 The Marketing Philosophies help determine

the management of marketing.

 Companies approach and conduct business in

different ways in order to achieve their

organizational goals.
 These are competing concepts by which

companies are guided in their marketing

efforts.
 Production concept
 Product concept
 Selling concept
 Marketing concept
 Societal marketing concept
Marketing Management Philosophies
Production
ProductionConcept
Concept

Product
ProductConcept
Concept

Selling
SellingConcept
Concept

Marketing
MarketingConcept
Concept

Societal
SocietalMarketing
MarketingConcept
Concept
 Based on the fact that consumers favor
products that are available and affordable
 Concentration on production efficiency and

effective distribution networks

 Outweigh the customer’s actual needs and

wants
 Used primarily when demand exceeds supply

and the focus is on finding production

methods that can bring the price down to
attract more customers
 When mass production techniques created the Industrial
Revolution, the volume of output was greatly increased.
 Yet the increased production of goods did not immediately
eliminate the shortages from the pre-industrial era.
 The new mass production techniques provided economies
of scale allowing for lower costs of production and
corresponding lower prices for goods.
 Lower prices greatly expanded the market for the goods,
and the new production techniques were struggling to
keep up with the demand.
 This situation meant that the product philosophy would
work just as well in the new industrial environment.
 Consumers still did not need to be consulted for the
organization to sell its products.
 Henry Ford - the classic example of the production philosophy in
use after the Industrial Revolution
 Henry Ford pioneered mass production techniques in the
automobile industry - he offered cars at affordable prices to the
general public
 Before this time, cars were hand made, and only the very wealthy
could afford them
 The public enthusiastically purchased all the Model T Fords that
the company could produce
 The evidence that the production philosophy was alive and well in
Ford Motor Company came in Henry Ford's famous reaction to
consumer requests for more color options
 He was said to have responded that "you can have any color car
you want as long as it is black”
 Realizing that different colors would increase the cost of
production and price of the Model T's, Henry Ford, using the
production philosophy, decided that lower prices were best for
the public.
 Based on ways to improve the quality,
performance, and features to attract buyers
 This philosophy tends to spend too much

time adding features to their products

 Does not think about what people actually

need and want

 The product philosophy was the dominant

marketing philosophy prior to the Industrial

Revolution and continued to the 1920s.
 The organization knows its product better

than anyone or any organization.

 The company knows what will work in
designing and producing the product and
what will not work.
◦ For example, the company may decide to
emphasize the low cost or high quality of their
products.
◦ This confidence in their ability is not a radical
concept, but the confidence leads to the consumer
being overlooked.
◦ Since the organization has the great knowledge and
skill in making the product, the organization also
assumes it knows what is best for the consumer.
 This philosophy of only relying on the
organization's skill and desires for the product
did not lead to poor sales.
 In much of the product philosophy era,
organizations were able to sell all of the
products that they made.
 The success of the product philosophy era is
due mostly to the time and level of technology
in which it was dominant.
 The product era spanned both the pre-
Industrial Revolution era and much of the time
after the Industrial Revolution
 The period before the Industrial Revolution
was the time when most goods were made by
hand.
 The production was very slow and few goods

could be produced.
 However, there was also a demand for those

goods, and the slow production could not fill

the demand in many cases.
 The importance for management of this

shortage was that very little marketing was

needed.
 Product oriented organizations essentially push
their products without focus on the customer
requirement or business need.
 It takes the view that if it makes a better quality
or better specified item, the item must sell.
◦ A good example of this was the Digital Equipment
Company (now part of HP), which developed and
perfected the minicomputer.
◦ Unfortunately, they continued to do so long after the
demand for minicomputers had been replaced by the use
of personal computers.
◦ It is very easy for an organisation to forget that it is in
business to serve customers.
 The gunsmith shop in Williamsburg, Virginia, still operates
using the product philosophy.
 The gunsmiths produce single-shot rifles using the technology
available during the 1700s.
 They are only able to produce about four or five rifles every
year, and they charge from $15,000 to $20,000 for each rifle.
 However, the high price does not deter the demand for the
guns; their uniqueness commands a waiting list of three to
four years.
 Today's Williamsburg Gunsmith Shop situation was typical for
organizations operating before the Industrial Revolution.
 Most goods were in such short supply that companies could
sell all that they made.
 Consequently, organizations did not need to consult with
consumers about designing and producing their products.
 Places the focus on sales rather than what
people actually need or want
 Most of the time the product is
misrepresented
 Results in high customer dissatisfaction
 The selling era has the shortest period of

dominance of the three philosophies.

 It began to be dominant around 1930 and

stayed in widespread use until about 1950.

 It is a company centered approach
 The selling philosophy holds that an
organization can sell any product it produces
with the use of marketing techniques, such as
advertising and personal selling.
 Organizations could create marketing
departments that would be concerned with
selling the goods, and the rest of the
organization could be left to concentrate on
producing the goods.
 The reason for the emergence of the selling philosophy
was the ever-rising number of goods available after the
Industrial Revolution
◦ Organizations became progressively more efficient in production,
which increased the volume of goods
◦ With the increased supply, competition also entered production
◦ These two events eventually led to the end of product shortages and
the creation of surpluses
◦ It was because of the surpluses that organizations turned to the use
of advertising and personal selling to reduce their inventories and
sell their goods
 The selling philosophy also enabled part of the organization to
keep focusing on the product, via the product philosophy
 In addition, the selling philosophy held that a sales or
marketing department could sell whatever the company
produced
 The Ford Motor Company is also a good example of the
selling philosophy and why this philosophy does not work in
many instances.
◦ Ford produced and sold the Model T for many years.
◦ During its production, the automobile market attracted more
competition.
◦ Not only did the competition begin to offer cars in other colors, the
styling of the competition was viewed as modern and the Model T
became considered as old-fashioned.
◦ Henry Ford's sons were aware of the changes in the automobile market
and tried to convince their father to adapt.
◦ However, Henry Ford was sure that his standardized low-price
automobile was what the public needed.
◦ Consequently, Ford turned to marketing techniques to sell the Model T.
◦ It continued to sell, but its market share began to drop.
◦ Eventually, even Henry Ford had to recognize consumer desires and
introduce a new model.
 The selling philosophy assumes that a well-
trained and motivated sales force can sell any
product.
 However, more companies began to realize
that it is easier to sell a product that the
customer wants, than to sell a product the
customer does not want.
 When many companies began to realize this
fact, the selling era gave way to the marketing
era of the marketing concept and philosophy.
 The marketing concept and philosophy states that
the organization should strive to satisfy its
customers' wants and needs while meeting the
organization's goals.
 The best way to meet the organization's goals is
also by meeting customer needs and wants.
 The marketing concept's emphasis is to
understand the customers before designing and
producing a product for them.
 With the customer's wants and needs incorporated
into the design and manufacture of the product,
sales and profit goals are far more likely to be met.
 The marketing era started to dominate
around 1950, and it continues to the present.
 The marketing concept recognizes that the

company's knowledge and skill in designing

products may not always be meeting the
needs of customers.
 It also recognizes that even a good sales

department cannot sell every product that

does not meet consumers' needs.
 When customers have many choices, they will

choose the one that best meets their needs.

 Focuses on what people need and want
 Less focus on the needs of the seller
 This concept is about the importance of

satisfying the customer’s needs to achieve

company success
 Products are developed around those needs

and wants
 Relies upon marketing research to define

market segments, their size, and their needs

 The marketing department makes the
appropriate decisions to satisfy those needs
 The organization strives to satisfy customer
wants and needs while meeting the
organization's goals - "the customer is king"
 The implication of the marketing concept is

very important for management -

◦ It is not confined only to the marketing function /
department, but adopted by the entire
organization.
◦ From top management to the lowest levels and
across all departments of the organization, it is a
philosophy or way of doing business.
 The customers' needs, wants, and satisfaction
should always be foremost in every manager
and employees' mind.
 Wal-Mart's motto of "satisfaction guaranteed"

is an example of the marketing concept.

◦ Whether the Wal-Mart employee is an accountant or
a cashier, the customer is always first.
 With the customer's satisfaction the key to the
organization, the need to understand the customer
is critical.
 Marketing research techniques have been developed
just for that purpose.
 Smaller organizations may keep close to their
customers by simply talking with them.
 Larger corporations have established methods in
place to keep in touch with their customers, be it
consumer panels, focus groups, or third-party
research studies.
 Whatever the method, the desire is to know the
customers so the organization can better serve them
and not lose sight of their needs and wants.
 3
1

Marketing as the
Marketing as an equal important function
function

Marketing as a more
4 important function 5

P - Production
F - Finance
M - Marketing
HR - Human Resources
C - Customer

Customer as the Customer as the controlling function -

critical function Marketing as the integrative function
 Interpreted literally, the marketing concept only
advocates discovering consumers' wants and needs
and satisfying them.
 Critics assert that consumers may not be aware of
all of their wants and needs.
◦ In the 1950s, were consumers aware of a need to cook their
food by sending microwaves through their food?
◦ In the 1960s, were consumers aware of a need to have
personal computers in their homes?
 Critics argue that the marketing concept's
concentration on consumers' wants and needs stifle
innovation
 Organizations will no longer concentrate on
research and development in hopes that one
product in ten might meet with consumer
acceptance
 It is less likely come up with innovative products
such as microwaves and personal computers
 Not only uses the same philosophy as the
marketing concept, but also focuses around
the products benefit to the betterment of
society as a whole
 Greater emphasis is put on environmental

impacts, population growth, resource

shortages, and social services
 Concern for environment is very high
 Eco-friendly products, environmental friendly

products are in vogue today

 Emphasis on social responsibility
 Marketing strategy should deliver value to
customers in a way that maintains or improves
both the consumer's and the society's well-being
 Most companies recognize that socially
responsible activities improve their image among
customers, stockholders, the financial
community, and other relevant publics.
 Ethical and socially responsible practices are
simply good business, resulting not only in
favorable image, but ultimately in increased sales
 Body Shop
◦ Body Shop is a cosmetic company found by Anita Roddick.
◦ The company uses only vegetable based materials for its products.
◦ It is also against Animal testing, supports community trade, defend
Human Rights, and overall protection of the planet.
 Ariel
◦ Ariel is a detergent manufactured by Procter and Gamble.
◦ Ariel runs special fund raising campaigns for deprived classes of the
world specifically the developing countries.
◦ It also contributes part of its profits from every bag sold to the
development of the society.
 British American tobacco Company
◦ BAT is a British based Tobacco company.
◦ It was found in the year 1902.
◦ BAT is involved in working for the society in every part of the world.
◦ It conducts tree plantation drives as part of its societal marketing
strategy.
 This concept was a forerunner of sustainable
marketing in integrating issues of social
responsibility into commercial marketing strategies
 Early mention of this topic was by William Lazer
(1969), Philip Kotler and Sidney Levy (1971)
 Should not be confused with Social Marketing
◦ Social marketing uses commercial marketing theories, tools
and techniques to social issues
◦ Social marketing applies a "customer oriented" approach
and uses the concepts and tools used by commercial
marketers in pursuit of social goals like Anti-Smoking-
Campaigns or fund raising for NGOs
What is Marketing Management about?