Marketing Concepts Notes

Marketing Concepts

Performance Objectives

Students should be able to explain:

Concepts under which organization conduct marketing activities.

2. The production concept

3. The product concept

4. The selling concept

Content

1. Concepts under which organization conduct marketing activities.

2. The production concept

3. The product concept

4. The selling concept

Marketing Concepts

The following scholars view the marketing concept as reproduced below:

Keith (1960): “a managerial philosophy concerned with the mobilization, utilisation and control of total corporate effort for the purpose of helping consumers solve selected problems in ways compatible with the planned enhancement of the profit position of the firm”.

Baker (1974): “the customers want satisfaction is the economic and social justification of a company’s existence under marketing, the customer becomes the fulcrum, the pivot about which the business moves in operating for the balance test/interest of all concerned “.

Modern (1991): ” marketing concept is the most important managerial task within the organisation is that of understanding the needs and wants of customers in the market and of adapting the operations of the organisation to deliver the right goods and services more effectively and efficiently than its competitors “.

Kotler and Armstrong (1987):” marketing concept may be defined as a managerial orientation or outlook that accepts that the key of the organisation is to determine the needs, wants and values of a target market and to adapt the organisation to delivering the desired satisfaction more effectively and efficiently than its competitors “.

Hesket (1976): “a corporate state of mind that insists on the integration and corporation of all the marketing functions which in turn, are wielded with all other corporate functions for the basic objective of producing maximum long-range corporate profit”

Summary of the Marketing concept

Scholars’ interpretation of the marketing concept can be summarised as below:

i. that business organisation need to find out the needs of their prospective customers/consumers;

ii. Thereafter develop a product, services or goods to meet the identified needs of the customers;

iii. find out or determine an appropriate and relevant target customer/market segment for it;

iv. fashion out a mean or method/strategy of marketing the product or services at a profit;

v. that the business survival of an organisation depends on the highness or lowness of patronage enjoyed from the customers.

Concepts Under Which Organisations Conduct Marketing Activities

These concepts include the following:

1. The Production Concept.

The production concept is a marketing philosophy that says “customers or consumers will like or accept the product and services which are highly available and affordable. This connotes that producers must produce promote and distribute through an appropriate channel. However, service providers or marketers are of the opinion that consumers will accept their products and services with timely production and efficient distribution, reduction in price, consumers are aware of the competitor’s prices, the service provider must not lower quality or standard in term of production and distribution.

2. The Product Concept

This is a marketing philosophy anchored on the belief that consumers/customers/buyers/patronisers favour or prefer products or services that offer or give them most quality performance and features (value/utility i.e maximum satisfaction) therefore service providers or business organisations or producers must not lower the standard, be quality conscious and make concerted efforts in product improvement.

Philip Kotler assumptions of a product concept are:

● that customers/ consumers aim are purely in quality and standard of product that gives them value for their money.

● that customers/consumers patronize products rather than a solution to their needs.

● that customers/consumers are aware of the quality and features of competitive products and services.

● that customers/consumers confidence and loyalty can only be sustained only by offering them quality products and services.

3. The Selling Concept (Sales concept)

This marketing philosophy anchors on the belief that consumers will either not buy or buy enough or much of the organisation’s products except and useless the service provider, marketer, producer or organisation make a concerted effort to enhance, stimulate or build their confidence and interest in the products/services. This means producers must embark on intensive and aggressive promotional campaigns

Assumptions of the selling concept

● Producers/service provider can influence consumers/customers to patronise them through various sales stimulant devices or strategies e.g offering a discount, buy one, get one free campaign etc.

● The task of the organisation is to have a strong think- thank the sales team that can devise various strategies to hold the attention, attraction and retain their loyalty to the organisation’s products/services.

● Consumers/customers avoid buying unnecessary nonessential goods and services i.e they will not patronise goods and services that are considered as extravagant.

Marketing Concept continued.

Performance Objectives

Students should be able to explain:

1. Concepts under which organization conduct marketing activities.

2. The societal marketing concept

3. The consumer orientation

4. Integrated organizational efforts

5. Profit orientation

Content

1. Concepts under which organization conduct marketing activities.

2. The societal marketing concept

3. The consumer orientation

4. Integrated organizational efforts

5. Profit orientation

The Marketing Concept

This marketing concept is premised on the identification of the needs and wants of the prospective client or customers, therefore, the business firm or organisation must adapt the 4ps if the marketing mix(product, price, place and promotion) to ensure efficiency and effectiveness of the meeting and satisfying the needs and wants of the customers.

Assumptions of the marketing concept

●Consumers can be classified into different categories depending on their needs and wants.

●Irrespective of the market category, customers/consumers will likely favour or prefer the offer of the service provider or organisation whose products/services is closest to satisfying or meeting their particular needs, want and desires.

●The main aim of the organisation/service provider is to further research with a view to holding and retaining their customer’s patronage/interest.

1. The Societal/Consumer/Orientation Marketing Concept

This is the marketing orientation that recognises customers as the spine and cord i.e backbone of an organisation. It sees customers as the “live wire” and “lifeblood”, the heart of the business survival. It holds customers in high esteem and honours them as kings. In essence, the concept holds customers orientation that the company must define the customer’s needs from the customer’s aggregate points of view. That business organisations’ thinking should be geared towards meeting and serving the need and wants of a market or prospective customers that have been well defined and segme. This connotes that business organisation recognize the threat and opportunities that abound and business organisation develop an effective efficient feedback mechanism with a view to being handling the yearning and concerns of unsatisfied customers and clients etc.

2. The Integrated/Coordinated Marketing Efforts

According to Packard(1982) ” Marketing is too important to be left to the marketing departments alone but it supposed to be the assignment/responsibility, the preoccupation of all the departments in the organisation. Hence, the integrated/concerted marketing efforts simply connotes that to meet and satisfy the needs of customers, the various marketing functions (advertising, publicity, sales, promotion, pricing, marketing, research, product, development and distribution etc.) must be coordinated and packaged by other existing departments( administration, production, public relations, etc.).

3. Customer Satisfaction and Profit Orientation Concept

This is geared towards striving and make profits through the supply of consumer satisfaction in an effective and efficient manner. This can be achieved when business establishments/firms, accept and are ready to adequately find ways to maximize revenue and minimise cost, accept to establish a working and perfect system which knows and recognizes the sales potential and profitability of their different market segment, customer and consumer needs and wants and adopts the use of all available tools such as distribution cost, profit analysis and sales force productivity all in a bid to reduce cost with a view to profitably provide services that will give value for money.

4. The Societal Marketing Concept

The Societal marketing concept is believed to be the newest and latest marketing concept. The philosophy according to Kotler (1993) holds that “organisation or business establishment should determine the needs, wants and interests of target markets and deliver the desired satisfaction more effectively, efficiently than competitors in a way that maintains or improves the consumer and the society’s wellbeing. A scholar opined that the societal marketing concept quarried the appropriateness and adequacy of marketing concept as an organisational philosophy taking into cognizance the era of environmental hazards and deterioration, scarcity and shortage of resources, the high growth rate of population/exploitation, poverty, disease etc. The concept beckons on professional marketers to equate three considerations in setting their marketing policies which are public interest or welfare, company’s profit and consumer want and satisfaction.

5. Profit Orientation

A term used to describe a business that operates under the primary objective of making money. Although most commercial enterprises have some form of profit orientation to motivate employees to maximize revenues, the most successful producers also incorporate a customer orientation into their corporate philosophy to protect the company’s reputation and facilitate client satisfaction with its products.

Test : Marketing SSS1 First Term Mid-Term Assessment

Top of Form

1. The principle of marketing is anchored on an exchange?

True

False

2. What is the full meaning of AMA?

Accordance Marketing American

American Marketing Association

Americans Marketing Association

Accordance Marketing Americans

3. . According to___________ “Marketing involves analysing customer needs, securing information needed to design and produce goods or services that match buyers expectations, and creating and maintaining relationships with customers and suppliers “?

Boone and Kurtz

AMA

Institute of Marketing London

Institute of Marketing Nigeria

4. According to __________ “Marketing is the performance of business activities that direct the flow of goods and services from the producers to consumers or end-users”.

Boone and Kurtz

AMA

Institute of Marketing London

Institute of Marketing Nigeria

5. According to ______________ “Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably”.

Boone and Kurtz

AMA

Institute of Marketing London

Institute of Marketing Nigeria

6. . ____________ the quantity of a commodity that a consumer is willing to buy and able to buy at a given price and at a particular time. Wants without a purchasing power and willingness to part with funds to satisfy it is not a demand but a gift?

need

product

demand

transaction

7. __________ refers to the perceived rating of the product offer for the price and this also connotes the degree of satisfaction derived from the consumption of a product viz-a-viz the amount paid to exchange the product. There must be a principle of equity and fairness in value, utility and exchange?

need

product

demand

value

8. ___________ is essential, not extravagant?

need

product

demand

transaction

9. __________ connotes negotiations, business dealing and management. This is the process of what transpires between a client and service provider, a buyer and seller, a retailer and wholesaler, a teacher and a student?

need

product

demand

transaction

10. __________ connotes anything that can be offered to someone to satisfy a need or want. It is what is given in exchange for something?

need

product

demand

transaction

11. ._________ function philosophy opines that some marketers believe that the goal of a marketing system should be to maximize product variety

Maximize consumption