As per the definition, “The selling concept holds that consumers and businesses, if left alone, won’t buy enough of the organisation’s products.” In simple words, the selling concept means selling what the organisation makes by advertising, door-to-door selling, discounts and promotions, etc. Evolving from production concept and product concept, selling concept gained significance as one of the earlier marketing ideas.
‘Sell what you make’ sounds familiar. Think about the insurance business. It’s been weeks and you have left an insurance agent hanging to buy an insurance policy for yourself to secure your wife’s and children’s future when you won’t be around. You might feel, what is the need to cover whole life? Accidents? Medical treatments? All these get covered, so why have life insurance. But the agent is not ready to budge. You tell him to call some other time and he does not fail to call you. This is ‘Hard Selling’. Yes, it is hard because neither you are ready to buy it promptly nor you feel the need. It is also hard selling for the agent as he has to sell the policy, because his chance to earn extra commission depends upon your purchase.
The selling concept adopted by companies, cash in on its numerous benefits. Firstly, Cost. You’re going to sell a product which gives you cost advantage. A firm with the intention of becoming a cost leadership firm will practice selling. Secondly, Profits. Lower costs, higher profits. Hard selling leads to higher sales volumes. Your selling team will put in more efforts to increase your sales when you reward them handsomely.
After the three benefits listed, now think of me as an agent, who has come to your doorstep to sell you a water purifier from XYZ Co, a new company trying to make its mark in India. The moment you look at me, you tell me you don’t need a water purifier. Still I insist you to see a demonstration, you let me in, I give a demonstration and based on its benefits you buy the product. The use the product for a month and your electricity bill shoots up due to the new device. Now you’re bad mouthing the XYZ Co., complaining about the product. Hard selling has its own share of risks. I have diluted XYZ’s brand value, even before it was created.
Many of us mistake selling concept with the product concept. Yes, you sell what you make. Here, you pull the customers to buy your product, unlike in selling concept, where you are pushing the product in the face of the customers. The product concept brings in continuous innovation whereas selling brings in cost leadership. Consider Apple’s IPod, a unique product, introduced in the era of MP3 players. It brought in invention and innovation through its features and portability. MP3 players and IPod had the same use. It cannibalized sales for MP3 manufacturers i.e. wiping off competition from its rivals (Sony, Phillips), entering a new segment and building brand value for its new product. 13 years from its launch and no imitations.
Today, firms want to create a long lasting relationship with their customers. They want their customers to buy their product throughout their lifetime, also, recommend the same to others. These firms believe they can create brand value for their firms only if they focus on customer satisfaction. Thus they manufacture what the customer wants i.e. they make what sells in the market. In 1960, Theodore Levitt, lecturer at Harvard Business School introduced a new concept ‘The Marketing Myopia’. He pointed out the short-sightedness of the firms practising the selling concept. These firms believed in selling what they make ignoring their customer needs. Marketing Myopia brought in the Marketing concept. Levitt said, selling focuses on the needs of the seller and marketing on the needs of the buyer. It is about finding the right product for your target group and not the right people for your product.
According to the marketing concept, you find the needs of your target group. Design and manufacture a product which is exact to your target group’s needs. When you are aware of the demand for your product, your inventory is low. The probability of your product failing is zeroed down. Also, it’s an answer to the increasing competition. If you produce a product according to the specifications of your consumers, your customer are not leaving you and going to your competitors. You will build up customer loyalty. If your company is to launch a new product, it can do that under the brand name and take advantage of this customer loyalty.
Marketing concept helps you in coming up with your own Unique Selling Proposition (USP). It also helps in creating brand value for the particular product. For instance, Tanishq, one of the leading jewellery selling brands in India, under the house of TATA, has created its own brand value. Avoiding irrelevant costs and demand forecasts are outcomes for the firms following marketing concept. Another aspect is the focus groups. The discussions led by these groups will help you realise if your product is upto your customer expectations and how much are they willing to pay.
Dell is respected as the industry leader in the segment of personal computers. Their marketing strategy involves making the product according to the specifications of the customer and delivering them personally. This has helped Dell to build customer loyalty and reduce costs. Customization of products also helps in charging a premium price. Its competitors (HP, Lenovo) have focused on reducing prices of their personal computers by reducing costs. However, Dell has been able to save its highest market share in the segment by not focusing on reducing the cost, thus, not comprising its product.
In the recent years, we have seen a gradual shift towards societal and holistic concept. Companies have now started adopting these concepts for the greater good of their customers and the society. They indulge in CSR (Corporate Social Responsibilities) activities to interact with its customers and the society at large. This helps in gaining visibility, understanding the changing customer needs and increasing the customer base.
Article by Divyanka Gangurde