Marketing strategy depends on many factors such as human resources, technology, economy, and several other factors.
Also, Marketing strategy is changing rapidly every year, but the core concepts of marketing are still the same as they were before 50 years ago.
According to Investopedia marketing refers to the activities of a company associated with buying, advertising, distributing, or selling a product or service.
It is important to understand that marketing and selling are two very different ends of the business.
Often people think about marketing as they were about selling.
In simple terms, selling is to convert a product or service into cash, and marketing is to introduce one’s product or service so that buyers and sellers come together and a market is created.
There is a general thumb rule of 5percent which says that companies should spend 5percent of their sales revenue on marketing.
According to neuphoric.com small business administration in the US suggests spending 7 to 8 percent of your total revenue on marketing if you are doing less than 5 million dollars in sales and your net profit margin after all expenses is 10 to 12 percent.
Marketing concepts are made keeping in mind the basic philosophy of a business to identify the needs of the customers and to fulfill them.
In today’s world Philip Kotler the father of modern marketing was believed to give the word marketing, but the concept was first given by Adam Smith in his book The wealth of nations.
The marketing budget can be seen as an expense or an investment, The good marketers however see the marketing budget as an investment.
It is very important to plan out before you allocate the actual funds for marketing that where you’re going to spend all of this money.
Here are some areas you have to think
1. Set marketing Goals
2. Identify different channels of marketing
3. Write down detail specific plans for each channel.
Above is the sample marketing budget of a business to give you an idea of how a company plans its marketing budget.
As we have mentioned above that the core concepts of marketing are not changed, so now let’s discuss these concepts.
There are mainly 5 concepts of marketing.
1. Production concept
4. Marketing concept
5. Societal marketing concept
Let’s discuss each of them in detail
1. Production Concept
Marketing… this term makes sense if a company wants to expand, or if a company wants to make it’s unique identity and presence in the market. And it seems a necessity after the industrial revolution.
Before the industrial revolution, people manufacture goods themselves and therefore it is not possible to scale the process on a large scale, then in the early 1900s machines begin to manufacture goods and the process was scalable.
Companies at that time which are using production concepts believe that people want products that are useful and affordable.
Companies using the production concept wants to implement the idea of mass production. To reduce their costs and increase the supply, they believe in economies of scale i.e to reduce the per-unit cost of the good.
The best example of a production concept when it was newly introduced is FORD motors.
Henry Ford did make the best use of this concept at that time, he breaks the whole process of manufacturing a car which was a very difficult process to certain steps in an assembly line that install the engine, installs the wheels, etc.
The production concept was to show the people that you can lower business costs via mass production.
But now the production concept was like a past thing because it was seen later that when you are producing on a very large scale it is very difficult to maintain the quality of the goods and also to understand people’s behavior and choice are very important aspects of the game now.
2. Product Concept
The product concept was based on the belief that people want products of higher quality and price don’t influence their decision.
Companies that focus on the product concept focus on the quality of the product produced, they manufacture goods with high quality of raw material and are concerned that all the processes included in the manufacture of that should be done properly.
The best example of product concept companies in today’s date is apple, apple focuses on the quality of product and customer satisfaction.
Also, modern IT companies are the best example as they are always improving and updating their products, to give the best quality of services to their clients.
3. Selling Concept
The production concept and product concept both focuses on producing but the selling concept focuses on the actual sales of the product.
Selling concept focuses on every possibility regarding the selling of a product their main goal was neither the quality nor customer satisfaction they only focus on how they can increase their sales in the market.
This concept has gain popularity in the 1930s at that time customer demands were already meeting but the companies started selling their products aggressively.
Companies attempting to convince the customers to buy a product through personalized selling and advertisements. Although a company can sell their products through this concept, this can not be sustainable for a long period of time.
This concept highlights that a customer would buy a product if a company is selling that product very aggressively.
4. Marketing Concept
This is the concept that many of the companies in using these days as it is an effective way to build a strong customer base. Not only that marketing concept also helps in customer retention.
According to an article in Hubspot 5% increase in customer, retention can increase company revenue by 25%-90%. Isn’t that a huge number, therefore customer retention is very important for a business and it can only be done by understanding the problems and requirements of a customer and solve them in an efficient way.
Companies that follow marketing concept place customers first understand their requirements and take their decisions on the data provided by the customers.
Marketing concept believes in catching the signal which customer is giving them either by feedback or by complaining them personally or by giving them a suggestion they collect all the data points that they can to give the best products and services which their customers expect from them.
The thinking of marketing concept id based on the belief that if customers need any goods and services then only they should be made.
5. Societal Marketing Concept
The societal marketing concept is one step further in the marketing concept it believes in providing a better product to a targeted market from its competitor.
This concept also takes care of the wellbeing of the customers and society as a whole.
Marketers who follow the societal marketing concept approach also follow social and ethical considerations into their marketing practices as that was also a part of it.
Above is the example of the societal marketing concept, the Body shop has started a scheme that brings back our bottles and they will refill it, instead of using a new bottle. Their belief behind this was to tackle the plastic crisis in a different way.
So campaigns like this which also help and add value to society were a part of the societal marketing concept.
Companies see this as an affordable solution to raise their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage.
Companies start realizing what their customers stand for, and they started marketing based on their customer’s beliefs not on their behaviors.
There were many marketing practices before and even today which plan their marketing campaign based on the behavior of their customers, on their thinking but the most effective way to run a marketing campaign is to run on the belief of the customers.
Devdutt Pattanaik a famous leadership coach and mythologist has mentioned in his book Business Sutra that as is a belief, so his behavior, so is business. This is the business sutra.