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Key Marketing Management Philosophies
What are Marketing Management Philosophies?
Marketing is the process of selling and buying products or services with the objective to gain profit either in monetary terms or in fringe benefits. It is a part of a larger management process. Management is the structured way adopted and followed by an organization from the starting till the implementation process.
All the marketing efforts are guided by certain philosophies, which determine how the marketing activities should be carried out. Such philosophies are known as the marketing management philosophies.
Marketing management has five philosophies to achieve the objectives of an organization. The evolution of marketing management philosophies started in the middle of the 18th and 19th centuries, during the industrial revolution. Every company has different marketing philosophies devised as per their requirement. But in a broader sense, there exists five marketing philosophies or concepts and a company should follow the right philosophy, as per their requirements and customer needs.
The five major marketing philosophies are as follows −
- Production Concept
- Product Concept
- Selling Concept
- Marketing Concept
- Social Marketing Concept
As per the management guru Philip Kotler, this concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features.
The idea of consumer demand for affordable products comes from the Say’s law that states that “supply will create its own demand”.
By increasing the production of the products, the companies utilize the advantage of economies of scale. The reduced cost price makes the product appear inexpensive to the customer which generates more sales. Lower price may be able to generate more customers, but with the decline in quality the sales volume will decrease.
This theory holds good when demand is more than the supply, but a customer will not always be looking for cheaper products, there will be many factors that will impact the customer purchase decision.
Philip Kotler suggests that this orientation holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers focusing on this concept concentrate on making superior products and improving them over time. They assume that buyers admire well-made products and can appraise quality and performance.
However, these managers are sometimes caught up in a love affair with their product and do not realize what the market needs. Management might commit the “better-mousetrap” fallacy, believing that a better mousetrap will lead people to beat a path to its door.
Companies following this approach will be creating high quality products that will satisfy the requirements of such customers, but it will be expensive in the process. Since the focus of the companies is on producing quality products, they lose out on customers that seek inexpensive products or are influenced by availability and usability of the product.
For example, the Rolls Royce company will make their cars available to only a certain set of buyers. Unlike Honda or GM, they will not mass produce their cars and make those available for one and all.
According to Philip Kotler, this business orientation holds that consumers and businesses, if left alone, will ordinarily not buy enough of the selling company’s products. The organization must, therefore, undertake an aggressive selling and promotion effort.
This concept assumes that consumers typically show buying inertia or resistance and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and promotional tools to stimulate more buying. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.
Companies following this approach have a short life span and thus have fewer repeat customers. For example, the companies that started manufacturing face shields and sanitizers during the pandemic.
This is a business philosophy that challenges the above three business orientations. Its central idea was conceptualized and implemented in the 1950s. It suggests that the key to achieving the goals of the selling company lies in the company being more effective than its competitors in creating, delivering, and communicating customer value to its selected target customers.
The marketing concept rests on the following four pillars −
- Target Market
- Customer Needs
- Integrated Marketing
However, it should not be confused with Sales concept because, Sales Concept focuses on the needs of the seller, whereas the Marketing Concept focuses on the needs of the buyer. The Sales Concept is preoccupied with the seller’s need to convert his/her product into cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the customer by means of the product as a solution to the customer’s problem (needs).
Companies conduct research in order to identify customer needs and create a product that meets those needs in a better way than their competitors. It results in businesses developing relationships with customers that leads to profit generation in the long run.
Classic examples for this can be Coca-Cola and Pepsi or Samsung Vs Nokia war where each company tried to establish or create a set of niche fans and customers.
Societal Marketing Concept
This is the fifth marketing concept that is mainly concerned with meeting the needs of customers as well as working towards protecting the environment, its natural resources and overall wellbeing of the society.
This marketing philosophy believes that business is a part of the society and therefore businesses should give it back to society in the form of social services like poverty eradication, promoting literacy, etc.
This orientation arose as some questioned whether the Marketing Concept is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services.
Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best long-run interests of consumers and society? Any company that follows the societal concept should maintain an equilibrium between the three aspects:
- Profits of company
- Satisfaction of the customers
- Overall benefit of the society.
If we look at the fried chicken industry, it offers tasty but unhealthy food. The chicken fries have a high fat content, and the restaurants often add on fries and cola, two products that are equally unhealthy, as a combo and the pricing is kept attractive. The products are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems.
Ideally, the products that bring harmful effects on environment should not be supplied only to fulfil the goal of customer-satisfaction. The customer’s satisfaction must be within the ethical ecological aspects of our society.
These marketing management philosophies are actually a set of concepts, which is the central focus for the business to do their operations. Moreover, the organizational goals of these companies are set in the light of these marketing management philosophies. These cover the interests of not only the organization but also the customers and the society as a whole.
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