Marketing concept

The marketing concept is a company-wide consumerorientation policy with the objective of achieving long-run commercial success. While this may seem like common sense, in fact the idea that a business exists to anticipate, meet, and exceed the needs of its customers is a relatively new concept in American business. From the beginnings of the American Industrial Revolution (1870s) to about 1925, most businesses operating in the United States (and other industrialized countries as well) focused on producing goods. Marketers refer to this as the PRODUCTION era, in which a good PRODUCT would sell itself. Prior to the 1870s, production was mostly done by small-scale craft businesses, but the Industrial Revolution brought factory systems and constant reductions in the cost of production through job specialization and ASSEMBLY LINE techniques. Manufacturers focused on reducing the cost of production, recognizing that consumers would buy more because the price was now lower. The production era is epitomized by the Henry Ford saying that customers “can have a car any color they want so long as it is black.” Eventually initial consumer DEMAND was satisfied and manufacturers recognized their products would not just sell themselves. In the 1920s, many companies adopted a sales orientation, putting salespeople on the road to convince consumers to buy what the company was producing. But selling is only one part of marketing, and eventually even a good sales force could not convince consumers to buy what they did not need or want. Beginning in the 1950s (some companies did not catch on until much later), American businesses started focusing on customer needs, General Electric’s 1952 Annual Report stated a new management philosophy.

[The concept] introduces the [marketer] at the beginning
rather than at the end of the production cycle and integrates
marketing into each phase of the business. Thus,
marketing, through its studies and research, will establish
for the engineer, the design and manufacturing [person],
what the customer wants in a given product, what price he
[or she] is willing to pay, and where and when it will be
wanted. Marketing will have authority in product planning,
production scheduling, and INVENTORY CONTROL, as
well as in sales, distribution, and servicing of the product.

A “company-wide consumer orientation” emphasizes the fact that every job in the organization exists to meet the needs of customers. “Achieving long-run commercial success” reinforces the idea that to succeed a company has to build and maintain relationships with its customers and anticipate rather than respond to customer desires, thus recognizing the lifetime value of customers.