We can describe marketing management as the conscious effort to achieve desired exchange outcomes with target markets. What philosophies should guide these marketing efforts? What weight should be given to the interests of the organization, the customers, and the thin market? Very often these conflict.
Marketing functions are implemented under a specific philosophy. These ideas provide direction and focus to make the most of production, deliverability and profits. Failure to identify and modify business strategies causes established companies to lose market share or to fail completely.
Marketing management can be broken down into five competing concepts under which business and other organizations conduct their marketing activity: production, product, selling, marketing, and societal awareness concepts. These concepts are responses to different periods in American economic history. Each period presented different challenges for company survival and profitability. The evolution from a production or product concept to a selling, consumer, or even societal orientation has been fueled by major social economic and political changes during the past two and a half centuries.
The production concept is a foundational philosophy that guides marketers. The production concept is the primary philosophy in two common situations. First is where demand for a product outpaces supply. Managements reaction should be to concentrate on finding increasing production. The second situation finds the product's cost is too high and improved productivity is needed to reduce it. Henry Ford's philosophy was to systematize the production of the model T so that manufacturing costs would be lowered and become accessible to more people. He joked famously about offering people any color car as long as it was black. Today home builders practice this philosophy of pursuing production efficiencies and lower costs in order to sell bigger homes at lower prices. They succeeded in winning a major share of the American housing market with this philosophy. However, when track builders applied the same strategy in the subdivision market, it failed. Although they large homes were priced low, over saturation occurred and customers did not find these prices attractive any more.
Many service organizations also follow the production concept. Many hospitals and outpatient practices are organized on assembly-line principles, as are some government agencies such as unemployment offices and license bureaus. Although efficiencies are realized, this type of management is causes client frustration through the absence of personal attention.
The product philosophy is another influential concept guiding sellers. The product concept holds that consumers will support those products that offer the superior quality, performance, and benefits, and thus the organization should devote its resources to continuously improving its product. Many manufacturers believe that if they can build a better widget, the world will beat a path to their door. Without luck these businesses are rudely shocked. Buyers are looking for a solution to a problem, but not necessarily a better widget. The solution that works better than their current solution. Furthermore, a better widget will not sell unless the manufacturer takes positive steps to design, package, and price it to the attention of persons who is looking for it, and showing them that the new widget has superior qualities.
The product concept leads to marketing myopia. Railroad management thought that users wanted trains rather than transportation and overlooked the growing challenge of airlines, buses, trucks, and automobiles. Slide-rule manufacturers thought that engineers wanted slide rules rather than calculating capacity and over-looked the challenge of pocket calculators.
In following articles, we will delve deeper into the selling concept, the marketing concept and the societal marketing concept. Each has served as a primary model for an economic period only to be adjusted as the American business landscape changes.
Marketing functions are implemented under a specific philosophy. These ideas provide direction and focus to make the most of production, deliverability and profits. Failure to identify and modify business strategies causes established companies to lose market share or to fail completely.
Marketing management can be broken down into five competing concepts under which business and other organizations conduct their marketing activity: production, product, selling, marketing, and societal awareness concepts. These concepts are responses to different periods in American economic history. Each period presented different challenges for company survival and profitability. The evolution from a production or product concept to a selling, consumer, or even societal orientation has been fueled by major social economic and political changes during the past two and a half centuries.
The production concept is a foundational philosophy that guides marketers. The production concept is the primary philosophy in two common situations. First is where demand for a product outpaces supply. Managements reaction should be to concentrate on finding increasing production. The second situation finds the product's cost is too high and improved productivity is needed to reduce it. Henry Ford's philosophy was to systematize the production of the model T so that manufacturing costs would be lowered and become accessible to more people. He joked famously about offering people any color car as long as it was black. Today home builders practice this philosophy of pursuing production efficiencies and lower costs in order to sell bigger homes at lower prices. They succeeded in winning a major share of the American housing market with this philosophy. However, when track builders applied the same strategy in the subdivision market, it failed. Although they large homes were priced low, over saturation occurred and customers did not find these prices attractive any more.
Many service organizations also follow the production concept. Many hospitals and outpatient practices are organized on assembly-line principles, as are some government agencies such as unemployment offices and license bureaus. Although efficiencies are realized, this type of management is causes client frustration through the absence of personal attention.
The product philosophy is another influential concept guiding sellers. The product concept holds that consumers will support those products that offer the superior quality, performance, and benefits, and thus the organization should devote its resources to continuously improving its product. Many manufacturers believe that if they can build a better widget, the world will beat a path to their door. Without luck these businesses are rudely shocked. Buyers are looking for a solution to a problem, but not necessarily a better widget. The solution that works better than their current solution. Furthermore, a better widget will not sell unless the manufacturer takes positive steps to design, package, and price it to the attention of persons who is looking for it, and showing them that the new widget has superior qualities.
The product concept leads to marketing myopia. Railroad management thought that users wanted trains rather than transportation and overlooked the growing challenge of airlines, buses, trucks, and automobiles. Slide-rule manufacturers thought that engineers wanted slide rules rather than calculating capacity and over-looked the challenge of pocket calculators.
In following articles, we will delve deeper into the selling concept, the marketing concept and the societal marketing concept. Each has served as a primary model for an economic period only to be adjusted as the American business landscape changes.
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