In business marketing, there are 5 fundamental marketing concepts you should know about. The importance of these marketing concepts is that it will shape and steer your business into the right direction. They will help you create business plans to respond to your customers’ demands, improve your sales, boost revenue, and help you maintain your market share against your rivals.
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The 5 foundations of business marketing are: The Production Concept; The Product Concept; The Selling Concept; The Marketing Concept; The Societal Marketing Concept.
#1: The Production Concept:
This concept follows companies believe that customers’ primary aim is to buy products that are affordable and accessible. Through increasing its supply of products, the company believes that it will decrease its cost of production and there increase its profits through economies of scale. While these focus on production, it is also a concept that aligns companies’ operations for efficiency. The downside of this concept is that a business’ production may experience a gradual decline in product quality and sales, and this requires a strict quality standards policy and process. This business strategy is best for companies that find themselves in a market in which demand for products outstrips supply for that company to take advantage of the market space.
#2: The Product Concept:
For this concept, companies follow the idea that customers will not buy all of their products unless they are mass-marketed and promoted. In this concept, companies prioritize creating sales above all other aspects. Here, the company will sell what the production makes instead of following market demands and habits. It is a high-risk strategy to follow and is an expensive marketing practice with high returns if it works out favourably. To put it into context, these Selling Concepts are usually employed by insurance firms, for example.
#4: The Marketing Concept:
This one is not about marketing per se, but more about prioritizing the value proposition of a product over that of a rival company’s products. This concept holds it follows the needs and demands of a specific target market to showcase your product’s competitive advantage.
#5: The Societal Marketing Concept:
Companies that follow the Societal Marketing Concept believe in creating products for the social good of the community and environment. By creating products and marketing them to address societal problems, a business believes in creating products that people love and will improve the world around them.