Five Marketing Concepts: Advantages, Disadvantages & Best Practices

The Five Marketing Concepts: Advantages and Disadvantages

Each of the five marketing concepts takes a slightly different approach to defining how production, selling, service, and marketing strategies can consistently meet and exceed customer expectations. The production concept is based on the assumption that consumers prefer products that are widely distributed and inexpensive, positioned at the low end of the pricing spectrum for their markets. The limitations of this strategy are, first, the pure economics of it: lowering costs will eventually squeeze a company's profitability, and quality often suffers. Second, a reputation for quality is tarnished when price—rather than differentiated value—becomes the only differentiator (Hyun, 2010).

The product concept states that consumers buy based on the innovativeness, quality, and performance of products. Apple has demonstrated this powerfully with the iPod, iTouch, iPhone, iPad, and the iTunes music and video content sales the company has achieved (Crosby & Masland, 2009). The selling concept holds that customers will not buy enough products if left to their own devices, and therefore concentrates on aggressive selling and closing techniques. The downside is that more customers than ever are skeptical and cynical, buying only from sources they trust. In recessionary times this is a particularly challenging strategy, because trust is paramount when the economy is weak.

The marketing concept places the needs of the customer at the center of all strategies (Kotler, 1986). The strength of this concept is that it anchors strategies in the needs, preferences, and wants of a specific audience or market segment. Its weakness is that it can ignore key areas of a company's value chain. Despite these limitations, the marketing concept has emerged as the foundation of modern marketing theory.

The holistic marketing concept is based on the assumption that everything matters—from relationships with customers to integrated marketing communication (IMC) strategies for reaching new prospects. This approach is also heavily dependent on analytics and metrics. The holistic marketing concept sets the ambitious objective of delivering a consistently accurate 360-degree view of the customer and creating a knowledge base of what most and least interests them (Greenberg, 2009). The downfall of this approach is the level of detail required to make it work effectively. It is time-consuming and often difficult to obtain a truly accurate picture of any customer group or individual customer, as that picture is constantly changing.

Of all these approaches, the one best suited for planning, executing, and measuring strategies is the marketing concept. In a sense, the marketing concept is a superset of all the rest. Focusing on the unmet needs of customers and prospects, then defining strategies for meeting and exceeding their expectations—whether through products or service experiences—unifies all other concepts under the marketing concept.

Five Core Business Processes

The synchronization of each department and division toward a shared marketing vision, objective, and strategy is the deciding factor in a company's ability to sustain momentum toward long-term goals. This coordination of departments, often illustrated by the value chain concept (Dedrick, Kraemer, & Linden, 2010), sets the foundation for the five core business processes all companies rely on.

These five processes are: the market sensing process, the new offer realization process, the customer acquisition process, the customer relationship management (CRM) process, and the fulfillment management process. The market sensing process encompasses the market research strategies used for listening to existing customer needs and determining what future products and services should include. The new offer realization process concentrates on market-testing new product and service ideas. The customer acquisition process contains the steps necessary for attracting and selling to customers. The CRM process encompasses some of the most critical strategies for a company, concentrating on building trust with customers and delivering exceptionally positive experiences (Palmer, 2010). Finally, the fulfillment process addresses delivery of ordered products for product-based companies, and the fulfillment of commitments to clients for service-based companies (Tanik, 2010).

Each of these processes requires a company to keep its value chain tightly integrated so that more challenging shared objectives can be attained over time. Value chains serve as the foundation for unifying these five core processes (Dedrick, Kraemer, & Linden, 2010).

Core Beliefs vs. Secondary Beliefs

Core beliefs are those ingrained in American culture through parents' teachings and the reinforcement of institutions. Americans hold core beliefs about honesty, the progression of their lives into marriage, and the pursuit of philanthropic fulfillment. Core beliefs are driving factors in purchasing lifecycles (Dumont, 2001), as many consumers are motivated by these beliefs to model their lives accordingly.

A secondary belief, by contrast, is one that is subject to change based on both individual and collective perceptions. An example is the perception that it is better to start a family at a young age. Many couples reject this idea and choose to enjoy their lives while they are young and healthy enough to travel extensively. The tension young couples experience with their extended families—who want grandchildren while the couple is enjoying the freedom that comes with increased earning and independence—is a common illustration of shifting secondary beliefs. Lifestyle marketers watch for clues that secondary beliefs are shifting quickly so they can create effective messaging strategies that resonate with their target audiences (Swenson, 1986).

Every generation battles the core and secondary beliefs of the previous one and tends to retain only the most critically important. Over time, the core belief about starting a family is interpreted by each generation in its own way. In a sense, secondary beliefs are the signature and personalization that each generation adds to the next. Marketers who pay attention to these shifts through psychographics and attitudinal measures can capitalize on the rebellious spirit of one generation while positioning their products as reinforcing that nonconformance and unique identity.

Data Collection Methods: Mail, Telephone, and Personal Interviews

Each method of collecting data from customers has its own unique advantages. The chief advantage of mail questionnaires is the capture of precise data from specific audience or sampling-frame respondents (Michaelidou & Dibb, 2006). When deployed via email, this method also makes it easy to follow up with those who have not yet responded. Mail and email questionnaires can be quickly tabulated using statistical analysis software to yield new insights on which to base strategies.

The greatest strength of the telephone interview is the ability to branch a discussion toward the points that most concern a respondent. Telephone interviews are best used with open-ended questionnaires so that data gathering can be maximized depending on the concerns and perceptions of the respondents (Reagan, 2002).

The personal interview is the most effective of all interview strategies—and the most expensive. Its chief advantage is the ability to observe first-hand what the respondent cares most and least about in the concepts presented. The personal interview is also highly effective for exploratory research, where open-ended questions are used to gain insights into what matters most to respondent groups and audiences (Reagan, 2002).

Each of these interview techniques carries a completely different set of advantages and needs to be matched to individual research strategies to be as effective as possible. The techniques for capturing respondent data must be balanced against the information needs of each specific research strategy.

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