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MarketingConcept

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TheMarketingConcept

Themarketingconceptisthephilosophythatfirmsshouldanalyzetheneedsoftheir

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customersandthenmakedecisionstosatisfythoseneeds,betterthanthe
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competition.Todaymostfirmshaveadoptedthemarketingconcept,butthishasnot
About
alwaysbeenthecase.
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In1776inTheWealthofNations,AdamSmithwrotethattheneedsofproducers
Reprints
shouldbeconsideredonlywithregardtomeetingtheneedsofconsumers.While
TermsofUse
thisphilosophyisconsistentwiththemarketingconcept,itwouldnotbeadopted
widelyuntilnearly200yearslater.
Tobetterunderstandthemarketingconcept,itisworthwhiletoputitinperspective
byreviewingotherphilosophiesthatoncewerepredominant.Whilethese
alternativeconceptsprevailedduringdifferenthistoricaltimeframes,theyarenot
restrictedtothoseperiodsandarestillpracticedbysomefirmstoday.

TheProductionConcept
Theproductionconceptprevailedfromthetimeoftheindustrialrevolutionuntilthe
early1920's.Theproductionconceptwastheideathatafirmshouldfocusonthose
productsthatitcouldproducemostefficientlyandthatthecreationofasupplyof
lowcostproductswouldinandofitselfcreatethedemandfortheproducts.Thekey
questionsthatafirmwouldaskbeforeproducingaproductwere:
Canweproducetheproduct?
Canweproduceenoughofit?
Atthetime,theproductionconceptworkedfairlywellbecausethegoodsthatwere
producedwerelargelythoseofbasicnecessityandtherewasarelativelyhighlevel
ofunfulfilleddemand.Virtuallyeverythingthatcouldbeproducedwassoldeasilyby
asalesteamwhosejobitwassimplytoexecutetransactionsatapricedetermined
bythecostofproduction.Theproductionconceptprevailedintothelate1920's.

TheSalesConcept
Bytheearly1930'showever,massproductionhadbecomecommonplace,
competitionhadincreased,andtherewaslittleunfulfilleddemand.Aroundthis
time,firmsbegantopracticethesalesconcept(orsellingconcept),underwhich
companiesnotonlywouldproducetheproducts,butalsowouldtrytoconvince
customerstobuythemthroughadvertisingandpersonalselling.Beforeproducinga
product,thekeyquestionswere:
Canweselltheproduct?
Canwechargeenoughforit?
Thesalesconceptpaidlittleattentiontowhethertheproductactuallywasneeded
thegoalsimplywastobeatthecompetitiontothesalewithlittleregardto
customersatisfaction.Marketingwasafunctionthatwasperformedafterthe
productwasdevelopedandproduced,andmanypeoplecametoassociate
marketingwithhardselling.Eventoday,manypeopleusetheword"marketing"
whentheyreallymeansales.
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11/09/2016

MarketingConcept

TheMarketingConcept
AfterWorldWarII,thevarietyofproductsincreasedandhardsellingnolonger
couldbereliedupontogeneratesales.Withincreaseddiscretionaryincome,
customerscouldaffordtobeselectiveandbuyonlythoseproductsthatprecisely
mettheirchangingneeds,andtheseneedswerenotimmediatelyobvious.Thekey
questionsbecame:
Whatdocustomerswant?
Canwedevelopitwhiletheystillwantit?
Howcanwekeepourcustomerssatisfied?
Inresponsetothesediscerningcustomers,firmsbegantoadoptthemarketing
concept,whichinvolves:
Focusingoncustomerneedsbeforedevelopingtheproduct
Aligningallfunctionsofthecompanytofocusonthoseneeds
Realizingaprofitbysuccessfullysatisfyingcustomerneedsoverthelong
term
Whenfirmsfirstbegantoadoptthemarketingconcept,theytypicallysetup
separatemarketingdepartmentswhoseobjectiveitwastosatisfycustomerneeds.
Oftenthesedepartmentsweresalesdepartmentswithexpandedresponsibilities.
Whilethisexpandedsalesdepartmentstructurecanbefoundinsomecompanies
today,manyfirmshavestructuredthemselvesintomarketingorganizationshaving
acompanywidecustomerfocus.Sincetheentireorganizationexiststosatisfy
customerneeds,nobodycanneglectacustomerissuebydeclaringita"marketing
problem"everybodymustbeconcernedwithcustomersatisfaction.
Themarketingconceptreliesuponmarketingresearchtodefinemarketsegments,
theirsize,andtheirneeds.Tosatisfythoseneeds,themarketingteammakes
decisionsaboutthecontrollableparametersofthemarketingmix.

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