THE PRODUCT CONCEPT
The Product Concept focuses on the feature of the product – constantly seeking new product improvements. Its’ assumption is that the customer will buy the high quality products with the greatest performance and features.
Company directs its potentials to the production of high quality products and continuously works on their improvement, not noticing often-large changes that occur in the supply market. There is a risk that organisation loses sight of underlying customer needs by only focusing on existing wants. When focusing on the product concept instead of the benefit that consumers receive from the using the product can result in marketing myopia or short sightedness.
THE SELLING CONCEPT
Most company practise the selling concept when there is overcapacity and the aim is to sell what they make rather than make what the market wants. The starting point is the so-called aggressive sales (putting maximum efforts into promotion and advertising of a product).
This concept is typically practiced with unsought product, those that consumers do not ordinarily think of buying. The danger is that the focus on making the sale overshadows the focus on building long-term relationship with customer. Once the customer buys the product, this philosophy assumes that he or she will be satisfied with the product or will simply forget about any disappointment or dissatisfaction with having bought an unsatisfactory product. Deciding on the best way to organise your sales force means that you need to consider the people that make up that sales force and how they should be selected and trained. There are the following steps selling process:
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Prospecting and qualifying. The salesperson must identify qualified potential customers
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Preapproach. The salesperson should "do his/her homework" before approaching the prospect
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Approach. The salesperson needs to get the relationship off to a good start, followed by asking questions about customer's needs
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Presentation and demonstration. The salesperson presents the product, it's features, and benefits it represents to the buyer
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Handling objections. The salesperson should seek out, clarify and overcome any objections buyers may have for buying the product.
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Closing. Many salespeople lack confidence, feel guilty about asking for an order, or do not recognise the right moment for closing the sale.
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Follow up. This final step is a key different between selling the sales-oriented way, and selling the marketing-oriented (or customer-oriented) way
(Source - - Understanding Marketing - Monash University)
THE MARKETING CONCEPT
The Marketing concept involves the following:
- Focuses on customer wants and needs to distinguish products from competition
- Integrates all organization’s activities to satisfy customer wants and needs
- Achieves organization’s long-term goals by satisfying customer wants and needs
Marketing begins with an idea about a want-satisfying product and does not end until customers wants are completely satisfied, which sometimes occurs after the sale. The focus of management is on the customer's ultimate satisfaction. Marketing concept relies upon marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing team makes decisions about the controllable parameters of the marketing mix (product, price, place or distribution and promotion or marketing communications - designed to satisfy customers).The aim of marketing is to make selling superfluous and to know and understand the customer so well that the product or service fits him or her and sells itself.
Figure 1.2 The selling and marketing concept contrasted
(Source - Kotler, P., Amstrong G., Brown L & Adam S., - Marketing – 4th Edition. Prentice Hall Australia Pty Ltd, pg 19)
Sometimes selling and marketing concept are confused. In the Figure 1-2 we can see the comparison between two concepts. The selling concept takes an inside-out perspective. It focuses on customer conquest- getting short –terms sales with little concern who buys or why. Marketing concept takes outside-in perspective - focuses on customer needs, coordinates all the marketing activities affecting customers and makes profits by creating long-term customer relationship based on customer value and satisfaction.
THE SOCIETAL CONCEPT
Figure 1-3. Three considerations underlying the societal concept
(Source - Kotler, P., Amstrong G., Brown L & Adam S., - Marketing – 4th Edition. Prentice Hall Australia Pty Ltd, pg 21)
As shown in Figure 1-3 the societal marketing concept calls on marketers to balance three considerations in setting their marketing policies; company profits, consumer wants and society interests.
The societal marketing concept is the newest concept. The concept was developed in a time where society began to question if the marketing concept was adequate in the face of worldwide environmental problems, resource shortages, and other social problems. For example, Greenseas Tuna which is dolphin-safe because they do not use dredge nets in catching their fish, or recycled tissue paper, or CFC-free spray cans. It is more appealing due to society’s concerns. Companies are in business to make money. Basically, taking care of society's well-being is good for business that is the bottom line. Societal marketing managers believe that consumers will respond more favourably to companies which are socially responsible (eg. McDonalds for using more environmentally-friendly wrapping), and react unfavourably to companies which they feel are not socially responsible (eg. Exxon for denying all involvement and responsibility in an oil spill). This gives socially-responsible companies a competitive edge over their competitors.
The supply chain or chain is that series of interlinking steps which collectively define the nature character and value of the product at the time of receipt by the end costumer. The chain includes all of the scientific, production, commercial, technical, structural, policy and related activities involved in the matching of the product to a consumer needs, its production, storage, packaging, marketing, sale and transport, including in-chain and in-store quality management.
(Source: Department of Agriculture, Fisheries & Forestry Australia – Chain Stocktake of Some Australian Agricultural and Fishing Industries - 20 –Aug-03 <> pg 11)
Figure 1.4 The common supply chain for pulses
(Source - Department of Agriculture, Fisheries & Forestry Australia – Chain Stocktake of Some Australian Agricultural and Fishing Industries - 20 –Aug-03 <>, pg 35)
The commodity chain in Figure 1.4 demonstrates all of the deficiencies of a production driven operation such is not customer focused. Growers have little understanding of the chain, and expect in the most general sense, have no knowledge of the market into which their product is exported. Trust is missing at various levels which interfere with any semblance of through-chain planning or management, and in any case, the absence of clear leadership limits the potential for coordination. The chain is also characterised by levels of secrecy, which preclude any form of transparency, expect perhaps in some of the front end relationships.
CONCLUSION:
Competing in today's competitive marketplace requires getting to market as quickly and economically as possible. To help customers do that we need a thorough understanding of our customers' requirements.
Getting from a concept, to a design, to a physical product can be tedious and expensive. Many key factors must be considered. What is your product? Who are your customers? How and where will the product be used? What shape will it take? What properties will it need? The key to competing in today's competitive marketplace is getting to market quickly at lower cost. It is important to understand customer's requirements regarding material, part design, and process selection.
If the decision has been made to adopt the marketing concept, then the consideration has to be given to the implications for each of the participants and the functions performed within the marketing system. Where one or more elements of the system are found to be other than market orientated, then either a change towards the marketing philosophy has to be introduced in those elements or a change in the configuration of the marketing system has to be implemented.
The success of the chain depends on number of factors such as: trust; good selection of supplier and/or buyers; openness and reliability; balance in power; communication and the competence to manage the partnership.
REFERENCES
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Kotler, P., Amstrong G., Brown L & Adam S., - Marketing – 4th Edition. Prentice Hall Australia Pty Ltd
- Schaffner, D. J., William, R & Earle, M. D. 1998, – Food Marketing: An international Perspective. McGraw Hill Australia, Roseville, NSW.
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Kohl, R. L. & Uhl, J. N. 1998, Marketing of agricultural products. 8th edn. Prentice Hall, New Jersey.
- Agricultural and Food Marketing Management
<> 07/08/03
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- Introduction to Marketing
<>25/07/03
- Understanding Marketing – Faculty of Business and economics – Monash University
<> 25/07/03
- Agribusiness Marketing – AGB301 Readings 1.1 Kotler, P., Fitzroy, P. and Shaw, R. 1980, - The Role and philosophy of marketing – Charles Sturt University – May 2003
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Department of Agriculture, Fisheries & Forestry Australia – Chain Stocktake of Some Australian Agricultural and Fishing Industries - 20 –Aug-03 <>
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