Business Approach in Marketplaces
In the dynamic world of business, companies often adopt various approaches to meet the demands of the marketplace. These approaches, or orientations, can significantly influence a company's success. Here's a look at five common company orientations and their key characteristics.
- Production Concept
This orientation focuses on high production efficiency, low costs, and mass distribution. Companies following the Production Concept believe that customers prefer widely available and affordable products. The emphasis is on efficient manufacturing and distribution rather than customer preferences.
- Product Concept
The Product Concept, on the other hand, concentrates on product quality, features, and continuous improvements. Businesses assuming customers seek superior quality and innovative products are willing to pay for them. The focus is on making the best product, often limiting quantity for quality and innovation.
- Selling Concept
The Selling Concept centers on aggressive selling and promotional efforts to persuade customers to buy products. It is useful when companies have overstock or new products that are not yet in demand.
- Marketing Concept
The Marketing Concept is a philosophy that prioritizes identifying and meeting customer needs better than competitors. The firm bases its activities on market research and customer satisfaction, aiming for long-term profitability through customer loyalty. This approach is outside-in, focusing on customer wants rather than what the company can make.
- Societal Marketing Concept
The Societal Marketing Concept extends the marketing concept by incorporating societal welfare into business decisions. It balances company profits, customer satisfaction, and public good, often involving social responsibility, sustainability, and environmental concerns.
These orientations evolve from inward-focused approaches (Production and Product) to outward customer-focused philosophies (Marketing and Societal Marketing), with the Selling Concept focused primarily on pushing products through promotion rather than adapting to customer needs.
The Production Concept, while still relevant in certain sectors, is less common now due to a growing focus on customers. The Product Concept, particularly applicable to electronics and techno gadgets, states that customers will always choose better quality, performing, and feature-rich products.
The Selling Concept believes that customers are less likely to buy products without persuasion, and the Societal Marketing Concept believes a company should give back to society as it has benefited from it. Marketing and branding are crucial for a company to achieve its sales target, and the Marketing Concept proposes that a firm's success depends on marketing efforts in delivering a value proposition.
Moreover, the Societal Marketing Concept is one of the fastest growing marketing concepts, as companies increasingly recognise the importance of creating a positive impact on society and building an unparalleled brand image. The applicability of these concepts can vary sector by sector, and a company's orientation towards the marketplace can depend on the application of various concepts, some of which may not be applicable in today's market.
- In the world of business, understanding a company's finance can help determine its chosen orientation, as the Production Concept prioritizes low costs for mass production, while the Product Concept focuses on investing in quality and features.
- The Marketing Concept, which centers on delivering customer value and satisfaction, requires effective financial management to support marketing efforts and establish a strong brand image, particularly in the era of Societal Marketing Concept, where corporate social responsibility and sustainability are becoming increasingly important.
