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The Marketing Concept

1950

The marketing concept is a business philosophy holding that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. It represents a shift from a product-centric (“make and sell”) approach to a customer-centric (“sense and respond”) one, placing the customer at the core of all business decisions.

The marketing concept emerged in the post-World War II era as production capacity began to outstrip consumer demand in many industries. Prior to this, many businesses operated under a production orientation (focusing on manufacturing efficiency) or a sales orientation (focusing on aggressive selling to overcome consumer resistance). The marketing concept fundamentally changed this perspective. It posits that a firm’s success is not found in its production capabilities or its sales force, but in its ability to satisfy customer needs. This philosophy has three main pillars: a customer orientation, an integrated effort, and a goal orientation. A customer orientation means all decisions start with the customer. An integrated effort requires that marketing is not just a departmental function but a company-wide philosophy embraced by everyone from R&D to finance. A goal orientation means the firm aims to achieve its own goals (e.g., long-term profits) by satisfying customer wants. Theodore Levitt famously articulated this in his 1960 article “Marketing Myopia,” arguing that companies fail when they define their business by the product they sell rather than the customer need they fulfill (e.g., railroads defining themselves as being in the railroad business instead of the transportation business).

UNESCO Nomenclature: 5312
– Business Administration

Type

Abstract System

Disruption

Foundational

Utilisation

Widespread Use

Precursors

  • Adam Smith’s ideas on the consumer being the sole end of production
  • The rise of consumer choice and discretionary income after WWII
  • Early forms of market research and surveys

Applications

  • market research and consumer behavior analysis
  • new product development based on identified customer needs
  • user-centered design principles in software and technology
  • customer segmentation, targeting, and positioning (STP) strategies
  • total quality management (TQM) initiatives

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Related to: marketing concept, customer orientation, market orientation, customer-centric, marketing myopia, Peter Drucker, Theodore Levitt, sense and respond

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