Embedded Files
Concepts/Different Approaches In Marketing
Concepts/Different Approaches In Marketing
1. The Production Concept
The production concept holds that consumers will favor products that are available and highly affordable. Therefore, management should focus on improving production and distribution efficiency. This concept is one of the oldest orientations that guide sellers.
The production concept is still a useful philosophy in some situations. For example, computer maker Lenovo dominates the highly competitive, price-sensitive Chinese PC market through low labor costs, high production efficiency, and mass distribution. However, although useful in some situations, the production concept can lead to marketing myopia. Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective—satisfying customer needs and building customer relationships.
2. The Product Concept
The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on making continuous product improvements.
Product quality and improvement are important parts of most marketing strategies. However, focusing only on the company's products can also lead to marketing myopia. For example, some manufacturers believe that if they can "build a better mousetrap, the world will beat a path to their door But they are often rudely shocked. Buyers may be looking for a better solution to a mouse problem, but not necessarily for a better mousetrap. The better solution might be a chemical spray, an exterminating service, or something else that works even better than a mousetrap. Furthermore, a better mousetrap will not sell unless the manufacturer designs, packages, and prices it attractively; places it in convenient distribution channels; brings it to the attention of people who need it; and convinces buyers that it is a better product.
3. The Selling Concept
Many companies follow the selling concept, which holds that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort. The selling concept is typically practiced with unsought goods—those 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 product benefits.
Such aggressive selling, however, carries high risks. It focuses on creating sales transactions rather than on building long-term, profitable customer relationships. The aim often is to sell what the company makes rather than making what the market wants. It assumes that 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. These are usually poor assumptions.
4. The Marketing Concept
The marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Under the marketing concept, customer focus and value are the paths to sales and profits. Instead of a product-centered "make and sell" philosophy, the marketing concept is a customer-centered "sense and respond" philosophy. The job is not to find the right customers for your product but to find the right products for your customers.
Figure contrasts the selling concept and the marketing concept. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company's existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses primarily on customer conquest—getting short-term sales with little concern about who buys or why.
In contrast, the marketing concept takes an outside-in perspective. As Herb Kelleher, Southwest Airlines' colorful CEO, puts it, "We don't have a marketing department; we have a customer department." The marketing concept starts with a well-defined market, focuses on customer needs, and integrates all the marketing activities that affect customers. In turn, it yields profits by creating lasting relationships with the right customers based on customer value and satisfaction.
Implementing the marketing concept often means more than simply responding to customers' stated desires and obvious needs. Customer-driven companies research current customers deeply to learn about their desires, gather new product and service ideas, and test proposed product improvements. Such customer-driven marketing usually works well when a clear need exists and when customers know what they want.
In many cases, however, customers don't know what they want or even what is possible. For example, even 20 years ago, how many consumers would have thought to ask for now-commonplace products such as cell phones, notebook computers, iPods, digital cameras, 24-hour online buying, and satellite navigation systems in their cars? Such situations call for A customer driving marketing—understanding customer needs even better than customers themselves do and creating products and services that meet existing and latent needs, now and in the future. As an executive at 3M puts it, "Our goal is to lead customers where they want to go before they know where they want to go."
5. The Societal Marketing Concept
The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. Is a firm that satisfies the immediate needs and wants of target markets always doing what's best for consumers in the long run? The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being.
Consider today's flourishing bottled water industry. You may view bottled water companies as offering a convenient, tasty, and healthy product. Its packaging suggests "green" images of pristine lakes and snow-capped mountains. Yet making, filling, and shipping billions of plastic bottles generate huge amounts of carbon dioxide emissions that contribute substantially to global warming. Further, the plastic bottles pose a substantial recycling and solid waste disposal problem. Thus, in satisfying short-term consumer wants, the highly successful bottled water industry may be causing environmental problems that run against society's long-run interests.
As Figure shows companies should balance three considerations in setting their marketing strategies: company profits, consumer wants, and society's interests. Johnson & Johnson does this well. Its concern for societal interests is summarized in a company document called "Our Credo”, which stresses honesty, integrity, and putting people before profits. Under this credo, Johnson & Johnson would rather take a big loss than ship a bad batch of one of its products.
Consider the tragic tampering case in which eight people died in the United States 1982 from swallowing cyanide-laced capsules of Tylenol, a Johnson & Johnson brand. Although Johnson & Johnson believed that the pills had been altered in only a few stores, not in the factory, it quickly recalled all of it’s product and launched an information campaign to instruct and reassure consumers. The recall cost the company $100 million in earnings. In the long run, however, the company's swift recall of Tylenol strengthened consumer confidence and loyalty, and today Tylenol remains one of the nation's leading brands of pain reliever.
Johnson & Johnson management has learned that doing what's right benefits both consumers and the company. Says former CEO Ralph Larsen, "The Credo should not be viewed as some kind of social welfare program . . . it's just plain good business. If we keep trying to do what's right, at the end of the day we believe the marketplace will reward us." Thus, over the years, Johnson & Johnson's dedication to consumers and community service has made it one of America's most admired companies and one of the most profitable. Nokia faced a similar situation in India in 2007, when they had to replace defective batteries manufactured by some other battery manufacturer.
References
References
Philip Kotler, Principles of Marketing, Printice Hall
Questionnaire
Questionnaire
Long Questions
1) Explain the different concepts in marketing
2) Explain the different approaches towards marketing
Short Questions
1) Differentiate between marketing and selling concept
Short Notes
1) The societal marketing concept
2) Selling & marketing concept
Multiple Choice Questions
Click here for MCQ Test
Page updated
Google Sites
Report abuse