Meaning and Types of Marketing Concepts for SS 1

Marketing Concepts

Performance Objectives

By the end of the lesson, students should be able to:

1. explain the meaning of marketing concept;
2. discuss the various marketing concepts;
3. differentiate among the marketing concepts;
4. Apply the marketing concepts in formulating marketing strategies.

Meaning of Marketing Concept

The marketing concept is a business philosophy that states that achieving organisational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.

It is a customer-centred approach to business. Instead of focusing on what the company can produce or sell, it focuses on understanding what customers want and then creating products or services to meet those needs.

Types of Marketing Concepts

Over time, businesses have adopted different philosophies or approaches to guide their marketing efforts. These approaches are known as marketing concepts. Each concept reflects a different emphasis on production, product quality, selling, customer needs, or societal well-being.

1. The Production Concept

The production concept is one of the oldest philosophies in business. It holds that consumers will favour products that are available and highly affordable.

Businesses operating under this concept focus on improving production and distribution efficiency. The main goal is to produce goods in large quantities at a low cost, making them widely available and affordable to many customers. This concept is often useful when demand for a product exceeds supply, or when the product’s cost is too high and needs to be brought down.

For example, a company producing basic food items like garri or rice might focus on efficient farming and processing to ensure these staples are always available and cheap for the average Nigerian household.

2. The Product Concept

The product concept holds that consumers will favour products that offer the most quality, performance, and innovative features.

Under this concept, businesses focus on making continuous product improvements. They believe that if they build a better product, customers will naturally buy it. This approach often leads to businesses investing heavily in research and development to create superior products, assuming that customers will recognise and value these improvements.

For instance, a smartphone manufacturer might constantly release new models with better cameras, faster processors, or longer battery life, believing that these enhanced features will attract customers.

3. The Selling Concept

The selling concept holds that consumers will not buy enough of the firm’s products unless the firm undertakes a large-scale selling and promotion effort.

This concept is typically used for “unsought goods”—products that buyers do not normally think of buying, such as insurance or blood donations. The focus is on aggressive selling and promotion techniques to persuade customers to buy. Businesses believe that customers, if left alone, will not buy enough of the product, so they must actively push sales.

An example is a company that sells water purifiers door-to-door, using persuasive sales pitches and demonstrations to convince families of the need for clean water, even if they hadn’t considered buying a purifier before.

4. The Marketing Concept

The marketing concept holds that achieving organisational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.

This is a customer-centred philosophy. Instead of finding the right customers for the product, it finds the right products for the customers. Businesses first identify what customers want, then create products and services to satisfy those wants, ensuring profitability through customer satisfaction. This concept is about understanding the market from the customer’s perspective.

For example, a fashion brand might conduct surveys and observe trends to understand what styles and fabrics young Nigerians prefer, then design and produce clothing lines specifically to meet those identified preferences.

5. The Societal Marketing Concept

The societal marketing concept holds that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.

This concept is an extension of the marketing concept, adding a concern for society’s well-being. Businesses aim to deliver value to customers in a way that maintains or improves both the consumer’s and society’s well-being. It balances company profits, consumer wants, and society’s interests.

An example is a beverage company that not only produces popular drinks but also invests in sustainable packaging, water conservation projects, and community health initiatives, showing concern for the environment and public health alongside its profits.

Differences Among the Marketing Concepts

The various marketing concepts differ primarily in their starting point, focus, means, and ends. Understanding these differences helps businesses choose the most appropriate approach for their products and market conditions.

The table below highlights the key distinctions between these concepts:

Formulating Marketing Strategies Using Marketing Concepts

A marketing strategy is a plan of action designed to promote and sell a product or service. Each marketing concept provides a different foundation for developing these strategies.

How to Apply Marketing Concepts in Strategy Formulation

To formulate effective marketing strategies, businesses must first decide which marketing concept best suits their goals, products, and market conditions. The chosen concept will then guide all marketing decisions.

1. Understand the Business Goal: Determine what the business aims to achieve (e.g., high sales volume, premium product image, customer loyalty, social impact).
2. Identify the Target Market: Clearly define who the customers are and what their characteristics are.
3. Choose the Appropriate Concept: Select the marketing concept that aligns with the business goal and target market.
4. Develop Strategies Based on the Concept: Create specific plans for product, price, place (distribution), and promotion that reflect the chosen concept.

Examples of Strategy Formulation

Here are examples of how different concepts lead to different marketing strategies:

1. Using the Production Concept:
   1. Business Goal: To make basic, affordable goods widely available.
   2. Strategy: Focus on mass production to achieve economies of scale. Invest in efficient logistics and a wide distribution network to ensure products are easily found in many markets, including rural areas. Pricing will be kept low to attract a large customer base.
   3. Example: A company producing bottled water might invest in high-speed bottling plants and a vast network of distributors to ensure its water is the cheapest and most accessible option in every shop and street corner.
2. Using the Product Concept:
   1. Business Goal: To be known for superior quality and innovation.
   2. Strategy: Invest heavily in research and development to create unique features or improve product performance. Marketing communications will highlight the product’s advanced features, durability, and craftsmanship. Pricing will likely be premium to reflect the higher quality.
   3. Example: A local furniture maker might focus on using high-quality, durable wood, unique designs, and excellent finishing. Their marketing strategy would involve showcasing the craftsmanship and longevity of their furniture, targeting customers willing to pay more for superior quality.
3. Using the Selling Concept:
   1. Business Goal: To sell products that customers might not actively seek out.
   2. Strategy: Develop strong sales teams and aggressive promotional campaigns. This might include direct sales, telemarketing, and persuasive advertising that emphasises the benefits and urgency of buying the product. Special offers and discounts might be used to close sales quickly.
   3. Example: A company selling educational software for children might employ a team of sales representatives to visit schools and homes, demonstrating the software’s benefits and offering special packages to convince parents and teachers to purchase it.
4. Using the Marketing Concept:
   1. Business Goal: To satisfy specific customer needs better than competitors.
   2. Strategy: Conduct extensive market research to understand customer preferences, pain points, and desires. Products and services are then designed specifically to meet these identified needs. Promotion will communicate how the product solves customer problems, and distribution will ensure the product is available where target customers shop.
   3. Example: A food delivery service might research what types of meals busy professionals in Lagos prefer for lunch, how quickly they need delivery, and what payment methods they use. Their strategy would then involve partnering with restaurants offering those specific meals, guaranteeing fast delivery times, and providing convenient payment options.
5. Using the Societal Marketing Concept:
   1. Business Goal: To meet customer needs while also contributing to societal well-being and long-term sustainability.
   2. Strategy: Integrate social and environmental considerations into product design, production, and marketing. Promote the product’s benefits to both the customer and society. Engage in corporate social responsibility (CSR) initiatives and communicate these efforts to the public.
   3. Example: A soap manufacturer might develop a new line of organic soaps using locally sourced, sustainable ingredients. Their marketing strategy would highlight the soap’s natural benefits for the skin, its support for local farmers, and its eco-friendly production process, appealing to health-conscious and environmentally aware consumers.