Posted by mbalectures | Posted in Principles of Marketing | 46,592 views | Posted on 02-07-2010 |
There are different concepts that guide sellers to conduct their marketing activities. For example sellers can only focus on production and try to reduce their cost of production, or focus on improving the quality of product. Similarly they can pay more attention to selling and promotion. In this way different concepts have evolved to help the organizations in managing their marketing activities. These concepts are: production, product, selling, marketing, and societal marketing. The explanation of these concepts is given below.
- Production Concept
Production concept refers to the philosophy that supply creates its own demand. It means that the sale will increase automatically with the increase in production and distribution facilities. This is one of the oldest concepts and works only in few situations. For example if the management is trying to reduce the cost of production then it can do so by increasing the production. With the increase in production, economies of scale takes place and the cost of production reduces, which helps to reduce the prices. Similarly the concept of production is helpful in situation when there is imbalance between demand and supply i.e. demand exceeds supply. Due to higher demand, prices start to increase therefore management can earn higher profits by increasing the production.
- Product Concept
Product concept states that the sellers should focus on improving the quality of their products, improve the performance, add more innovative features etc. So basically this concept is about to attract the customers by improving the quality and performance on one hand and offer attractive prices on other. Similarly the design, packaging and effective distribution channels of product are some of the important tactics to attract the customers. The important drawback of product concept is that it can lead to marketing myopia in which the organization overlooked the importance of other substitutes available in the industry.
- Selling Concept
The concept of selling focuses on the large scale selling and promotion activities in order to attract more customers. There are various industries which sell products that buyers do not normally think of buying. Therefore in order to attract such buyers, these organizations have to practice the selling concept. There is high risk in such marketing because the organizations try to sell the product whether the buyers like or not. Therefore, if the buyers do not like the product then it can really spoil the reputation of organization.
- Marketing Concept
According to marketing concept, organizations should focus to analyze the needs and wants of target market and provide the desired satisfaction more effectively than competitors do. Most people mix marketing concept with selling concept but there is difference between the two. Selling concept starts with the production of goods, focuses on promotion and sales and ends at getting profits. In contrast the market concept starts with a well defined market, focuses on customer needs and wants and ends at creating long term customer relationship by effectively satisfying the needs and wants of customers. Thus though marketing concept, organization could be benefited in the long run.
- Societal Marketing Concept
Societal marketing concept focuses to improve the well being of consumers and society as a whole. Therefore those organizations which are practicing this concept try to analyze the needs, wants and demand of target market and deliver superior value to customers which results in overall wellbeing of customers and society. Societal marketing concept is relatively new as compared to the other marketing management philosophies.