Marketing concepts

Last updated November 20265 sectionsabout 7 min read

Key takeaways

Marketing is the set of activities through which a business identifies, anticipates and satisfies customer needs profitably, covering product, price, place and promotion.
There are five orientations: production (availability and affordability), product (quality and features), selling (aggressive persuasion), marketing (start from customer needs) and societal marketing (customer satisfaction, profit and social welfare together).
Marketing links the organisation to its external environment and supplies the information production and finance rely on to plan capacity and budgets.
The marketing process runs: understand the marketplace, design a customer-driven strategy, construct an integrated marketing programme, build profitable relationships, then capture value in return.
In a scenario question, name the philosophy the business actually follows; the marketing concept is not always the answer.

This opening chapter fixes what marketing actually is, the philosophies a business can adopt toward it, and why it matters, before the rest of the paper moves on to segmenting a market, planning for it, and managing the customers it produces.

Key terms

Market

A group of actual and potential buyers who share a need or want and have the ability and willingness to exchange something of value to satisfy it.

Marketing

The set of activities a business undertakes to identify, anticipate and satisfy customer needs profitably, covering product, price, place and promotion.

Marketing research

The systematic gathering, recording and analysis of data about customers, competitors and the market, used to inform marketing decisions.

Why marketing matters

Identifies who the customer actually is and what they need
Builds awareness of a product or service in the market
Creates and sustains demand, translating awareness into actual sales
Differentiates a business from its competitors
Builds customer loyalty and repeat business over time
Provides feedback that can guide product and service improvement

Marketing orientations

These are the five broad philosophies a business can adopt toward how it wins customers, each dominant at a different point in the history of marketing thought.

The production concept

Assumes customers favour products that are widely available and affordable, so management focuses on production efficiency and distribution reach rather than on the product itself.

The product concept

Assumes customers favour the highest quality, performance or features, so management focuses on continuous product improvement, sometimes at the risk of losing sight of what customers actually want to pay for.

The selling concept

Assumes customers will not buy enough unless actively persuaded to, so management focuses on aggressive selling and promotion, common for goods customers do not normally seek out.

The marketing concept

Starts from the customer's needs and works backward, achieving organisational goals by delivering customer satisfaction more effectively than competitors do.

The societal marketing concept

Extends the marketing concept to also weigh society's long-run wellbeing, balancing customer satisfaction, company profit and social welfare together rather than pursuing the first two alone.

Marketing's role in a business

Generates revenue by winning and retaining paying customers
Links the organisation to its external environment, customers, competitors and market trends
Guides product development toward what the market actually wants
Builds and protects the organisation's brand and reputation
Provides the information other departments (production, finance) rely on to plan capacity and budgets

The marketing process

Understand the marketplace and customer needs, through marketing research
Design a customer-driven marketing strategy, choosing which customers to serve and how
Construct an integrated marketing programme, the 5Ps of the marketing mix (see the chapter on positioning), that delivers superior value
Build profitable relationships with customers (see the chapter on customer relationships)
Capture value from customers in return, as sales, profit and customer loyalty

Exam tip

The five concepts above are commonly tested by scenario: a business described as focused purely on 'making it cheaper and getting it everywhere' is the production concept; one 'aggressively pushing sales through a call centre' is the selling concept. Read for the philosophy the scenario actually describes rather than assuming the marketing concept is always the right answer.

Self-check

(a) A furniture manufacturer focuses entirely on making the cheapest, most widely distributed chairs possible, with little attention paid to what customers say they actually want. Identify the marketing concept described, and explain why. (4 marks)

(b) Distinguish between the marketing concept and the societal marketing concept, using an example of a decision the two might differ on. (5 marks)

(d) Explain why marketing is described as linking the organisation to its external environment, and state one way this benefits departments other than marketing itself. (4 marks)

(e) Distinguish between the product concept and the selling concept, giving one example business practice each would lead to. (4 marks)

Show worked answer

(a) This is the production concept, which assumes customers favour products that are widely available and affordable, so management focuses on production efficiency and distribution reach rather than on the product itself or genuine customer input, exactly the manufacturer's described focus on cheapness and wide distribution above all else. (4 marks)

(b) The marketing concept starts from the customer's needs and works backward, achieving organisational goals by delivering customer satisfaction more effectively than competitors. The societal marketing concept extends this to also weigh society's long-run wellbeing, balancing customer satisfaction, company profit and social welfare together. The two might differ on a decision to sell a product customers want but that carries a genuine long-run societal cost (for example, a highly sugared drink), the marketing concept alone would support selling it if customers want it, while the societal marketing concept would weigh the wider public health cost against that customer demand. (5 marks)

(c) Understand the marketplace and customer needs, through marketing research; design a customer-driven marketing strategy; construct an integrated marketing programme (the marketing mix); build profitable relationships with customers; and capture value from customers in return. (5 marks)

(d) Marketing links the organisation to its external environment because it is the function that directly studies customers, competitors and market trends, information the rest of the organisation would otherwise have limited visibility into. This benefits other departments because marketing provides the information production and finance rely on to plan capacity and budgets, for example, forecasted demand from marketing research informs how much a production department should plan to manufacture. (4 marks)

(e) The product concept assumes customers favour the highest quality, performance or features, leading a business to continuously improve its product's specifications, sometimes without checking whether customers actually want to pay for those improvements. The selling concept assumes customers will not buy enough unless actively persuaded, leading a business to invest heavily in aggressive sales tactics and promotion, for example a high-pressure call centre sales team, common for goods customers do not normally seek out on their own. (4 marks)