Page 41 - Marketing Management

18 PART 1 UNDERSTANDING MARKETING MANAGEMENT

The Production Concept

The production concept is one of the oldest concepts in business. It holds that consumers 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 orien-
tation makes sense in developing countries such as China, where the largest PC manufacturer,
Legend (principal owner of Lenovo Group), and domestic appliances giant Haier take advantage of
the country’s huge and inexpensive labor pool to dominate the market. Marketers also use the pro-
duction concept when they want to expand the market. 40

The Product Concept
The product concept proposes that consumers favor products offering the most quality,
performance, or innovative features. However, managers are sometimes caught in a love affair with
their products. They might commit the “better-mousetrap” fallacy, believing a better product will
by itself lead people to beat a path to their door. A new or improved product will not necessarily be
successful unless it’s priced, distributed, advertised, and sold properly.

The Selling Concept
The selling concept holds that consumers and businesses, if left alone, won’t buy enough of
the organization’s products. It is practiced most aggressively with unsought goods—goods
buyers don’t normally think of buying such as insurance and cemetery plots—and when firms
with overcapacity aim to sell what they make, rather than make what the market wants.
Marketing based on hard selling is risky. It assumes customers coaxed into buying a product
not only won’t return or bad-mouth it or complain to consumer organizations but might even
buy it again.

The Marketing Concept
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The marketing concept emerged in the mid-1950s as a customer-centered, sense-and-respond
philosophy. The job is to find not the right customers for your products, but the right products
for your customers. Dell doesn’t prepare a perfect computer for its target market. Rather, it pro-
vides product platforms on which each person customizes the features he or she desires in the
computer.
The marketing concept holds that the key to achieving organizational goals is being more effec-
tive than competitors in creating, delivering, and communicating superior customer value to your
target markets. 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 clus-
ter of things associated with creating, delivering, and finally consuming it. 42
Several scholars found that companies embracing the marketing concept at that time achieved
superior performance. 43

The Holistic Marketing Concept
Without question, the trends and forces that have defined the first decade of the 21st century
are leading business firms to a new set of beliefs and practices. “Marketing Memo: Marketing
Right and Wrong” suggests where companies go wrong—and how they can get it right—in
their marketing.
The holistic marketing concept is based on the development, design, and implementation of
marketing programs, processes, and activities that recognize their breadth and interdependencies.
Holistic marketing acknowledges that everything matters in marketing—and that a broad, inte-
grated perspective is often necessary.