The Product Concept

The product concept believes that consumers respond to good quality products that are reasonably priced. It is a slight modification on the production concept, where the emphasis is shifted from output levels to product quality, performance and features. Organizations adopting this concept believe that very little effort is required to sell the good quality products that are reasonably priced. They concentrate on designing long lasting products and provide warranty for longer periods. They have heavy faith in role of engineers in the development of super products. This concept has given birth to products, such as wristwatches and fountain pens which are guaranteed for lifetime use of the user.
These companies later realized that people do not want to wear the same wristwatch or write with the same fountain pen for seventy five years. Organizations adopting this concept neglect two major variables one is preference of buyer and another one is technology. Both these variables change with time and make the long-lasting, high performance and wide feature products redundant in the market place

The Production Cocept

The production concept believes that consumers will factor those products that are widely available and low in cost. It is the oldest business concept. Managers of production oriented organizations concentrate on achieving high production efficiency and wide distribution coverage. Their focus is on the existing products and all efforts are directed at raising out put bevels and produce standardized product. The concept is based on the philosophy of mass production and mass merchandising. It assumes that buyers are fully aware of the available brands and given a choice, will generally buy the lowest priced product. Thus, under this concept, the price is thee critical variable in the buying decision. A business that adopt the concept focus on building internal capabilities of the business in terms of production and selling. Business uses the lower costs to cut prices and expand market sizes.

Most of the Nepalese companies are currently working under the production concept. This may be due to the fact that in many product sectors the demand for the product exceeds the supply.
When such a condition exists, production concept can play in the market areas. However, we see that many business organization like confectionery, cigarettes, tea, and soaps are adopting the production concept when the market for these products has become highly competitive and consumers highly sensitive to non-price factors.

Evolution Of The Marketing Concept

The modern marketing concept evolved out of various business concepts developed and practiced by businessman. There are five business concepts under which organisations can conduct their operations. These are listed below:-

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

These marketing concepts are listed above are the five evolution of the marketing concept. For the details of these five evolution of marketing concepts, see my next articles.

Profitability As Fundamental Principle Of The Marketing Concept

Profitability:-

The principle of profitability calls for an analysis of every business opportunity from the view point of profitability and survival of the organization. Profit is a major goal of every business organization and the organization can not sacrifice profit in any situation. The marketing oriented organization, however, scarifies short-term profit opportunities and targets at log term profits through creating and retaining satisfied customers. For non-profit organization, the quality of service offered to public becomes the survival factor.

Profitability is most important for any organization. The economic growth of any organization is only possible when they earn profit and reinvest them into productive area. So profitability is the one of the most important fundamental principle of the marketing concept.

Integrated Marketing As Fundamental Principle Of The Marketing Concept

Integrated Marketing:-

The principle of integrated marketing calls for a full coordination and integration of the various marketing activities performed within the organisation. The coordination has to be achieved at three levels. First, all the marketing activities, such as product development, marketing research, pricing, distribution, sales-force management, advertising and customer relations should be coordinated and integrated to achieve the marketing goals. Second, the marketing activities need to be coordinated with the activities of the other departments within the organisation, such as purchasing, production, personnel and finance. Third, there should be effective coordination of the organisation's activities with the external institutions, such as marketing intermediaries, transporters, advertising agencies, market research companies, etc.

Customer Orientation As Fundamental Principle Of The Marketing Concept

Customer Orientation:-

The principle of customer orientation calls for the organisation to carefully and accurately define customer needs from the customers' point of view. Once an organisation adopts the marketing concept, customer satisfaction becomes its main focus. Customer satisfaction is possible only when the organisation correctly assesses the needs and wants of the customers. For the need assessment, the customers should be allowed to Say what they need and prefer. The organisation should realize that its success depends on satisfied customers who make repeat buying of the organisation's product and also relate their good experience to friends and acquaintances so that the organisation gets new customers. The organisation has to use the tools of market research to understand customers' needs.

Target Market Focus As Fundamental Principles Of The Marketing Concept

Target Market Focus:-

An organization begins applying marketing concept with the definition of its target market. The principle of marketing concept emphasizes That no organization-business or non-business, big or small can operate in every market and satisfy every category of needs of the market. An organization can do better if it can define the boundaries of its operation and follow a market tailored business strategy. To implement this principle, the organization has to use the tool of market segmentation and targeting. The value of the market has to be correctly assessed through market analysis.

Exchange And Transactions

Exchange:-

Exchange is the act of obtaining a product from someone by offering something in return. People can obtain products through self-production, coercion, supplication and exchange. Self-production involves producing everything one needs as was done in the primitive hunting and gathering societies. Self-production is not practical and feasible in the modern age. coercion, the use of force in obtaining products from other people (theft and robbery) is socially unacceptable. Supplication or begging for products, although practiced by some, is not a feasible method for all people. The only feasible and socially acceptable approach for obtaining products is through the process of exchange. Marketing emerges only through the process of exchange. For successful exchange, the following five conditions should be present:-

1) There must be at least two parties.
2) Each party has something of value to offer to the other party.
3) Each party can communicate with the other party and also deliver the product.
4) Each party is free to accept or reject the offer.
5) Each party feels that it is appropriate of desirable to deal with the other party.

Transaction:-

A transaction is the trade of values between two or more parties. In the exchange process, two parties negotiate and move toward an agreement setting the terms and conditions of exchange. When an agreement is made, it results into a transaction. Transaction can either be barter of monetary. Under barter transaction, goods and/or services. In monetary transaction, goods and services are exchanged for money.

Customer Value And Satisfaction

Customer Value:-

Customer value is the difference between the values the customer receives from owning and using a product and the costs of buying the product. People's choice of product is guided by the concept of customer value or utility. Sellers sell different types of values attached with the product. For instance, a beauty saloon catering to women sells youth, attractiveness and confidence values to its customers.

Satisfaction:-

Customer satisfaction depends on the product's performance in delivering value as per the customer's expectation. If the product performs less than the customer's expectation, the buyer is dissatisfied; if it matches the expected performance, the buyer is satisfied. If the performance exceeds expectation, the buyer is delighted and highly satisfied. Satisfied customers become brand loyal and also tell the people about their good experience with the product performance with customer expectations. Many successful companies like to delight customers by providing more performance (values) than expectations.

Needs, Wants And Demands

Needs:-
Needs are a state of self-deprivation. The starting point for marketing is the human needs. Human needs can be physical, such as need for food, clothing, shelter, sex and sleep, or social, such as need for love and security, or individual, such as need to knowledge and self-expression. When one of these needs reaches a threshold level it creates a state of anxiety in the individual. This state forces the individual to undertake an activity that will reduce the level of need related anxiety. This can be achieved by moving towards objects that will satisfy the needs.

Wants:-
wants are desires for specific satisfiers of needs. The type of need satisfying objects differs from one society to other and from one individual to the other. Wants are shaped by the culture, social class and individual personality. What a person will want when he/she is hungry will depends on his/her consumption behavior shaped by the culture, social class and individual taste preferences.

Demands:-
Demands are human wants backed by ability and willingness to buy. Individuals have unlimited wants but their resources are limited. Thus, they have to choose products that deliver the most utility and satisfaction. Needs are not created by the marketer. They exist in the individual through the biological, social and individual processes. Marketers can influence human wants by providing a variety of need-satisfying objects, suitable culturally, socially and individually. Marketers can also influence demand by offering products at different price and quality levels that suit the buying power of various categories of buyers.

Meaning and concept of marketing

Marketing is recognizes as a process. The process involves planning and implementation of the marketing activities, such as conception, pricing, promotion and distribution of products (ideas, goods and services). These marketing activities are undertaken to create exchanges that meet individual and organizational goals. The individual goals include satisfaction and utility from the product. The organizational goals include profit and long term survival of the organization.

In the view of William J. Stanton, marketing as a dynamic integrated process. In his views marketing as a managerial system involving the marketing activities of planning, pricing, promoting and distributing of want satisfying products to target markets. The activities are undertaken to meet the organizational goals. Stanton has further emphasized on two more aspects of marketing. First, the entire system of business activities should be market of customer-oriented. Customer wants must be recognized and satisfied effectively. Second, marketing should not end until the customers' wants are completely satisfied, which may be sometime after the exchange is made.

In the views of William M. Pride and O.C. Ferrell, marketing is viewed as a diverse group of activities directed at various products and performed within many types of organizations. The activities are performed individually of institutionally by customers, producers and intermediaries. Besides business organizations, social, religious and political organizations also perform marketing activities. Marketing is executed through the mutually satisfying exchange process. Marketing has to perform in a dynamic environment. The various forces affecting marketing, such as laws, economy, technology, socio-culture are all dynamic.