As we have seen, markets and marketing are as old as exchange itself yet many
people regard marketing as a phenomenon which emerged in the second half of
the twentieth century - to be precise about 1960 when Professor Ted Levitt
published an article entitled 'Marketing myopia' in the Harvard Business Review in
which he addressed the fundamental question of why do firms, and indeed whole
industries, grow to a position of great power and influence and then decline.Taking
the American railroad industry as his main example, Levitt showed that this industry
displaced other forms of overland transportation during the nineteenth century
because it was more efficient and effective than the alternatives it displaced.In truth,
marketing has been around since the very first commercial exchange but there can
be little doubt that until comparatively recently it has been of secondary or even
tertiary importance to other more pressing imperatives in terms of increasing
supply to meet the needs and wants of a rapidly expanding population.The objective
of authors and teachers in using the three-stage evolutionary model has been
to highlight the major changes in the dominant orientation of business rather than to
analyse in detail the much more complex processes which underlay and resulted
in these changes.What is beyond doubt is the fact that from around 1960 onwards
marketing thinking and practice has been dominated by the marketing management
school of thought. Numerous
examples support Fullerton's contention that producers of the so-called production
era made extensive use of marketing tools and techniques as well as integrating
forward to ensure their products were brought to the attention of their intended
customers in the most effective way.That said, the examples provided (with one or
two possible exceptions) do not, in my opinion, invalidate the classification of the
period as the 'production area' in the sense that it was the producer who took the
initiative and differentiated his product to meet the assumed needs of different
consumer groups based on economic as opposed to sociological and psychological
factors.Some of the famous pioneers of production such as Matthew Boulton and Josiah
Wedgwood were also pioneers of modern marketing, cultivating large-scale
demand for their revolutionary inexpensive products with techniques usually
considered to have been post-1950 American innovations: market segmentation,
product differentiation, prestige pricing, style obsolescence, saturation advertising,
direct mail campaigns, reference group appeals, and testimonials among
others.Similarly, while the period from 1870 to 1930 saw the emergence and development
of important marketing institutions in terms of physical distribution, retailing,
advertising and marketing education, which are still important today, it does
not seem unreasonable to argue that all these institutions were designed to sell
more of what was being produced.This is not to deny the 'rich marketing heritage'
documented by Fullerton, but to reinforce the point that the transition to a
'marketing era' was marked by a major change in business philosophy from a
producer-led interpretation of consumer needs to a consumer-driven approach to
production.By contrast the 'era's model' is seen,
at least by this author, as serving a different purpose in that it seeks to distinguish
betweenmarketing as a practice clearly present in both the production and sales eras,
and marketing as a philosophy of business which shifts the emphasis from the
producer's pursuit of profit as the primary objective to the achievement of customer
satisfaction which, in the long run, is likely to achieve the same financial reward.First, there is a 'philosophical belief that historical phenomena such as
OVERVIEW 10 OF MARKETING THEORY
markets are intrinsically rich and complex; efforts to simplify or assume away
aspects of such phenomena are deeply distrusted' (Fullerton, 1988: 109).In other words, producers inferred the consumer's behaviour but they had
MARKETING - PHILOSOPHY OR FUNCTION 11
not yet developed techniques or procedures which would enable them to define
latent wants, and design, produce and market products and services to satisfy them.Fullerton's analysis reflects a growing interest in the history of marketing thought
and confirms that 'modern marketing has a rich heritage worthy of our attention'
(1988: 123).Whether one should substitute his conceptualization as contained in his
complex flux model for the widely accepted production-sales-marketing era's
model is not seen as an either/or choice.In the USA it was adopted with enthusiasm and Americans came to
be seen as 'the supreme masters of aggressive demand stimulation', a fact frequently
referred to in contemporary marketing texts of the early 1990s.In the early years
this challenge was limited because of the high cost of the substitute product, its
lack of sophistication and reliability and low availability.However, its potential was
clear to see - if you owned a car or truck you had complete personal control over
MARKETING - PHILOSOPHY OR FUNCTION 9
your transportation needs and could travel fromdoor to door at your own convenience.In addition to the reality of a depressed world economy in the
1930s, which required large-scale producers to sell more aggressively to maintain
economies of scale, the period saw the migration of many behavioural scientists
from a politically unstable Europe to the safety of the USA.Precipitated by the
Industrial Revolution, and the mass migration from the countryside to an urban
environment, potential markets had to be created through marketing techniques
and activities.In the sales era firms were still
largely production orientated but, as demand stabilized supply, continued to grow,
resulting in fierce competition between suppliers.Second,
the historical research tradition emphasizes 'systematic and critical evaluation of
historical evidence of accuracy, bias, implicit messages, and now extinct meanings'
(1988: 109).In retrospect it appears
that it was this migration that led to the more rigorous analysis of consumer behaviour
which was to underpin the emergence of a new 'marketing era'.Combined with its greater insight into consumer behaviour was a period of great
economic growth and prosperity following the SecondWorldWar, together with a
major increase in the birth rate, which was to result in a new generation of
consumers brought up in a period of material affluence (the baby boomers).Thus, if the railroad
management had concentrated on the need served - transportation - rather than
their product, they might have been able to join the infant automobile industry
and develop a truly integrated transportation system.The essence of the production orientation - a preoccupation with the product
and the company - and the marketing orientation - a focus on the consumer's
needs and the best way to serve it - have already been touched on in reviewing
Levitt's 'Marketing myopia'.Fullerton's complex flux model embraces four eras:
1.(Fullerton, 1988: 112).2.3.4.2.3.4.