The Evolution of Marketing Thought: From Past to Present

Even though marketing has existed for centuries, the scope of marketing and its perception has evolved through years of research. To understand the present marketing structure and predict future possibilities, a marketer needs to understand its evolution. The second industrial revolution lead to the rise of a mass market. Therefore, Traditional Marketing was adapted by firms to increase demand to match their supply. This lasted from 1900 to 1950 and lead to the recognition of marketing as an independent discipline only in the 20th century. It suited a market that predominantly advertised agricultural products.

The world changed after WW2, with US markets dominating the global economy. The socio-economic structure of the US was very different from that of European countries. Science, technology and urbanisation created a vacuum for potential customers but according to O’Malley et al., the economic system was in danger of collapse. Firms that increased their production capacity during the war, strived to maintain the same high level of demand. This led to a new marketing concept that worked consistently, and a marketing education where scientific theory was infused into business systems. This shift was called the Managerial Turn and it led to a revolutionary way of marketing called Modern Marketing.

In the 1950s, marketers began to take interest in the managerial side of marketing and the scholarly articles released were oriented towards problem-solving and decision making. Borden introduced the concept of Marketing Mix that encompasses 12 variables, from which marketers could blend into a developed marketing strategy. It became the widely accepted concept of marketing as it was versatile and direct in its approach. Development of marketing mix concept was beneficial to scholars, students and business firms that hired marketers as it emphasised on profit maximisation by satisfying customers. McCarthy simplified the 12 variables into the 4Ps of Marketing – Product, Price, Place and Promotion. The stable economy of the US and the growing middle-class paved way for manufacturing industries to succeed which created a homogenous market. This along with the simplicity and feasibility of the standard 4P model cemented the place of the 4Ps in the annals of modern marketing.

Marketing education’s shift to a modern setting was mainly due to the works of Wroe Alderson and the concepts of marketing though management ultimately fuelled the rise of Marketing Management School. It focused on the seller’s point of view to try and minimise costs. Marketing Management school became so successful that it is still studied as a subarea in the schools of marketing thought. Simultaneously, the idea of market segmentation and brand image were developed. Another school that emerged was the Marketing Systems School which defined marketing as ‘a function of various systems that work together’. The late 1950s was a period of liberty, creativity and economic growth as it saw a rise in users of Radio and TV. Advertisements became the most important source of product promotion and marketers utilised the segment. As a consequence of the socio-economic situation, Consumer Behaviour school was formed. It surveyed inputs from consumers and researched on it which made a big impact in the modern schools of marketing. But the concept of marketing through consumer behavior was replaced by research studies in psychology. A school that had a unified theory of marketing thought called the Macromarketing School, one that focused mainly on the transaction called the Exchange School and one that focused on the history of marketing called the Marketing History School were all setup. But Marketing Management School remains the most successful till date and Kotler had the biggest influence. He was so influential that his principles were given a name of its own as Kotlerism. These schools and their practices dominated the field of marketing between 1950 and 1980 in a new combined theory called Transactional Marketing which can be defined as a business strategy that works towards increasing efficiency and profits by reducing costs.

Wide-scale globalisation began in the 1980s along with technological improvements. Marketing mix became production oriented rather than market oriented. Customers became more sophisticated and market aware. The society valued image more than the substance itself. Transactional Marketing failed in its primary goal of satisfying customers as businesses and literatures were more focussed on making profits. Its failure in service sectors, globalisation and European markets lead to its replacement by a new concept that would focus on relationships along with the product.

The idea first originated in Sweden’s Upsala University where a more interactive concept of marketing was suggested. Firms realised that during an exchange, interactions had a big impact on both buyer and seller as much as the economics involved. Marketing mix’s perspective ideas and an interactive exchange concept merged to form Relationship Marketing. Grönroos defined it as “to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfilment of promises”. McCarthy’s 4Ps were replaced by Kotler and Keller’s new 4Ps – People, Processes, Programs and Performance, recognising the shift in marketing. Customer satisfaction now depended on both the product quality and the interaction during the exchange. Although relationship marketing is costlier than transactional marketing, it proved to be more effective and efficient.

The postmodern society has customers who want more choices. The creative side that was lost during the transactional paradigm was sought after. One of the major challenges in the current marketing world is the ability of a firm to differentiate its products from their competitors. The products are differentiated through intangible factors even though the generic product is identical. A modern sports brand called ‘Urban Armour’ managed to differentiate their products positively with their latest ‘Athlete Focussed’ campaign by which they insist upon excellence, hard work and patience. The idea was not to promote the product itself, but to promote what the products represents while their competitors focused more on the latter.

Segmentation which was mostly location centric is now based on behaviour of customers. Relationship Marketing has taught many firms to survey their customers and deduce valuable insights to better improve their marketing strategy, and ultimately maximise profits. Sunsilk is one of the biggest manufacturers of cosmetics in the world market. However, they were struggling in a developing market like India in the 2000s as it had thousands of poor villages. 80% of the population was paid daily wages for hard labour and they did not have the luxury of buying a shampoo bottle. So, Sunsilk launched a 1 Rupee sachet line to counteract the difficulties. It became a huge success as consumers could get a sachet soon after work every day. Even though being a global brand, Sunsilk succeeded in sensing the market condition in individual countries. Segmenting based on the economy and the behaviour was the main reason for its success and dominance in Indian markets. However, Apple did not achieve this. Although being the biggest smartphone manufacturer in the world, they are not among the top 5 brands in India. Their failure is due to their lack of flexibility and adaptability. Their success is only in developed countries but not in developing countries. Indians in general, prefer adaptability and interchangeability over anything in smartphones which allowed for the dominance of Android smartphone brands like Samsung and Google. And hence, Apple’s limited product line and zero flexibility lead to its downfall in Indian markets.

Ethics in business are the moral principles that govern a firm’s behaviour during the course of their business. It has one of the biggest impacts in customer’s preference as it leaves a sense of accomplishment and fulfilment in customers who opt for an ethically sound brand. In the 2010s, brands started using ethics as a means of promotion. What should be a standardised norm in a business is now used as a marketing tactic. Similarly, Environmental Sustainability also emerged as a means to market a firm’s products and services. With pollution levels being at a record high, consumers try to be responsible with the products they buy. Every major firm in the automobile industry has started investing in electric cars despite them being inefficient to the usual Internal Combustion Engines.

The reason for the success and failure of the firms explained above is solely because of their Relationship Marketing strategies. They changed their strategies according to customer’s preferences. That is why it remains the dominant concept of postmodern marketing. However, modernisation and globalisation will only grow, and marketing will continue to evolve giving meaning to Egan’s quote, “theory builds on theory”.