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importance of Marketing concepts in business enterprises
Business enterprises are conducting their marketing activities under the following five marketing concepts.
1. Product Concept
2. Production Concept
3. Selling Concept
4. Marketing Concept
5. Societal Concept
1. Production Concept: is the oldest concept under which the businessmen produce goods thinking customers are interested only in low priced, extensively and easily available goods. Finishing and the interest of customers are not important for the manufacturers. They focus only on large scale production and try to make it available on large scale. They try to achieve high production efficiency and creating wide distribution coverage. This concept can be adopted under the following situations.
a. When the supply of the product is less than the demand, you can sell more if you increase production. Main concern is to fill the demand by producing more.
b. If the cost of the product is high and the increase in production will decrease the cost of goods, this concept can be adopted.
Production orient business organizations adopt this concept. Such organizations have only sales department which sell product at a price set by production and finance department.
2. Product Concept: Consumers favour those products that
most quality, performance and features is the basis of product
concept. They believe that consumers are willing to pay higher cost
for the goods or services which has extra quality. Companies which
concentrate on product concept is focused on product improvement. They
constantly improve the product quality and features to satisfy and
attract the customers. Too much focus on product may go off the track
and fail. For example, a biscuit manufacturer produced a new brand of
biscuits with good colour, ingredients and packing etc., without taking
much importance in consumer tastes and preferences. This may fail in
the market if the biscuit does not taste good to the ultimate consumer.
3. Selling Concept: In selling concept, producers believe that the aggressive persuasion and selling is the essence of their business success. They think without such aggressive methods they cannot sell or exist in the market. They are focused on finding ways and means to sell their products. They believe that consumer themselves will not buy enough of the enterprises products or service by themselves. Hence they do a considerable promotional efforts to sell their product through advertisements and other means. Sales agents of electrical equipments, insurance agents, soft drink/health drink companies and fund raisers for social or religious causes comes under this category. That is why we are getting lots of calls from insurance agents, even though insurance is a subject matter of solicitation. In short, selling concepts assumes that consumers on their own will not buy enough of enterprises products, unless the enterprise undertakes aggressive sales and promotional efforts.
Marketers who follow selling concept often forget the taste of consumers and not interested in the feedback of consumers. They use fair and unfair means of persuasion to increase sales. They are not interested in building a network of satisfied customers and target new customers for selling their products.
4. Marketing Concept: Under marketing concept the task of marketing begins with finding what the consumer want and produce a product which will meet the consumer requirement and provides maximum satisfaction. "Customer is the King" concept emerged from this point of view. In the process of evolution many organizations changed their way of thinking to match the marketing concept. Under this concept producers considers the needs and wants of consumers as the guiding spirit and deliver such goods which can satisfy the consumer needs more efficiently and effectively than the competitors. Marketing concept is consumer oriented and look forward to achieve long term profits by making a network of satisfied consumers. When an organization practice the marketing concept, all their activities such as research and development, distribution, quality control, finance, manufacturing, selling etc., are focused to satisfy the consumer needs and wants.
Now a days, those companies which have attained a certain maturity who look on beyond the immediate future adopt this concept. Some companies avoid this concept due to unavailability of short term profit and the uncertainty and unpredictability of the future profit. Also the companies who look for 'quick bucks' may not adopt this concept.
Companies which are successful and enjoys goodwill adopt marketing concept as their philosophy. They realized that the satisfied customers are the best advertisers for their products. This concept is now a days used world wide.
5. Societal concept: With the growing awareness of the social responsibility of the business, attempts made successfully to turn the business organizations socially responsible. Environmental deterioration, excessive exploitation of resources and growing consumer movements have necessitated the recognition and relevance of marketing based on socially responsible. Societal concept is the extension of marketing concept to cover the society in addition to the consumers. Under the societal concept the business organization must take into account the needs and wants of the consumers and deliver the goods and services efficiently so as to balance the consumers satisfaction as well as the society's well being.
A company which adopts the societal concept has to balance between the society interests, company profit and consumer satisfaction. A voluntary acceptance of societal concept is necessary for the long term existence of the business organization. Such organizations try to reduce the emission of pollutants to the environment and market such goods which give full value and satisfaction of the money spent.
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