Evolution of marketing means slow and gradual development of marketing over the years.
The fact that marketing is virtually everywhere in today’s free-market economies is a dramatic change from a few decades ago. Marketing emerged as a discrete discipline in the early 1900s, but it didn’t affect most companies right away. Many businesses went through distinct phases on their way to becoming marketing oriented.
Learn about the stages involved in the evolution of marketing.
Evolution of Marketing: Evolution Process and Stages involved in the Marketing Evolution
Evolution of Marketing – Top 3 Stages
From the earliest time when people satisfied their needs, wants and demands by exploiting natural resources (termed as resource utilization stage) to modern times, the concept of marketing has travelled through several stages.
1. Production Concept/Production-Orientation Stage:
Manufacturers believed that customers would seek out and buy reasonably priced products, which are easily available, so they focused on increasing the output. This led to the industrial revolution. The companies were dominated by engineers and people with manufacturing backgrounds. At this stage, the demand for goods generally exceeded the supply and the companies found little problem in getting customers. Hence, they focused mainly on improving production and distribution efficiency.
According to the product concept, consumers will favour products that are of superior quality, have innovative features and give good performance. Therefore, organizations should devote their energies to making continuous product improvements through strenuous R&D efforts.
The product concept can also lead to a situation called “Marketing Myopia” a term coined by Theodore Levitt. According to Levitt, customers buy a solution to their problem rather than a product. Thus, a buyer of a car wants a solution for his transportation problem, which can be solved by a motorcycle also. So the marketer has to see the buyer’s need rather than the product he sells. It is a need the marketer is attempting to meet by selling a car, whether it be personal transportation, status symbol or time saving.
2. Selling Concept/Sales-Orientation Stage:
The idea behind this concept is that consumers will buy enough of the organization’s products only if they are cajoled through large-scale selling and promotion efforts, because consumers have the opportunity to choose from many alternatives. Thus, this sells-orientation stage was characterized by a heavy reliance on promotional activities to sell the product the firm wanted to make.
Here the company assumes that consumers show buying inertia or resistance unless, it has promotional and selling tools to stimulate more buying. Here, a firm aims at selling whatever they have made, rather than making goods that the market wants. In this stage, selling- related activities and sales executives began to get respect and responsibility from company management.
In the marketing-orientation stage, companies identify what customers want and tailor all of the activities of the firm to satisfy those needs as efficiently and effectively as possible. Hence, the marketing concept holds that achieving organizational goals depends on determining the needs and wants of the target markets and delivering the desired satisfaction more effectively and efficiently than their competitors.
For a firm’s marketing to be effective, its top executives must have a favourable attitude towards marketing. Philip Knight, Chairman and CEO of Nike makes this point – “For years we thought of ourselves as a production-oriented company, meaning we put all our emphasis on designing and manufacturing the product. But now we understand that the most important thing we do is market the product.”
This requires accepting the notion that wants and needs of customers, not the desires of management, direct the organization. As an advertising executive puts it, “We must learn to listen (to customers) as a student listens to a mentor.” An executive believes that the customer pays his salary, not the company.
According to Peter Drucker, every organization must ask itself an important question – “What business are we in?” And get the correct and meaningful answer.
Evolution of Marketing
Following Robert Bartels, we may distinguish six different periods in the history of marketing since its discovery between 1900 and 1910. Prior to 1900, market behaviour and trade practice were explained mainly from macro-point in economic theory.
The period of discovery is a period in which the early teachers of the subject sought facts about the distributive trades. In the process of this search, theory was borrowed mainly from economics; particularly in the fields of distribution, world trade and commodity markets and the term marketing was selected to describe this particular activity.
The years between 1910 and 1920 are characterized as a period of conceptualization and in this era basic concepts on which the structure of marketing thought was built for the next 40 or 50 years emerged and were crystallized. It was during this period that many marketing concepts were initially developed and classified and terms defined. It was also during this time that three lines of approach to the analysis of marketing were identified — the institutional, the functional and the commodity approaches.
The next decade (1920-30) is characterized as a period of integration. The years between 1920 and 1930 mark the coming of age of the discipline of marketing. During that decade not only did all the branches of the subject attain a general or integrated statement but two additional areas of specialization appeared — wholesaling and marketing research.
However, during the 1930s changes in social and economic conditions had a marked effect moulding the direction of thinking and practice in marketing with the result that the 1930s and 1940s are described as a period of development. This phase is characterized as one during which specialized areas of marketing continued to be developed, hypothetical assumptions were verified and quantified and some new approaches to the explanation of marketing were undertaken.
The developments of the 30s laid the basis for the next decade —typified as a period of reappraisal. By 1950 marketing thinking encompassed an impressive array of content and techniques that was short of concepts and lacked any general theory of marketing.
It was with these latter issues that we have been concerned in the second half of the 20th century commencing with period of conceptualization (1950-60), the period during which traditional approaches to the study of marketing were supplemented by increasing emphasis upon managerial decision-making, the societal aspects of marketing and quantitative marketing analysis. Many new concepts borrowed from the field of management were introduced into marketing.
Evolution of Marketing – Production Era, Sales Era, and Marketing Era
The fact that marketing is virtually everywhere in today’s free-market economies is a dramatic change from a few decades ago. Marketing emerged as a discrete discipline in the early 1900s, but it didn’t affect most companies right away. Many businesses went through distinct phases on their way to becoming marketing oriented.
The Industrial Revolution of the eighteenth century was the beginning of the production era, which lasted until the late 1920s. During this period, companies focused on the manufacturing process. They looked for ways to produce their goods faster and more efficiently.
The production era had sellers’ markets in many industries, meaning that demand for products exceeded supply. During this era, manufacturers could afford to focus on production because demand was assured. Desire for their products was so strong, in fact that they needed to streamline production methods just to meet existing demand.
For example, Pillsbury’s production era started when the business was founded in 1869. As a flour producer, Charles A. Pillsbury had only two things on his mind back then – wheat and water power. Production, not marketing, was his main concern. His orientation was typical for the time, and it worked-for a while.
The sales era followed on the heels of the production era and extended from the 1930s into the 1950s. During the sales era, manufacturers believed business success lay in outselling the competition. The question they asked was not “What does the customer want?” but “How can we get them to buy what we make?”
Companies emphasised product promotion during the sales era, just as they tried to improve manufacturing techniques during the production era. Firms formed direct sales forces and established relationships with dealers and other firms that could push their products into the market. Advertising also took on new importance during this time.
Pillsbury entered its sales era in the 1930s. In that decade and the next, Pillsbury grew to appreciate both the grocers who sold its products and the consumers who bought them. Realising it could use information about customer likes and dislikes to create advertising that would stimulate demand, the company formed a research department to collect market data.
Also recognising the importance of strong relationships with grocers, Pillsbury built on these relationships to assure a smooth flow of Pillsbury products from the mill to the customer.
(3) The Marketing Era:
The 1950s were the start of the marketing era, during which companies began to practice marketing in its current form. The development of efficient production techniques earlier in the century had laid the groundwork for plentiful supplies of most products.
The outcome in many cases was a buyers’ market; that is, supply overwhelmed demand. In a buyers’ market, you’ve got to do more than just build things in order to succeed.
The method of achieving business success shifted from pushing products on customers to finding out what buyers wanted and then filling that need. The focus during the marketing era was not the manufacturer’s goals, as in the first two eras, but customers’ needs and wants. The new marketing departments formed in many companies started trying to provide the goods and services that customers desired.
Pillsbury’s marketing orientation grew during the 1950s, a decade in which the firm learned to value customer opinions. Rather than worrying about how much it could produce or sell, the company focused on meeting customer needs and wants with new and enhanced products. During the 1950s, Pillsbury expanded its advertising department into a marketing group responsible for satisfying both current and future needs of customers.
The notion of marketing continued to evolve until businesspeople began talking about the marketing concept. This concept stresses not only customer needs and wants but also long-term profitability and the integration of marketing with other functional units within the organisation. The marketing concept came into existence in the 1960s and continues to develop and expand.
Evolution of Marketing
The origins of marketing can be found in the process of people’s exchange of one good for another. Before the Industrial Revolution, exchanges of goods were limited, as people did not have many items to trade. An early framework on the evolution of marketing since the industrial revolution is Keith’s. According to him, there are three distinct central stages; the production era, the sales era and the marketing era. This framework has been widely accepted for a number of years, and is presented in several introductory marketing textbooks.
Far from being an alternative definition of marketing, the marketing concept is “a way of thinking—a management philosophy guiding an organisation’s overall activities [affecting] all the efforts of the organisation, not just its marketing activities”. Recently, the marketing concept has become the way of thinking where the customer is located at the centre. This constitutes a radical departure from Henry Ford’s marketing philosophy in the early 1900s, epitomised by his famous “the customers can have any colour car they want as long as it is black.”
Before the evolution of the American economy into a consumer society in the 1950s, marketing was primarily seen in the terms of selling, and the focal point for companies was products, not customers. Emerging first in the General Electric Company in 1952, the marketing concept has been consistently redefined over the past four decades.
The landmark general electric company annual report announcing a new management philosophy stated that:
“[The concept]… introduces the marketing man at the beginning rather than at the end of the production cycle and integrates marketing into each phase of business. Thus, marketing, through its studies and research, will establish for the engineer, the design and manufacturing man, what the customer wants in a given product, what price he is willing to pay, and where and when it will be wanted. Marketing will have the authority in product planning, production scheduling and inventory control, as well as in sales distribution and servicing for the product”.
This radical step in the business world led various authors to further indulge in the marketing concept and consequently academic literature has gained new terms and views. The earliest response to business action was from Peter Drucker suggesting that the purpose of business should be to create and retain satisfied customers.
Felton stressed the importance of integration and coordination of all the marketing functions, defining the marketing concept as “a corporate state of mind that insists on the integration and coordination of all the marketing functions, which, in turn, are melded with all other corporate functions, for the basic purpose of producing maximum long-range corporate profits.”
Keith’s article still remains one of the significant commentaries as to the application of the marketing concept in practice. Keith described the changing attitudes on marketing as the marketing revolution, stressing that the business world now accepted the idea that the consumer, not the company, is at the centre.
He examined the evolution of the Pillsbury Company in four stages, from production oriented to sales oriented, moving on to a marketing oriented state, the latter based on the idea that “marketing begins and ends with consumers”. Finally, the fourth stage of this marketing revolution is marketing control which aims that marketing will become the basic motivating force for the entire corporation —from finance to sales and to production —to satisfy the needs and desires of the consumer.
Due to its highlighting of the sharp contrast between selling and marketing concepts, Levitt’s ‘Marketing Myopia’ made a big contribution to the marketing literature. “The difference between marketing and selling is more than semantic. Selling focuses on the needs of seller, marketing on the needs of buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it”.
Levitt underscored that the reason for the demise of many failing or declining industries was their product, rather than customer orientation. “The history of every dead and dying ‘growth’ industry shows a self-deceiving cycle of bountiful expansion and undetected decay”.
For Levitt, the presence of the following four conditions would usually guarantee this outcome:
i. The belief that growth is assured by an expansion and a more affluent population.
ii. The belief that there is no competitive substitute for the industry’s major product.
iii. Too much faith in mass production and in the advantages of rapidly declining unit costs as output rises.
iv. Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement, and manufacturing cost reduction.
Evolution of Marketing – Evolution Process Charted as Follows
If we attempt to trace the evolution of the approaches of marketing, we will find that the concept has undergone a remarkable change from its primitive barter system to the present-day management-oriented approach to marketing.
The evolution process may be charted as follows:
1. Barter System:
It may be regarded as the initial beginning of the concept and approach of marketing evolution process. Under this system, the goods are exchanged against goods without any other medium of exchange like money.
This system suffers from certain limitations or drawbacks as follows:
(i) The method depends on one party to be able to satisfy another party’s wants, which poses difficulties in most situations and
(ii) The method necessitates the determination of a rate of exchange which is difficult to arrive at in m circumstances of the trade.
2. Production Orientation:
This approach was based on the assumption that whatever is produced a o accepted by the customers or consumers. In other words, the producer instead of being concerned with the consumer preferences concentrates on the production of goods for the purpose of profit realization. This approach was the outgrowth of the industrial revolution to produce goods on a mass scale in anticipation of demand.
The drawbacks of this approach are:
(i) The interest of the consumer is virtually ignored to that of the producer;
(ii) The marketing becomes either product-oriented or production-oriented;
(iii) The stress is not on the consumption which is the ultimate objective of industry and commerce; and
(iv) The marketing process comes to an end as soon as the products reach the consumers.
3. Sales Orientation:
This approach, in the evolution of marketing, involves a deliberate orientation towards the promotion of sale. Various socio-economic factors, like shift from agriculture to industry, development of the means of transport and communications, better living standards of people, competition among the producers to reach out to consumers, etc., have given birth to this approach.
In a word, it puts emphasis only on the increase of sales turnover without any consideration of the production of the goods desired the consumers. The selling activity becomes the dominant factor in the marketing of goods in an environment of competition.
The major limitation of the system is that marketing becomes highly sales-oriented without any efforts of the satisfaction of the consumer needs.
4. Consumer/Customer Orientation:
This approach refers to the concept of marketing that is related to the needs of the buyers. Under the system, only such products are brought forward in the market, which are capable of satisfying the tastes, preferences, and expectations of the consumers. This stage, in the evolution process of marketing, ushered in a major breakthrough in the outlook of the producers towards marketing.
This stage or phenomenon is characterized by the following redeeming features:
(i) The production of goods far exceeds the demand;
(ii) The increased awareness of the consumers drives them to shift from one product to another; and
(iii) The producers realize the consumer demands and choices and there-by, are forced to adopt consumer- oriented approach to marketing, so that they can survive in the market.
At this stage, the marketing management strives to organize the factors of production within the organization keeping in view the factors of consumption outside. This approach, thus, aims at consumer satisfaction by means of production or the right kind and quality of products, in the right qualities, at the right price and in the right market. The matching of products and services with the markets and consumers becomes the motto of the consumer-oriented approach to marketing.
5. Management Orientation:
This approach or concept can be said to be a natural consequence of increasing attention to the consumer satisfaction. Marketing, under this concept, is conceived of as a total management system of interacting business activities designed to plan, promote, and distribute want satisfying products and services to the existing and potential consumers. In the present highly competitive and changing world, the marketing factor has become very crucial to all business planning and decision making.
The marketing function has now come to be associated with various aspects like pricing, products, markets, market research and analysis, advertising and sales promotion, field sales, distribution, organization and staffing, and co-ordination with the manufacturing and other operations. In all these areas, the management has to develop and adopt procedures for planning, organizing, directing, reviewing, controlling, etc.
In other words, the management has to harmonize all these variable factors, in the context of the nature and size of business, to gain continued acceptance of its products and services from the different classes of consumers and customers.
Therefore, in common parlance, marketing is understood to mean the sale and purchase of goods and services but it is narrow thinking to understand it so. The term ‘marketing’ is very wide. It does not mean only the sale and purchase of goods and services. It means entire process of satisfying the needs of consumers! It starts with discovery of needs and wants of the consumers, and it continues, till these needs and wants are satisfied. To understand the meaning of marketing clearly; it becomes necessary that different concepts of marketing must be understood.
Marketing as an umbrella concept, under which many sub concepts reside. Marketing is all about servicing society and making life of people better by providing things that they need. Most of the time people carry a narrow and transaction based view about marketing that is not true. Marketing is nurturing and marketer is like mother who nurture the needs of her sibling. Like a mother understands the requirements of her child without telling, same is expected from a profess marketer.
Marketing is indeed as Ancient Act as it has been predicted in one form or other since the days of Adam and Eves. Think of how emperors marketed their military power so well that many smaller states bowed to them without fighting and shared their state revenue. Since then marketing has gone through a paradigm shift.
Marketing is the process of matching the resources of the business with identified customer needs. In other words marketing is concerned with the focusing of the organization’s resources to ensure that the customer is satisfied at a profit to the business.
It should be observed that marketing is not exclusively applicable to product alone. Whether you intend to market a Television Set or a Cooking Range or offer Insurance, Banking or Health Services, marketing is basically the same.
For the convenience, the concepts of marketing may be divided into two parts:
(i) Old concept of marketing or product-oriented concepts, and
(ii) New concept of marketing or consumer-oriented concept.
(i) Old Concept or Product Oriented Concept of Marketing:
Marketing is an exciting, fast-paced, and contemporary field. It influences us daily in both our roles as provides of goods and services and as consumers.
Different authorities as in Traditional View have defined the word “Marketing” differently. Their marketing means to make the Goods and find out the ultimate customers, but now, the view has been changed from “Exchange” to satisfaction of human wants, which means to first find what the customers want and then make the product accordingly for satisfying their want.
According to the classical concept of marketing, marketing is a part of production process. This concept is based on the assumption that the manufacturer must produce the goods and distributes them to the consumers. He needs not to bother about the choice of the needs of the consumers.
According to American Marketing Association, “Marketing is the performance of business activities that direct the flow of goods and services from the producer to consumer or user. Marketing is organisational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefits organization and its stakeholders.”
According to Prof. J.F. Pyle, “Marketing comprises both buying and selling activities”. Above two definitions of marketing confines the marketing to sale and purchase only.
According to Tousiey, Clark and Clark, “Marketing consists of those efforts which effects transfers in the ownership of goods and services and provide for their physical distribution”.
This definition of marketing includes the factor of physical distribution also along with sale and purchase of goods and commodities. Thus, this definition is wider than the earlier definitions.
These definitions do not include any allied activity of marketing such as, transportation, storage, financing, insurance, risk bearing, etc.
Characteristics of Old or Product-Oriented Concept of Marketing:
Main characteristics of this concept of marketing are as follows:
(a) It stresses upon production.
(b) It assumes that marketing is only the physical distribution of goods and services from producer to consumer.
(c) It assumes that marketing starts after the goods have been produced and it ends after the goods have been sold.
(d) It does not provide for any allied activity of marketing such as, transportation, warehousing, insurance, financing etc.
(e) According to this concept, the ultimate object of marketing is to maximize the profits by maximizing the sales.
(ii) New/Modern Concept or Customer Oriented Concept of Marketing:
Modern concept of marketing is a customer-oriented concept. This concept is based on the assumption that a business and industrial enterprises can achieve its object of maximizing the profits only when it considers the needs and wants of its consumers and it tries the satisfaction of these needs and wants.
Therefore, according to this concept, marketing starts with the discovery of needs and wants of consumers and ends with the satisfaction of these needs and wants.
According to William J. Stanton, “Marketing is a total system of interacting business activities designed to plan, price, promote and distribute want-satisfying products and services to the present and potential customers”.
According to Prof. Paul Mazur, “Marketing is the delivery of standard of living to the society”.
According to Prof. Malcolm McNair, “Marketing is the creation and delivery of standard of living to the society”.
According to Cundiff and Still, “Marketing is the business process by which products are matched with tie market and through which the transfers of ownership are affected.
Characteristics of New or Modern or Consumer-Oriented Concept of Marketing:
Important characteristics of this concept are as follows:
(a) According to this concept consumer is the key of the market and his needs and wants are the goals of the business activities.
(b) Marketing is the entire process of understanding and satisfying the needs and wants of consumers.
(c) Under this concept, first of all the needs and wants of consumers are discovered; then these needs and wants are converted into goods and services; then demand is created for these goods and services: these goods and services are physically distributed from producer to consumer and after-sale-services are provided so that the needs of consumers may be satisfied in most effective manner.
(d) This concept assumes that the object of earning the profit can be achieved only when the needs of society are satisfied.
(e) According to this concept, Marketing is the creation and delivery of standard of living to the society.
Importance of Modern Concept of Marketing:
The importance of modern concept of marketing may be described as under:
a. Helpful in Product Development:
Modern concept of marketing is very helpful in the discovery and development of new products because this concept is based on intensive research regarding needs, wants and behaviour of consumers. Based on such research, the businessman always tries for new and developed products so that he may produce and increase the demand for his product. Thus, this concept results in the development of products.
b. More Social Satisfaction:
Modern concept of marketing stresses upon the satisfaction of needs and wants of consumers. It starts with the discovery of consumer needs and every activity of a business and industrial enterprise clusters around these needs.
Under this concept, the goods of standard quality are provided to the consumers at reasonable prices, at the time and place most suitable to the consumers, through channels of distribution most convenient to the consumers and the best possible after-sale-services are provided. Thus, this concept provides for greater social satisfaction. In fact, it creates and delivers the standard of living to the society.
c. Importance towards National Economy:
Modern concept of marketing is important not only from the consumer’s and producer’s point of view but also from the point of view of the country as a whole. This concept provides more employment, makes maximum exploitation to the resources of the country. Restricts the wastage to the minimum and up gears, the industrial production. It provides more and new goods and services to the society and increases the standard of living. Thus, this concept of marketing is very helpful in the overall growth and development of the country.
Marketing for those in role of goods and service providers, is related to decisions as choosing who our customers are, what goods and services to offer, where to sell these goods and services, agendas to stress in marketing related communication, the prices to charge and create and sustain demand. Marketing decisions also involve choosing to offer products internationally (as well as domestically) and how to operate in an ethical and socially responsible manner.
Marketing was earlier seen as supporter of organizational strategies. In today’s context marketing has occupied the driver role in organizational strategy making. The job of marketing is not limited to chosen few; rather successful organizations are marketing organizations where ‘everybody is marketer’. Endlessly marketers are expected to reinvent their market dynamics and find what their customers are looking for and how they could be satisfied in better manner than competitors.
Components of Modern Concept of Marketing:
The very first and most important base of modern concept of marketing is that it is a customer-oriented concept of marketing.
This concept assumes that all the activities of a producer must go around the choice or behavior of consumers. It assumes that we should produce the quality which is liked by our consumers; we should produce the quantity which is required by our consumers; we should fix the price which can be afforded by our consumers; we should distribute our products through the channels of distribution which are most suited to our consumers; and we should provide this all at the time and place most convenient to our consumers.
Therefore, a successful producer is one who stress upon marketing research and as a result it makes the necessary changes in his product.
The main components of this concept are as under:
(i) A consumer is the king of the market. A producer depends upon his consumers and the consumers do not depend upon the producer.
(ii) Only those goods and services can be sold in the market, which are according to the tastes and likings of consumers.
(iii) A producer should always stress upon the production of new and developed products so that he may attract more consumers.
b. Integrated Marketing:
The second important base of modern concept of marketing is that marketing is an integrated system. It is not limited to physical distribution of goods and services. Under this concept a firm has to satisfy the needs of its customers by establishing effective co-ordination between various departments.
Marketing department has to co-ordinate the activities of all other departments of the firm in a manner that all the departments may discharge their responsibilities in the best possible manner and may contribute to the satisfaction of consumers. All the departments of a firm are coordinated through marketing department and the decisions of marketing manager are considered to be the most important. All other departments have to follow these decisions.
c. Profits through the Satisfaction of Consumers:
According to this new concept of marketing object of a firm must be earning the maximum profits through maximum satisfaction of consumers. This concept is based on the assumption that satisfaction of consumer needs is itself a great success to the firm. If the consumers of a firm feel satisfied, the demand of the products of the firm will increase.
It will result in the increase of sales and increase of profits. Thus, this concept emphasizes upon the maximization of profits through satisfaction of consumers and not through maximization of sales.
d. Consumer Welfare:
New concept of marketing stresses upon consumer welfare. It starts with the discovery of consumer needs and it ends with the satisfaction of these needs. And the efforts are made to provide the goods and services of best quality at most reasonable prices. Thus, it is a social concept focusing upon consumer welfare.
Evolution of Marketing – 3 Distinct Stages
Marketing has developed in an evolutionary manner, and not in a revolutionary manner. In other words, there is only an evolution of marketing, and not a revolution of marketing.
Evolution of marketing means slow and gradual development of marketing over the years.
Various Stages of Evolution of Marketing:
Evolution of marketing is closely connected with different stages of human civilisation or stages of economic development of man.
The evolution of marketing can be studied under three distinct stages.
Those three stages or periods are:
1. Pre-industrial Revolution Period.
2. Period of Industrial Revolution.
3. Post-industrial Revolution Period.
Let us, now, consider the evolution of marketing in these three periods or stages:
1. Marketing in the Pre-Industrial Revolution Period:
In the earliest stage of human civilisation or economic development, i.e., in the hunting and fishing stage, man led a primitive life. He lived mostly on wild fruits, roots, flesh of animals and birds and fish. He covered his body with leaves of trees and skins of animals. He lived in caves. His main occupation was hunting. As his main occupation was hunting, he did not live in a fixed place.
He moved from place to place in search of food. He lived in groups called tribes. His wants were very few and simple. His elementary wants of life, viz., food, clothing and shelter, were satisfied by himself and his family. Therefore, commerce did not exist at this stage, and consequently, marketing was not there at this stage.
In course of time, i.e., during the pastoral stage, man, instead of killing the animals for food and clothing, domesticated them. Animals like cattle, sheep, goats, pigs, etc. were domesticated, and they provided him with food and clothing. Even at this stage, man could not settle down in any particular place.
He had to move from place to place in search of grass for his domestic animals. Though man had reached a slightly better degree of economic development at the pastoral stage, commerce did not exist even at this stage, as the tribes were self-sufficient. On account of the absence of commerce, marketing did not exist even at this stage.
A little later, i.e., during the next stage, called the agricultural stage, man developed agriculture as his occupation. Owing to his occupation, viz., settled agriculture, he had to live in a fixed place. Therefore, he built houses to live in. This led to the growth of communities or villages. Further, simple form of division of labour was practised at this stage. According to the principle of division of labour, different villages produced different commodities.
They produced more than their requirements. Therefore, they exchanged their surplus products for the products of other villages. Thus, the foundation of trade was laid at the agricultural stage, and trade, the heart of marketing, laid the foundation of marketing at this stage.
Agriculturalists required agricultural tools, houses, clothes, etc. In order to meet these requirements of agriculturists, some people engaged themselves in the making of agricultural tools, building of houses, weaving of clothes, etc. Thus, a body of professional craftsman and artisans, such as blacksmiths, carpenters, masons, weavers, etc. came into existence. So, this stage was called the handicraft stage. The craftsmen and artisans, at the handicraft stage, carried on production with their hands in their homes on a small scale.
They supplied their products to the agriculturists, and in return, obtained their requirements from the agriculturists. Thus, the simple form of division of labour, which was already there, was developed further. Some people specialised in agriculture, and others specialised in various handicrafts. This division of labour among the people contributed to the system of barter, i.e., exchange of goods for goods. The emergence of barter system indicated the gradual development of marketing, the foundation of which was already laid at the agricultural stage.
No doubt, the barter system (i.e., exchange of goods for goods), prevalent during the agricultural and handicraft stages, contributed to the growth of trade and marketing. But certain difficulties, such as absence of double coincidence of wants, lack of common measure of value, difficulty of sub-division of certain commodities and the difficulty of storing wealth, were noticed in the barter system with the progress of human civilisation and with the increased volume of trade.
To overcome the difficulties of the barter system, money was introduced. With the introduction of money, goods were exchanged for money, and money was exchanged for goods. Further, the value of every commodity entering into trade was expressed in terms of money. Initially, certain commodities, such as skins of animals, shells, cattle, wheat, etc. which were commonly accepted as medium of exchange, were used as money.
Subsequently, metals, such as iron, copper, silver, gold, etc., were used as money. Later, these metals were converted into coins of definite size, weight and value and the metallic coins were used as money. Still later, paper money (i.e., currency notes) was introduced. The use of money, viz., metallic coins and currency notes, contributed to further development of trade and marketing.
With the growth of population, the handicraft system could not meet the increasing demands of the people. Therefore, the domestic system came into existence. Under the domestic system, a number of middlemen or merchants appeared. These merchants and middleman supplied raw materials to craftsmen and artisans for production. The craftsmen and artisans converted the raw materials into finished goods in their own houses with their own labour and tools, delivered the finished goods to the merchants and received their charges.
The merchants, in turn, sold the finished goods to the consumers. This contributed to further development of trade and marketing. The appearance of middlemen or merchants in the field of trade and marketing signified the presence of specialised persons in the field of marketing, and these specialised persons contributed to the development of marketing. At this stage, there also appeared the system of offers and negotiations to determine the terms of exchange.
Again, at this stage, the system of personal selling also came into existence. At this stage, there was also the development of local markets, which gradually developed into town markets. Above all, at this stage, pricing became the chief mechanism of trade and marketing.
2. Marketing during the Period of Industrial Revolution:
Industrial Revolution between 1730 and 1930 contributed to the remarkable development of modern marketing. In fact, modern marketing is regarded as the child of Industrial Revolution.
During the period of Industrial Revolution, there was increased use of giant machines for the production of goods. Further, there was change in the system of production. The domestic system of production was replaced by the factory system of production under which goods were produced in large factories. Again, there was mass or large-scale production of standardised goods. Above all, there was also the emergence of new forms of business undertakings, particularly joint stock companies.
The large-scale production, brought about by the Industrial Revolution, necessitated large-scale distribution of goods required for the success of large-scale production. Further, the remarkable development in transport systems, brought about by the Industrial Revolution, also contributed to the success of large-scale distribution of goods. Markets for goods were expanded into national markets and further to international or world markets.
Thanks to the above changes in production and distribution, brought about by the Industrial Revolution, the channels of distribution of goods became longer, and so, better methods had to be devised to market the goods over long distances. Branding and packaging of goods had to be introduced by every manufacturer of goods to distinguish his goods from those of rival manufacturers and to create and expand the markets for his goods.
Advertising was evolved as a means of stimulating sales. Manufacturer’s agents and salesmen were added to expand the existing markets or to find new markets. Sales promotion was employed to stimulate immediate sales. New products were developed and quality of products was improved to gain preferred positions in the markets.
It may also be noted that, with automation in industries, brought about by industrial Revolution, the hours of working in the factories were reduced, and people had more leisure time with them. Again, with the economic development brought about by the Industrial Revolution, there was increase in the income of the people. These changes led to demand for new goods and services, which in turn, led to more marketing opportunities for the sale of new products and services.
From a study of the above facts, it is quite clear that Industrial Revolution had contributed immensely to the development of modem marketing.
3. Marketing in the Post-Industrial Revolution Era:
In the Post-industrial Revolution era, there is economic revolution (i.e., development). The economic revolution in the Post-industrial Revolution era has, in large part, been a marketing revolution caused by the assumption of responsibility for creative and aggressive marketing by businessmen. Fifty years ago, the typical attitude of businessman towards marketing was that the sales department would sell whatever products the factory produced. But, today, the attitude of businessmen towards marketing is to produce what the consumers need and desire. That means, consumer-oriented marketing was evolved.
After the Second World War, thanks to increase in population, large increase in the income level of the people and the demand for new goods and services, the size and the characteristics of the markets have changed considerably. Astounding developments have taken place in business and marketing. There has been the introduction of a greater variety of goods as well as services. In short, there is further development of consumer marketing.
At the same time, marketing of products and services has become unusually difficult because of severe competition, abundant choices available to consumers and the awareness of the consumers about their rights and importance in the marketing of goods. So, to maintain and to expand their markets, businessmen are required to ensure that their products and services are available at a place convenient to consumers, at prices which the consumers can afford and at a time when the consumers need.
Businessmen are also required to see that the complaints received from consumers are attended to promptly, and there are proper after-sales services. All these developments mean still further development of modern marketing.
Again, due importance is given to marketing research and information in modern or present day marketing. The importance of advertising has increased in recent years, and advertising has become scientific. The importance of personal selling has also increased. There is also aggressive selling, and the importance of sales promotion has increased considerably.
Of late, there is even price war between businessmen so as to increase their market segments and market shares.
Evolution of Marketing
There is an endless debate about the origin of marketing. Some people consider marketing is the world’s oldest business activity. However, there is little doubt that marketing was practised to offer goods and services for thousands years. The earliest civilization witnessed agriculture and handcrafts as major economic activity.
The agricultural produce like corn, cotton, wheat, rice, vegetables and fruits were exchanged with non-agricultural products like leather, metal products, woodcrafts, furniture, utensils and hand-tools. This exchange of goods is commonly known barter system.
Though barter system remained dominant for centuries but it had inherent limitation of volume and quality of goods in the exchange process. Gradually, barter system was replaced by money or currency system. The pricing system determined the amount of money or currency to be paid for certain quantity of goods.
The industrial revolution and subsequent development of science and technology brought in a major change in business process and slowly marketing activity became an integral part of the entire business programme. As the world became more sophisticated and developed, the role of marketing became more significant. The management expert, Peter Drucker thinks that marketing was first to surface in Japan in the seventeenth century.
Marketing was recognised as a useful activity by Mitsui family in Japan around 1650, when they started a departmental store in Tokyo. The concept of department utilization of product sale or counter sale has undergone substantial changes in the last three centuries, but the basic idea still remains unchanged, i.e., to serve consumers according to their needs and requirements.
But the credit for thinking in terms of scientific methods or ways to investigate the needs of consumers and accordingly plan all marketing activities was done by C.H. McCormick in 1850. McCormick’s invention of mechanical harvester and his ideas about marketing as a central function in business was put into practice by international harvesting companies in the 1850s.
However, the marketing activity as a serious scientific and rational process remained unacknowledged till early this century. The commercial research, as it was known at that time, was first adopted by Curtis Publishing Company in 1911. They were taking up investigations in the market which will fetch market information so that they can make their sales more effective and remunerative.
However, various marketing functions like market research, advertising, customer’s service, distribution logistics, transportation and packaging became more and more prominent features after World War II. Many organisations in Western Europe and North America started thinking in terms of product, quality and all other functions related to marketing.
The term marketing first appeared in college education in the early 1900s. In 1905, “The Marketing of Products” was taught at the University of Pennsylvania and in 1910, “Marketing Methods” was taught at the University of Wisconsin. Marketing as a subject became popular only after World War – II. In India marketing was regularly taught at business management classes since 1970s. Of late, marketing and finance are two courses which are popular for professional courses.
Though Curtis Publishing Company initiated first the marketing research department and in those days it was called commercial research, but subsequently marketing research departments were established at US Rubber in 1916 and Swift & Company in 1917.
The task of these marketing research departments was to collect and develop information which would help sales department to sell more and the departments were viewed as adjuncts to the sales department. Later marketing research departments were given additional responsibilities such as sales analysis, sales administration, marketing research, advertising and customer service.
Initially, marketing was accepted in the consumer goods sector and it spread and grew very fast in packaged goods company and then to consumer durable firms. A few companies like General Electric, Procter & Gamble, General Motors and Sears Saw the potential of marketing and were the first few companies who started practising marketing management.
Gradually, marketing spread to industrial products and equipment sector. Industrial products like steel, fertiliser, oil, petrochemicals, plastics, paper, cement, chemical synthetic products came much later into the marketing area and still a long way to go and mature into an activity or management function.
It was only in 1960s and 1970s that service-oriented products like airlines and banks started using marketing. Airlines were the first to study traveller’s attitude towards different features of their various services offered like timely departure and arrival, schedule frequency, on-flight food and service, baggage handling, ticket service, safety, tariff and other incentives.
British Airways, Air India, KLM, American Airlines and Thai Airlines practiced marketing since 1960s and were highly appreciated by passengers and general public. Banks entered the marketing fold later, though there was lot of resistance initially. American Express and The Citi Bank group were the first to start marketing activities.
Marketing has now entered into other service sectors like insurance, tours and travel, hospital, and health care but it is only in the initial stages and would take long time to mature. Though they have been practicing marketing in developed economies but their entry into developing countries has given rise to hopes that marketing will now be regularly practiced in these service areas.
Marketing has now entered into-area which was unthinkable few decades back an i.e., non- government organisations and non-profit organisations, charity organisations, religious centres, environmental organisations, wildlife protection organisations, general hospital, schools, colleges, and universities, police department, political organisations, municipal and civic bodies, housing and real estate, museum, sports and sport organisations.
Nonprofit organisations use celebrities and advertisements like Red Cross, Rotary International, World Wildlife, World Wrestling Entertainment, FIFA (World Football), International Cricket Council, Golf, Tennis Associations are all using marketing to the maximum to generate fund and popularity.
It has only been since the 1970s that marketing has featured significantly on major university syllabi all over the world. However, to some of the more traditional academic institutions, marketing has been essentially a topic of application rather than a discipline in its own right.
Marketing as a serious subject of study has drawn on heavily on the areas mentioned below:
1. Psychology has been used extensively for study of consumer behaviour, qualitative studies and attitudinal studies. Psychological theory and various motivational theories have been used in studying consumer buying behaviour as well as motivation of sales staff.
2. The importance of growing pressure groups on many consumer and commercial purchases, a body of knowledge developed by sociologists have been used by marketing organisations. As an example, socio-psychologists have contributed an understanding of the processes which has been applied to the study of long-term buyer-seller relationship.
3. The marketing studies, particularly marketing research and survey activities, draw heavily on statistical methods like moving averages, standard deviation, mean-median regulation, co-efficient of correlation, trend analysis and time series analysis. Besides these, large scale empirical research into buyer behaviour, product design preferences and pricing effectiveness studies have used statistical methods.
4. Economics is one of the widely used topics in marketing studies. The pricing strategy, different costing methods, break-even volume, and free competition to monopoly markets are all based on economics.
5. Finally, the law represents an increasingly important area for marketing companies. The legal framework is an important consideration for techno commercial negotiation for industrial marketing as well as international marketing. Use of franchise system and retail marketing need legal framework to be considered by marketing people.
Marketing has developed theories and techniques which have been adopted by other discipline areas. For example- Marketers have contributed significantly to the development of conjoint analysis in the study of consumer preferences and this statistical methodology has now found widespread application elsewhere.
There is a gradual shift in mindset and attitude of business organisations, entrepreneurs, non-profit organisations, service organisations and above all, those who are associated with customer, product and customer care, have started taking marketing as a profession very seriously.
There are reasons highlighted below for gradual importance of marketing in our lives:
i. Fast Changing Social Behaviour:
Due to changing social patterns with fast communication and conveyance system as well as the regular interaction of various communities, the social pattern is changing, i.e., the social behaviour and demand for particular goods or services are changing. It is essential for any product or services to keep pace with this change in order to survive in the market.
The influence of western education and western lifestyle has tremendously affected developing and less developed countries including countries like India. The demand for electronic gadgets, electronic entertainment items and consumer personal products have changed tremendously in the last 20 years.
ii. Mass Communication and Transport Facilities:
The Spread of electronic media, television and audio- video systems have greatly reduced the ignorance level and the awareness of products and services and their performance is creating change in consumer behaviour. The fast and easier transport facilities have resulted in urban-rural interaction regularly and also global tours are becoming very common.
These have helped to change consumer’s attitude and mindset towards marketing activity. The demand for frost free refrigerators, high quality soaps, moisturising creams, fuel-efficient cars, diesel operated, even battery operated machines and remote-controlled electronic machines are increasingly in demand everywhere. Buyers and consumers are searching for better products at reasonable prices.
iii. Increased Education Facilities and Literacy Level:
These days many government and non-government organisations are spending substantial amount of finance and effort to increase the educational level of population. With the increase in educational facilities, the awareness of products and services used by consumers as well as which are available in the market can be assimilated by consumers and therefore the need for better products became essential.
It would be noticed that in regions with high education level, the need for sophisticated consumer products are very high and also the need for better products change with time faster than expected. The same is true for all developing countries where educational level is going up particularly in urban areas.
In rural areas, the demand for two-wheelers, electronic entertainment products, personal consumer products, newspapers and books and readymade garments is growing steadily, giving rise to more marketing activity.
iv. Rise in Standard of Living Urban and Rural Society:
With the rapid industrialization of developing countries, the standard of living or per-capita income is going up and this has resulted in higher disposable income which could be utilised for purchase of goods.
The standard of living in rural areas has also gone up in certain states in India like Punjab, Haryana, Karnataka, Maharashtra, Gujarat and Tamil Nadu and disposable income available with rural population in these areas is quite high and this has given rise to demand for large number of products and services like two-wheelers, televisions, audio system, bicycle, toothpaste, soap, detergent, batteries, insurance, bank, transport, health care etc. which was unthinkable in post-independent era of India.
v. Increased Competition:
With rapid industrialization, the manufacturing base has gone up and a large number of organisations are manufacturing consumer products and giving rise to competition. Consumers have now the option to select a suitable product or brand which could meet their requirements.
Thus, the marketing activity of all competing products has become an important day-to-day matter and the same cannot be ignored. The companies which are not taking suitable action on their product attributes, or packaging, distribution system or pricing, are likely to face a situation when the customer will move away from such products.
vi. Technology-Driven Products Creating Demand:
The fast pace at which products are changing due to technology has made marketing more important in business operations. The life cycle of products are becoming shorter and consumers are seeking more convenient products and technically superior products and services.
vii. Increased International Co-Operation:
With the changing political and socio-economic scenario of the world, the technical and financial collaboration or joint venture between international organisations have increased. This is significant in use of state of art technology and global distribution and the marketing programmes. More and more companies in developing countries aim to manufacture and market products or services for domestic and international markets for the western world.
The growing demand of consumer and industrial products in developing countries which was so far neglected by western countries is now being given importance and would result in more international cooperation. This would help in production and marketing of international quality products and services.