COURSE: EXPERIMENTAL MARKETING (COM 656)

TOPIC: EVOLUTION OF MARKETING; AND ITS IMPACT ON

ECONOMY, TECHNOLOGY AND CONSUMER BEHAVIOUR

Broadly speaking marketing is everything you do to place your product or service in

the hands of potential buyers. However Kotler et al (2008) defines marketing as ″an

integrated process through which companies build strong customer relationships and

create value for their customers and for themselves″. The Chartered Institute of

Marketing further defines marketing as “the management process responsible for

identifying, anticipating and satisfying customer requirements profitably”. The

common theme in the definitions of marketing mentioned above is that marketing is

about meeting needs and providing benefits. Marketing includes activities such as;

sales, public relations, pricing, packaging and distribution.

Marketing as we know it today has evolved over the centuries. There are four basic

eras of the evolution of marketing; production, sales, marketing and customer

relationship eras (Bartels (1988), Joans et al (2006, Hollander et al (2005)). Marketing

is a relatively young discipline; which has been in existence whenever and wherever

there have been buyers and sellers; because some marketing tools have been in

existence years. It is on record that the ancient Greeks used advertising for

commercial purposes (Kotler et al 2008). Trade by barter was practiced in ancient

civilizations, thus marketing can also be said to be as old as civilization itself (Bartels

1988).

Production Era (Earliest civilization to the 1950s):

The production era evolved from the home to the factories, where people became

specialized and dependent on others and the market place to fill their needs, (Wilkie et

al 2003).This era focused on the functions needed to close the gaps between

production and consumption. According to Bartels (1988) the development of

marketing theory during this period was characterized by discovery of basic concepts

and their exploration, conceptualization and definition of terms which includes

integration on the basis of principles which helped in the development of

specialization and variation theory”. Marketing strategies and tactics were geared

toward selling products and services with little regard for what customers really

wanted. This factor limited the recognition of marketing as a separate field of

expertise. Supply created its own demand. The economic implications of this era

include; narrow product lines, pricing based on cost of production and distribution.

Packaging was designed just to protect product, while market research was limited to

technical product-research, with minimal promotion and advertising which was

limited to raising awareness of the existence of the product. The Production era is

much related to product era though some authors defined it as a separate era.

Organisations are only concerned with the quality of its own product. They would

assume that as long as its products were of high standard and quality, people would

buy and consume the product. The profit driver was just the quality of the product.

Basically production and product orientation eras were characterised by short term

planning, while business growth was taken for granted. Provision of the highest

quality goods and services were assumed to be an automatic guarantee of success with

little knowledge of the customer.

The economy of the world then was based mainly on agriculture. Manufacturing was

just beginning to make an impact, because there was demand than supply. People

depended on the manufacturers to give them whatever they can. Technologically, the

process of manufacturing was slow, which contributed to the issue of more demand

than supply. Consumer behaviour was dictated by the organisation who never

considered issues from the consumer’s point of view. There was little or no

relationship between the consumer and the manufacturer.

The sales orientation era (1950s to the 1970s):

After the production era, with the advent of the industrial revolution, goods were

produced at a faster and better way. Supplies exceeded demand and as a result,

products could not sell themselves as they did during the product era. This led to the

sales orientation era (Bartels 1988, Cohen 2003). Companies had to promote their

products to convince consumers to buy their products rather than their competitor’s

products.

After the production era, with the advent of the industrial revolution, goods were

produced at a faster and better way. Supply production era. This led to the sales

orientation era (Bartels 1988, Cohen 2003). Companies had to promote their products

to convince consumers to buy their products rather than that of competitors.

Manufacturers in this era still produced what they wanted to produce, counting on

their ability to peddle their products to concentrate on ways of selling their products.

Numerous techniques such as closing, probing and qualifying were developed during

this period and the sales department had an exalted position in a company’s
organizational structure (Davis 1957). Promotional techniques like advertising, and

sales promotions started to be taken seriously, as a result packaging and labelling

began to be used for promotional purposes more than for protective purposes. This

time around prices were based on comparism with that of the competitors.

Through improved technology, production was increased but was given a personality

(branded), so that buyers could easily identify products. As in the production

orientation era, attention was not paid to the consumers. Organizations were simply

concerned on pushing the product they had already produced. Consumer behaviour

simply geared toward the purchase of products they knew through advertising which

also solved their problems. Undue focus and concentration was on selling products

rather than meeting the needs and wants of the consumers.

The sales orientation era was an inward looking era like the manufacturing era, but

with the need to increase sales at almost any cost. According to Middleton (2001),

increased expenditure on advertising, distribution channels, sales promotion, and the

use of price discounts are simply a rational response on the part of producers who

need to capture higher levels of demand in order to make use of their existing

production capacity. Price wars affected the economy of the companies with the

resultant use of technology to device new methods to attract the attention of potential

customers. This era witnessed a lot of innovation especially in the mass media as

radio, television; magazines, newspapers etc. were new inventions during this era.

The sales orientation era had many limitations, for instance promotions stressed on

products feature not customer needs. Decisions were made from a production or sales
perspective not with the customer needs in mind. The customer had an idea of what he

wanted but had to depend on what is available for sale. Smart sales people took

advantage of the vulnerability of the customer to short change him in most cases.

Marketing Orientation Era (1960s to the 1980s):

Markets became saturated during this era, consequently intense competition occurred,

giving rise to what we know today as red ocean. Marketers became involved with the

marketing strategy of organizations; they informed organizations on what to produce,

where it should be sold, price of the products and how it should be communicated to

the consumers. This signalled the attempt of organizations to identify customer’s

needs so as to develop products which should satisfy these needs. Market research

became a very crucial component of marketing. Related to the market orientation is

the societal marketing which emerged in the 1960s. Emphasis was laid on the needs,

wants and demands of customers, how to satisfy them by producing superior value

that should satisfy the customers and also promote the well being of the society. The

implication of this is that producers should not produce goods deemed hazardous to

the society. Among the most notable developments of the marketing orientation era

were the publications of several important statements of the marketing concept (Smith

1956, Borch 1959, Drucker 1954, Keith 1960, Levoit 1960, Mckitterick 1957).

There was a great growth and increase in marketing staff at this era, in the areas of

market research, product planning, strategy, advertising etc to support sales operations

in the company. This influenced the development of the product or brand

management form of organization, and the appearance of path breaking texts which
helped to produce a consensus definition of marketing strategy decisions as product,

price, promotion and physical distribution also known as the four P’s.

Day (1992) observed that "in retrospect, the 1960s were the era or marketing’s widest

influence and greatest promise”. Marketers tried seriously to understand consumer

needs (potential needs) and allocate organizational resources appropriately to meet

these needs. Branding was used more in this era to differentiate products among

competitors. Every body in the organization was involved with marketing activities.

However, marketers’ main goal was profit at the unprecedented expenses of

consumers, even though their needs were satisfied. Consumer’s needs were only taken

into consideration as a survival tactic for organizations. Even though constant

feedback was sought from customers in order to adapt to the changing tastes of the

consumers, it was indirectly linked to achieve organizational goals.

Levit (1960) described their activities as marketing myopia because, that was lack of

depth in thinking and planning. To avoid this short sightedness, customers’ need

should be a constant concern. Customer behaviour and perception towards the

organization should be sought through frequent interviews which should be made

based on the strengths and weakness relative to competitors. Interdepartmental

cooperation was valued and encouraged, while measurement and evaluation of

marketing activities were done frequently.

Customer relationship orientation era (1980- till date):

As the sales and market oriented, emphasis were fading, the customer relationship era

began. Building customer relationship is now seen as the number one goal of every
organization. Relationship with the customer is seen as a top priority which should be

nurtured for the growth and satisfaction of the customer and the company. Business is

no longer as usual because the customer is now ‘king,’ his feelings, reactions and

emotions matter a lot to organizations who want to remain in business. This is evident

in the fact that most organizations spend millions each year training their employees

on customer relationship building techniques. Constant research is done in today’s

marketing into customers, competition etc, and there is a constant improvement in

customer care, and retention which should reflect long term changes and future

market trends. Technology has also provided many avenues of interacting with the

customer in the era of relationship building. Digital marketing and new media are

seen as good tools of forging a long lasting relationship with the customer.

Many companies now work with customers to clarify their expectations, so as to meet

and exceed customer expectations and form partnerships that will extend beyond

traditional exchange of goods and services. Finally, customer satisfaction is now the

core need for organizational survival, because customer satisfaction and feed back

provide positive word of mouth, public relations and customer referrals necessary for

organizational growth and development.

Summary and conclusion:

Though marketing is as old as civilization, it is still a relatively new discipline which

has been defined in many ways. The main theme of marketing is to satisfy customer

needs and achieve organizational goals. Various authors have subdivided the

evolution of marketing into four eras. Even though these classifications exist, within
time frames, their practices overlap. For instance, production orientation which is the

first era is still practiced in some organizations even till today. Many companies still

have the challenge of understanding what it takes to move their products as well as

satisfy their numerous customers. Therefore in order to survive in this competitive

era, companies have to look beyond these eras to identify ways of building long term

relationships with customers which will help to make competition irrelevant i.e. create

a “blue ocean.”

With science and technology, companies should try to identify ways to utilize the new

media to interact with the customers whose taste and demand is constantly change.

Perhaps, experiential and alternative marketing will help provide avenues to push

marketing to another interesting era.

References

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Publishing Horizons

Borch, Fred J. (1959), "The Marketing Philosophy as a Way of Business Life," in

The Marketing Concept: Its Meaning to Management. New York: American

Management Association, 1-6.

Cohen, Lisabeth (2003), A Consumer's Republic: The Politics of Mass Consumption

in Post-war America. New York: Alfred A. Knopf.

Davis, Kenneth R. (1961), Marketing Management: Text and Cases. New York: The

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Day, George S. (1977), "Diagnosing the Product Portfolio," Journal of Marketing, 41

(April), 29-38

Drucker, Peter F. (1954), The Practice of Management. New York: Harper & Row

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(2005). "Periodization in Marketing History". Journal of Macro marketing 25 (1):

http://en.wikipedia.org/wiki/History_of_marketing

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pages.

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