Fundamental Concepts of Marketing

Unit –2
Prof. Preksha Yadav
Unit 2: Fundamental Concepts of Marketing

1. The Exchange Concept

2. Production Concept
3. Product Concept
4. Sales Concept
5. Marketing Concept
6. Holistic Marketing
7. Differences between Sales and Marketing
8. Marketing Myopia
Learning Outcome

To understand the basic Marketing Concepts.

 Exchange Concept

Exchange Concept gives importance to the exchange of goods and services.

1. Here, consumers have to accept those goods that are available in the market.
2. This idea does not give importance to quality, consumers satisfaction, etc.
3. It is a traditional concept of marketing.
4. This concept was in use before the industrial revolution. It is an old, outdated and narrow
concept of marketing.
 Production Concept
Production Concept gives importance to the production of goods.
1. This concept is production-oriented. Here, goods are produced and distributed on a large scale.
2. According to this concept, the consumers will purchase those products that are readily available and are
low in cost. During the industrial revolution, this concept was widely used.
3. Today, this concept is only used in the third world countries. In these countries, the demand is more than
supply.
4. So the consumers are more interested in purchasing the product. They don't pay much attention to the
quality of the product.
5. Developed countries don't follow this concept. In these countries, the consumers are more interested in
the product quality.
 Product Concept
Product Concept gives importance to the quality of the product. This concept is product-oriented.
1. Here, good quality products are produced and distributed on a large-scale.
2. The company goes for product excellence. That is, they work on improving the quality of the
product.
3. According to this concept, the consumers will only purchase good quality products.
4. This idea does not give any importance to the needs, wants and problems of the users. Here,
products are not made according to the needs and desire of the consumers.
5. So this concept does not concentrate on the consumer. It only focuses on the product. Therefore,
this idea is not accepted.
 Sales Concept
Sales Concept gives importance to sales promotion techniques. This concept is sales-oriented.
1. Here, the product is pushed into the market by aggressive advertising and publicity, personal
selling, discount offers, gifts, attractive packages, etc.
2. According to this concept, the sales will increase only by using sales promotion techniques. That
is, the consumer must be induced (attracted) to purchase the product.
3. It does not give any significance to the needs and wants of the consumers.
4. Companies who have excess production capacity and who face a lot of competition use this
concept. However, this is not useful for all marketing situations.
 Marketing Concept

Marketing Concept gives importance to consumers and service. This concept is consumer-
oriented. In fact, this concept is also called Consumer-Orientation Concept.
1. This concept started in 1950.
2. According to this concept, the company must first find out the needs and wants of the
consumers.
3. Then they must satisfy these needs and wants.
4. Here, the consumers are the primary focus of a business. They are the centre of all marketing
activities.
 Societal Concept
Societal Concept gives importance to consumer satisfaction, social welfare and company's profit. This concept is
social-oriented.
1. This concept started in 1980.
2. According to this concept, the company must satisfy society.
3. The company must produce products that are healthy for the consumers and friendly to the environment.
4. The company must perform all its social obligations like pollution control, environment protection, not harming
the ecology balance, doing social welfare activities, etc.
5. This concept is broad, dynamic and socially significant. Today this concept is universally accepted.
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Holistic Marketing

Holistic marketing concept considers all the different parts of a business as one single entity. It is based on the
premise that the whole is greater than the sum of its parts. As such, there is a shared aim and purpose for all the
activities related to a business. This ensures that each person in every department, from sales to operations to HR to
marketing and others, work towards one common goal.

Holistic Marketing Example:

Coca-Cola has one of the best examples of holistic marketing concept. They have recently refreshed their entire global
identity to “Real Magic”. The idea behind this strategy is to showcase the brand’s goal to refresh the world and make a
difference. Manuel Arroyo, the global chief marketing officer for The Coca-Cola Company says, “Real Magic is not just
a tagline. We see it as a philosophy that transcends advertising and embodies all that is special about the brand.”
Holistic Marketing
1. Internal Marketing

Holistic marketing sees two types of customers - internal and external. While external customers are the top priority for

any business, internal customers (employees) also play a vital role in the marketing process. Internal marketing treats

employees as customers who must be convinced of the company’s core values just as aggressively as its external

customers. This ensures that they understand their role in the marketing process.

2. Integrated Marketing

Integrated marketing creates a seamless experience for the consumer to interact with the brand by integrating various

communication channels (sales promotion, public relations, advertising, direct marketing, digital marketing, etc). This
3. Societal Marketing

Societal or socially responsible marketing involves a broader concern for society at large. It follows the philosophy that a business

is part of a society and should give back to it. This requires following certain business ethics and focusing on philanthropy and

community organizations. Societal marketing encourages all stakeholders of a business to have a positive impact on society.

4. Relationship Marketing

Relationship marketing is centered on the relationships you have with your potential and existing customers, employees, partners,

and competitors. This component of holistic marketing focuses on creating a comprehensive business plan with long-term goals

that cover the whole business system. The main goal is to focus on marketing activities that create a strong, emotional bond and
3 Features of Holistic Marketing Philosophy

There are three main features of holistic marketing philosophy: a common goal, aligned activities, and integrated

activities.

1. Common Goal - All parts of the business focus on a single goal to provide a great customer experience.

2. Aligned Activities - All activities, processes, and communication that occur within the business should be

aligned towards the achievement of the common goal.

3. Integrated Activities - All activities done within the business should be designed and integrated such that they

work in a cohort to provide a seamless and consistent customer experience.

5 Reasons to Have Holistic Marketing

1. Brand Building

2. Focus

3. Efficiency

4. Effectiveness

5. Cohesiveness
Differences between Sales and Marketing

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Marketing Myopia

Marketing myopia is a situation when a company has a narrow-minded marketing

approach and it focuses mainly on only one aspect out of many possible marketing
attributes.

A brand focusing on the development of high-quality products for customers who

disregard quality and only focus on the price is a classic example of marketing myopia.
 When Does Marketing Myopia Strike In?
Marketing myopia strikes in when the short term marketing goals are given more importance than
the long term goals. Some examples are:
• More focus on selling rather than building relationships with the customers.
• Predicting growth without conducting proper research.
• Mass production without knowing the demand.
• Giving importance to just one aspect of the marketing attributes without focusing on what the
customer actually wants.
• Not changing with the dynamic consumer environment.