Most marketing textbooks will include a discussion, generally in chapter 1, of how marketing has evolved over the last hundred years or so. In this discussion they talk about various concepts, philosophies or eras. The exact terminology slightly various between the major marketing textbooks, but generally they address these five main marketing eras or philosophies:
- Production concept
- Product concept
- Sales/promotion concept
- Marketing concept
- Societal marketing concept
About the marketing eras and concepts
After the Industrial Revolution manufacturing became more widespread and gradually became more efficient. Many firms believe that the key to success in the marketplace was to minimize price to the consumer. The best way to control this was by minimizing their costs of production and distribution.
The classic example that is provided in nearly every marketing textbook is of the Ford Motor Company. We remember this company primarily because of its production and manufacturing system, where it had its workers specialize into particular tasks and roles. As a result, Ford was able to significantly reduce cost of manufacturing a motor vehicle and was able to offer its cars at prices well below its competition.
As other firms in other industries saw the success of Ford, they to try to follow this example and worked hard to streamline their manufacturing production system and also reduce costs of logistics in their distribution channels.
Therefore, marketing success and to those firms that were very cost focused and very efficient and were in a position to pass on those savings to the end consumer.
While this is a relatively outdated approach in a developed economy in today’s world, it is generally how some manufacturers in developing countries are currently competing – by be able to manufacture products much cheaper than its competitors, or competing nations.
One of the reasons that Ford was able to reduce its cost to such extent was that it offered only one product, namely the Model T Ford, which only came in the color black.
Other car manufacturers who could not match Ford’s cost efficiency and price structure decided to change their marketing strategy and compete on a different basis. What they started to do was to offer different products – that is, to give consumers a choice.
And it should come to no surprise to us today that consumers were willing to pay a little bit more something new and different. The overall motor vehicle market also increased, as more affluent consumers were willing to trade up to a new car earlier than they would normally because the car was new and exciting.
As with the production concept, other businesses watched the success of companies introducing variety and choice into the marketplace. Naturally there were many followers, which created the product era where companies worked with their manufacturing system to produce many variations of the product offerings.
As you can well imagine, the product era above generated a whole variety and choice of products for a whole range of consumers. As more and more companies adopted this marketing strategy, and while consumers had many choices, there simply wasn’t enough demand to satisfy every company.
This led to some companies becoming far more aggressive in terms of their sales and promotional activities. They already had the product and manufacturing systems and distribution channels in place, what they needed to do was increase sales volume.
Again, like the earlier two eras, the first companies that introduced more aggressive sales and promotion tactics achieved success – primarily because they have no real competition in that regard, that is, a high “share of voice".
And like the other eras, once other companies started to follow the success, each firm’s promotional efforts and sales teams had the impact of cancelling each other out.
The marketing concept is typically what is discussed in most marketing textbooks today – this is generally how we understand the approach to marketing.
The previous concepts and worked initially but as more and more companies adopted similar approaches (that is, competing on price, providing product choice, heavy promotion) they progressively became less successful. The core reason behind these concepts fizzling out over time is that they were company-centric. In other words, they only looked at the needs of the company; they did not consider the market or the consumers’ needs.
This created the need for companies to shift to what is known as the marketing concept. The marketing concept has the consumer at the center of companies focus. So before developing products and promotional messages, companies reverse the traditional approach, and identify target markets and seek to understand customer needs.
With this understanding of their target market and the consumer, companies will then identify appropriate competitive marketing strategies to be successful in the marketplace. The goal of the marketing concept is a win-win scenario, where the customer receives good value and is satisfied on the firm is rewarded with profitable business.
Societal marketing concept
In more recent years, the natural environment, the global marketplace and being a good corporate citizen has been given more prominence by some firms. The societal marketing concept is extension of the marketing concept and represents the future direction of marketing.
Some firms already practice the societal marketing concept. Basically it involves balancing three goals (instead of the two main goals of the marketing concept) – company profitability and growth, customer satisfaction, contribution to society.
Companies who follow this concept believe that they have a responsibility to society or to a local community. They want make a difference, not just to their consumers and shareholders, but to society overall.