Marketing Management Lecture 2

What are the 4 marketing philosophies?

Production, selling, product, marketing

What is the production concept about? Which 2 situations might arise?

Production concept (1700-1930s): consumers want affordable + available products (Henry Ford)

o   2 situations: production cost is too high and demand > supply -> increase production efficiency

What is the selling concept about? Name an example for this!

Selling concept (1930s-1950s): a lot of aggressive, exaggerated (benefits are exaggerated + expectations are raised) promotion is needed so customers buy the product (e.g. insurance companies)

o   1930s: America was in the great depression, so companies had way too many products left + tried to convince consumers to buy their products

Which assumptions did people have while using the selling concept as a framework?

1. consumers will be satisfied with the product (wrong, raised expectations because the benefits are exaggerated)

2. consumers will be dissatisfied, they will forget about it and buy again (wrong)

What is the product concept about?

Product concept (1960s): consumers prefer products with the highest quality, performance + innovative features

o   big focus on continuous product development

What is a common problem that happens with the product concept? (IMPORTANT)

marketing myopia: too much focus on current products leads to forgetting to acknowledge customer needs

What is the marketing concept about?

assessing needs + wants of the target market and delivering satisfaction effectively + efficiently at a profit with the use of the marketing mix (4 Ps)

=opposite of selling concept

Compare the 4 philosophies!

Start: internally, only marketing focuses on the market (externally)

Focus: products, only marketing focuses on needs and wants

What is the difference between discrete and relationship marketing?

Discrete Marketing =maximizing profits on each transaction

Relationship Marketing: =maintaining mutually beneficial long-term relationships with customers (+financial benefits, social bond, structural ties)

the tide is shifting from discrete to relationship marketing!