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distribution efficiency. This concept is one of the oldest philosophies guiding sellers.
The production concept is a proper strategy in two types of situations. In the first, the demand for a product is bigger than the supply. In this case, management should look for ways to increase production. The second situation is one in which the product's cost is high and improved productivity is needed to bring it down. Today Texas Instruments (TI) follows the philosophy of increased production and lower costs in order to bring down prices. It won a major share of the American hand-calculator market with this philosophy.
The Product Concept
Another major concept guiding sellers, the product concept holds that consumers will favor products that offer the most quality, performance, and features, and therefore the organization, should devote its energy to making continuous product improvements. Sometimes the product concept leads to marketing myopia. Railroad management thought that users wanted trains rather than transportation and overlooked the growing challenge of airlines, buses, trucks, and automobiles. Colleges assume that high school graduates want a liberal arts education rather than specific job skills and overlook the increasing challenge of vocational schools.
The Selling Concept
Many organizations follow the selling concept, which holds that consumers will not buy enough of the organization's products unless the organization undertakes a large selling and promotion effort. The selling concept is practiced hardest with unsought goods, those that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots. These industries are good at tracking down prospects and hard-selling them on product benefits. The selling concept is also practiced in the nonprofit area. A political party will vigorously sell its candidate to the voters as being a fantastic person for the job.
The Marketing Concept
The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired, satisfactions more effectively and efficiently than competitors. This concept is a. relatively recent business philosophy. The marketing concept has been stated in colorful ways, such as "Find a need and fill it"; "Make what you can sell instead of trying to sell what you can make"; and "We're not satisfied until you are". J. C. Penney's motto summarizes this concept: "To do ail in our power to pack the customer's dollar full of value, quality, and
satisfaction".
The selling concept and the marketing concept are frequently confused.
The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company's existing products, and calls for heavy selling and jnromoting as a means to achieve profitable sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates all the marketing activities that affect customers, and produces profits by creating customer satisfaction. Under the marketing concept, companies produce what consumers want and, in this way, satisfy consumers and make profits.
The marketing concept is practiced more in consumer-goods companies than in industrial-goods companies and more in large companies than in small companies. Also, many companies claim they practice the concept but do not. They have the forms of marketing - such as a marketing v^ce-pres-ident, product managers, marketing plans, marketing research - but not the substance. Several years of hard work are needed to turn a sales-oriented company into a market-oriented company.
The Societal Marketing Concept
The societal marketing concept holds that the organization should determine the needs, wants, and interests of tar-