In creating output in the form of a product or service. Companies must know how the general stages to create output that is following customer desires and generate profits. Therefore, a company must know the 5 marketing concepts before carrying out production and marketing.
The definition of marketing is all activities by a series of institutions or organizations, through the process of creating, communicating, delivering, and exchanging offerings that have value for customers.
This means, that marketing is a buying and selling activity that starts from the process of changing inputs (such as raw materials and packaging materials) into outputs in the form of goods or services.
This definition of marketing described by a marketing organization from America, namely the American Marketing Association in 2007.
Definition of 5 Marketing Concepts According to Philip Kotler
According to marketing expert Philip Kotler, he stated what is meant by the marketing concept.
The marketing concept is a description, activity, or method of how a company tries to sell products or services that can satisfy customers, in which the process of producing the output of this product goes through the stages of the 5 marketing concepts.
5 marketing concepts according to Philip Kotler, namely:
- Social marketing.
Although this marketing concept seems to have its respective goals. But in the theory of marketing, we will go through everything to produce an effective and targeted strategy.
1. Production Concept
In the production concept, to make output according to consumer demand, the company will emphasize low production costs, high production efficiency, and mass production and distribution (large production volume).
Its main focus is distribution and price.
Therefore, China always uses this concept in all of its products to compete on an international scale.
They reduce production costs so that the price of goods/services is cheaper than in other countries (even companies like Apple carry out production activities in China because the production costs are cheap).
In addition, the distribution of Chinese products is also very wide and even shipping from China to several countries is free of shipping costs.
2. Product Concept
Companies will make products based on what consumers want, based on the nature of consumers who will prefer products that have better quality, performance, and features than normal products.
So the company does not only make products based on consumers but needs to emphasize in terms of quality.
The product concept is very necessary for the company. For example, Apple and Google products put forward a wealth of new features and innovations.
The process of determining this product is not easy. A company must spend a lot of money to do research. The research will cover the application of STP (segmentation, targeting, positioning) Marketing knowledge.
In practice, companies need to collect customer databases and competitor lists. We can do this collection by hiring the services of an agency or doing it ourselves by conducting a survey.
3. Sales Concept
In the concept of customer nature selling, individuals or organizations will not buy the resulting product unless they are persuaded to buy it through a sales/promotional effort. So a company has to do sales and promotion of their products.
Consumers are usually provoked to buy through persuasive actions and change the views of those who previously bought because of the need to buy because of their motives.
For example, when there is a promotion for buying 1L of oil, buy 1 get 1 free, consumers who initially don’t need to buy oil will be interested in buying because their views have changed, such as for supplies at home, etc.
4. Marketing Concept
This concept begins when the company analyzes the needs and wants of consumers and ends when customer satisfaction is achieved.
So that in this concept the company set a long-term and short-term strategy to achieve customer satisfaction.
Therefore, in the long-term strategy, the company will determine the STP process (segmentation, targeting, and positioning) and the 4p marketing mix (product, price, place, promotion).
While in the short term the company will set tactics in sales and promotions.
The difference between marketing and sales concepts is as follows:
|Point of Difference||Sales Concept||Marketing Concept|
|Strategy focus||Sales strategy||Market research|
|How to sell||Large-scale promotion||Understanding the market|
|Risk||Having a high risk||Having a lower risk|
|Application||Offering Continuously||Looking for what customers want|
|Sources of information||Strategy based on assumptions||Strategy based on research results|
Social marketing concept
In the social marketing concept, companies must make good marketing decisions by considering consumer wants, company needs, and the long-term interests of society.
Usually, the company will make a CSR that will help the community in social matters, this concept is not entirely about social but sometimes there are hidden marketing activities to increase brand value or branding.
So, after we know what the marketing concept is, we also need to understand the marketing mix.
12 Marketing Mix Elements
In the marketing concept, you will be familiar with the idea of marketing mix elements or marketing mix which was coined by Neil Borden in an article entitled Journal of Advertising Research in 1964.
He also identified four factors that greatly influence the marketing mix, namely:
- Consumer behavior
- Government policy
Neil Borden made mix elements consisting of 12 marketing mix elements, then these 12 elements were shortened by Jerome McCarthy in 1968 into 4 main aspects which are now known as the 4Ps, namely Product, Price, Place, Promotion. So the term marketing mix is known as the 4Ps.
12 Elements of the Marketing Mix By Neil Borden:
- Product planning
- Distribution channels
- Personal selling
- Product placement
- Physical handling
- Fact-finding and analysis
The process for identifying and articulating the market requirements that define a set of product features. Thus, product planning serves as the basis for decisions about pricing, distribution, and promotion. Which talks about product quality, product design, target market, and research programs.
The process by which a business determines the price of its products and services based on COGS and agreed margins.
Introducing a brand in the form of a name, term, design, symbol, or other feature that identifies a seller’s goods or services and differentiates them from other sellers.
The intermediary of goods or services so that it reaches the final consumer. This can include wholesalers, retailers, distributors, and even the internet. Distribution is broken down into two forms, namely direct and indirect: Direct distribution allows consumers to buy goods from manufacturers, and indirect distribution allows consumers to buy goods from merchants or retailers.
Personal sales or better known as face-to-face where one seller tries to convince consumers to buy a product. It is a method of promotion in which a salesperson uses his skills and abilities in an attempt to make a sale.
Means of communication with users of products or services. Advertisements are messages that are paid for by those who send them and are intended to inform or influence those who receive them, as defined by the British Advertising Association.
A series of activities that communicate products, brands, or services to users. Its function is to make people aware, attract and encourage them to buy the product, preferably by others. For example, there is a buy 2 get 1 free promo.
All activities related to designing, evaluating, and producing containers for a product. Simply put, the place where the product is stored to protect it from physical damage and at the same time attracts the customer through its attractiveness is called packaging. For example, sachets, boxes, and boxes.
How to arrange products in stores which aim to attract consumers to be interested in buying these products.
An attractive communication process to consumers where this activity aims to retain consumers, to meet consumer wants and needs
All activities related to product supply in every process, from the production line to the consumer including customer service, order processing, inventory control, transportation and logistics, packaging, and raw materials.
Fact Tracking and Analysis
Marketing Research is the systematic collection, recording, and analysis of data on issues related to the marketing of goods and services.
Conclusions 5 Marketing Concepts
In producing a product/service output, the company will go through 5 marketing concepts in which each concept must understand everything about the marketing elements so that the company can produce product and service outputs that are following consumer desires, satisfy consumers, and can create profits in the end
The functions of the 5 marketing concepts are as follows:
- Emphasis on low production costs and production efficiency
- Creating products/services based on consumer desires and emphasizing quality, features, and performance.
- Make sales in a persuasive way to change consumer desires and buy their products.
- Regulate long-term and short-term strategies to achieve customer satisfaction.
- The company makes a strategy that is also responsible for social and community conditions.
Questions and Answers About 5 Marketing Concepts
Can the marketing concepts work together?
The marketing concept can go hand in hand, even large companies run this concept at the same time.
What is the difference between a sales concept and a marketing concept?
The difference between sales and marketing concepts is that the sales concept is more concerned with current sales (profit) without prioritizing long-term effects and customer satisfaction.
While the marketing concept focuses more on consumer satisfaction and long-term strategy.
What is the purpose of the sales concept?
The purpose of the sales concept is to create profit or profit as much as possible. They do not create products according to consumer desires but sell existing products. So the sales concept requires competent human resources and extra staff.
So many explanations about the marketing concept according to Philip Kotler, it’s good that we understand this concept before starting a business.