Firms vary in their perceptions about business, and their orientations to the marketplace. This has led to the emergence of many different concepts of marketing. The following five are the noteworthy ones:
1. The exchange concept
2. The production concept
3. The product concept
4. The sales concept
5. The marketing concept
We will see in this article what marketing means under each of these concepts, how organizations following concepts other than the marketing concept suffer a disability and how organizations that follow the marketing concept are better enabled to win customer and succeed. To facilitate the discussion, we shall also examine some definitions of marketing.
A cursory glance the definitions would reveal that there are varying perceptions and viewpoints on the meaning and content of marketing. It would also be obvious that marketing has been viewed from different perspectives. It is corresponding to these differences that varying concepts of marketing have emerged.
What do these concepts signify?
Let us now see the features of each of these concepts.
The Exchange Concept
The Exchange Concept of marketing, as the very name indicates, holds that the exchange of a product between the seller and the buyer is the central idea of marketing. While exchange does from a significant part of marketing, to view marketing as mere exchange, will result in missing out the essence of marketing. Marketing is much broader than exchange. Exchange at best covers the distribution aspect and the price mechanism. The other important aspects of marketing such as concern for the customer, generation of value satisfactions, creative selling and integrated action for serving the customer, are completely overshadowed in the exchange concept.
The Production concept:
According to the Production Concept marketing is a mere appendage. In organizations that practice this concept, production dominates the thinking process. They believe that marketing can be managed by managing production. The concept holds that consumers would, as a rule, support those products that are produced in great volume at a low unit cost. Naturally, in such organizations, all effort is focused on production. They do achieve cost reduction through maximization of output. They assume that the lower cost will automatically bring all the customers to their doors. In actual practice, however, this does not happen in most cases. The organizations do not get the assumed customer patronage. Customers, after all, are motivated by a variety of consideration in their purchases, besides price. As a result, the production concept fails to serve as the marketing philosophy for an enterprise.
The Product concept:
The Product Concept is different from the production concept. Whereas the production concept seeks to win markets and profits via high volume of production and low unit cost, the product concept seeks to achieve the same result via product excellence, improved products, and new products and ideally designed and engineered products. It also places an emphasis on quality assurance. In general, the product concept tries to achieve marketing success through product attributes.
Organizations that subscribe to the product concept assume that consumers would automatically vote for products of high quality. They concentrate on product excellence; they spend their time and money on research and development, and bring out many new products. Yet, in many cases, they fail in the marketplace. They do not bother to study the market and the consumer in depth. They get totally engrossed with the product and almost forget the consumers for whom the product is actually meant; they fail to find out what the consumers actually need and what they will gladly accept.
In simple terms, â€œmarketing myopiaâ€ means a colored or crooked perception of marketing and short-sightedness about business. Excessive attention to production or the product or selling aspects at the cost of the customer and his actual needs creates this myopia. The obsession with the product and the neglect of the customer and they donâ€™t get as excited about their customers in their own backyard as about the oil on the distant Sahara desert. Such myopia leads to a wrong or inadequate understanding of the market hence failure in the marketplace. It even leads to a wrong or inadequate understanding of the very nature of the business in which the organization is engaged.
The Sales Concept:
The Sales Concept maintains that the company has to aggressively promote and push its products; it cannot expect its products to get picked up automatically by the customers. Heavy advertising high-power personal selling, large scale sales promotion, heavy price discounts, and strong publicity and public relations are the normal tools used by organizations that rely on this concept. But, these organizations too, do not enjoy the best of customer patronage. Obviously, the sales concept to suffer from marketing myopia, just as the exchange concept, the production concept and the product concept do. Companies practicing the sales concept assume that selling is synonymous with marketing. In reality, there is a great deal of different between selling and marketing.