We describe marketing management as carrying out tasks to achieve desired exchanges with target markets. What philosophy should guide these marketing efforts? What weight should be given to the interests of the organization, customers and society? Very often these interests conflict. Invariably, the organization's marketing management philosophy influences the way it approaches its buyers.
There are five alternative concepts under which organizations conduct their marketing activities: the production, product, selling, marketing and societal marketing concepts.
The production concept holds that consumers will favour products that are available and highly affordable, and that management should therefore focus on improving production and distribution efficiency. This concept is one of the oldest philosophies that guides sellers.
production concept The philosophy that consumers will favour products that are available and highly affordable, and that management should therefore focus on imprttving production and distribution efficiency.
The production concept is a useful philosophy in two types of situation. The first occurs when the demand for a product exceeds the supply. Here, management should look for ways to increase production. The second situation occurs when the product's cost is too high and improved productivity is needed to bring it down. For example, Henry Ford's whole philosophy was to perfect the production of the Model T so that its cost eould be reduced and more people could afford it. He joked about offering people a ear of any colour an long as it was black. Today, Texas Instruments (Tl) follows this philosophy of increased production and lower eosts in order to bring clown prices. The company won a big share of the hand-calculator market with this philosophy. However, companies operating under a production philosophy run a big risk of focusing too narrowly on their own operations. When Tl used the same strategy in the digital watch market, it failed. Although TTs watches were priced low, customers did not find them very attractive. Tn its drive to bring down prices, Tl lost sight of -something else that its customers wanted - namely, attractive, affordable digital watches.
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