Here Are 5 Marketing Philosophies for Small Businesses

Marketing philosophies change how we approach marketing as a whole. No matter which one you subscribe to, marketing is all about crafting the right experiences for the right people. This objective is deceptive in its simplicity, though, and raises many questions. How do you define the “right” experience? How about the “right” people? Even if you do define both, how do you know when you’ve succeeded in crafting the right experiences for the right people?

Whether marketing is an art or a science depends on who you ask. I tend to lean a little more toward the science side myself because I have a background in information systems – a data-driven field. The fact that this is a question means there are different schools of thought on how to characterize marketing as a discipline. It’s a fundamental question in the field.

Just as surely as we can doubt the nature of marketing itself, we can ask ourselves what success looks like in marketing. Are we trying to sell to the most customers? Should we try to make the best product instead? Is marketing about making the most sales?

Maybe all those questions are wrong-headed and too company-focused. Should we instead focus on filling customer needs? Or, better yet, do we need to focus on the well-being of society at large?

If your head is spinning, then I don’t blame you. The truth is, there is no right or wrong answer. (Welcome to philosophy!) What you’ll need to do in lieu of finding absolute moral truth in marketing is choose the philosophy that works for your business. That’s what we’ll be talking about today. I’ve provided an outline below for you:

The 5 Marketing Philosophies

1. Production Philosophy
2. Product Philosophy
3. Selling Philosophy
4. Marketing Philosophy
5. Societal Marketing Philosophy
6. Which of these marketing philosophies is right for my small business?

The 5 Marketing Philosophies

Production Philosophy

The production marketing philosophy hails from a bygone era in which consumers could be counted on to prefer products which were widely available. The idea is that customers like cheap stuff that’s easy to get. Consumers are motivated by low costs and convenience. If you run a company based on this idea, you want to produce efficiently, cut costs, and distribute widely.

You’ve probably noticed that I’m talking about the production philosophy as if it’s a throwback. That’s because it is. The roots of this concept come from the early twentieth century when we’d reached the heights of what industrialization could provide. However, as we’ve talked about in the consumer behavior and consumer decisions articles, people are not automatons concerned with only price and availability. People buy expensive items all the time, and from obscure places, too. Whether it be the Sears-Roebuck catalog or Amazon Prime, we’ve been buying expensive items from far away for a long time.

R.I.P. Production Philosophy?

So…the production philosophy is dead, right? No, not at all. The US industrialized in the early 1900s. Henry Ford created the Model T on a very smartly optimized assembly line, cranking out identical cars at a pace nobody had ever seen before. The assembly line was so optimized that the cars came in “any color as long as it’s black” because that color paint dried fastest. The production concept put the Ford Motor Company on the map in the early 1900s. This same technique is being used in developing countries right now, where it makes sense.

Look, I’ll level with you. If you’re running a small business, this probably isn’t the marketing philosophy for you. I just want you to know it exists so you understand history, context, and other businesses.

Product Philosophy

The product marketing philosophy stands in stark contrast the production philosophy. It doesn’t assume customers make decisions based on what’s available and what’s cheap. Rather, it assumes customers make rational decisions based on product features and quality. One of the benefits of this belief is that businesses end up making really well-crafted products.

As well all know, though, people are not rational. When you assume that customers will always make rational decisions based on product features, you miss a lot of what drives people to make decisions in the real world. The risk is that you end up making the wrong product – one without actual product-market fit. Some call this the “better-mousetrap” fallacy. “A better mousetrap will bring people to our door.”

While this is a much better philosophy for a small business to follow than the production philosophy, it’s still pretty flawed. You need to find market needs and make something to address them, instead of making something first and finding people who want it later. Failing to do so is one of the biggest strategic mistakes a business can make. In fact, I made that mistake myself in 2018.

Don’t get me wrong, though, in many established businesses, this philosophy can still work. This is the approach automakers like Toyota and Honda take. They make the same basic cars, but with slight improvements to safety, fuel economy, and style every year. They are not revolutionaries like Tesla, but they don’t have to be. A car is a commodity and a big purchase, so “people make decisions based on quality” is an unusually accurate assumption in their line of business.

Selling Philosophy

The other two marketing philosophies we’ve talked about are focused on the product. What if we flip the script and focus on a real-world metric of success? Let’s talk about sales. Let’s assume more sales mean the business is doing better, all else equal.

The selling philosophy is the most short-term of all the marketing philosophies. When you subscribe to it, your goal is to sell whatever you’ve got, without considering what the market wants.

This is really risky. You have to assume that customers will cave when sold to. If disappointed, you assume that they forget that and buy again later. It assumes you have vast marketing and promotion resources at your disposal.

Can this work? Yes, surprisingly. If you’re making a really cheap commodity like $5 earphones, chapstick, or gag gifts, you don’t have to care about quality or repeat purchases. You simply have to crank out goods and sell them quickly. For this reason, your small business can actually operate based on the selling philosophy.

Think twice about what you’re selling if you choose to travel this path, though. If you make a product where quality is an important factor, you shouldn’t go this way. If you need repeat purchases to survive, you run into the same problem. Your goods have to be cheap, interchangeable, and your new customer acquisition cost needs to be really low.

Marketing Philosophy

The three previous marketing philosophies, as you can imagine, have their roots in the 1800s and early 1900s. In the 1950s, a new marketing philosophy came into vogue, and it’s one you probably recognize. The central tenet of the marketing philosophy is that success comes from creating the right products for the right people. This is the philosophy behind Marketing is the Product.

The marketing philosophy is the first of the four marketing philosophies we’ve discussed that addresses the customer. It can be broken into four parts:

1. Target Market
2. Customer Needs
3. Integrated Marketing
4. Profitability

Target Market

In the marketing philosophy, you immediately put people first. You choose a group of people who you would like to serve. You may choose your audience based on size, relative lack of competition, or a personal affinity for them. The point is, you always start with people first.

Customer Needs

Once you choose your target market, you identify their needs and seek ways to fill them. Needs vary far and wide by different audiences. No matter what, this philosophy remains fixed on their needs and how they perceive them. If they need a Ferrari to fit in with their neighborhood, we still consider that a need.

Integrated Marketing

Once you’ve found a market and created a product to meet their needs, you have achieved product-market fit. This is at the core of the marketing philosophy. After you achieve product-market fit, it’s time to communicate and deliver value to your customers. This is the part where you let people know you exist, convince them to go through your sales funnel, and make that sweet, sweet money.

Profitability

The marketing philosophy ultimately measures success in terms of profitability. While customer satisfaction is the vector by which you achieve profitability, customer satisfaction is not the end goal. We assume that customers are smart enough to buy what fills their needs. We assume that profitability is the natural outcome of achieving product-market fit and building an effective sales funnel.

The Marketing Philosophy in Use

Any product or service that you really enjoy is probably using the marketing philosophy. We tend to forget about commodities like milk or iPhone charging cables. Those products can be sold through the production, product, or selling philosophies.

For example, I really love Spotify’s service. It has nearly all the music you could possibly want to listen to alongside wonderful features that generate custom playlists for you. They identified a need in the world – a need for an easy-to-use music listening service – and created a nearly perfect service around it. After they provided a service which fit their market of young music listeners, they effectively spread the word. This led to their fantastic success by following the marketing philosophy.

The Marketing Philosophy’s Dark Side

Clearly, the marketing philosophy is the most enlightened of the four marketing philosophies I’ve listed so far. Yet it still has problems that we will all collectively have to reckon with at some point in the near future. Namely, the marketing philosophy does not address externalities.

An externality is a cost or benefit that affects someone not involved in a transaction. Sometimes this can be good. If people around you get a flu shot, but you choose not to, your odds of getting the flu shot due to herd immunity. Likewise, if my home is uphill of yours and I have the lawn regraded to prevent my basement from flooding, the water may then fall on to your lot and flood your basement instead!

Air and water pollution, climate change, spam, antibiotic resistance, and traffic congestion are all negative externalities that can arise from our purchasing habits. As the world becomes more interconnected, we will still want to maintain our ability to make meaningful choices about our lives. At some point, businesses will have to either voluntarily address externalities or have their hand forced by the government.

Societal Marketing Philosophy

Focusing strictly on the business and the customer leaves behind the bystanders. Obviously, this is bad. The societal marketing philosophy is the newest of the marketing philosophies. It seeks to address externalities.

Societal marketing is concerned with society’s well-being as a whole. Success is measured not only in company profitability and customer satisfaction, but also society’s well-being. Under this philosophy, companies are compelled to take care of the environment, reduce poverty, teach people how to read, and more.

The societal marketing philosophy sounds like a utopia, but it comes with a downside too. Namely, society might not be ready for it. Getting companies to take the first steps is hard. It’s rarely in a company’s best short-term economic interest to reduce negative externalities on society.

How do we move forward then? I see it going one of two ways. Consumers could become much more conscious, changing their buying habits and perhaps even protesting bad behavior. Banks such as Aspiration are already looking for ways to promote conscious consumerism. Alternatively, large governments such as the United States or European Union could drop the hammer on big businesses. They could hit them with regulations, taxes, and laws that protect society from bad behavior.

No matter how this happens, it’s going to happen. Companies need to be ready for the right time to move from the marketing philosophy to the societal marketing philosophy. My recommendation is to start small – make small choices that are better for society and slowly move toward social marketing over the next couple of decades. Tiny changes over a long period of time add up, and yes, it’s often better than doing a complete 180.

Which of these marketing philosophies is right for my small business?

Having exposed you a whole bunch of marketing philosophies, I’d be remiss if I didn’t provide a little direction on how to proceed. At some point – whether you mean to or not – you will choose to follow one of these philosophies. Here is what each one would look like in a small business:

Production Philosophy: We make whatever we can make most efficiently and we sell it. End of story. If you can crank out stuff cheaply, quickly, and get it shelved in a lot of stores, follow this philosophy.

Product Philosophy: We already know what we make, and we keep making it better. If you have learned a trade where things don’t change often, this is fine. Continually improving your skills and maintaining your existing customers is probably enough to succeed.

Selling Philosophy: If you have a lot of inventory, a low customer acquisition cost, and don’t need repeat purchases, then this philosophy could be right for you.

Marketing Philosophy: For the vast majority of small businesses – especially ones just starting out – this is the philosophy you will need to follow. You need to find a market, identify needs, fill the needs, tell the market you can fill their needs, and sell at a profit.

Societal Marketing Philosophy: As time goes on, we will all need to be more aware of how our actions affect others in the world. Start by making considerate and sustainable choices in small ways and build from there. Society will slowly adopt this marketing philosophy. This should only be your primarily marketing philosophy if your business is branded as eco-friendly, sustainable, fair trade, or something else like that.

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Marketing philosophies change how we approach business from the top to the bottom. How we craft the right experiences for the right people comes down says a lot about how we run our business.

Which of these marketing philosophies does your small business subscribe to?