Company alignment to market place


The competing concepts under which organizations have conducted marketing activities include: production concept, product concept, selling concept, marketing concept, and holistic marketing concept. What philosophy should guide a company’s marketing efforts? What relative weights should be given to the interests of the organization, the customers, and society?

Production Concept

Production concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers of production –oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution. This orientation makes sense in developing countries such as China where the largest PC manufacturer, Legend, and domestic appliances giant Haier take advantage of the country’s huge inexpensive labor pool to dominate the market. It is also used when a company wants to expand the market.

Product Concept

Product Concept holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers in these organizations focus on making superior products and improving them over time. However, these managers are sometimes caught up in a love affair with their products. They might commit the “better-mousetrap� fallacy, believing that a better mousetrap will lead people to beat a path to their door. A new or improved product will not necessarily be successful unless the production is priced, distributed, advertised, and sold properly.

Selling Concept

Selling Concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products. The organization must, therefore, undertake an aggressive selling and promotion effort. The purpose of marketing is to sell more stuff to more people often for more money in order to make more profit.
Selling concept is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants. However, marketing based on hard selling carries high risks. It assumes that customers who are coaxed into buying a product will like it; and that if they do not, they will not return it or bad-mouth it or complain to consumer organizations, or might even buy it again.

In the course of converting to a marketing orientation, a company faces three hurdles: organized resistance, slow learning, and fast forgetting. Some company departments (often manufacturing finance and R&D) believe a stronger marketing function threatens their power in the organization. Initially, the marketing function is seen as one of several equally important functions in a check-and-balance relationship. Marketers argue that their function is more important. A few enthusiasts go further and say marketing is the major function of the enterprise, for without customers there is no company. Enlightened marketers clarify the issue by putting the customer at the center of the company. They argue for a customer orientation in which all functions work together to respond to, serve, and satisfy the customer.

Holistic Marketing Concept

Holistic marketing concept is based on the development, design and implementation of marketing programs, processes and activities that recognize their breadth and inter dependencies. Holistic marketing recognizes that “everything matters� with marketing and that a broad, integral perspective is often necessary.

A whole set of forces that appeared in the last decade call for new marketing and businesses practice. Companies have new capabilities that can transform the way they have been doing marketing. Companies need fresh thinking about how to operate and compete in a new marketing environment.

Marketers in the twenty-first century are increasingly recognizing the need to have a more complete, cohesive approach that goes beyond traditional applications of the marketing concept.