Predominantly the word “marketing” means to influence any specifically targeted persons (like clients, consumers and broadly everyone) through communicating, delivering and exchanging values. Let’s dive into this article and do discuss the difference between old and new concept of marketing.
What is the marketing concept and why is it important?
The core concept of marketing means the social and managerial process by which individuals or firms obtain what they need or want through creating, offering, exchanging products of value with each other.
Concepts are some terms that are followed and implemented for getting an idea about your segment. As Marketing has also some very essential concepts and kind of fundamental for a Marketer. Without these concepts, marketing can’t be started. So, to get a sharp idea about marketing, one must have a clear idea about those concepts.
What are the core marketing concepts?
The concepts are-
1. Needs 2. Wants 3. Demand 4. Customer Value 5. Exchange 6. Customer and Consumer 7. Customer Satisfaction 8. Customer Delight 9. Customer Loyalty 10. Marketing V/s Market.
Needs are some basic requirements that human beings require for existence. Needs can be anything, just vary from person to person and his/her demand. It is the first, foremost and difficult task for a marketer to know what consumers want or how the demand is changing from time to time. A marketer always has to be careful about all kinds of situation (economical, natural, philosophical, cultural) changes.
In a detailed way the needs can be further classified into some types like:
- Sophisticated Needs:
There are some clearly defined and known needs (normally customers talk about these kinds of needs). These take the least effort to identify from the current market situation of a specific region.
- Unstated Needs:
Generally, these types of needs are the benefits that are not asked by the customers. But at the same time, they want that those benefits will be offered naturally as products/services by the marketer. Usually, people hope this kind of offerings from their trusted, known and famous SHOWROOM or DEALER or MARKETER (it can be the algorithm of one personal social media, the websites which he/she visits, advertisements through entertainment sources)
- Real Needs:
Real needs required some questions from the seller. An example may clear this- suppose a customer went to a showroom and wanted to buy an AC at an affordable price. It is a stated need. And the real need is the customer needs an AC which consumes less electricity. So, the seller has to know about the needs of the customer and must ask some questions for clarification and understand the actual demand.
- Delightful Needs:
It occurs when a customer gets more than what he needs. Everyone loves to be surprised. So, it will certainly delight the customer, isn’t it? This kind of need is called delight need.
For example, a customer bought an AC from you. And you offer him a free installation and free home delivery. The customer must be happy with your superb service. This will be making a very impactful influence on your customer’s mind and he must recommend to his friends and family about your service. He may add your showroom name whenever he/she starts gossiping about the AC he/she has bought (a word-of-mouth marketing indeed)
- Unexpressed Needs:
These types of needs generally don’t disclose by the consumer, however, they still try to indicate those needs. Like a consumer wants to show himself socially better than his friend who has a less modern AC.
Wants are a step ahead of needs that are broadly dependent on human needs. Philip Kotler and Gary Armstrong said, “Wants are the form human needs take as they are shaped by culture and individual personality”
Like when we are hungry as a human we will take bread-butter or rice-curry when the other animals will take according to their eating things.
Needs exist in the market already; however, wants may be created by marketers. It can also be said that Need and Want are relative terms. Because a specific product/service can be considered as “Need” by someone but it may also be taken as “Want” by others. (To have food is a basic need of human beings but to have noodles for food is a want created by the marketers.)
Demands are human wants that are backed by buying powers. Demand is generated when a consumer wants to buy a particular product and has the financial state to pay for it. A company needs to study not only how many people demand their product but also how many might have the ability to buy the product. Many would desire to buy a Rolls-Royce car; however, there is only a little portion who can afford to buy. And it reflects the demand for Rolls-Royce cars in the market.
There must have three conditions for being a Demand:
- Want/Tend for buying
- Financial ability to buy
- Willing to expense and must have the authority
Customer value is the difference between the values the consumer gains from owning and using a product and the costs of obtaining the product.
Value is reflected by the sum of the perceived tangible and intangible benefits and costs to customers. Here the costs include both economic and non-economic costs whereas benefits include both tangible as well as intangible ones. A product or service is profitable when it delivers value and satisfaction to the clients. Value is commonly a perfect mixture of quality, service, and price.
$$ Value=benefits/costs $$
Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing usually tries to satisfy needs and wants through a happy exchange. In business, a buyer should always feel worthy after buying something from me with his money.
The relationship between seller and buyer is very important for growing a startup. Because the person who bought our product for the first time, if he/she is satisfied according to his/her expectation, that going to help retain that consumer and as a result a healthy relation automatically grow between seller and buyer.
Customer and Consumer:
Interchangeably, customers and consumers are normally used to define the same individual but there is a difference. A product purchasing path and that situation when it’s already purchased differentiate the consumer from a customer.
When one purchases an item for his use, then that individual is a consumer. However, if that individual buys the product as a gift or purchases it for someone else for any cause then the person purchasing that product is the customer and the person who is going to use the product or benefit from its purchase is the actual consumer.
In a sense, we can hypothesize that all the customers are perhaps called a consumer but a consumer may or may not be a customer.
Satisfaction reflects a person’s judgment of products after use and performance about expectations. Customer satisfaction with a buy depends on how well the product’s performance lives up to the customer’s expectations.
(i) If the performance is unfilled in terms of expectations, the customer is dissatisfied.
(ii) If it matches expectations, then that specific user is satisfied.
(iii) If it goes beyond the expectations, then the customer is delighted.
Performance < Expectation → Dissatisfied Customer
Performance = Expectations → Satisfied Customer
Performance > Expectations → Delighted Customer
Satisfied customers are going to buy the same product repeatedly. These customers recommend the same products to others.
On the other hand, dissatisfied customers may switch to competitors’ products. They discourage others to buy the products. Marketers should be very careful while setting expectations of a product. If they set expectations too low, they may satisfy those who buy but fail to attract enough customers. If they raise expectations too high, a customer might be disappointed.
We can define Customer delight as the effect of delivering a product or service that surpasses customer expectations in an acceptable experience.
Performance > Expectations → Delighted Customer
Delighted customers often tend to come back another time just because of the great services they previously had received from the company. This directly affects the sales and profitability of a company as it distinguishes the company and its products and services from the competition.
Customer delight can be made by the product itself, by accompanied standard services, and/or by interaction with people at the front line.
The greatest source of opportunities to create delight is the customer’s interaction with the staff, also it can be personalized and tailored to the specific needs and wishes of the customer. During contacts with touchpoints in the company, more than just customer service can be delivered.
The employees of the front line of a company have the ability for creating a relationship between the customer and the brand. A grocery shop presenting a free cake to the customer during New Year bash thrown in that restaurant will keep the people delighted and astonished and might make the consumer loyal to them.
Loyalty can be defined as a customer’s strong consistent belief that an individual organization’s products/services offer remains as their best option. Customers are usually told for being loyal when they continuously purchase a certain product or brand over an extended period.
Loyalty also means customers keep hanging in there, even when there can be a problem with the company’s products or services, just because the organization was good to them in the past and had addressed most of the issues whenever they arise or seek for.
Authentic loyalty needs both share-of-wallet and share-of-heart so that loyal customers can continue to buy. Some situational factors may make a repeat purchase difficult, such as a stock outage, or alternative providers try to persuade customers to switch to them by using promotional offers.
For example, the customers who are attracted to any product for yours just because of discount, then it’s very common that when those particular customers will get another better offer, they going to leave us.
Marketing vs Market
We have talked about marketing in the starting that it is the process of trying to influence people for buying a company’s product or services.
Market: It’s not obvious that there has to be a fixed place for any individual market. Rather Market is a collection of buyers and sellers/givers and takers. where people can exchange their needs can be called a market. But primarily market is for BUYING.
Lastly, a market is the set of all actual and potential buyers of a market offer. A market is any space within which trade takes place between buyers and sellers for a well-defined product.
On the other hand, Marketing is all those activities that facilitate trade. These include activities that identify consumers’ needs such as market research and those activities that satisfy consumers’ needs.
What is Five Marketing Concept Strategy?
There are mainly five core marketing concepts. These are:
- The Production Concept
- The Product Concept
- The Selling Concept
- The Marketing Concept
- The societal Concept
Old marketing concepts or Traditional marketing
Marketing means the selling of goods and services by influencing a targeted audience. Marketing consists of the procedures which are related to the transfer of ownership of goods from producers to consumers. In other words, it is the process by which goods are made available to the ultimate consumer from their place of origin.
The traditional concept of marketing corresponds to the general notion of marketing, which means selling goods and services after they have been produced. The emphasis of marketing is on selling (complete product) goods and services. Eventually, consumer satisfaction is not given adequate emphasis. Lastly, we can say this type of marketing is dedicated mainly to production/sales.
Mostly used Old Marketing or Traditional marketing strategies are:
- TV and Radio ads
- Billboards and signage
- Flyers and brochures
- Ads in related weekly magazines
- Telephone marketing
- Business cards
Advantages of Traditional marketing:
- Opportunity for powerful creative efforts
- Less Risky
- Audience spend more time with tv and radios
- Unintentionally audience get the informed time and again
- Can reach even illiterate
- Traditional marketing is harder to neglect
- Easy to understand
- Easier reach to the local target audience
Disadvantages of Traditional marketing:
- Little interaction
- Targeted customer is minimal
- A bit expensive in respect of its efficiency
- Often not as measurable as digital marketing
- take longer to execute
- Can’t cope with the rapid changing strategies
New Marketing Concepts or Modern Marketing
Philip Kotler is the father of Modern Marketing
In this era, new marketing concepts consist of digital marketing. New marketing concepts of marketing are based on the Marketing and Societal concept of marketing strategy. New marketing concepts or modern marketing are mostly focused on customers’ needs, wants, and satisfaction.
You must have often heard the term digital marketing nowadays. Digital marketing is one of the parts of Modern Marketing.
Let’s dive in to look at what it is with the advantages and disadvantages of Modern marketing concepts.
Modern marketing or Digital marketing is the newest evolution of marketing techniques, it is different from old/traditional marketing, to fight for a place in the competitive and ever-progressing world, with the kind of digital growth the world is showing over these years it is important to change our focus towards the millions of audiences available online.
While traditional marketing uses mostly TV, radio, and newspapers to attract digital marketing set their eagle-eyes on social media and websites, you can do this through paid marketing or organic methods, it is difficult to track the output of your traditional marketing campaign whereas the numbers of digital marketing campaigns are easily available and it allows to connect with the audience effectively costing a lot less than traditional marketing sounds good right. A perfect way for reaching/attracting people nowadays saving your expenses.
The most commonly used modern concept of marketing strategies are:
- Internet ads
- E-mail marketing
- E-commerce website
- Use of social media
- Marketing automation
Advantages and Disadvantages of Modern Marketing Concept:
- Higher ROI
- Deeper levels of customer engagement and targeting
- Opened to larger and bigger markets
- Global Reaching
- Measurable Results
- Conversion Rates
- Requires technical skill to be active in digital marketing and use of the internet
- More costly in implementing
- High Competition
- Complaints and Feedback
- Security and Privacy Issues
Difference between Old and New concept of Marketing (Traditional VS Modern Marketing)
|Topic||Old Marketing Concepts||New Marketing Concepts|
|Meaning||Business is the production and distribution of products.||the business organization should determine the needs of the customers and deliver them the desired products,|
|Concept||this concept starts with the product or output which is produced in factories,||this concept starts with target market selection and finding the needs and wants of the target market so selected.|
|Origin||Need of the producer to sell his excess production to earn the profit.||competitive market conditions, the legal framework of business, the consumer.|
|Objective||The objective of marketing under the traditional concept is maximizing profit by maximizing sales.||The objective of marketing under the modern concept is profit but through consumer satisfaction.|
|Assumption||Customers will buy these products which are available at cheaper tares in the market.||The business will survive only when product/service the customer needs and protect society’s interest|
|Focus||The focus of this concept is on production.||The focus of this concept is on consumer needs, wants, and satisfaction.|
|Geographical Score||Limited to the local area.||The extent of the global area.|
|Oriented||Profit-Oriented.||Customer and society-oriented|
|Term||Short Term||Long Term|
|Promotional Activities||Less Promotional Activities||Sustained Promotional Activities|
|Base||Manual and physical marketing concept||Digital and automated marketing along with traditional marketing|
|Scope||Narrow Concept||Broader Concept|
|Market||Existing market||In search for potential market|
|Customer Base||No targeted customers||The target set of customers|
|Marketing Concept||Production and Selling Concept||Social and selling concept|
|Marketing Process||Starts after production and ends after the sale||Starts before production and ends after the satisfaction of consumers.|
|Marketing System||Does not have any MIS||MIS is very important|
|Social Responsibilities||Ignore Social Responsibilities||Emphasize social responsibilities|
Traditional vs Modern Marketing
1. The old marketing concept is based on production and product concepts. Previously, marketers focused on the production and products. They believed if the products are good and the selling price is reasonable, they will be sold automatically. But new concepts of marketing think this process differently. It is more customer-oriented and emphasized more on customer needs, wants and satisfaction.
2. In the old marketing concept, the main target was to make profits through producing the goods at low cost and high sales. On the contrary, the new marketing concepts focus more on customers and earning sustainable profit.
3. In the old marketing concept, the scope was narrow. There were pre-production problems as well as post-sales. High competition and new ideas outdated old concepts very quickly. But in the new concept of marketing explore new ideas and focuses more on customer and quality rather than quantity.
4. There is no co-relation between departments and integration with marketing and production department was hardly found in the old concept of marketing. But in new concepts, it is important to maintain integration between each department, otherwise the company may fail in the long run
5. There is no word like customer satisfaction in old marketing concepts. But new concepts of marketing are based on customer satisfaction.
Frequently Asked Questions
What is the difference between traditional communication and digital communication?
In the past, there was a one-way path to communicate as well as advertising, because digital devices weren’t available so overall communication was a little hard. To make it clear, traditional marketing is a one-way communication channel such as newspapers, magazines, TV and radio. While digital marketing includes two-way communication channels involving Websites and social networking platforms.
What is the difference between traditional and contemporary marketing?
Contemporary marketing is digital marketing that focuses on the actual needs of the consumers. The strategy of this kind of marketing is that, when implemented, offer greater support for their client base with a product range that varies depending on markets desires. Rather than what the company wants them to have.
Though somewhat devious, it is most definitely effective. For example, products including the vast array of kitchen appliances with built-in failure components attract their customer base back to them for further purchases.
Traditional marketing theories are said to favor this ideology. Though somewhat devious, it is most definitely effective. Attracting customers to their product range has become more difficult because consumers have become more literate in technology and, therefore, can research items before purchase. This allows them to make a conscious and informed decision to avoid companies with this ethos.
On the other hand, Traditional Marketing is the system where only three elements (product, production, sales) are being considered as a principle. The thought process is related to increasing production as well as developing products quality. Here sales should be increased but consumers’ needs aren’t equally important.
But these traditional marketing messages are not necessarily outdated, however, research has shown those companies that have abandoned simply using these channels, and adopted contemporary marketing channels proposed in this article, have remained prosperous and seen an increase in leads, a higher quality of leads, sales and traffic to web content.
What is a big difference between the marketing of today versus marketing products 50 years ago?
We know that perspectives, surroundings and systems are being changed as time passes. 50 years ago, there we could hardly some digital way to reach targeted audiences. Hence there were different kinds of ways to advertise according to those times’ perspective. But a big and notable contrast with today’s marketing is that then the description of a product wasn’t precisely described and marketers couldn’t target or define consumers’ actual needs because of lack of digital elements.
What is the new element that is included in the definition of marketing in the 21st century?
Primarily the only element which is included in definition or marketing in the 21st century is understanding the actual needs of targeted consumers and satisfying them with products or services.
Marketing is the art of advertising and gradually spreads goods and services to consumers as well as businesses. For an organization with a limited budget, it is important to determine the target customers. In the previous century, companies mostly focus on mass audiences and tried to reach more people to create awareness about their products.
In this 21st century, data is playing a very crucial role in marketing. Those organization that runs their advertisement based on data, can easily reach their target customers and make them more loyal than before centuries.
So, in short, the most effective marketing in the 21st century is “Data-Driven Marketing”