In general sense, marketing means to sell product.

But selling is only the

part of marketing. This is the age of marketing. Marketing activities are the
part of our daily life. All types of organization needs marketing.
Organizational success depends upon the marketing. Marketing is the
business activity which is directed at satisfying human needs. Marketing
tries to identify human needs and produce product to satisfy them.
Marketing matches products with consumer needs. Marketing means not
only to buy and sell but it is moreover attracting costumer satisfying their
needs for retaining them. Marketing always aims to develop long term
relationship with the costumer.
According to William Staton: Marketing is a total system of business
activities designed to plan, price, promote and distribute want satisfying
product to target market to achieve organizational objectives.
According to Kotler and Armstrong : Marketing is the process by which
individual and group obtain what they need and want by creating and
exchanging products and values with others.
Marketing thus is the system which follows a systematic process. It consists
of set of activities like product development, modifying existing products,
branding , packaging, labeling , quality control, setting pricing, objectives,
distribution and channel management, promotional activities. Consumer's
needs identification and satisfaction is the main theme of marketing and
they are aimed to achieve organization objectives in a dynamic
environment. Thus marketing process encompasses all activities aimed at
identifying and satisfying costumer needs through exchange relationship to
achieve organizational objectives in dynamic environment.

Importance of Marketing
Marketing has become the part of our everyday life. Marketing plays
significant role for the organization,consumer and society. Its importance is
increasing day by day. The following charts show the importance ......
Of marketing to consumer, society and organization

To Consumer To
Organization To Society
Standrad of living Demand Management
Social well being
Value Addition Product distribution
Employment generate
Information Coordinated usage of resources
Meet community need
Product Assortment Objectives achievement
Economic mgmt
Satisfaction

Importance to Consumer: Marketing is importance to consumer in

following ways

I) Standard of living: Marketing delivers standard of living to consumer. It

offers product that satisfy their needs. Safe and hygiene product of high
quality improve the quality of live as well as living standard.

Ii) Value Addition: By delivery of products at right quantity at right time at

right price , marketing adds value of products to consumer.

Iii) Information: Marketing provides information to consumer about

product, price, place and promotion. This promotes efficient buying for
consumer.

Iv) Product Assortment: Marketing provides all product at the convenient

place. So they can exercise freedom of choice.
V) Satisfaction: Better product performance provides satisfaction.
Marketing provides satisfaction to consumer. By matching the product to
consumer need, consumer get satisfaction.

mportance to Organization
Marketing plays vital role in an organization. The importance of marketing
to the organization can be classified in following ways.
I) Demand Management: Through the various promotional tools of
marketing stimulate demand. Such tool s inform, remind and encourage
costumer to purchase product.
Ii) Product Distribution: Marketing distribute products manufactured by
the organization. It distribute the product of right quality in right time to
right place in right quantity.
Iii) Coordinated usage of resources: Marketing identifies market
opportunity in target markets. Organization can choose the most profitable
segment. Integrated approach to marketing facilitate the coordinated use of
resources.
Iv) Objectives achievement: The main target of marketing is to achieve
organizational objectives. Marketing mix can be changed to meet
competition and consumer need.
V) Environmental Adaptation: Marketing monitors and identifies
environmental changes to identify important trends. Changes in consumer
preference resulting from technological, economic, poltical and socio-
cultural forces can be monitored. This helps organization to adopt in
dynamic environment.

Importance to Society:
I) Bears social responsibilities: Marketing bears social responsibility
objectives along with its other objectives. Marketing concern for safe
guarding about social needs. The societal interest to are protected through
environmental quality < Natural resources are properly used. Pollution is
controlled. Eco friendly products are made to promote social interest.
Planting trees, reflecting used materials, and saving on energy use also
enhances social well being.
Ii) Employment GeneratApproach to the study of Marketing
A) Commodity approach to Marketing: This approach focuses on flow of
commodity. According to this approach marketing is the function of flow of
commodity from source of production to the place of consumption. It is
concerned with demand, supply, channels and transportation. This
approach is prevalent in agro- oriented economics.
Advantage:
I) this approach is concerned with flow of specific commodity from supplier
to consumer.
Ii) This approach establishes marketing system for each commodity.
Disadvantage:
I) this approach results in duplication of marketing efforts.
Ii) It is time consuming and costly.
B) Functional Approach to Marketing: This approach focuses on different
functions of marketing. It is concerned with the following functions of
marketing.
I)Exchange Function: This is the primary function of marketing. It is
related with the buying and selling function. Buying function involves
demand forecast, identification of supply sources, purchase of raw material,
machinery and IT. Where as selling function involves identification of
costumer, demand stimulation, price fixation and promotion. It is the key
function of marketing.
Ii) Distribution Function: This is the supporting function of marketing. It
covers the area of transportation and storage. Finished products are
transported to the consumer through the means of transportation and
storage is related with inventory management.
Iii) Facilitating Function: This is the auxiliary function of marketing it
involves standardization, finished goods are standardized and graded.
Financing needed financial resources can be fulfilled by loan. All types of
marketing risk are managed and insurance. All the information are flowed
and gathered and research and development are done about new trade,
competitors and environmental dynamics.
Advantages; This approach is concerned both with flow of commodity and
institutions in the movement of goods. It gives emphasis on the function of
marketing.
Disadvantages: This approach gives more emphasis to the marketing
function where as it ignores costumer needs.
C) Institutional Approach: This approach focuses on various institutional
involved in marketing. They can be related to product, price and
promotion. There are several institution related to marketing.
Producer and manufacturers: Produce raw material, manufacturer convert
raw material into finished goods.
Middleman: Wholesaler, Resellers, Agents etc.
Facilitating institution: transportation agencies, public warehouses(
provides facilities for storage of goods.) , Advertising agencies, financial
institution, Research and consultancy firms( solves marketing problems)
Advantage: the understanding of institutions helps marketing and its cost
can be reduced through proper selection of institution.
Disadvantage: This approach does not provide a total view of marketing
and its also ignores costumer needs.
D) System Approach to Marketing: This approach is system oriented. A
marketing system is collection of interrelated and interaction parts to
achieve objectives. Marketing system consists of input, processing, output,
and feedback components that operates in a dynamic environment.
A) Input: It includes the marketing mix element: product, price, place and
promotion.
B) Processing: It consists of environmental influences and buyer decision
for purchase
C) Output: It consists of objectives achievement in terms of profit, service,
growth, survival, leadership.
D) Feedback: It provides information to redesign inputs and processing.
E) Environment: These components as well as the whole system are
affected by dynamic environment. This may be the internal environment
and external environment.
Advantages:
I) Synergy: In this approach marketing does not give undue importance to
any one element of marketing mix. It looks at the total pictures.
Ii) Marketing effectiveness: Marketing objectives are effectively achieved.
Marketing resources are efficiently utilized.
Iii) Changing forces in the environment are carefully considered in
designing the marketing mix.
Disadvantages: It ignores costumer needs. It is difficult to implement.
E) Environmental Approach to Marketing: This approach is concentrated to
the environment within which it operates. Marketing operates in a dynamic
environment. It should continiousualy monitor and adopt to the changing
environment to achieve objectives. There are mainly two forces of
environment which affects the marketing , they are internal forces and
external forces.
F) Managerial Approach to Marketing: This approach is management
oriented. It focuses on managerial decisions related to marketing. It
emphasizes achievement of goals by getting marketing jobs done through
people. This concept basically gives emphasis on following managerial
means:
I) Marketing Planning:
It is the process of setting marketing goals and choosing future marketing
action to achieve these goals. It includes the SWOT analysis, establishment
of marketing goals., selecting marketing action to achieve goals, designing
marketing mix, co-ordination of marketing activities etc.
Ii) Marketing Implementation: Implementation means assignment and
direction of human resource to carry out the marketing plan in a co-
ordinated manner. In this phase human resources are hired, channel for
distribution are selected, physical and financial resources are provided.
Organization climate is created by improving the quality of work
environment.
Iii) Marketing Control: It ensures that the right things are done in the right
manner and at the right time. Marketing control is the measurement and
correction of marketing performance to achieve planned goals. This process
includes the establishing standards, measuring actual performance, finding
deviation( difference between actual performance and standard
performance.) And taking the corrective action.
Advantages: This approach uses both qualitative and quantitative
techniques for marketing decision making. Timely decision making helps
marketing to achieve objectives.
Disadvantages: This approach ignores costumer and the environmental
dynamics.
 G) Economic Approach to Marketing:
According to this approach marketing is the process of buying and selling of
goods and services. Wants are unlimited but resources to fulfill those needs
are scarce. Marketing helps to make effective use of scarce resources.
The assumption of this approach are:
- There are many individual firms in the market.
- The objectives of these firms is to maximize profit.
- The buyer wants to get maximum satisfaction.
- both the buyer and seller have complete information about market.
- Price is determined by the interaction between demand and supply.
Advantages: this approach is well developed and popular among
economists.
Disadvantages: This approach is based on various assumption and has no
relevance in the world of mar
ion: Marketing is an important source of generating employment
opportunities. About 33% of people of world are engaged in marketing
activities.
Iii) Economic development; Marketing activities accelerate business
activities. It helps industrialization. It is the important tool for economic
management. Most economic decision are affected by marketing.

Development of Marketing Concept / Business concept:

Business concepts are the philosophies which organizations conduct their operation. The philosophy guides the
marketing effort and activities any producer or organization. There are five business concepts under which
organization conduct their marketing activities:
1) Production concept:
Production concept is the oldest or concept of marketing. This concept focuses on mass production and mass selling.
This concept holds that consumer will prefer those products that are widely available and at low cost. Hence,
producer should concentrate on achieving high production efficiency and distribution coverage. This will lead to
economies of skill and cost per unit will be reduced. This concept has following concept:
a) It is production oriented and focuses on selling what can be produced.
b) It focuses on high production efficiency to reduce cost.
c) It focuses on wide distribution to make product easily available.
d) It attracts consumer through low pricing.
This concept is useful to expand the market share, but it leads to the poor quality services. Customer needs are
disregarded.
2) Product concept:
This concept focuses on the quality performance and features of goods and services. This concept believes that
producer and organization should develop their efforts towards making continuous quality improvement of product,
this concept implies that;
a) Producer concentrates on quality improvement of the product.
b) Consumer prefer high quality product at a reasonable price.
c) It does not care consumers’ needs, taste, and preference.
d) Effective and efficient management is needed to improve the quality of product.
In product concept producer focuses only on improvement of quality but not in consumers’ preferences, needs, and
taste so the change.
3) Selling concept:
Selling concept mainly focuses on selling expect by the use of excessive selling and promotion effort. It tries to
persuade customer to buy.
 This concept implies that:
a) This concept is selling orientation and tries to fulfill sellers’ needs.
b) Aggressive selling and promotion are conducted to attracted customer product or push in the market.
c) Customer needs, satisfaction is not concerned.
d) Profit is made through high sales volume.
e) Consumers are persuaded by the uses of selling technique.
Under this concept managers focuses on increasing sales volume through promotional tool. This concept is
dominates in Nepalese organization.
4) Marketing concept:
Marketing concept is a new concept that identified customers’ needs. It holds that the key to achieve organizational
objective is to satisfy needs of customer through the integration of marketing activities.
This concept implies that:
a) The starting point to target market, marketing programme is design according to the needs of customer.
b) Customer needs is focus on the philosophy “we make what we want” is followed.
c) Customer oriented product is to be designed. Customer value is to be created.
d) There is integration of all activities through coordinated marketing effort.
e) Profit is made through customer needs, satisfaction.

5) Societal Marketing concept:

It is the latest business concern. It focuses on the responsibility towards the society. In the name of satisfaction
customer needs different bad practices came into existence. It resulted into inflation, environmental change,
increasing pollution etc to eradicate such threats this concept is introduce after 1970’s.
This concept is an emerging concept. It focuses on protecting interest of consumers and safe guarding the well
being of society. Marketing must be socially responsible.
This concept implies that:
a. This concept gives priority to the social responsibility and accountability.]
b. It focuses on fulfillment of consumers need, want and interest by providing social friendly competitive product.
c. Integrated marketing approach is used to coordinate all the activities of organization.
d. It concentrates earning profit by satisfying consumer and welfare of society. It is for long term existence of the firm.

Principles/Fundamental of marketing concept:

The development of this concept after 1950’s is based on four fundamental principles which are also known as four
pillars of marketing.
a) Target market focus:
By the help of market segmentation need desire and interest of the customer should be identified. According to the
findings marketing programmes should be developed to satisfy specified customer with the product or services.
b) Customer orientation:
After defining and choosing target market the firm should considered different need of customer and developed
product to meet the needs. This is popularly known as customized marketing which helps to built long term
relationship in between buyer and seller.
c) Integrated marketing:
The concepts of integrated marketing implies that all the companies department such as research and development
engineering, purchasing, manufacturing selling, etc should work together to achieve companies overall objective.
d) Profit through customer satisfaction:
The primary objectives of the business firm to satisfy customer. Profit is the secondary objective of the firm. Firm
creates superior customer value and target at long term profit through creating and retaining satisfied customers.

Marketing mix:
Marketing mix is the overall activities of marketing from marketing research to consume satisfaction. In other word
marketing mix can be understand as a set of product, price, place, and promotion which are used to achieve from
marketing objective in the target market. Marketing mix concerns about which product to produce, how to produce,
where to sell, how to deliver and motive to the target consumer.
In 1960AD prof. Mecarthy popularized the concept of 4ps as a marketing mix. They are product, price, place, and
promotion which are explained as follows:
1. Product mix
 Product is anything that can satisfy customers' needs. It may be physical or non physical like services, ideas, etc.
Producers or distributors develop the product to satisfy the customers’ needs. For this they are concerned about
quality, range, durability, branding, packaging, etc product mix includes the following elements.
i. Product planning and development
Through research and feedback from the customers producers should find out the interest fashion, want and demand
of customer. Product planning and development includes the replacement of old goods change in colour brand
packaging and reformation in the product.
ii. Standardization and Grading:
If the product is divided according to the physical shape then such division is known as standardization of the
product. For example: different size of same brand shoes if the product is divided according to the quality of the
product such division is known as Grading. For example: cheap, and expensive types of shoes hence standardization
indicates physical measurement or quantity and Grading indicates quality of product.
iii. Branding and packaging
Branding means giving identification to the product it is necessary to differentiate the product from others, names
word sign design and symbol helps to identify the seller and differentiate from the competitors. Brand should be short,
attractive and memorable. Packaging is equally important as branding. Good packaging must be done according to
nature of the product promote and attracts the customers.
2. Place mix:
All the activities that take place while transferring ownership of product from the point of origin to the point of
consumption is known as place mix. It is also called distribution mix. Place mix includes the following elements:
i. Selection of channel of distribution:
The different factors such as cost, nature of product competitors are to be considered while selecting the channel of
distribution. The right decision for the channel of distribution to deliver the right goods to the right customer at the
right place and at the right time can result to success.
ii. Physical distribution:
Physical distribution concerns with delivering the goods from the producers to the customers. Physical distribution
has to supply in right quantity to the right place, at the right time. These functions play determining role for all
marketing activities so, it is also known as second half marketing. It includes transportation, ware housing, inventory
control, and material.
3. Promotion mix:
Informing and persuading the customer regarding the organization and each product is called promotion. It is
necessary tool to achieve success in this competitive world. The main elements of promotion mix are as follows:
i. Personal selling:
It is the face to face communication in between producer and customer. It is costly and time consuming process. But
it is very effective for selling high priced product and new product.
ii. Advertising:
It is a paid form of promotion in which mass media are used to communication about the product. Newspaper, radio,
television, poster, etc are used to create demand of the product. This form of promotion is effective if producers or
distributers want to send information widely.
iii. Sales Promotion:
It is the technique used to sale more goods at the short span of time display and decoration of product, trade fair;
exhibition, free sample, discount gift etc are the promotional activities to attract the customer and increase volume of
sales.
iv. Publicity:
It is the non paid form of promotion, news release, press conference, publication are the example of publicity. It does
not remain under controll of organization.
Difference between sales promotion and advertising:

4. Price mix:
Price plays an important role for the exchange process. Price stands for the amount of money that customer have to
pay to obtain the product. It also determines the result of investment to the producer. Cost, competitors, rules and
regulation expenses, etc are to be analyzed while fixing the price. The important elements regarding price mix are as
follows:
i. Selling price:
Price decision and policy has direct impact on the sales volume and profit of the organization hence while
determining the price, notional profit, customer interest, cost factor competitors situation etc are to be analyzed.
Reasonable selling price keeps the faith of the customer and helps to increase the sales volume.
ii. Discount and commission
Discount is the reduction in price. It is of two types i.e. trade discount and consumers’ discount.
Trade discount is concern with providing discount to the middleman such as agent, wholesaler and retailer. It is useful
for push strategy.
 Consumers’ discount is concerned with providing discount to the ultimate consumer. It is useful for adopting pull
strategy.
Commission is the extra amount given for the specific performance carried out by the middlemen. It is determined
according to the sales volume.

Approaches to the study of marketing:

Marketing can be understood through event approach. The most common approaches marketing are:
1) Commodity approach:
This approach focuses on the study of different types of product. It concentrates on product to determine about its
production and distribution through different channel of distribution. The commodities are classified as:
a) Consumer product
The product which are sold to ultimate consumer for final consumption are known as consumer product it is of four
types i.e. convenience goods, shopping goods, specialty goods and unsought goods.

b) Industrial product:
The products which are sold for further production or processing are known as industrial product. It is of five types i.e.
raw material, lubricating material and parts, installation, accessories equipment and operating supplies.
c) Agricultural product:
The products which are the result of cultivation, dairy farming, and poultry farming are known as agricultural product.
There are two types, i.e. industrial consumer product and consumer agriculture product.
Advantages:
a) This approach is concern with flow of specific commodity from supplier to the consumer.
b) This approach covers the institution involve in the flow of commodity.
Disadvantages:
a) This approach results in duplication of marketing efforts.
b) It is time consuming and costly process.
2) Functional approach:
Functional approach is concerned with the various marketing function. It views marketing on “what marketing does”
rather than “what marketing is.” Some of the major function includes:
a) Exchange function:
Exchange with concern with buying and selling activities it involves:
i. Buying function:
Buying function is receiving ownership of production by paying certain amount of money. It involves demand forecast,
identification of supply services purchase of goods, etc.
ii. Selling function:
Selling is transferring the ownership of product by receiving certain amount of money. It includes product planning
and development, contact, demand creation, negotiation and contractual function.
b) Distribution function:
Distribution function is concerned with transferring goods from point of origin to the point of consumption. It includes:
i. Transportation:
Transportation is important means to transfer goods and services from production point to consumption point.
Transportation creates place utility. There are different modes of transportation such as railway, roadway, airway, etc.
ii. Storage:
Storage is the method of preserving the product so we can consume them at the time of necessity. Hence it created
time utility. It helps to preserve the quality and insure continuous supply of the product.
c) Facilitating function:
This function is also known as auxiliary function of marketing. It involves:
i. Financing:
Finance is concern with the collection and allocation of financial resources. Different financial institutions provide
funds to the business.
ii. Risk bearing:
Marketing involves different risk such as danger of loss, fashion out, physical damage, etc. Some of the risk can be
transferred to the insurance company.
iii. Market information:
Information is a most important factor that leads towards the success of the organization. Information flow is carried
out for research buying, selling and distribution activities.
Advantages:
a) This approach is concern with floe of goods as well as institution involved in the movement of goods.
b) This approach emphasizes the function which marketing must perform.
Disadvantages:
a) This approach puts too much attention on marketing function.
 b) It ignores consumers’ needs.
3) Institutional approach:
This approach is concern with various institutions involved in marketing activities. Such activities may be related with
product, price, place and promotion. It is useful in explaining the roles and significance of the institution. It includes:
a) Producer/Manufacturer:
Producers or manufacturers are the source of marketing activities. Producers produce raw material whereas
Manufacturer converts raw material into finished product.
b) Middlemen/Intermediaries:
Intermediaries are those who act as a link in between producer and consumer. They can be agent, wholesaler,
retailer, etc. Agents perform their activities on the basis of commission received, wholesalers are those who deal with
large quantity of goods and act as a link between producer and retailer. Retailers are those who act as a last
middleman and sell the product to the ultimate consumer.
c) Facilitating institutions:
All those supporting agencies in marketing activities are financial institution. It includes:
 Transportation agencies
 Public warehouse
 Advertising agencies
 Financial institutions
 Research and consultancy firms
Advantages:
a) Marketing activities are not possible in the absence of institution.
b) Marketing costs can be reduced through proper selection of institution.
Disadvantages:
a) This approach does not provide total view of marketing.
b) This approach does not address consumers’ needs.
4) System approach:
Under the system approach, marketing is viewed as an organized and integrated effort to secure customer
satisfaction and profit. A marketing system is unified whole composed of interrelated and interacting parts to achieve
objective. It includes:
A. Input:
Input includes all those resources that are needed to conduct marketing activities. It consists of marketing mix
elements i.e. product, price, place and promotion.
B. Processing:
Inputs are processes so as to derive outputs. It consists of environmental influences and buyer decision for purchase.
C. Outputs:
Outputs are the main point of marketing activities. It consists of profit, service, growth, survival, leadership, etc.
D. Feedback:
Feedback is a mechanism to provide information. It helps to re-design input and processing activities.
E. Environment:
Environment influences overall marketing activities; marketing operates in a dynamic environment.
Advantages:
a) It is an integrative view of marketing activities, synergy is achieved.
b) Marketing resources are effectively utilized and achieved objective.
Disadvantages:
a) It is difficult to implement.
b) It ignores customers’ need.
5) Environmental approach:
Marketing activities do not operate in vacuum. The environmental factors affect marketing programme. Hence
markets must anticipate (forecast) and predict the dynamic forces in the environment. It can be classified into
following:
a) Internal environment:
All the forces and conditions which are under the control of organizational are known as internal environment. It
consists of:
i. Organizational structure
ii. Organizational resources
iii. Organizational culture
iv. Employees
b) External environment:
All the forces and conditions are outside the control of organization is known as external environment. It is located
outside the organization. It consists of:
i. Political and legal forces
ii. Economical forces
 iii. Socio-cultural forces
iv. Technological forces
Advantages:
i. It helps to conduct “SWOT” analysis according to which marketing strategy is design.
ii. Marketers developed the marketing mix programme so as to adopt environment forces.
Disadvantages:
i. It is costly together information regarding marketing environment.
ii. It is not objective oriented.
6) Managerial approach:
This approach is management oriented and focuses on managerial decision to the marketing activities. Goals are
achieved by using managerial tools, they are:
a) Marketing planning:
Planning is the primary function of marketing management. It is an intellectual process which is concerned with
deciding in advance what, when, why, how, and who shall do the marketing activities. Generally, marketing manager
defines goal and take necessary steps to achieve goal in different efficient manner.
b) Marketing implementation:
Implementation means the producers that convert plans into action. Marketing management must coordinate different
department for effective marketing implementation. It requires regular instructions, guidance, supervision and control
over subordinates. Leadership skill is required for effective implementation of marketing plans and programme.
c) Marketing control:
Marketing control is the measurement and correction of marketing performance to achieve planned goal. Planning
and control are closely related. It includes:
i. Establishing standard
ii. Measuring actual performance
iii. Finding deviations
iv. Using corrective action
Advantages:
a) This approach uses both qualitative and quantitative techniques for marketing decisions.
b) It helps to develop timely decision to achieve objective.
Disadvantages:
a) This approach ignores customers’ needs
b) Changing environmental forces are ignored.
7) Economic approach:
Economic approach is concerned with the allocation of resources. It is concerned with maximizing profit with the least
cost. Cost and profit analysis is required for the optimum utilization of resources and achieve marketing goal. This
approach studies about:
a) What to produce and in what amount.
b) What resources are to be used in production and distribution process
c) How to manage demand and supply
d) Who gets the resulting output and in what amount
Hence this approach focuses on efficient used or allocation of resources in order to satisfy consumers’ need and
achieve organizational goal.
Advantages:
a) This is well developed approach and popular among economist.
b) This approach ensures optimum utilization of resources.
Disadvantages:
a) This approach is based on various assumptions.
b) It has no relevance in the world of marketing.
8) Legal approach:
This approach is concerned with statuary and common law the effect of marketing environment. This approach
focuses on the laws, rules and regulation which directly and indirectly affect the marketing activities. The main subject
matter of this approaches are:
a) Marketing is regulated by law.
b) Such law may be local, national, international
c) Law prohibits or permits certain actions of marketing. Hence, it has positive and negative impact on marketing.
d) Law can prescribe certain act which is man for marketing.
e) Law provides opportunities and threats for marketing.
Advantages:
a) This approach ensures legal compliance of marketing activities.
b) This approach is concerned with consumer welfare and social responsibility to the stakeholder.
Disadvantages:
a) This approach has a narrow focus.
b) It is not pro-active according to the changing environmental forces.

Company Orientations to the Marketplace

What philosophy should guide a company marketing and selling efforts? What
relative weights should be given to the interests of the organization, the customers,
and society? These interest often clash, however, an organization’s marketing and
selling activities should be carried out under a well-thought-out philosophy of
efficiency, effectiveness, and socially responsibility.

Five orientations (philosophical concepts to the marketplace have guided and

continue to guide organizational activities:

1. The Production Concept

2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept

The Five Concepts Described

The Production Concept. 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 Product Concept. 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.
 The Selling Concept. This is another common business orientation. It 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 sho9w buyi8ng 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.

The Marketing Concept. This is a business philosophy that challenges the

above three business orientations. Its central tenets crystallized in the 1950s. It holds
that the key to achieving its organizational goals (goals of the selling company)
consists of the company being more effective than competitors in creating, delivering,
and communicating customer value to its selected target customers. The marketing
concept rests on four pillars: target market, customer needs, integrated marketing and
profitability.

Distinctions between the Sales Concept and the Marketing Concept:

1. The Sales Concept focuses on the needs of the seller. The Marketing Concept
focuses on the needs of the buyer.

2. 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).

The Marketing Concept represents the major change in today’s company

orientation that provides the foundation to achieve competitive advantage. This
philosophy is the foundation of consultative selling.

The Marketing Concept has evolved into a fifth and more refined company
orientation: The Societal Marketing Concept. This concept is more theoretical and
will undoubtedly influence future forms of marketing and selling approaches.

The Societal Marketing Concept. This concept holds that the organization’s
task is to determine the needs, wants, and interests of target markets and to deliver the
desired satisfactions more effectively and efficiently than competitors (this is the
original Marketing Concept). Additionally, it holds that this all must be done in a way
that preserves or enhances the consumer’s and the society’s well-being.
 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?

The marketing concept possibily sidesteps the potential conflicts among

consumer wants, consumer interests, and long-run societal welfare. Just consider:
The fast-food hamburger industry offers tasty buty unhealthy food. The hamburgers
have a high fat content, and the restaurants promote fries and pies, two products high
in starch and fat. 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.