History of marketing

This article discusses the history of marketing as a recognized discipline, along with concomitant changes in marketing theory and practice. (Marketing comprises all activities involved in the transfer of goods from the producer or seller to oh the consumer or buyer, including advertising, shipping, storing, and selling.)

The study of the history of marketing as an academic field emerged only recently. Controversies and disputes abound in the field. The publication in 1976 of the book The History of Marketing Thought, by Robert Bartels marks a turning-point in marketing thought. Since then, academics specializing in marketing decided to imitate economics, distinguishing theory and practice. Two different fields of study emerged:

1. the history of marketing thought, giving theoretical accounts
2. marketing history, focusing on the history of marketing practice

This division parallels the distinction between the history of economic thought and economic history.^[1]

Practitioners of the history of marketing thought note that both practitioners and academics know relatively little about the field. But history has significance for academics because it helps to define the baselines upon which they can recognize change and evolve marketing theory.^[2] On the other hand, proponents of marketing history argue that one cannot fully compare the marketing field with economics and hence suggest the impracticality of divorcing theory and practice. First, marketing scholars seldom engage in the practice of marketing as much as economists engage in the development and execution of public policies. Second, business people innovate in the marketing field, and the history of marketing will remain incomplete if one dissociates academia from practitioners.^[1]

The following sections discuss both approaches to the history of marketing, closing with a debate about the standard chronology of marketing, a widely known hypothesis about the history of marketing, but one that historians in the marketing field have challenged.

History of marketing thought

The history of marketing thought deals with the evolution of theories in the field of marketing, from the ancient world. Marketing historians agree that the discipline branched out of at the turn of the twentieth century, though some argue that scholars in the ancient and medieval ages had already studied marketing ideas.

Periodization

Robert A Bartels in The History of Marketing Thought categorised the development of marketing theory decade by decade from the beginning of the 20th century thus: some of the there in formation is not rightë

• 1900s: discovery of basic concepts and their exploration
• 1910s: conceptualisation, classification and definition of terms
• 1920s: integration on the basis of principles
• 1930s: development of specialisation and variation in theory
• 1940s: reappraisal in the light of new demands and a more scientific approach
• 1950s: reconceptualisation in the light of managerialism, social development and quantitative approaches
• 1960s: differentiation on bases such as managerialism, holism, environmentalism, systems, and internationalism
• 1970s: socialisation; the adaptation of marketing to social change

With the growth in importance of marketing departments and their associated marketing managers, the field has become ripe for the propagation of management fads which do not always lend themselves to periodization.

Birth of marketing ideas

In pre-modern economies, the predominance of small enterprises militated against the recognition of marketing as a separate field of expertise. Changes in the patterns and intensity of economic activity, as well as the rise of economics as a science, particularly in the 19th century, paved the way for studies of marketing. The growth in size and scope of national and international economies in the course of the Industrial revolution led eventually to a transcendence of ad hoc retailing and advertising innovations and eventually to systematization. Marketing emerged as a separate technical field only in the late 19th century. The OED traces the abstract usage of the word only as far back as 1884.

Traditional schools

Traditional authorities on marketing concentrated on products and on the sale and purchase of goods and services. They paid little attention to areas like after-sales service, and devoted even less attention to social responsibility or to social accountability.

Modern schools

Marketing historians like Eric Shaw and Barton A. Weitz point to the publication of Wroe Alderson's book, Marketing Behavior and Executive Action (1957), as a break-point in the history of marketing thought,^[3] moving from the macro functions-institutions-commodities approach to a micromarketing management paradigm. After Alderson, marketing began to incorporate other fields of knowledge besides economics, notably behavioral science, becoming a multidisciplinary field. For some scholars, Alderson's book marks the beginning of the Marketing Management Era.

Unlike economists, marketers have difficulty in organizing the different theories in their discipline into schools of thought. However, some marketing historians like Jagdish Sheth have tried to identify the main concepts behind the work of scholars in the field, grouping their ideas into "marketing schools" such as the following:

• the Managerial school emerged during the late 1950s and became arguably the predominant and most influential school of thought in the field
• the Consumer/buyer behavior school, which dominated the academic field in the second half of the twentieth century (apart from the Manageerial school), features theories emerging from behavioral science
• the Social exchange school, which focuses on exchange as the fundamental concept of marketing okay so what about the teachers ^[4]

Marketing history

Much of traditional marketing practice prior to the twentieth century remained hidebound by rules-of-thumb and lack of information. Information technology, especially since the mid-twentieth century, has given the marketeer new channels of communication as well as enhanced means of aggregating and analyzing marketing data. Specializations have emerged (especially sales versus marketing and advertising versus retailing) and re-combined (business development) over the years.

Timeline of innovation

• 1450: Gutenberg's metal movable type, leading eventually to mass-production of flyers and brochures
• 1730s: emergence of magazines (a future vector of niche marketing)
• 1836: first paid advertising in a newspaper (in France)
• 1839: posters on private property banned in france
• 1864: earliest recorded use of the telegraph for mass unsolicited spam
• 1867: earliest recorded billboard rentals
• 1880s: early examples of trademarks as branding
• 1905: the University of Pennsylvania offered a course in "The Marketing of Products"^[5]
• 1908: Harvard Business School opens
• 1922: radio advertising commences
• 1940s: electronic computers developed
• 1941: first recorded use of television advertising
• 1950s: systematization of telemarketing
• 1970s: E-commerce invented
• 1980s: development of database marketing as precursor to CRM^[6]
• 1980s: emergence of relationship marketing
• 1980s: emergence of computer-oriented spam
• 1984: introduction of guerrilla marketing
• 1985: desktop publishing democratizes the production of print-advertising
• 1991: IMC gains academic status ^[7]
• 1990s CRM and IMC (in various guises and names) gain dominance in promotions and marketing planning,^[8][9]
• 1995-2001: the Dot-com bubble temporarily re-defines the future of marketing
• 1996: identification of viral marketing
• 2000s: Integrated marketing gains acceptance and in 2002 its first dedicated academic research centre^[10][11]

Periodization

One marketing standard chronology (Bartels, 1974; Dawson, 1969; Keith, 1960; Kotler and Keller, 2006) subdivides marketing history as follows:

• Production orientation era
• Product orientation era
• Sales orientation era
• Market orientation era
• Customer orientation
• Relationship orientation
• Social/mobile marketing orientation

Production orientation

A production orientation dominated business thought from the beginning of capitalism to the mid-1950s, and some argue it still exists in some industries. Business concerned itself primarily with production, manufacturing, and efficiency issues. Say's Law encapsulated this viewpoint, stating: "Supply creates its own demand". To put it another way, "if somebody makes a product, somebody else will want to buy it". This orientation rose to prominence in an environment which had a shortage of manufactured goods relative to demand, so goods sold easily.^[12]

Implications of this orientation include:

• narrow product-line(s)
• pricing based on the costs of production and distribution
• research limited to technical product-research
• packaging designed primarily to protect product
• minimal promotion and advertising, limited to raising awareness of the existence of the product
• consumers more interested in simply obtaining the product, and less in its quality

Some examples:

• The early car industry provides the classic example of production orientation, exemplified by the story of Henry Ford's Model T. At this time production orientation, an industry-wide philosophy, applied in many industries.

• As of 2009 one sees examples of production-orientation marketing in individual companies rather than in whole industries because of increased competition. One might argue that some elements of the production orientation appear in the electronics industry where firms manufacture large quantities of low-cost, low-price goods when they know that a market exists. As a possible supplementary factor, one can usually replace an electronic product much more cheaply than fixing it.

• Philip Kotler argues that assembly-line techniques have migrated to services like government benefits offices, in which they deal with people very efficiently, but without necessarily entailing full satisfaction on the part of the customer

Relationship orientation

Starting in the 1990s, a new stage of marketing emerged called relationship marketing. The focus of relationship marketing is on a long-term relationship that benefits both the company and the customer.^[13] The relationship is based on trust and commitment, and both companies tend to shift their operating activities to be able to work more efficiently together.^[14] One of the most prominent reasons for relationship marketing comes from Kotler's idea that it costs about five times more to obtain a new customer than to maintain the relationship with an existing customer.^[15]

Sales in relationship marketing should encompass the following: open communication, employee empowerment, customers and the planning process, and teamwork.^[14] First, communication is essential in figuring out what the customers need and determining how the firm can satisfy those needs. With open communication, both sides can express what they are trying to do and can work out a way to make it work together. Second, employee empowerment is important so that the employees are able to satisfy customer needs. Without empowerment, they may be limited in their solutions and cannot creatively satisfy needs. Third, customers must be involved in the planning process. Customer input is invaluable, as the customer is the one who will be using the product. If the customer is not satisfied from the beginning, there is no way to gain approval after the product is incorporated. Lastly, relationship marketing must emphasize teamwork. Several people who can help solve customer problems should work together and use their talents to best serve the customers.^[14]

While relationship marketing is largely held as the most recent stage of marketing, there is speculation that we are now entering into a new era of marketing called the social/mobile marketing era where companies are connected to customers 24/7.^[13]

The societal marketing concept

Societal marketing emerged in the 1960s. The societal marketing concept deals with the needs, wants and demands of customers: how to satisfy them by producing superior value that should satisfy the customers and promote the well-being of society. The producer should not produce products deemed hazardous to society.

Societal marketing developed into sustainable marketing.

See also

• Psychological pricing
• Wroe Alderson

References