During WWII world industry geared up for accelerated wartime production. When the war was over this stimulated industrial machine turned to producing consumer goods. By the mid 50’s supply was starting to outpace demand in many industries. Businesses had to concentrate on ways of selling their products. This is where the selling concept was born. Numerous sales techniques such as closing, probing, and qualifing were all developed during this period and the sales department had a supreme position in a company’s organizational structure.
What is a Selling Concept?
The Selling concept is used when there is an abundance of product supply and lack of product differentiation, and you just have to find the right customers to sell the products to. Companies use a sales concept by using promotional activities, cold calling and push strategies at large scale so that they can push across their products to the end customers.
When the great depression ended, there was a lack of supply. However, after the great depression, manufacturing took off again, and more and more products were available in the market. Companies, therefore, started using the selling concept to liquidate more of their inventories.
The logic behind the sales concept was that we already have the products manufactured and we just have to find the right customer to sell to. Thus, there were jobs such as the traveling salesman, and door-to-door salesmen. These continue till date, wherein physical visits by salesmen have been converted to cold calls or cold emails.
Ultimately, the goal of selling concept is to increase the number of transactions and it ignores traditional marketing concepts such as relationship building. This is why the concept is useful in the sale of unsought goods, goods that are not actively required by the customer. Some examples of this include insurance, fire fighting equipment etc. The products are mainly sold to whoever convinces the customer first.
Off course, due to its very approach, there is a clear difference between the sales concept and the marketing concept. We discuss that below.
Difference between Selling Concept and Marketing Concept
The major difference between the selling concept and marketing concept is that the marketing concept looks to satisfy the needs and wants of the consumers whereas the selling concept is mainly looking to liquidate the products to the customer.
Lets take an example of soap. A few decades back a single company used to manufacture only a single type of Soap. This company knows there is a huge demand in the market for soap so its only job is to sell the soap in the market.
However, in todays day and age every company is manufacturing different types of soaps to meet the customer’s needs. Thus, previously the companies were using the selling concept and trying to liquidate whatever soaps they could manufacture and today they are actually trying to understand the customer’s needs.
- A selling concept looks to liquidate the products whereas marketing concept looks at customer needs.
- There is low product differentiation in products that are sold whereas there needs to be high differentiation in products that are marketed.
- A tougher business environment will call for the need for marketing, pulling the customer to the company. Only the sales concept will not work in such an environment.
- The sales concept works in favor of the company selling the product whereas the marketing concept works in favor of the customers.
Advantages of Selling Concept
Here are five advantages of the sales concept
- Clear Focus on Sales. There are products which till date require a lot of selling because there is lack of differentiation in products. Telecom market, banking products and other such unsought goods have to be sold to the customer. With the selling concept, there is a clear focus on selling only.
- Inventory Liquidation. In cases where inventory has to be sold, there is clear inventory planning and not much inventory gets left behind because there is aggressive selling taking place. Low-cost Vacumm cleaners and water purifiers are segments where aggressive sales do take place in the lower models. And in such cases, the focus is on sales to liquidate the inventory and not on Marketing to create a pull for the product.
- Planned Advertising. In seasonal products which require selling, there can be planned advertising efforts put in. For example if you are an Umbrella manufacturer, you can advertise only during the season when the maximum sales is going to take place. Thus the sales plan drives the advertising budget. Similarly, Restaurants which want to sell their inventory in a saturated market, will look to advertise only in the peak season with the best rates.
- Increase in Market Share. Aggressive selling will always lead to an increase in Market share because the company with the best salesmen is going to conquer more market share. If in a same region, there are more qualified salesmen in company A as compared to company B, company A will win the market thereby leading to an increase in sales volume as well as Market share.
- Increased awareness due to sale. When you sell more units, you tend to get more customers via referrals because referral sale is another thing you are looking for. Thus, a company which is looking to sell via referrals can 10x their sales via this concept. This ultimately results in increased awareness because a lot of your product is available in the market. Continuing the soap example above, if there are 1 lakh units of your soap sold, without a doubt a lot more people are aware of the soap brand. Thus, selling also increases the awareness of the product in the market. This is why unknown companies should use aggressive sales concepts in the start before their brand is built.
Disadvantages of Selling Concept
- Ignores Customer Needs. The focus of the selling concept is to sell the products produced by the company. This focus completely ignores the company needs. For example – if you were selling umbrellas, but a customer is using a raincoat, you would completely ignore that customer. Whereas, in the marketing concept, you would present a variation to your product (Raincoat) as per the customer’s needs.
- Ignores Marketing Basics. The selling concept ignores all the marketing concepts such as building relationships with the customers, getting customer feedback, understanding needs and wants and branding. Selling does not understand the power of pull marketing wherein the customer himself wants to acquire your products, thereby leading to far higher sales volume compared to pushing the products down customers throats.
- Short term Strategy. Selling has a short-term focus because the customer is ignored once the product has been sold. The lifetime value of the customer is not looked into. With such an approach, the growth of the company will always be stunted. To explore the full potential, selling needs to be combined with marketing.
Examples of Selling Concept
Here are some of the examples of the Selling concept in action. Notice that selling concept is still alive in products which do not have a lot of differentiation.
There is very less differentiation between Insurance products. As a result, most insurance companies are looking for higher sales transactions so that they can sell more units. Insurance agents are given clear monthly targets to achieve which they have to achieve anyhow. A wide variety of product range is available but the focus is on finding customers and selling those insurance products, whichever one they can sell.
Low cost Electronics like Water purifiers and Vacuum Cleaners
If you look at low-cost electronics like low-cost smartphones, water purifiers, or vacumm cleaners, even now the focus is on aggressive selling tactics and not on pulling the customers. The companies are carrying large inventories of such products and they dump the stock to their distributors who in turn push the product to end customers through retailers. As these are mass products with little differentiation, the products sell on basis of availability and whoever reaches the customer first.
Cold Calling and Cold Emails
In all the talk of physical products, let us not ignore your own email inbox. Any cold emails that you are getting for buying a software, or buying a subscription plan, is in fact you being sold to. There may not be a limitation of inventory when it comes to software products, but people still get a lot of cold emails because the software maker just needs to find the right customer who will buy the product. Similarly, you would receive a lot of cold calls for Banking products, buying telecom products, and other such offers. Whenever you are receiving a cold call or cold email, you are seeing the selling concept in action.
The Selling concept video by Marketing91
Although very relevant a couple of decades back, the selling concept has taken a backseat over the marketing concept. With social media channels at their peaks, consumers can read reviews and get to know about a product without even receiving it in their hands. Thus, selling might not work as effectively anymore. However, bundling selling and Marketing together is still a master strategy because you can get the best products in the hand of customers and also maintain customer relationships and recurring transactions over a long period of time.
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