Introduction
Marketing is a social and managerial process where by individuals and groups obtain what they need and what they want through creating and exchanging products and value with others. (Kotler, et la, 1996).
There are two major functions of marketing. One is to attract new customers and other is to retain the old ones. For this a company needs to have a marketing plan. In order to have a good marketing plan the four P’s of the plan should reflect the needs, wants of the target market. The four P’s are product, pricing, promotion and placement. These are referred as the marketing mix. These general sets of activities are developed in a way that they meet the customer needs. (The Concept of the Marketing Mix” from the Journal of Advertising Research, June 1964).
History
During 1910 and 1920, there was no actual production going on. It was the simple trade era. People usually exchanged things which were in excess; hence there was no need of marketing. After 1920 and 1930, few specialized products were made. What little amount of products were made, were sold immediately. As the companies saw the increase in demand, they started to try new methods to improve their production. Most of the products were sold immediately; hence there was no need of marketing, but as production increased, companies saw that they had products left unsold. This was the time when manufacturers started practicing different techniques of marketing in order to sell their products. This could be said as the first stage of marketing. The basic aim was not to satisfy customers but to sell more and more products. It was after 1940 when the companies realized that it was all about customer satisfaction. They found out that a satisfied customer would come again and again. After 1950, companies starting taking marketing seriously. It was then, made as a separate department. Later on, all the companies’ processes were focused around this department. Companies started building up relationships with their customers. This relationship made the customers come back, and hence reduced the cost of attracting new customers. This was the relationship era which continues still (Robert, 1976).
Stages of Evolution
Before the industrial revolution, people usually consumed what they made. There was very little need of marketing. If they fell short of anything they could always get it by swapping, more commonly known as the barter system. As time passed, societies grew, this exchange system became difficult and what we call as “The Evolution of Corporate Marketing” began. This evolution is broken down in to six eras or stages, which are discussed below.
Simple trade era
This was the era of subsistence economy. In this people consumed almost all they made, what little was left was brought to the market in order to exchange for other goods. Usually a middle man was present; who would either sell it in the market himself or any other middleman. This was the first stage of marketing evolution.
Importance
This era is the pillar of marketing evolution. It is this stage when people’s surplus goods which were actually useless for them were made useful. Before this if people needed anything, they would exchange it for something else. This was called Barter. Barter was not always possible and not always fair; hence the simple trade era helped people sell their excess household goods with a fair return. Little effort was needed as selling and buying was done in small circles. If anybody did not want to go to town and sell his products, he could simply give the product to the middleman, and the middleman would then take care of the rest. This stage was not only important to the people, but also to ‘marketing’. This is where the evolution of marketing begins
Benefits
There was little systematic exchange required in this stage. This made the whole process very easy and quick. Moreover as people were buying and selling what they actually had, therefore there was no manufacturing or production going on. This process was also fairer than the earlier processes. People did not have to wait for somebody who would want to take their things and had things they needed. They could simply go to market and get what they wanted. Even if they did not want to go to the market, they could simply give their excess goods to the middleman. No marketing was needed in this era hence there was no cost and time spent on marketing.
Example
To understand this more better let us take an example. If in a neighborhood, almost everybody is cultivating wheat, and in another neighborhood (which is quite far from the first one), cows and cattle is reared. And there is a third one growing all the fruits. Each of them would need the things the other one has. In this case all of them will sell their things to the middleman, who will just interchange the products and voila! The transaction is complete. Obviously the middleman will keep some for himself also.
Production era
The production era is the time after the industrial revolution lasting till the late 1920s. In this era there were only few specific products manufactured which were sold immediately. The companies tried new and efficient ways of production in order to reduce their costs. Two innovations had a great impact, Henry ford’s assembly line and Fredrick W. Taylor’s scientific management movement. (Haber, 1964)
These helped manufacturers in mass production resulting in huge profits. At that time it was thought that reduced production costs result in reduced prices hence more sales, but the economic conditions at that time proved otherwise sales went down (porter, 1980).
Importance
This era was the result of the Industrial revolution. It was the first time ever that products were produced in a mass amount. The aim of actually ‘producing for selling’ was introduced in this era. It brought in the idea of supply and demand. In this era as actual production was going on, there fore jobs were created. People who did not have their own lands or livestock could now work in the factories and earn some money. Many new innovations came up, which made a great impact not only in this era, but the upcoming eras also. The main focus was on; how to increase supply? This focus definitely helped made a lot of advancement in the production techniques.
Benefit
In this the producers sold their goods as fast as they were created. This era brought in the technological advancements and the industrial revolution. Consumers found what they needed very easily and producers made huge profits. This era proved beneficial for the economy, the companies and for the people. New jobs were created. Later with the advancement of technology, even more jobs came up. Everybody was happy, companies made huge profits, poor people got jobs, rich got new products and the economy went up.
Example
Let’s assume that there are only one or two companies producing pencils. Not much marketing is needed as pencils with lower price will speak for itself. But companies would have to put their energy in the advancement of product line in order to reduce their costs. If it was produced in the production era, then even the price would not matter because the amount of goods produced were so less, that whatever was manufactured got sold. Hence my company will not need any marketing at all. However I will have to come up with new techniques in order to reduce my costs and make more products because, in this production era, anybody who makes more; sells more and gets more profit.
Sales era
After 1930 everybody was producing goods. Now the problem was not to produce them but to sell them. Companies started to use different techniques to persuade the customer to buy their products. Sales went up again. But in October 1930, the stock market, which was the chief indicator of America’s economy, showed the worst fall of prices. More than $30 billion was lost from the economy (Schultz, 1999).
It was then when the idea of satisfying the customer rather than selling the product came up (Levitt, 1960).
Importance
This era brought in the actual marketing. The companies used various techniques like personal selling and commercials on radio. Their main aim was to sell no matter what. This is when they realized that they should try and satisfy the customer instead of trying to just sell their product. This theory is still valid. Sales era had laid a foundation of ‘customer satisfaction’. Customers were given more importance. Companies realized that they could save their marketing costs if they can make a customer like them. This customer would then buy their product whenever he needed one.
Benefit
Due to the marketing which started in this era, customers started to find more about what they are buying. The commercials which were played on the radio were compared with other sales commercials. Price and quality was checked. Though sometimes it came a little hard on the producers, who now had to monitor their quality and price but it was good for economy and labor.
Example
In the last era not much competition was there, so almost all of my pencils got sold. As in this era everybody realized the profits in this business therefore everybody starting producing one thing or the other. Not only this, but they also started to advertise. So in order to sell my pencils now I have to check that I have the lowest price, the best quality and make sure everybody know about this. For this I will have to come up with different selling techniques.
Marketing department era
This was the era when all the marketing activities were brought under one single department name as ‘marketing’. From this era a change in the thinking of the companies occurred. Henry ford (who created the assembly line) believed that he could sell a car for 500 dollars not because his assembly line reduced his prices but because a buyer was willing to buy it for 500 dollars (Ford, 1923).
It shows that the manufacturers of that time were now focusing more on satisfying their customers instead of selling their products. In this era marketing was identified as an important element for the company and was now a separate department.
Importance
This era brought up what marketing actually is and made it what it is today. It gave the main marketing concept which is; we should find out what the customer wants and then sell it to them at a price profitable for the company. In this era companies started making short run policies, which circled around the marketing department. Marketing became on of very important department in the company.
Benefit
The marketing department area definitely brought benefit to not only the customer and the companies but to marketing it self. Companies started to make more profits. This era developed the thought of the companies and they found out what business is actually about. It was not about just selling products but satisfying the customer, therefore they started to make policies, which, revolved around this concept. This era brought a new concept to marketing.
Example
In this era you will have to find a way to satisfy the customer buying your pencils. Though your pencils might be better, but the other company sells more. Why? Because they not only focus on selling, but they make sure they manufacture what the customer wants. Therefore, now I will introduce a new department in my company named as the marketing department. This department will help me introduce new ways to attract customers and help me make what the customer actually wants not what I want to sell.
Marketing company era
In the marketing company era, it was not just a department, but it actually set the company’s operating policy, its research, procurement, advertising and sales. This era says that all the functions of a company should be focused on the customers’ needs. This mean they might need to do pricing again, they might need to make changes in distribution and sales. In short do everything that will make their customer happy.
Importance
The importance of this era is that without this, marketing would be incomplete. In this era marketing come to its fullest sense.i.e. focus all the energies of the company in satisfying the customer. All the companies’ policies now revolved around this department. Marketing became so important that without this the company would not survive.
Benefit
Again, the benefit comes to the companies and the customers both. In this era the companies, in addition to the short term plans made long term plans. Their main focus was now marketing, and it proved beneficial for everybody. Companies came up with new methods to satisfy customer. The customer now has more say than the company itself.
Example
With more companies coming in competition has increased. Now you need a separate department which will focus everything such as, price, promotion, research and sales towards the satisfaction of the customer. Now my pencil company will make sure that all their processes and strategies are based around marketing. My marketing department will make all the policies and will base them upon customer’s needs.
The relationship marketing era
The cost of attracting a customer is five times the cost of retaining a customer (Kotler, 1997). Therefore in this era the companies built long term relationship with the customers. It changes the whole mission statement of the company. Now it is about building relationship with the existing customers, not just attracting new ones.
Importance
Up to this far, this is the most recent and new marketing concept. It certainly helps the customers, as they do not have to search for new producers every now and then. It is good for the companies also, because half of the battle is won if your customer is satisfied to the extent that he wants to come back again. This era, which continues still, defines buying as not just getting the product but an experience of the customer with the company.
Benefit
The long term relationship the company has with the customer helps avoid the cost of attracting a new one. It takes marketing one step further. The customers are also more satisfied as now a lot of other policies in their have come up, like after sale service, which, build a relationship of the customer with the company.
Example
Saturn, a car manufacturing company has retained almost 60% of its customers. How? Well, instead of selling just a car they include the entire shopping and ownership experience. This helps retain the customers even though competitors might have better cars (Herron, 1996). This shows that in order to sell more products, attract more customers and satisfy existing ones, my company will have to think beyond just giving the pencil to the customer.
Relation of all the eras to the modern marketing
In the simple trade era we can see that there was minimal marketing or almost no marketing. Where as when we come to the production era, we can see that though the companies were doing no marketing, but it was carried out at some level. One customer told another about any good product he bought, and there fore almost all products got sold. When many companies came up and sales went down, manufacturers started thinking about marketing. This is when the sales era started. Manufacturers thought about attracting customers to buy their products. It was still just about selling. When the marketing department era came, it was then the manufacturers realized that it was all about satisfying the customer. And therefore all the energy of the company was focused on the customer satisfaction. This developed into a new stage called the marketing company era. Last but not the least came what we call today as modern marketing, the relationship era. This era is still going on. In modern marketing companies try not to just sell their products but to bring in a whole new experience with it.
Conclusion
It can be seen that how from a time when nobody knew what it meant, marketing has developed to an extent where not even one company can survive without it. Companies are selling not just products but a whole new experience with them also. Companies see themselves as customers’ partner, and this relationship goes a long way.
Works cited
Bartels, Robert 1976. “The History of Marketing Thought,” 2 ed.htm
Ford, Henry. 1923. My Life and My Work. New York: Doubleday, Page and Company
Haber, Samuel. 1964. Efficiency and Uplift. Chicago: University of Chicago Press.
Herron, Melissa.1996 “Masters of Marketing; Saturn: Enthusiasm Sells.” Builder Online. 1996.
Kotler, Philip. 1997. Marketing Management: Analysis, Planning, Implementation, and Control, 9th ed. Upper Saddle River, NJ: Prentice-Hall.
Kotler. Philip; Armstrong, Gary; Cunningham, Peggy.H. 1996. Pearson prentice hall.
Levitt, Theodore. 1960. “Marketing Myopia.” Harvard Business Review
Porter, Michael. 1980. Competitive Strategy. New York: Free Press.
Schultz, Stanley K. 1999. The Crash and the Great Depression.
The Concept of the Marketing Mix” from the Journal of Advertising Research, 1964