The Marketing Concept

In marketing concept the firms analyse the needs of their customers and then make decisions to satisfy those needs, better than the competition.

To better understand the marketing concept, it is worthwhile to put it in perspective by reviewing other concepts that once were predominant. While these alternative concepts prevailed during different historical time frames, they are not restricted to those periods and are still practised by some firms today.

The Production Concept:
The term production concept was coined by Henry Ford who made the auto-mobile which was till then only affordable for the rich people for even a common man to purchase.

*Assumes that consumers are interested primarily in product availability at low prices
Marketing objectives:
* Cheap, efficient production
* Intensive distribution
* Market expansion

The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself create the demand for the products.

Virtually everything that could be produced was sold easily by a sales team whose job it was simply to execute transactions at a price determined by the cost of production. The production concept prevailed into the late 1920's.

The Product Concept:
Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features
Marketing objectives:
* Quality improvement
* Addition of features
Tendency toward Marketing Myopia

The Sales Concept:
Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so
Marketing objectives:
* Sell, sell, sell
Lack of concern for customer needs and satisfaction

By the early 1930's however, mass production had become commonplace, competition had increased, and there was little unfulfilled demand. Around this time, firms began to practice the sales concept (or selling concept), under which companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. Before producing a product, the key questions were:

* Can we sell the product?
* Can we charge enough for it?

The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word "marketing" when they really mean sales.

The Marketing Concept:
Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition
Marketing objectives:
* Make what you can sell
* Focus on buyer’s needs

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, customers 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:

* What do customers want?
* Can we develop it while they still want it?
* How can we keep our customers satisfied?

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

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

When firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was to satisfy customer needs. Often these departments were sales departments with expanded responsibilities. While this expanded sales department structure can be found in some companies today, many firms have structured themselves into marketing organizations having a company-wide customer focus. Since the entire organization exists to satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing problem" - everybody must be concerned with customer satisfaction.

The marketing concept relies upon marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing team makes decisions about the controllable parameters of the marketing mix.