The Five Marketing Concepts Explained

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Despite the fact that modern business is changing rapidly and it’s radically different from 10, 20, or 50 years ago, some core marketing concepts have remained the same.

Marketing is defined by the American Marketing Association as:

 "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.“

Marketing concepts relate to the philosophy a business use to identify and fulfill the needs of its customers, benefiting both the customer and the company. Same philosophy cannot result in a gain to every business, hence different businesses use different marketing concepts (also called marketing management philosophies).

The 'marketing concept' proposes that in order to satisfy the organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. This concept originated from Adam Smith's book The Wealth of Nations, but would not become widely used until nearly 200 years later.

Marketing and marketing concepts are directly related.

Given the importance of customer needs and wants in marketing, we have to understand them correctly.

They have been defined long time ago as this:
  • Needs: Something necessary for people to live a healthy, stable and safe life. When needs remain unfulfilled, there is a clear adverse outcome: a dysfunction or death. Needs can be objective and physical, such as the need for food, water and shelter; or subjective and psychological, such as the need to belong to a family or social group and the need for self-esteem.
  • Wants: Something that is desired, wished for or aspired to. Wants are not essential for basic survival and are often shaped by culture.
  • Demands: When needs and wants are backed by the ability to pay, they have the potential to become economic demands.
There are numerous marketing concepts which are used by marketers as a reference in the marketing field. Some of these marketing concepts exist to date, while some others are outdated and have been taken over by other marketing concepts.


The five marketing concepts

The five marketing concepts are:
  1. Production concept
  2. Product
  3. Selling concept
  4. Marketing concept
  5. Societal marketing concept


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    Let’s take a closer look at each one.


    The production concept

    When the production concept was defined, a production oriented business dominated the market. This was from the beginning of capitalism to the mid 1950’s.

    During the era of the production concept, businesses were concerned primarily with production, manufacturing, and efficiency issues. Companies that use the production concept have the belief that customers primarily want products that are affordable and accessible.

    The production concept is based on the approach that a company can increase supply as it decreases its costs. Moreover, the production concept highlights that a business can lower costs via mass production.

    A company oriented towards production believes in economies of scale (decreased production cost per unit), wherein mass production can decrease cost and maximize profits. As a whole, the production concept is oriented towards operations.


    The product concept

    This concept works on an assumption that customers prefer products of greater quality and price and availability doesn’t influence their purchase decision. And so company develops a product of greater quality which usually turns out to be expensive.

    One of the best modern examples would be IT companies, who are always improving and updating their products, to differentiate themselves from the competition. Since the main focus of the marketers is the product quality, they often lose or fail to appeal to customers whose demands are driven by other factors like price, availability, usability, etc.


    The selling concept

    Production and product concept both focus on production but selling concept focuses on making an actual sale of the product. Selling concept focuses on making every possible sale of the product, regardless of the quality of the product or the need of the customer.

    The selling concept highlights that customers would buy a company’s products only if the company were to sell these products aggressively.This philosophy doesn’t include building relations with the customers. This means that repeated sales are rare, and customer satisfaction is not great.


    The marketing concept

    A company that believes in the marketing concept places the consumer at the center of the organization. All activities are geared towards the consumer. A business,aims to understand the needs and wants of a customer. It executes the marketing strategy according to market research beginning from product conception to sales.

    By focusing on the needs and wants of a target market, a company can deliver more value than its competitors. The marketing concept emphasizes the “pull” strategy". This means that  a brand is so strong that customers would always prefer your brand to others’.


    The societal marketing concept

    This is a relatively new marketing concept. While the societal marketing concept highlights the needs and wants of a target market and the delivery of better value than its competitors, it also emphasizes the importance of the well-being of customers and society as a whole (consumer welfare or societal welfare).

    The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. They must balance and juggle the often conflicting criteria of company profits, consumer want satisfaction, and public interest.


    Conclusion

    The five marketing concepts are a good example of how marketing has changed throughout the years. It has shifted its focus from products to users.

    Modern companies have to put users first, and build not only a good product (or service), but also a good experience around it. If you need help with creating marketing strategy, contact us today and we’ll be glad to help you.

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