods or services should be of better quality and marketable than those of competitors,
  • Only marketable (that can be sold in market) goods or services should be produced.
The managers believing in marketing concept emphasize to give maximum satisfaction to customers by clearly defining the targeted market and producing marketable goods or services. They believe that organizational goal can be achieved by selling products in profitable quantity.

5. The societal marketing concept

Societal marketing concept is the latest among the marketing concepts. This concept emphasizes that, besides customers’ satisfaction, business organizations should be responsible and accountable towards the society. This concept has been developed when there appeared perversions like inflation, environmental destruction, negligence to social welfare, increasing pollution etc. in the race of profit collection. This concept maintains the objective to earn profit satisfying customers by conducting integrated marketing activities and bearing social responsibility. Social responsibility includes control of pollution, equal employment opportunity, post sale service, public awareness, return of investment etc. So, managers should consider all such matters besides customers’ satisfaction and profits. Today, the global wave of industrialization has invited different diseases and perversions. So, the business organizations themselves should be responsible to take proper steps for remedy. This concept of marketing tries to maintain balance between customers’ wants, satisfaction and profit of business organizations. This is made clearer by the following figure:
Maintain balance between customers' wants, satisfaction and profit of business organization
According to societal marketing concept, a business organization should identify needs, wants and interest of targeted markets to work for the interest of the customers and society. The assumptions of this concept are as follows:
  • Societal marketing concept faces environmental threats,
  • It gives priority to social demographic responsibility,
  • It tries to earn profit only by fulfilling customers’ interest and promoting social welfare,
  • This concept believes that the customers and society should be positively influenced by promotional activities of goods and services.
  • Business organizations produce goods or services by identifying the needs, wants and interests of their customers.
In conclusion, this concept of marketing advocates for the interest of customers, business organizations and society. So, this concept is broad and appropriate compared to other concepts.

The following table shows all the five concepts of marketing in comparative form:
Concept
Focus
Means
End/Objectives
The production conceptProduction orientation- Mass Production
- Low cost
Profit through production efficiency
The product conceptProduct quality orientation- High quality
- Performance
- Innovation
Profit through quality product
The selling conceptSeller need orientation- Heavy promotional activitiesProfit through high sales volume
The marketing conceptCustomers need orientation- Integrated marketingProfit through customer need satisfaction
The societal marketing conceptSocial responsibility orientation- Responsible for social and ethical issuesProfit with customer and social well being

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