Towards the Marketing Concept

Few companies considered as top marketers like Amazon, Apple, and McDonald's have acquired the marketing concept as a value creation tool for their markets. The below article sheds light on the differences between the selling concept and the marketing concept and why organizations have to acquire the marketing concept to sustain growth and customer loyalty.

The selling concept is a business notion with an assumption that without capitalizing and using sales in the business operation, the organization will not be able to sell its product. The main focus in the selling concept is on the product with a volume-oriented approach. Companies that master the concept of sales use aggressive sales force and promotional techniques (such as advertising) to maximize profits through sales. Consequently, when the company is in an over-capacity situation, it has to sell the product regardless of the actual market demands. In other words, the selling concept is product-centric and not market-centric, where the customer's needs and satisfaction are usually taken for granted.

On the other hand, the marketing concept is a business notion that is customer and market-centric. While the selling concept focuses on the seller's needs, marketing concepts concentrate instead on the buyer's needs. With the marketing concept, firms accomplish their goals and generate profit by acquiring long-run-oriented plans to become better than competitors in providing customer satisfaction. The concept states that a firm's success lies in being more effective than the competition in providing and delivering customer value in the targeted markets.

Utilizing proper marketing by aiming to understand the customer needs, selling will be just a marginal activity. The product that fits those needs will sell itself as long as it is available. Top marketers like Apple will have their new launch iPhone, or iPad oversold as soon as they are released in the market. Before releasing the first iPhone, consumers were tired from the complication of using existing mobiles where the screen size was tiny and the keyboard buttons were small and impractical. Apple launched a promotional speech held by Steve Jobs in 2007 on iPhone 2G who highlighted the simplicity and practicality of the new touchscreen product where consumers can interact directly with their fingers rather than using the impractical stylus or typing with the tiny keyboards. When released in June 2007, thousands of customers reported to have waited outside Apple retails stores days before the launch of the device, and Apple sold 1,764,000 units in one quarter ("Apple Inc. Q3 2007 Unaudited Summary Data, July 25, 2007). Many stores reported stock shortages within an hour of availability. Apple did not create the need in the market; the demand was there, but Apple anticipated that need with the right marketing approach, and hence sales activities became superfluous.

Traditionally, companies focusing on the product rather than the market gave them a fake sense of control over the sales operations. Such companies get their sense of security by keeping their eyes on the inventory level and measuring the sale outcome. They usually put marketing within the sales process and focus on marketing aspects like pricing and promotion. While this process looks naturally straightforward, it loses sight of other value creation aspects like consumer co-creation and value proposition. Whereas top marketers put marketing at the beginning of any strategic planning, even before getting the product or service, they use a holistic approach to provide value creation for their targeted markets.

Reference: Apple Inc. Q3 2007 Unaudited Summary Data (July 25, 2007). https://web.archive.org/web/20080529133618/https://images.apple.com/pr/pdf/q307data_sum.pdf