In last Lesson the focus of discussion was core concepts of the
marketing and the increasingly important role of the marketing process
in the ever-changing domestic and global business environment Today we
will be covering following topics:
A. MARKETING IN HISTORICAL PERSPECTIVE AND
EVOLUTION OF MARKETING
The marketing concept is a matter of increased marketing activity,
but it also implies better marketing programs and implementation
efforts. In addition, the internal market in every company (marketing
your company and products to and with the employees of the company) has
become as challenging as the external marketplace due to diversity and
many other social/cultural issues.
What image comes to mind when you hear the word “marketing”? Some
people think of advertisements or brochures, while others think of
public relations (for instance, arranging for clients to appear on TV
talk shows). The truth is, all of these—and many more things—make up the
field of marketing. Marketing as “planning and executing the
strategy involved in moving a good or service from producer to
With this definition in mind, it’s apparent that marketing and many
other business activities are related in some ways. In simplified terms,
marketers and others help move goods and services through the creation
and production process; at that point, marketers help move the goods and
services to consumers. But the connection goes even further: Marketing
can have a significant impact on all areas of the business and vice
versa. Lets discuss some Marketing Basics In introductory marketing you
learned some basics—first the four P’s, and then the six P’s:
• Product—What are you selling? (It might be a product or a service.)
• Price—What is your pricing strategy?
• Place or distribution—How are you distributing your product to get it
into the marketplace?
• Promotion—How are you telling consumers in your target group about
• Positioning—What place do you want your product to hold in the
consumer’s mind? Personal relationships—How are you building
relationships with your target consumers? Marketing management is the
conscious effort to achieve desired exchange outcomes with target
markets. The marketer's basic skill lies in influencing the level,
timing, and composition of demand for a product, service, organization,
place, person, idea or some form of information. There are several
factors that participated role to evolution of marketing like:
1. Changes in Consumer Behavior
There have been many major marketing shifts during the last few
decades that have shaped marketing in the 21st century. There is a view
among professional marketers that there is no longer the substantial
product loyalty that existed over the last few decades. Product and
brand loyalty, many argue, has been replaced by something more akin to a
consumer decision that is based on the absence of a better product or
service. In addition, there are major changes in the way customers look
at market offerings. During the 1980s customers were optimistic, and in
the early 1990s they were pessimistic. Later in the 1990s, consumers
appeared rather optimistic, but still cautious at
times. The following chart demonstrates some of the major shifts that
have occurred to the present:
Increasingly it is clear that while the 4 Ps (product, price,
promotion, and place) have value for the consumer, the marketing
strategies of the 21st century will use the four “4 Cs” as added
critical marketing variables:
1. Care: It has replaced service in importance. Marketers must really
care about the way they treat customers, meaning that customers are
2. Choice: Marketers need to reassess the diversity and breadth of their
offerings into a manageable good-better-best selection.
3. Community: Even national marketers must be affiliated, attached to
neighborhoods wherever they operate stores.
4. Challenge: The task of dealing with the ongoing reality of
2. End of the Mass Market
During the late 1990s, we witnessed the death of the concept of mass
market. Regardless, some marketers continue to argue that database
marketing will never replace mass marketing for most products. The view
is that communicating with users by e-mail, Web site, mail, telephone,
or fax will never become cost-efficient enough to justify the return.
However, the success of the Internet provides considerable evidence that
one-to-one marketing is and will be appropriate for many packaged goods
and other high- and low-involvement products that in the past sold
almost exclusively with brand advertising.
Through the 1970s, only high-end retailers and personal-service firms
could afford to practice oneto- one marketing. For the most part, they
did it the old-fashioned way with personal selling and index-card files.
During the 1990s, bookstore chains, supermarkets, warehouse clubs,
and even restaurants began to track individual purchase transactions to
build their “share of the customer.” Many of these programs now run on
Personal Computers platforms or workstation environments much more
powerful than the most capable mainframes of the 1970s. It is possible
today to track 5 or 6 million customers for the same real cost as
tracking a single customer in 1950. With Internet-based databases and
remote access, this capability literally has exploded in the last few
The situation will become even more interesting as one-to-one
marketing becomes even increasingly pervasive. With an increasingly
powerful array of much more efficient, individually interactive
vehicles, the options are virtually unlimited, including on-site
interactivity, Web site connections, fax-response, e-mail, and
Most households today either have direct Internet access, or with TV
sets that also provide realtime interactivity through the Internet. We
are closing rapidly on the time where individuals will interact with
their television and/or computer simply by speaking to it. Via various
Web sites, computers work for us to enable us to remember transactions
and preferences and find just the right entertainment, information,
products, and services. Likewise, online capabilities enable providers
to anticipate what a consumer might want today or in the future.
Unfortunately, the system has been slower to protect consumers from
commercial intrusions that they may not find relevant or interesting.
The increasing level of market definition and refinement (and
resulting opportunities for marketers) is possible through the massive
social, economic, and technological changes of the past three decades.
Some of the important demographic shifts have been:
• Increasing diversity of the population. The United States
has always been an immigrant nation. However, large numbers of
immigrants from Latin America and Asia have increased the proportion of
minorities in the country to one in three, up from one in five in 1980.
This diversity is even more noticeable in the younger market.
• Changing family and living patterns. There has been a
substantial rise in the divorce rate, cohabitation, non-marital births,
and increased female participation in the labor force. In addition,
married couples with one earner make up only 15 percent of all
households. Dual-earner households have become much more common—the
additional income is often necessary for the family to pay their bills.
Thus, older have replaced the stereotypical family of the 1950s, working
parents with much less time available.
• Emergence of a new children’s market. Minorities are
over-represented in the younger age brackets due to the higher fertility
and the younger population structure of many recent immigrants. The
result is that one in three children in the United States is black,
Hispanic, or Asian. In addition, nearly all of today’s children grow up
in a world of divorce and working mothers. Many are doing the family
shopping and have tremendous influence over household purchases. In
addition, they may simply know more than their elders about products
involving new technology such as computers.
• Income and education increases are two other important
demographic factors impacting the marketing management arena. Generally,
income increases with age, as people are promoted and reach their peak
earning years, and the level of education generally has increased over
the last few decades. Family units today often have higher incomes
because they may have two earners. Accordingly, there is an increased
need for products and services because they likely have children and are
In sum, the need for market analysis and marketing decision-making,
and managers to perform those tasks has never been greater. But, as the
course will demonstrate, the complexities of, and analytical tools
required for, these activities have never been greater. Be prepared for
a challenging experience.
3. Marketing Management Philosophies:
There are several alternative philosophies that can guide
organizations in their efforts to carry out their marketing goal(s).
Marketing efforts should be guided by a marketing philosophy. Decisions
about the weight, given the interests of the organization, customers,
and society need to be made by marketing managers. There are five
alternative concepts under which organizations conduct their marketing
a. The Production Concept
The production concept holds that consumers will favor
products that are available ad highly affordable and that management
should, therefore, focus on improving production and distribution
efficiency. This is one of the oldest philosophies that guide sellers.
The production concept is useful when:
1). Demand for a product exceeds the supply.
2). The product’s cost is too high and improved productivity is needed
to bring it down. The risk with this concept is in focusing too narrowly
company operations. The production concept holds that consumers will
favor products that are affordable and available, and therefore
management’s major task is to improve production and distribution
efficiency and bring down prices.
b. The Product Concept
The product concept holds that consumers favor quality products that
are reasonably priced, and therefore little promotional effort is
required. The selling concept holds that consumers will not buy enough
of the company’s products unless they are stimulated through a
substantial selling and promotion effort. The product concept
states that consumers will favor products that offer the most quality,
performance, and features, and that the organization should, therefore,
devote its energy to making continuous product improvements. The product
concept can also lead to “marketing myopia,” the failure to see the
challenges being presented by other products.
c. The Selling Concept
Many organizations follow the selling concept. The selling
concept is the idea that consumers will not buy enough of the
organization’s products unless the organization undertakes a large-scale
selling and promotion effort.
1). This concept is typically practiced with unsought goods (those
that buyers do not normally think of buying e.g. insurance policies).
2). To be successful with this concept, the organization must be good at
tracking down the interested buyer and selling them on product benefits.
3). Industries that use this concept usually have overcapacity. Their
aim is to sell what they make rather than make what will sell in the
4). There are not only high risks with this approach but low
satisfaction by customers.
d. The Marketing Concept
The marketing concept holds that achieving organizational
goals depends on determining the needs and wants of target markets and
delivering the desired satisfactions more effectively and efficiently
than competitors do. The marketing and selling concepts are often
confused. The primary differences are:
1). The selling concept takes an “inside-out” perspective (focuses on
existing products and uses heavy promotion and selling efforts).
2). The marketing concept takes an “outside-in” perspective (focuses on
needs, values, and satisfactions). Many companies claim to adopt the
marketing concept but really do not unless they commit to market-focused
and customer-driven philosophies:
• Customer-driven companies research current customers to learn about
their desires, gather new product and service ideas, and test proposed
• Such customer-driven marketing usually works well when there exists a
clear need and when customers know what they want.
• When customers do not know what they want, marketers can try customer
driving marketing--understanding customer needs even better than
customers themselves do, and creating products and services that will
meet existing and latent needs now and in the future.
e. The Societal Marketing Concept
The societal marketing concept holds that the organization
should determine the needs, wants, and interests of target markets. It
should then deliver the desired satisfactions more effectively and
efficiently than competitors in a way that maintains or improves the
consumer’s and the society’s well being.
1). The societal marketing concept is the newest of the marketing
2). It questions whether the pure marketing concept is adequate given
the wide variety of societal problems and ills.
3). According to the societal marketing concept, the pure marketing
concept overlooks possible conflicts between short-run consumer wants
and long- run consumer welfare.
4). The societal concept calls upon marketers to balance three
considerations in setting their marketing policies:
a). Company profits.
b). Customer wants.
c). Society’s interests.
5). It has become good business to consider and think of society’s
interests when the organization makes marketing decisions.
4. Evolving Views of Marketing’s Role:
As expressed in figures initially the Marketing was considered to
play equal function as other departments of the organization. But with
the passage of times and growing importance of the customers marketing
department attained more importance and attained the central part in the
organization. Afterwards the customer is now the main actor that is
controlling almost all functions and efforts of the marketing
department, because the success of any organization in today’s
competitive era depends upon the level of satisfaction provided by the
company. Nowadays the marketing department is acting, as integration
department to provide integration among the functions performed by the
company and customer is acting as controlling factor