Distinguish between the marketing concept and the selling concept.
Selling concept is used when a company wants to get rid of its inventory, irrespective of customer needs. To achieve this, the company will use aggressive marketing, discounts, strong publicity, etc. A good example is insurance. The emphasis is on getting the sale volumes, rather than building long term customer relationships. The company generates profits by selling the commodity and the price is determined by the cost incurred by the company. Generally, the company will use existing technology and services and sell them by aggressive marketing. This approach is a short term method to achieve targets.
Marketing concept, on the other hand, relies on customer needs and emphasizes customer satisfaction, thereby hoping to build long-term relations. Here, the product is manufactured as per the needs of the customer and the company tries to be as innovative as possible (to stay ahead of competition). The customer decides the price (how much money is the customer planning to obtain this product or service?, etc.) and this price will determine the cost of the product. This long-term strategy relies on innovation. All the departments of the company work in conjunction to bring out a product that will, hopefully, satisfy the customer, unlike selling concept, where departments work in isolation.
hope this helps.