LESSON
TWO
SESSION OBJECTIVES
At the end of the session the leaners should be able to;
 Define and illustrate the different concepts in marketing
THE MARKETING CONCEPTS/PHILOSOPHY
The desire of the marketing management is to design strategies that will be of profitable
relationships with target customers. Marketing philosophies guide marketers in designing
these marketing strategies for instance; marketing philosophies can help marketers and
address the issue of how much weights should be given to the interest of the customers in the
organization and the society.
There are five (5) alternative concepts under which organization design carry out the
marketing strategies; the production concept, product concept, the selling concept, the
marketing concept and the societal marketing concept.
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 key questions that a firm would ask before
producing a product will include:

Can we produce the product?

Can we produce enough of it?
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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 show buying inertia or resistance and must be coaxed or persuaded
into buying. This concept is typically practiced with un soughted goods (i.e. goods not yet
demanded for) for instance insurance, funeral services etc. 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. Before producing a product, the key questions
include:

Can we sell the product?

Can we charge enough for it?
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The Marketing Concept
This is a business philosophy that challenges the above three business orientations. It holds
that the key to achieving 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
that is; target market, customer needs, integrated marketing and profitability. Thus, the
marketing concept starts with the well defined market, focuses on customer needs and
integrates all the marketing activities that affect customers.
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 key questions include:

What do customers want?

Can we develop it while they still want it?

How can we keep our customers satisfied?
NB. Many companies spend millions of shillings in promoting their goods and services only
to find that sales are lost because staffs do not deal with customers effectively.
Characteristics of the Marketing Concepts
 There is investment in marketing research and continuous new product development
 There is investment to staff training in customer care
 The marketing department plays a strategic role since the marketing personnel holds
senior positions in the organization
 There is focus on customer satisfaction
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 The marketing research determines the organizational out put
 There is flexibility in response to the environment and customer needs
 Organization should not try to provide customers with everything they want. Thus,
marketers should balance creating more values for customers against making profits
for the company.
Marketers need to be good at spotting opportunities.
Considering the characteristics of the marketer there is dire need for them to be assertive and
as such be spotters of the available opportunities as per Kotler. So because of their nature
they need to consider the following;

A company may benefit from converging industry trends and introduce hybrid
products or services that are new to the market. For example the cell phone
manufacturers have released the latest versions of phone cells with different functions
such as digital photo and video capabilities, radios, touches and Global Positioning
Systems (GPS).

A company may make a buying process more convenient or efficient. Consumers can
now use the internet to have VAT registration. apply for Education courses,
scholarships, find more books than ever and search for the lowest price with a few
clicks.

A company can meet the need for more information and advice. For example Angie’s
List connects individuals with local home improvement contractors and doctors that
have been reviewed by others.

A company can customize a product or service. For example the Uganda
telecommunication services have made it easy for the customers to choose the telcom
services they can utilise because of the variety.
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
A company can introduce a new capability. For example the phone users and moreso
internet users can create and edit digital “iMovies” with the iMac and upload them to
an Apple Web server or Web site such as YouTube to share with friends around the
world.

A company may be able to deliver a product or service faster. For example the Post
Office has also discover better ways of delivering mail faster to fit the customers
preferences using the Post Bus as opposed to the traditional post office boxes.

A company may be able to offer a product at a much lower price. For
example;Pharmaceutical firms have created generic versions of brand-name drugs,
and mail-order drug companies often sell for less.
Distinctions between the Sales Concept and the Marketing Concept
 The Sales Concept focuses on the needs of the seller. 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).
The Societal Marketing Concept
This concept holds that marketing strategy should deliver value to customers in a way that
preserves or enhances the consumer’s and the society’s well-being. In other words, its’ a
principle of enlightened marketing which holds that a company should make good marketing
decisions by considering consumers’ wants, needs, the company’s requirements, consumers’
long-run interest and society’s long-run interest.
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Therefore, the societal marketing concept questions whether the pure marketing concept over
look possible conflicts between consumers’ short-run wants and the consumers’ long-run
welfare (i.e. environmental deterioration, resource shortages, explosive population growth,
world hunger and poverty, and neglected social services). For example, if a company
produces a vehicle which consumes less petrol but spreads pollution, it will result in only
consumer satisfaction and not the social welfare. The Societal Marketing Concept is more
theoretical and will undoubtedly influence future forms of marketing and selling approaches.
Societies today have become very sensitive to this aspect of marketing with establishment of
institutions that ensure that organizations align their services in view of their impact on the
society. The different factors that have influenced marketing like technology are promoters of
marketing but at the same time become dangerous for human life.
Evolution of the marketing concept
The marketing orientation / concept has evolved from different angles
a)
Production orientation-During the 19th century it was often thought that people would
buy anything provided it was cheap enough. This belief had some truth in it, since the
invention of the steam engine allowed very much cheap mass sold items to be made and
indeed with item often on sale at around 1/10th the price of home-made equivalent, most
customers were prepared to accept poorer quality or an article that did not exactly fit their
needs. The prevailing attitude among manufacturers was that getting production rights was all
that mattered referred to today as a production orientation.
This paradigm usually prevails in market conditions under which demand greatly exceeds
supply and is therefore still found in 3rd world countries and Eastern European countries.
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b)
Product orientation
With the rising affluence people aren‘t prepared to accept standardized products and
as markets grew manufacturers began to look more closely of what they were
producing. This leads to the view that an ideal product could be made. One trial all
(most) customers would want engineers and designers development comprehensively
equipped methods with more and better features in an attempt to please everybody.
This philosophy is known as product orientation. Here the customer is being asked to
pay for features which they may not need. The problem which this approach is that it
does not allow for differences in test and needs between different customers and
consumers
c)
Sales orientation
As manufacturing capacity increases supply will tend to outstrip demand.
During the 1920’s and 1930’s in Europe and the U.S.A manufacturers began to take
the view that “a born sellers man” could sell anything to anybody and therefore
employing enough salesmen should get rid of the surplus puts. This is called sales
orientation and relies on the premise that the customer will allow him or herself to be
fooled again and again up until the 1950’s therefore personal selling and adverting
were regarded as the most important marketing activities.
Essentially what business were trying to do during this time (sometimes known as the
sales era) was to produce a product with given characterizes and then D the customer
to fit it.
d)
Customer orientation
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Modern markets take the view that the customers are intelligent enough to know what
they need, can recognize value for money when they see it and will not again buy
from the firm if they don’t get value for money.
This is the basis of the marketing concept putting the customer at the center of all the
organizational activities is easier said than done.
The marketing concept affects all areas of the business from production (where the
Engineers and designers have to produce items that meet customers’ needs through
after sales services where customer complaints need to be taken seriously. The
marketing concept is hard to implement because unlike the sale orientation approach
which seeks to change masses to fit the organization aim. The marketing concept
seeks to change and organization aims to fit one more specific group of customer who
has similar needs of stock.
This means that marketers often meet resistance from within their organizations.
In practice, this means finding out what a particular group of customers’ needs and
wants finding out prices that would be willing to pay and fitting organization
activities around meeting this needs and wants at a right price.
Marketing Intelligence
This is a very vital aspect of marketing especially in the recent decade when marketing has
become tense the previous strategies that worked for businesses cannot work even for one
year. Therefore the onus is on the marketing managers to go round the situation to be able to
staying the market place.
Definition of marketing intelligence
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According to Kotler this is the process by which information is is obtained about the
marketing environment and the marketing intelligence system is a set of guidelines that the
managers put in place to acquire relevant information about the various developments in the
business environment. There are different ways of accessing this kind of information by the
marketers such as; by reading books, newspapers, and trade publications; talking to
customers, suppliers, and distributors; monitoring social media on the Internet; and meeting
with other company managers.
Before the Internet, persons who needed information from the field had to go out in the field,
to obtain the information and watch the competition. This is what oil and gas entrepreneur T.
Boone Pickens did. In this field study Pickens recalls; “We would have someone who would
watch [the rival’s] drilling floor from a half mile away with field glasses. Our competitor
didn’t like it but there wasn’t anything they could do about it. Our spotters would watch the
joints and drill pipe. They would count them; each [drill] joint was 30 feet long. By adding up
all the joints, you would be able to tally the depth of the well.” Pickens knew that the deeper
the well, the more costly it would be for his rival to get the oil or gas up to the surface, and
this information provided him with an immediate competitive advantage.
Kotler notes that; ‘’Marketing intelligence gathering must be legal and ethical. In 2006, the
private intelligence firm Diligence paid auditor KPMG $1.7 million for having illegally
infiltrated it to acquire an audit of a Bermuda-based investment firm for a Russian
conglomerate. Diligence’s cofounder posed as a British intelligence officer and convinced a
member of the audit team to share confidential documents’’
ACTIONS TO IMPROVE A COMPANYS MARKETING INTELLIGENCE
There are a number of ways that the company can provide to be able to improve on the
quality and the quantity of the marketing intelligence. These include;
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• Train and motivate the sales force to spot and report new developments. The company
must be able to invest in helping the salespersons as the front line public relations offices to
know and appreciate their roles. They need to ‘’sell’’ to them the importance of gathering
information after realising their role. For example; Grace Performance Chemicals, a division
of W. R. Grace, supplies materials and chemicals to the construction and packaging
industries. Its sales representatives were instructed to observe the innovative ways customers
used its products in order to suggest possible new products. Some were using Grace
waterproofing materials to soundproof their cars and patch boots and tents. Seven newproduct ideas emerged, worth millions in sales.
• Motivate distributors, retailers, and other intermediaries to pass along important
intelligence.
It is worth noting that the distributors are an important part of the marketing and should be
encouraged so as to provide bedrock for product and service sale of a company. This is based
on the fact that they highly interact with the customers and the competition which puts them
in a better position to give helpful insights. For example a number of banks have reached out
to the people to find out the level of their services but more still is the quality offered at the
moment. Questions are asked to find out from the clients how the services can even be made
better for example as a result of these interviews executive banking and sits have been
provided for customers on the queue. Telecommunication helplines always ask users which
other service provider they have so as to appreciate their place in the market. Most of the
clients have been known to have more than one line so the task is left to the
telecommunication services to take a decision to keep the clients close to themselves. A
combination of data from the distributors and retailers avails enriched information for the
companies. The coca Cola product of coke zero which has less sugar caters for a number of
consumers who prefer little sugar because of their health and other reasons.
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• Hire external experts to collect intelligence. Many companies hire specialists to gather
marketing intelligence. Service providers and retailers send mystery shoppers to their stores
to assess cleanliness of facilities, product quality, and the way employees treat customers.
Health care facilities’ use of mystery patients has led to improved estimates of wait times,
better explanations of medical procedures, and less-stressful programming on the waiting
room TV.
• Network internally and externally. The firm can purchase competitors’ products, attend
open houses and trade shows, read competitors’ published reports, attend stockholders’
meetings, talk to employees, collect competitors’ ads, consult with suppliers, and look up
news stories about competitors. For example with the growth of the University education
different Universities have attended other University graduations so as to know what they do
differently to improve on their services.
• Set up a customer advisory panel. Members of advisory panels might include the
company’s largest, most outspoken, most sophisticated, or most representative customers. For
example, GlaxoSmithKline sponsors an online community devoted to weight loss and says it
is learning far more than it could have gleamed from focus groups on topics from packaging
its weight loss pill to where to place in-store marketing.
• Take advantage of government-related data resources. The Uganda Bureau of Statistics is
a good option for companies to obtain information regarding an in-depth look at the
population swings, demographic groups, regional migrations, and changing family structures,
These in turn enable the companies to come up with services and products that fit the
customers tastes and preferences as well as knowing the quantity to avail.
The latest census of August, 2014 in Uganda is a very good data base for information for the
companies to base on for planning.
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• Purchase information from outside research firms and vendors. Well-known data
suppliers can also be contacted. These collect information about product sales in a variety of
categories and consumer exposure to various media. They also gather consumer-panel data
much more cheaply than marketers manage on their own. For example they , provide realtime coverage and analysis of news media and consumer opinion information.
COLLECTING MARKETING INTELLIGENCE ON THE INTERNET
Companies may access the available options of getting the information and there are five
main ways marketers can research competitors’ product strengths and weaknesses online.
• Independent customer goods and service review forums.
• Distributor or sales agent feedback sites.
• Combo sites offering customer reviews and expert opinions.
• Customer complaint sites.
• Public blogs.
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