The marketing function in an organization wants to create marketing strategies that will successfully engage customers and build profitable relationships with them. However, a key question that arises in this regard is what philosophies will guide these marketing strategies. What should be the top concern when creating a marketing strategy? Should the interests of the organization be above the interests of the customers and the society or should each be given equal weightage? Often a conflict can arise in this area. For example, an organization’s interests can clash with society’s interests.
There are five concerns or marketing management orientations for designing and implementing marketing strategies.
Marketing Management Orientations
- The Production concept
- The Product Concept
- The Selling Concept
- The Marketing Concept
- The Societal Marketing Concept
The Production Concept:
The main focus of the production concept is on the efficiency of the production and distribution processes. According to this concept, the consumers will favor the products they find to be highly available and affordable. Apart from prices, the focus under this concept is on distribution or the two P’s – price and placement in the marketing mix. However, prices can best be managed by managing production efficiency and availability requires an extensive distribution network. Companies should therefore focus on improving production and distribution according to the production concept.
For example, Lenovo is the largest brand in the PC industry. It is based in China and one of the leading factors that have supported its faster growth is its ability to manage prices. Lower labor and raw material costs, production efficiency, and a large distribution network have helped the company win in the global market. The production concept works great in some situations but not in all. In some cases, it can lead to marketing myopia and cause companies to focus extensively on production and distribution instead of the needs the products serve.
The Product concept:
In the product concept, the focus is on the product, its quality, and its performance. According to this concept, the customers will favor the products that offer them the most in terms of quality, performance, and innovative features. Under this concept, the marketing strategy focuses on continuously improving the product to grow the attractiveness of the product and the size of the customer base.
The marketing strategies of a very large number of firms focus on product quality and continuous improvement. However, while focusing on product quality can definitely yield good results, it does not ensure that it will lead to higher popularity and sales. In several cases, just building a better product is not sufficient since just a good quality product does not ensure that the world will rush to your doors.
Product design, packaging, pricing, and distribution also play an important role in growing the influence of the product and the brand. Unless there is a strong distribution channel in place, the product will not be available to a large number of customers. The product needs to be placed before the customers’ eyes. Apart from that, there are more factors like attractive packaging and affordable pricing, which are essential to convince the customers that the product is worth buying.
The Selling Concept:
Under the selling concept, the focus is on sales and promotion. Companies believe that their products will not sell unless they carry out sales and promotions at a very large scale. This is particularly true about unsought goods. There are products that customers will not seek by themselves because they are not essential goods. Insurance products are a good example of such products. It is why insurance companies carry out a lot of marketing and promotions and employ various sales channels to push sales of their products.
Such industries hire sales representatives in very large numbers who need to be good at tracking prospects and selling the products’ features to them. However, there are also several risks related to aggressive selling. Companies often try to sell what they are making rather than making what customers need. They also make the mistake of assuming that the customers will like the product and if not they might forget their disappointment in the future. However, Kotler highlights that these are really poor assumptions.
The marketing concept:
The marketing concept focuses on just the opposite perspective of the selling concept. The selling concept follows an inside-out perspective but the marketing concept follows an outside-in perspective. The selling concept starts from the factory and then focuses on heavy sales and promotions to achieve profitable sales of the company’s existing products. The marketing concept does just the opposite and starts from the customer. Implementing the marketing approach does not mean just responding to the most obvious needs or desires of the customers. Instead, the customer-centered or customer-driven companies extensively research the customers to know about their needs and desires, and gather new product ideas or make product improvements. However, customer-driven marketing works well when the company has identified a clear need and the customers clearly know what they want.
In many cases, customers do not clearly know what they want or what is possible. For example, smartphones and social media were not commonplace a few decades ago. Customers did not know what was possible. It was after the product or services arrived that they knew what they could accomplish with it.
The Societal marketing concept:
The societal marketing concept looks for possible conflicts between consumer short-term wants and long-term welfare. A firm satisfying the immediate needs and wants of the customers may not necessarily be doing what is in the best interest of its consumers in the long run. According to the societal marketing concept, the firm’s marketing strategy should consider delivering customer value in a manner that maintains or improves the well-being of both the customer and the society. It calls for sustainable marketing and socially and environmentally responsible marketing that apart from meeting the immediate needs of customers and businesses also preserves or improves the ability of future generations to meet their needs. Companies need to balance three considerations while making their marketing strategies including profits, consumer wants, and society’s interests.