The businessman produces goods and services for consumer's use. These are not necessarily produced at the places where they are consumed or used. Even in villages, now-a-days you find the products manufactured all over India and in other countries are used. This implies that the manufacturers must be making efforts to ensure that their products are in demand and reach the ultimate consumers all over the globe.

So, when you go to the market to buy a ready-made shirt you find that there are several options available to you in terms of quality of cloth used, design, colour, price, etc. and you can buy what suits you most. This also implies that the manufactures assess the needs of the consumers, their tastes and preferences and plan the products accordingly.

Not only that, they also ensure that people are aware about the product and its features. All these activities are said to be part of marketing function of any organisation. Thus, marketing refers to the process of ascertaining consumers’ needs and supplying various goods and services to the final consumers or users to satisfy those needs.

Basically, marketing is the performance of business activities that direct the flow of goods and services from producers to consumers or users. The American Marketing Association defines marketing as an organisational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders.

Traditional Concept of Marketing

According to the traditional concept, marketing means selling goods and services that have been produced. Thus, all those activities which are concerned with persuasion and sale of goods and services, are called marketing. This concept of marketing emphasises on promotion and sale of goods and services and little attention is paid to consumer satisfaction. This concept has the following implications:

  1. The main focus of this concept is on product, i.e., we have a product and it has to be sold. So, we have to persuade the consumers to buy our product.

  2. All efforts of the marketing people are concentrated on selling the product. They adopt all means like personal selling and sales promotion to boost the sales.

  3. The ultimate goal of all marketing activity is to earn profit through maximisation of sales.

Modern Concept of Marketing

The modern concept of marketing considers the consumers’ wants and needs as the guiding spirit and focuses on the delivery of such goods and services that can satisfy those needs most effectively. Thus, marketing starts with identifying consumer needs, then plan the production of goods and services accordingly to provide him the maximum satisfaction.

In other words, the products and services are planned according to the needs of the customers rather than according to the availability of materials and machinery. Not only that, all activities (manufacturing, research and development, quality control, distribution, selling etc.) are directed to satisfy the consumers. Thus, the main implications of the modern concepts are:

  1. The focus of this concept is on customer orientation. The marketing activity starts with an assessment of the customers needs and plan the production of items that satisfy these needs most effectively. This also applies to all other marketing activities like pricing, packaging, distribution and sales promotion.

  2. All marketing activities like product planning, pricing, packaging, distribution and sales promotion are combined into one as coordinated marketing efforts. This is called integrating marketing. It implies:

    1. developing a product that can satisfy the needs of the consumers

    2. taking promotional measures so that consumers come to know about the products, its features, quality, availability, etc.

    3. pricing the product keeping in mind the target consumers’ purchasing power and willingness to pay

    4. packaging and grading the product to make it more attractive and undertaking sales promotion measures to motivate consumers to buy the product

    5. taking various other measures (e.g., after sales service) to satisfy the consumers’ needs

  3. The main aim of all effort is to earn profit through maximisation of customer satisfaction. This implies that, if the customers are satisfied, they will continue to buy, and many new customers will be added. This will lead to increased sales and so also the profits.

With growing awareness of the social relevance of business, marketing has to take into account the social needs and ensure that while enhancing consumer satisfaction, it also aims at society’s long-term interest.

Marketing Management Philosophies

Different producers lay different emphasis of different aspects of the concept of marketing. The making concept is characterised according to the philosophy of the producer. Seeing the outlook of the producers of the marketing concept may be looked at in the following works:

  1. Production Concept: In earlier days, selling was not a problem. So business organisations followed production concept. This concept means profits could be increased by producing large quantity of goods reducing the cost of production. A limitation of this concept is that quality conscious customers hesitate in buying.

  2. Product Concept: The producer of this class lay emphasis on the quality of products and services. As variety of products came in the society, customers began to prefer product of good quality and features. For example, normal toothpaste is not preferred when compared with toothpaste with salt or with any other protective items.

  3. Selling Concept: In order to survive and grow business firms adopted aggressive selling technique to attract customers to buy their product. Sales persons started using unfair practices like cheating the customers with defective products as their main target is to earn money from the product.

  4. Marketing Concept: Business firms adopting marketing concept, identified that consumer needs and wants must be considered which producing a product. Before starting productions, the target market for the product should be identified. Under marketing concept, customer satisfaction is the key to maximise profits.

  5. Societal Marketing Concept: In order to survive and grow business must satisfy the interest of society and the interest of customers. Under this concept, social welfare should be dalt by business firms. Public health, education, environmental protection, etc. are some of the social goals to be considered.