Session 5

EVOLUTION OF
MARKETING CONCEPT
Evolution of Marketing Concept:
►Exchange Concept
►Production Concept
►Product Concept
►Selling Concept
►Marketing Concept
►Holistic Marketing Concept
Production Concept
►Concentrate on achieving high production
efficiency, low costs, and mass distribution.
►Concept can be used when inexpensive labor
is available and when a company wants to
expand the market.
Production Concept

►Maximize output, achieve a lower unit cost; and sell at

a lower price is their Mantra.
►Lower cost and price automatically attract the
customers.
Product Concept
►Concentrate on making superior products and
improving them over time.
►Improved product will not be successful
unless the product is
►priced,
►distributed,
►advertised
►and sold properly.
Selling Concept
 Selling starts with the seller and is preoccupied all the time
with needs of the seller.
 Seller is the centre of the business universe;
 Activities start with the sellers existing products.
 Seeks to quickly convert products to cash.
 Views business as a goods producing process.
 The firm makes the product first and then figures out how to

sell it and make profit.

 Cost determines the price.
 Selling views the customer as the last link in the business.
 Emphasis on somehow selling
 There is no coordination among the different functions.
 Emphasis on staying with the existing technology and

reducing costs.
 MARKETING
Marketing originates with the recognition of a
need on the part of a consumer and terminates
with the satisfaction of that need by the delivery
of a usable product at the right time, at the right
place, and at an acceptable price.
 MARKETING MANAGEMENT
The art and science of choosing target markets
and getting, keeping, and growing customers
through creating, delivering and communicating
superior customer value.
Marketing Concept
 Marketing starts with the buyer and focuses constantly on
the needs of the buyer.
 Buyer is the centre of the business universe
 Activities follow the buyer and his needs.
 Seeks to convert customer needs into products.
 Views business as a customer satisfying goods.
 What is to offered as a product is determined by the

customer.
 Consumer determines price; price determines cost.
 Marketing views the customer as the very purpose of the

business.
 Emphasis is on integrated marketing; an integrated strategy

covering product, promotion, pricing and distribution.

 Emphasis on innovation in every sphere; on providing

better value to the customer by adopting better technology.

Holistic Marketing Concept
 Holistic marketing recognizes that “everything matters” with
marketing - and that a broad, integrated perspective is
often necessary.
 Holistic Marketing has four key dimensions:
 Internal Marketing
 Integrated Marketing
 Relationship Marketing
 Socially responsible Marketing
 Holistic Marketing has four key dimensions:
 Internal Marketing: ensuring that everyone in the organization
embraces appropriate marketing principles, especially senior
management.
 Integrated Marketing: create marketing activities (marketing mix
i.e. four P’s) and assemble fully integrated marketing programs
to create, communicate, and deliver value for consumers.
 Relationship Marketing: aim of building mutually satisfying long-
term relationships with key parties – customers, suppliers,
distributors and other channel partners.
 Socially responsible Marketing: understanding broader concerns
and the ethical, environmental, legal and social context of
marketing activities and programs. Example: McDonald’s
 COMPANY

Internal
External Marketing
Marketing

FRONT LINE CUSTOMERS

EMPLOYEES Interactive Marketing
 A

SOCIAL OTHER PRODUCTS/SERVICES

MARKETING CHANNELS
DEPARTMENT DEPARTMENT COMMUNICATION
DEPARTMENT

Internal Integrated
Marketing Marketing

Socially Relationship
Responsible Marketing
Marketing

COMMUNITY CUSTOMERS CHANNEL PARTNERS

ETHICS ENVIRONMENT LEGAL