Marketing as a subject is a recent phenomenon but the
concept of marketing has existed from the inception of human race in one form
or another. The involuntary use of marketing can be tracked down to the times
of Adam and Eve. The snake convinced Eve to have the forbidden fruit who in
turn convinced Adam. Coming to Indian
mythology, Lord Krishna’s character in Mahabharata can be easily juxtaposed
with that of a marketer when he convinces Arjun at the battleground.
The term “marketing” was coined in 1561 and was defined as
“the act or process of selling or purchasing in a market”. This definition
mostly catered to the trade happening in the typical market setup of 16th
century. The word marketing was first
used in Harper’s Magazine (second oldest magazine of US history) in 1884
describing the process of selling the product. Marketing as we see it today,
has evolved and is influenced by sellers as well as buyers.
Marketing as a concept has evolved over the years and is
more sophisticated now. The evolution of marketing is defined by classical
theory of marketing and can be divided into following periods/eras.
Simple Trade Era:
The period starting from the beginning of the time till mid-19th century
is known as Simple Trade Era of Marketing. The concept of economy wasn’t
christened by then and the goods produced were mostly consumed in the household
itself or bartered. The first palpable example of marketing can be traced back
to the branding of animals and slaves by farmers and masters respectively,
during Roman Empire.
Production Era: Remember
the concept of assembly line? This was the period when Henry Ford pioneered the
concept of assembly line in manufacturing T-model cars. In this era, reducing the cost of production became the pivot point leading to mass production of
goods. Mass production gave rise to the science of economics which in turn
paved the way for modern marketing. It started after the Industrial Revolution and
lasted from 1860 to 1920.
Sales Era: The
period from 1920 to 1940 was a tumultuous time for world economy. Slowdown due
to World War I and later due to The Great Depression saturated the demand,
magnifying the competition between producers and galvanising them to lookout
for competitive advantage.
For example, General Motors playing on their competitive
strategy, got the best of Ford in early 1920’s. Ford the market leader at that
time, used to create invariable cars of same model and colour. GM came up with
the strategy of making cars of different styles and in different colours, thus
giving exclusivity to the customers. This enabled GM to snatch significant
amount of market share from Ford.
This era also marked the inception of advertising. For the
first time, singing commercials of products were telecasted on radio to sell
the products.
Marketing Department
Era: In this period, marketing departments were established in the
companies, dedicated to work on customer reviews and feedback. These
departments helped in either improving the product or coming up with a new
product. P&G’s marketing department started taking customer feedback by
initiating door to door survey in 1940’s, followed by interviews on telephone
and via mail in 50’s. McDonald’s while opening its stores in various countries
started doing extensive MR for their product mix.
WWII led to the development of technology at such a fast
pace which wouldn’t have been possible during the peace time. Post war this
technological advancement was responsible for flooding of market with myriad consumer
goods. High discretionary income and pent up demand during the war resulted in
consumer boom. To harness this boom, companies invested in research facilities
under marketing department and came up with new products to entice customers. Unilever
instituted 11 R&D centres across the world during this time and came up
with numerous products like Sunsilk, Dove, Gibbs toothpaste, finger chips, etc.
This was the period when behavioural science (psychology of
the consumer) started influencing marketing. [Modern Marketing is a by-product of economics and behavioural science]
Marketing Company
Era: The next period starting from early 1960’s till present day is known
as marketing company era. This period made the marketing department fulcrum of
the company. It started anchoring the direction of company from procuring raw
materials to delivering after sales service to the customers. In this era, companies
started pre-empting customer needs and developed products and strategies accordingly.
Akio Morito of Sony identified the need of a music player with simplified usage and
gave Walkman to the world; Steve Jobs identified the scope of personal
computers and went on to revolutionize the PC market with products like Apple
II and Macintosh; Sam Walton identified the potential of an all in one chain
of general stores selling goods at a condensed price, he went on to create the biggest
retail chain in the world. During this period, customers became the kings and
their interests the bureaucrats of new product development.
Relationship
Marketing Era: Marketing Company Era further matured into Relationship
Marketing in the early 1990’s which lasted till 2010. According to Philip
Kotler, ‘the cost of attracting a new customer is estimated to be 5 times the
cost of keeping the current customer happy’. To increase the profits, retaining
customers became very important. Reward programs in casinos, airline industry,
credit cards, etc. and strategies of companies like IKEA, Dell, Maruti Suzuki,
etc. effectively created brand loyalists.
IKEA’s customization of products based on consumer needs;
Dell’s and Maruti Suzuki’s service centres won them long term customers. Apple Inc. through its exclusiveness directly created customer
loyalty, its incompatibleness with other OS and devices indirectly created
loyalists in different product segments. In this era, customer relationship
management came into existence and Pareto Rule (80-20 rule) became highly
relevant to identify the golden goose.
Social Marketing Era:
Social marketing era came into existence in early 2010 and is still
continuing. Social acceptance of products and services started giving much needed
impetus to their marketing. With the advance of internet and social networking
websites managing social reputation has become very tricky. Handling social
media such as twitter reactions and managing online reputation such as reviews
on Tripadvisor, memes on Facebook and Whatsapp etc. has taken the centre stage.
Now, it is very hard for companies to do away with
substandard offerings. Recently, Nestle’s Maggi bore the brunt of negative
social marketing. So did KFC and BMW when worms were found out in former’s
chicken and some technical failure caused 94,296 cars of BMW to be recalled. While
negative social marketing can drag down the company into doldrums, positive
social marketing can do wonders as is evident from the election win of Narendra
Modi.
Classic Theory of Marketing has come a long way from the
time of its origination. The ads of early 20th century for products
such as Coca Cola used to focus on the ‘freshness’ of the coke, i.e. product
quality. Now, Coke ads emphasise on ‘happiness’, which provides it a feel good
factor, i.e. social acceptance. This aptly asserts how marketing has evolved
from the product based marketing to social marketing.
As the world economy is growing, the standard of living
across the globe is increasing. This is resulting in companies contesting for
higher growth in revenues and in market share. Marketing managers are finding
out newer ways of reaching out to customers as is evident from Armchair
shopping introduced by Amazon.com, Guerrilla marketing by Durex and Surrogate advertising
from alcoholic beverage companies.
Customers have become multitaskers, they have a 24*7
lifestyle to maintain. A modern customer talks on the mobile, have pizza and
send mails at the same time. Marketing’s next goal is to cater to this need and
other such opportunities by the application of creativity, innovation and
development in technology. These will be the major factors affecting the scope
of marketing in foreseeable future.
