Strategic Management: Formulation and Implementation

Marketing Concept

The elements of marketing strategy are vital factors in overall business success. Therefore, managers need understand a general concept in order to simultaneously address many marketing concerns.

"The marketing concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors" (Philip Kotler).

The marketing concept has three aspects: needs, integrated efforts, and satisfaction.

The needs of market segments are identified so that marketing mixes can be tailored to fulfil these needs. Understanding customers needs means that marketers seek to develop new products that customers could not envision. Business organizations must be experts in designing and developing products that fulfil the needs of the target markets.

Integrated efforts means that all of the organization's activities are evaluated for their ability to increase the marketing mix's positive impact on target markets.

Satisfaction for the customer's needs is sought, but so is satisfaction for the company's profit needs.

Few products appeal to everyone in the market. Therefore, there is a need to divide the market into segments - each segment with some common set of needs. Market segments may be chosen as target markets.

Each target market's unique set of needs can then be satisfied with a marketing mix that is tailored specially to them.

The role of each element of the marketing mix - product, price, distribution, and promotion - should be examining for its contribution to an integrated marketing strategy. A somewhat different marketing mix is desirable for each selected target markets.

People do not generally decide to purchase a specific brand without considering their other options. An effective marketing program always position a brand in relation to other brands in relation to other products.

The first company to introduce a new product usually offers only the basis product because there are not directly competing brands. The companies that enter later in the product life cycle usually have to offer improvements, extras, and several different models in order to compete with the earlier brands. The product life cycle implies that every product will eventually enter a decline phase.

New marketing problems developing at the beginning of this century did not of themselves produce a marketing concept. The impelled thought, resulting in the gradual evolution (from 1900 to 1990) of marketing concept.

During the first part of the evolution, marketing became the business discipline concerned with the complete distribution of goods and services. This included both the negotiations leading to the transfer of ownership and also the physical storage and delivery of good. During the 1930s more emphasis was placed on selling and sales management and less attention was devoted to logistic.

In the 1950s, Wroe Alderson broadened the marketing concept with the new term "marketing management." This concept focused on creating new demands, taking the action needed to satisfy them, and paying less attention to purely physical exchanges.

Alderson was followed by Kotler and McCarthy in the 1960s and 1970s. They popularized the concept of the "4P's" in marketing - product, price, promotion and place (logistic or physical distribution). This original model of the four Ps was founded in the Industrial Revolution.

Today, three additional Ps (physical evidence, participants, and process) founded in the service sector, have been added and are often called the "expanded marketing mix" (see Booms and Bitner , Magrath and Collier ). These seven Ps recognize that at the points of service creation and delivery marketing and operations functions occur simultaneously.

Marketers must continually be applying the marketing concept and researching markets segment needs because new, improved marketing mixes are a continuing requirement.