The Marketing Chronicles!

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 16^th 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-19^th 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 20^th 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.