The process called Marketing is not the newly evolved concept in the recent years. We, as a human being, have been doing marketing in either way since the earliest time of our human beings.

However, the time that marketing was being specified as a subject that should be studied systematically is not over two centuries yet.

Let’s study the evolution of marketing philosophies in this article.

Company Orientations toward the Marketplace

  • Production Concept: Consumers favor products that are available and highly affordable.
  • Product Concept: Consumers favor products that offer the most quality, performance, and innovative features.
  • Selling Concept: Consumers will buy products only if the company promotes/ sells these products.
  • Marketing Concept: Focuses on needs/ wants of target markets & delivering satisfaction better than competitors.
  • Holistic Marketing Concept: Everything matters in Marketing.

The Production Concept: one of the oldest concepts in business

The companies which take marketing from the production point of view or philosophy of production hold the concept of making a solution first and then sell the solution.

The production concept holds that consumers favor the products that are widely available and highly affordable.

They have little concern on quality. They think that if they can make the products in least cost and sell in low prices, then consumers will buy more.

Production Concept

Therefore companies that are adopting production concept mainly concentrate on improving production with lowest costs, and distribute in mass volume.

The production concept is widely being applied in developing countries such as China and Vietnam, which have huge and inexpensive labor pool.

For example, the consumer production companies like Procter & Gamble Company, the food and beverage companies like Coca Cola have used the production concept to dominate the market.

Product of P&G

However, not every consumer like the products in low price with less quality. Some prefer premier quality products. That’s why some companies practice the Product Concept for those kind of consumers.

The Product Concept: mainly focuses on the quality of products

Some companies focus on philosophy of product by producing best quality products for premier customers.

The product concept holds that consumers prefer the high quality products with high performance and innovative features.

Many high branded products use the Product Concept by producing best quality products for the premier customers.

For example Shangri-La Five Stars Hotels & Resorts is following the product concept by maximizing their quality for their premier customers.

Shangri-La Hotel in Yangon

Many start-ups adopt the product concept in their first step of business, and highly concentrate on producing high quality products and sell in good prices. They might think that a high quality product will by itself lead people to them.

However, they have learned the hard way, they have realized that a new or improved product will not necessarily be successful unless it’s priced, distributed, advertised, and sold properly.

Let’s study another concept namely Selling Concept in the next topic.

The Selling Concept: sells what sellers have, not what buyers want

The companies which produce products that people don’t really think to buy practice the selling concept. The selling concept holds that buyers will not buy the products unless pushing the sell.

It is widely used with the goods that buyers don’t normally think of buying such as insurance, encyclopedia and cemetery plots.

Encyclopedia

Firms that are practicing the selling concept mainly focus on selling like persuading, asking, influencing in order to make people buy what they have made, rather than make what the market wants.

Marketing that is only based on hard selling concept is risky because it can either make the buyers won’t return or bad-mouth it or might return to buy it again.

The Marketing Concept: customer-centered philosophy

Marketing concept is emerged in the mid of 1950s as a customer-centered, sense-and-respond philosophy. Marketing holds on fulfilling the needs and wants of the target markets and delivering satisfaction better than competitors.

Marketing Concept

In marketing concept, the job of marketers is to find out the right products for the customers, not the right customers for the products.

Nowadays, most firms have adopted the marketing concept by setting up marketing department with the main objective of to satisfy customer needs.

For example, Dell utilizes the marketing concept by providing product platforms on which buyer can customize the features that he or she wants in the machine.

Dell Official Site

Let’s see how Harvard’s Theodore Levitt drew a perceptive contrast between the selling and marketing concepts.

Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.

The Holistic Marketing Concept: 21st Century Marketing

Nowadays, most business firms are going globally. With the growth of business, the firms have begun to adopt a new set of beliefs and practices which is called as holistic marketing.

In holistic marketing, everything matters in marketing. It consists of four components namely Relationship Marketing, Integrated Marketing, Internal Marketing, and Performance Marketing.

Relationship Marketing

With the growth of the business, marketing need to be extended to develop long-term relationship with all the different stakeholders that directly or indirectly affect the success of the business.

The stakeholders for relationship marketing could be categorized into four main groups as in the following:

  • Customers
  • Employees
  • Partners (Including Suppliers, Agencies, Distributors, Dealers, Channels, Re-sellers)
  • Financial community (Shareholders, Investors, Analysts)

In order to make all the stakeholders work like a team for the same goal or purpose, markets need to develop a network called marketing network. And try to develop this network into relationship marketing.

To develop a good relationship marketing with all the stakeholders, it requires marketers understanding their needs, wants, goals, capabilities and resources. 

With the good relationship marketing, not only the firm will be profited, but also all the stakeholders will be benefited as well. And keep the long-term success for the firm. 

Integrated Marketing

In marketing, there are two themes happening continuously. Two key themes are as the following:

(1) Many different marketing activities can Create, Price, Communicate, and Delivery values to customers.

(2) Marketers should design and implement any one marketing activity with the mind of making sure all the marketing activities are giving the same message. All the marketing activities should be in harmony.

For example, when a customer buy an air-conditioner from a shop, he expects delivery, installation, and maintenance services to go with the purchase.

Then we need Integrated Marketing to make sure all the marketing functions are going harmoniously. So when all the different marketing activities are implementing as one marketing activity, it can bring more satisfaction to customers.

Internal Marketing

The tasks of Internal Marketing is to hire, train, and motivate employees to serve the customers well.

In one organization, we have employees in all departments; marketing department is the department which is having mainly contact with the customers whilst other departments are having less. And we need senior management to take customers as priority in doing all the marketing activities.

Marketing is considered as success only when all departments work together to serve customer well. The company won’t be able to give the excellent service without the supportive of it’s employees.

The following example from Kotler Keller’s Marketing Management (pp.47) highlights some of the potential challenge in integrating marketing:

The marketing vice president of a major European airline wants to increase the airline’s traffic share. His strategy is to build up customer satisfaction by providing better food, cleaner cabins, better-trained cabin crews, and lower fares, yet he has no authority in these matters. The catering department chooses food that keeps food costs down; the maintenance department uses inexpensive cleaning services; the human resources department hires people without regard to whether they are naturally friendly; the finance department sets the fares. Because these departments generally take a cost or production point of view, the vice president of marketing is stymied in his efforts to create an integrated marketing program.

Therefore Internal Marketing requires not only horizontal alignment with other departments, but also vertical alignment with senior management so everyone understands, appreciates, and supports the marketing effort. 

Performance Marketing

At the end of the marketing, we need to measure the performance of our marketing activities. There will be two aspects in measuring the performance of the marketing as in the following:

(1) How are marketing activities impacting the finance of the company? 

(2) How well do our marketing activities serve the society? 

In performance marketing, we need to measure the return on investment on marketing activities: financial returns and society returns on marketing investment.

Nowadays, top marketers are going beyond to increase the sales revenue by focusing on market share, product quality, customer satisfaction, and other factors. They are also considering the society, legal, ethic, and environment when designing marketing programs.

Is your Company still focusing only on the sales revenue so far? If yes, then you should consider to increase the returns on social responsibility as well for keeping your company in long-termed success.

Conclusion – business philosophies for Start-Up

Let’s have a quick revision on the contents we have learned from this article.

There are five orientations that companies are practicing toward the marketplace. The five Company Orientations are as the following:

  • Production Concept: Consumers favor products that are available and highly affordable.
  • Product Concept: Consumers favor products that offer the most quality, performance, and innovative features.
  • Selling Concept: Consumers will buy products only if the company promotes/ sells these products.
  • Marketing Concept: Focuses on needs/ wants of target markets & delivering satisfaction better than competitors.
  • Holistic Marketing Concept: Based on the development, design, and implementation of marketing programs, processes, and activities.

In Holistic Marketing, everything matters in marketing. And it consists of four components namely Relationship Marketing, Integrated Marketing, Internal Marketing, and Performance Marketing.

After studying the business philosophies, we have to figure out how will we apply on our business? What kind of philosophy is our business practicing now?

If our business is a newly start-up business, then what kind of business philosophy should we focus on? It won’t be easy for a start-up to practice the Product Concept as it usually require big initial investment to make mass production to reduce the cost.

A start-up business should start taking the step from Marketing Concept by surveying what is the market demanding. And then focus on the Product Concept and produce high quality products. And also practicing the Selling Concept to push the sale of the business and increase the revenue. 

When the business has turned to be bigger, then we can analyze our business and update the business’s philosophy to make it better.