The five distinct marketing concepts are: Production, Product, Selling, Marketing, and Holistic. These philosophies have evolved over time and began with the production concept. The evolution of a new marketing concept does not mean that all companies are changing. Many companies continue to operate under the production concept.Under a production philosophy the company will seek to mass produce products and to distribute them on a wide scale. The belief is that consumers prefer products that are widely available and inexpensive.The product concept proposes that consumers prefer products that have higher quality, performance, or are more innovative. Often, managers focus too much on the product (a better mousetrap) but this does not always equal success.The selling concept argues that members of a market will not purchase enough product on their own so companies use the “hard-sell” to increase demand. Typically used with unsought goods such as insurance or cemetery plots, or when companies face overcapacity.The marketing concept first emerged in the 1950’s and focuses more on the customer with a “sense-and-respond” attitude. Companies that have embraced the marketing concept have been shown to achieve superior performance than competitors.The holistic concept takes a philosophy that everything matters in marketing. Figure 1.3 (next slide) outlines the Holistic Marketing Concept.
According to William Stanton, “Marketing is a total
system of business activities designed to plan,
price, promote & distribute want satisfying
products to target markets in order to achieve
According to Philip Kotler, “marketing is a human
activity directed at satisfying needs and wants
through exchange process.”
The aim of Marketing is to have:
the right product or service
at the right price
at the right place
at the right time
Production Approach- produce as much as
possible at lowest possible cost
Product Approach- produce high quality product
and the world will beat a path to your door.
marketing Approach- produce a product that fills
a consumer need, price it correctly, make readily
available and promote it properly and the
marketing success will follow
Societal Marketing Approach- extend the
marketing approach to consumer's and society’s
Product Planning & Development
Advertising & Publicity
Branding & Labeling
After Sales Service
Regular & Continuous Activity
Satisfaction of Human Wants
Relates to Goods and Services
Transfer of Ownership
Creates Different Utilities
Wide in Scope
Create, deliver, and
PRODUCT - what is it that you are going to sell.
Product Mix - range of PRODUCTS or SERVICES
offered for sale
Product Features- color, packaging, quality, brand name
Product Support - maintenance, after-sales
Service, pre-sale like advice and Quotations
Pricing - not just how much you charge for a
product but how the price fits your target
market and the image you wish to develop.
Pricing Methods you choose depends on:
competition in the market and your marketing
demand for your product
Distribution - how your products or services reach
Customers come to you
You take the product/service direct to the customer
You use an agent merchant franchise etc. to reach
LOCATION - the place of the business "locate your
business where the market is".
Factors in Selecting an area:
Adequacy of transport/communication facilities
Supply of skilled labor
The first "P" of the marketing mix deals with the
The positioning, packaging, etc.
The second "P" of the marketing mix is price.
There are several options to consider regarding
1) price matching, 2) price making, 3) introductory
penetration pricing, and 4) a competitive upgrade
The 3rd "P" of the marketing mix deals with product
placement--the width of distribution
promotions are designed to create demand.
Definition: “The process of dividing a market into
meaningful, similar and identifiable groups.”
3 Reasons That Segmentation Is Important:
Enables marketers to identify customers with similar
needs, buying behavior.
Allows for the tailoring of the “Marketing mix” to
specific segments (also cost effective).
Consistent with marketing concept of satisfying
customer wants and needs.
Segmentation for Business Markets:
Company Characteristics—location, type of company,
size of company, product use.
Buying Processes—purchasing criteria such as price,
Customer Relationship—the type/significance of the
relationship they have with their customer.