Marketing Concept in Marketing Management

In a modern industrial economics, productive capacity has been built up to a point where most markets are buyers markets (i.e. the buyers are dominant) and sellers have scramble hard for consumers and ultimately consumers began to occupy a place of unique importance. The business firms recognize that “there is only one valid definition of business purpose to create a customer”. In other words, the recognition of the importance of marketing leads to the acceptance of marketing concept.

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. To better understand the marketing concept, it is worthwhile to put it in perspective by reviewing other philosophies that once were predominant. 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, customer 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 :

  1. What do customers want ?
  2. Can we develop it while they still want it
  3. How can we keep our customers satisfied?

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

  1. Focusing on customer needs before developing the product
  2. Aligning all functions of the company to focus on those needs
  3. Realizing a profit by successfully satisfying customer needs over the long term

When firms began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was so satisfy customer needs.

Marketing Concept in Marketing Management

On other words, marketing concept aims customer’s needs and wants orientation backed by integrated marketing effort aimed at generating customer satisfaction as the key to satisfying organizational goals.

Features of Marketing Concept

The salient features of the marketing concept are:

  1. Consumer Orientation: The most distinguishing feature of the marketing concept is the importance assigned to the consumer. The determination of what is to be produced should not be in the hands of the firms but in the hands of the consumers. The firms should produce what consumers want. All activities of the marketer such as identifying needs and wants, developing appropriate products and pricing, distributing and promoting them should be consumer – oriented. If these things are done effectively, products will be automatically bought by the consumers.
  2. Integrated Marketing: The second feature of the marketing concept is integrated marketing i.e. integrated management action. Marketing can never be an isolated management action. Marketing can never be in isolated management function. Every activity on the marketing side will have some bearing on the other functional areas of management such as production, personnel or finance. Similarly any action in a particular area of operation in production or finance will certainly have an impact on marketing and ultimately on consumer. In a business firm that accepts the marketing concept as the corner stone of its business philosophy, no management area can work in isolation. Therefore in an integrated marketing setup, the various functional areas of management get integrated with the marketing function. Integrated marketing presupposes a proper communication among the different management areas with marketing influencing the corporate decision making process. Thus, when the firms objective is to make profit – by providing consumer satisfaction, naturally it follows that the different departments of the company are fairly integrated with each other and their efforts are channelized through the principal marketing department towards the objective of consumer satisfaction.
  3. Consumer Satisfaction: The third feature of the marketing concept is consumer satisfaction. The objective of the company adopting marketing concept is to satisfy the customers’ needs so perfectly that they will become regular or permanent satisfied customer. For example, when a consumer buys a tin of coffee, he expects a purpose to be served, a need to be satisfied. If the coffee does not provide him the expected flavor, the taste and the refreshments his purchase has not served the purpose. Or more precisely, the marketer who sold the coffee has failed to satisfy his consumer. Thus, ‘satisfaction’ is the proper foundation on which alone any business can build its future.
  4. Realization of Organizational Goals: Though the organizational goals may differ from firm to firm, though key areas such as innovation, market standings, profits and social responsibility are common to all firms. According to the marketing concept, the right way to achieve these organizational goals is through ensuring consumer satisfaction.
  5. Profit Creation: A distinguishing feature of the marketing concept is that it considers the creation of profits as an essential requirement for any business concern. The marketing concept is against profiteering but not against profits. Reasonable returns or surplus are essential for the survival and growth of business orgnizations.

Importance of marketing concept

Business enterprises are conducting their marketing activities under the following five marketing concepts.

1. Production concept

Production concept is the oldest concept under which the businessmen produce goods thinking customers are interested only in low priced, extensively and easily available goods. Finishing and the interest of customers are not important for the manufacturers. They focus only on large scale production and try to make it available on large scale. They try to achieve high production efficiency and creating wide distribution coverage.

2. Product concept

Consumers favor those products that offer the most quality, performance and features is the basis of product concept.  They believe that consumers are willing to pay higher cost for the goods or services which has extra quality. Companies which concentrate on product concept is focused on product improvement.  They constantly improve the product quality and features to satisfy and attract the customers.  Too much focus on product may go off the track and fail.  For example, a biscuit manufacturer produced  a new brand of biscuits with good color, ingredients and packing etc., without taking much importance in consumer tastes and preferences. This may fail in the market if the biscuit does not taste good to the ultimate consumer.

3. Selling concept

In selling concept, producers believe that the aggressive persuasion and selling is the  essence of  their  business  success. They think without such aggressive methods they cannot sell or exist in the market. They are focused on finding ways and means to sell their products. They believe that consumer  themselves will not buy enough of the enterprises products or service by themselves. Hence they do a considerable promotional efforts to sell their product through advertisements and  other means. Sales agents of electrical equipment’s, insurance agents, soft drink/health drink companies  and fund raisers for social or religious causes comes under this category. That is why we are getting lots of calls from insurance agents, even though insurance is a subject matter of solicitation. In short, selling concepts assumes that consumers on their own will not buy enough of enterprises products, unless the enterprise undertakes aggressive sales and promotional efforts.

4. Marketing concept

Under marketing concept the task of marketing begins with finding what the consumer want and produce a product which will meet the  consumer requirement and provides maximum satisfaction. “Customer is the King” concept emerged from this point of view. In the process of evolution many organizations changed their way of thinking to match  the  marketing concept. Under this concept producers considers the needs and wants of consumers as the guiding spirit and deliver such goods which can satisfy the consumer needs more efficiently and effectively than the competitors. Marketing concept is consumer oriented and look forward to achieve long term profits by making a network of satisfied consumers. When an organization practice the marketing concept, all their activities  such as research and development, distribution, quality control, finance, manufacturing, selling etc., are focused to satisfy the consumer needs and wants.

5. Societal concept

With the growing awareness of the social responsibility of the business, attempts made successfully to turn the business organizations socially responsible. Environmental deterioration, excessive exploitation of resources and growing consumer movements have necessitated the recognition and relevance of marketing based on socially responsible. Societal concept is the extension of marketing concept to cover the society in addition to the consumers. Under the societal concept the business organization must take into account the needs and wants of the consumers and deliver the goods and services efficiently so as to balance the consumers satisfaction as well as the society’s well being.

Benefits of Marketing Concept 

The major benefits of marketing concept are described below.

  • Benefits to Firms: A firm that believes in the marketing concept always feels the pulse of the market through continuous marketing audit and marketing research. It is fast in responding to the changes in buyer behavior. It rectifies any drawback in its product and this proves beneficial to the firm. The firm gives more importance to planning, research and innovation and its decisions are no longer based on hunches but on reliable scientific data and the proper interpretation of such data. The profits for the firm become more certain.
  • Benefits to Consumers: The concept on the part of various competing firms to satisfy the consumer puts the later in an enviable position. Reasonable prices, better quality and easy availability at convenient places are some of the benefits that accrue to the consumer as a direct result of marketing concept.
  • Benefits to Society: The practice of marketing concept contributes to better life style, better standard of living and also results in the development of entrepreneurial talents. All these sets the pace for social and economic development.

Thus the marketing concept benefits the organization, the consumer and society at large. A proper understanding of this concept is fundamental to the study of modern marketing.