concepts of marketing -ahmad faraz

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Marketing

By Ahmad Faraz

Concepts Of Marketing

WHAT IS MARKETING ?

Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others

PHILIP KOTLER

WHAT IS MARKETING ?

• In other words, it is the process of understanding, creating, and delivering profitable value to targeted customers better than the competitors.

A SIMPLE MARKETING SYSTEM

Industry Market

Communication

Information/Feedback

Goods & Services

Money

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Concepts Of Marketing:

• There are five concepts of marketing.1. Production Concept2. Product Concept3. Selling Concept4. Marketing Concept5. Societal concept

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Production concept: This concept is that• Consumers will favor products that are easily available and

highly affordable. Therefore • Increase production • Cut down costs• And build profit through volume. With the production concept, management focuses on

improving production and distribution efficiency. This concept is one of the oldest orientations that guides sellers.

• This was very much practiced by earlier industrials. Later it became a standardised practice for most companies. Ford, for instance, was considered as one of the earliest champions of the production concept. Ford once famously said that Americans can get ‘any car from Ford until it is black’. This quote has gone down in marketing history, as it has stressed the importance of production concept, and the importance that it once held in the world of business.

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• The production concept is still a useful philosophy in some situations. For example in the highly competitive, price-sensitive Chinese market, both personal computer maker Lenovo and home appliance maker Haier lead through low labour costs, high production efficiency, and mass distribution.

• However, although useful in some situations, the production concept can lead to marketing myopia and losing sight of the real objective—satisfying customer needs and building customer relationships.

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• Now The focus has shifted from the past’s famous ‘production

concept’, to a ‘customisation concept’.

The customisation concept is a concept whereby each and every product that has been produced and delivered, is done so according to the tastes of customers, the potential choices of customers. Basically businesses have to ensure that their products can suit all tastes. Dell is considered to be one of the best businesses that make use of this customisation concept. The car industry can be used, too, as vehicles are now available with as range of features and in an array of colours.

• Nokia phones can be example as well.

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•

(1) THE PRODUCTION CONCEPT

ProduceSell

Consumers

Company

Produce more & more

Practically sells itself

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Product concept: This concept is that• Consumers favor products that offer the most quality,

performance, and features. Therefore• Improve quality, performance and features. This would lead to

increased sales and profits.• The focus is on 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(offer better product), the world will beat a path to their doors.”

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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 something else that suits their needs 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.

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Product concept Example

• Examples can be Apple vs Samsung• For example, computer companies use the product

concept to consistently develop new hardware components and software programs that perform better than their competitors' offerings. Car manufacturers, clothing designers, cell phone companies and cosmetic companies are all good examples of companies who use the product concept to constantly create products that outshine comparable products already on store shelves.

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(2) THE PRODUCT CONCEPT

•

Produce Quality Products

Sell Consumers

Practically sells itself, it gives most quality for money

Buyers admire well-made products and can appraise product quality and performance.

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Selling concept: This concept is that• Consumers will not buy enough of the firm’s products unless the firm

undertakes a large-scale selling and promotion effort. Therefore• Promote sales aggressively.• Build profit through quick turnover.• The selling concept is typically practiced with unsought goods—those

that buyers do not normally think of buying, such as life insurance or blood donations. These industries must be good at tracking down prospects and selling them on a product’s benefits. The selling concept is used on goods such as smoke detectors, yam pounding machines, insurance (especially life assurance policy), club membership, etc.

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• Such aggressive selling, however, carries high risks. It focuses on creating sales connections 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.

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• The five most important points of the selling concept of the marketing are describe hereunder: -

1. This concept is typically practiced with unsought goods (those that buyers do not normally think of buying e.g. insurance policies).2. The selling concept focuses on existing products and uses heavy promotion and selling efforts.3. To be successful with this concept, the organization must be good at tracking down the interested buyer and selling them on product benefits.4. Industries that use this concept usually have overcapacity. Their aim is to sell what they make rather than make what will sell in the market.5. There are not only high risks with this approach but low satisfaction by customers.

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(3) SELLING CONCEPT

• Consumers have normal tendency to resist.

Produce

Sell it Consumers

Aggressive selling & promotion efforts

Making sales becomes primary function and consumer satisfaction secondary .

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Marketing concept:

Marketing concept is that “Know the needs and wants of the target markets and deliver the desired satisfactions better than competitors”. Under the marketing concept, customer focus and value are the paths to sales and profits.

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• The job is not to find the right customers for your product but to find the right products for your customers.

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example

• Let us look at the example of 2 interminable opponents – Pepsi and Coke – Both of these organizations sell the same products. However, the value proposal displayed by both is diverse. These organizations flourish with the concept of marketing. Where Pepsi concentrates on youths, Coke conveys on a broad methodology. That coke particularly flourishes with the advertising idea as contrasted with its rival(Pepsi)

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→ The concept of marketing accordingly depends on three key perspectives

• 1) What is the target market – The first step is to focus precisely which the object market is. This can be achieved by market research and choosing which target business sector will give the best returns.

• 2) What are the needs as well as the demands of the target market – A further project in market research is the ‘buyer preference’ study. This study will help the firm to focus on the needs and demands of the target market, consequently helping the firm in choosing their policies.

• 3) How better would we be able to convey a value proposition – In this step, the firm will decide on the policies that it would adopt. What sort of quality the firm would create and convey? In what capacity would it be advisable for the firm to incorporate its distinctive offices? Eventually, the firm chooses how to apply the concept of marketing to convey a better consumer experience.

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(4) MARKETING CONCEPT

• “ LOVE THE CUSTOMER , NOT THE PRODUCT ”

ConsumersProduce it

Market it

Learn what they want(MR)

Sell what they want(Satisfy needs of customers)

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Societal marketing: This concept is thatThe company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.

Students might be familiar with many different companies that practice societal marketing through their corporate social responsibility (CSR) initiatives. Students might be familiar with local retailers who are also involved in societal marketing. They will note that these companies donate, contribute, or offer services to charities and not-for-profit organizations.

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• 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.

• Many leading business and marketing thinkers are now preaching the concept of shared value, which recognizes that societal needs, not just economic needs, define markets.

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examples• Consumer Health• Marketing campaigns that emphasize consumer health are campaigns that

fall into the societal marketing strategy. • Eco-Friendly Marketing• Companies that place an emphasize on recycled products and organic

products that aren't going to damage the ozone layer fall under the societal marketing strategy

• Supporting Farms and Local Business• Companies that don't import raw materials practice a more contained form

of societal marketing by marketing products made with materials obtained from local sources. This type of marketing takes into account the well-being of a local social structure. A company that purchases raw materials from local farmers or other businesses can market its products using this fact as a key part of its marketing strategy.

Ahmad Faraz03047765351afaraz.ns@gmail.comRasool Pur Colony, Noor Shah, Sahiwal

BSCSBZU sub-campus SahiwalBatch-2nd