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Marketing:HistoricalPerspectivesFREEMarketing:
HistoricalPerspectivesinformation
MARKETING:HISTORICALPERSPECTIVES
Marketingisoneofthemajorfunctionalareasofabusinessfirm.Inthisintroductiontomarketing,
thisarticlewilldescribeanddefinetheconcept.Then,anaccountoftheevolutionofmarketinginthe
UnitedStatesispresented.Theevolutionofmarketingincludesseveralerasincludingthesimple
tradeera,theproductionera,thesalesera,themarketingdepartmentera,themarketingcompany
era,andtherelationshipmarketingera.

WHATISMARKETING
"Marketingisadvertising,likethosefalseordeceptiveadsontelevisionthattrytogetyoutobuy
somethingthatyoudon'treallywant."
"Marketingislikethosepushycarsalespeople,orthosesalespeoplethatcometoourfrontdoors
sellingoverpricedvacuumcleaners."
"Ihatethoserudetelemarketerscallingatalltimesofthedayandnight."
Somepeoplethinkthatmarketinginvolvesdeceptive,highpressuretacticstogetthemtobuy
somethingtheydonotreallywant.Thisisincorrect.Whilemarketingusuallyinvolvesadvertisingor
personalselling,marketingpracticedcorrectlyshouldnottrytogetpeopletobuythingstheydo
notwant,norshouldmarketersusedeceptiveorpushytacticstogetpeopletobuy.Marketingis
reallytheprocessofdevelopingproductstosatisfycustomersthroughproperpricing,promotion,and
distribution.
Thebasicpremisebehindmarketingistosatisfythecustomer.Satisfiedcustomersaremuchmore
valuablethancustomerswhohavebeendeceivedintobuyingsomething.Forexample,satisfied
customersaremorelikelytopurchaseproductsrepeatedly.Furthermore,satisfiedcustomersare
morelikelytorelatepositivewordofmouthtofriendsandacquaintances,whichcanincreasethe
chancethatthey,inturn,willbuythefirm'sproduct.Indeed,marketingisreallytheprocessof
developingandmaintaininglongtermexchangerelationships.Nevertheless,companieshavenot
alwayspracticedthisphilosophy.Thefollowingsectiondescribeshowcompanybeliefshavechanged
overtime.

THEEVOLUTIONOFMARKETING
Marketing,asitexiststoday,isarelativelyrecentphenomenonthatreallybeganpriortothetwentieth
century.Intheearlynineteenthcenturyawomanwhowantedanewdresshadtwochoices,eitherto
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makeherownortohiresomeonetomakeoneforher.Ifshedecidedtohiresomeone,thewoman
needingthedresswouldpickoutthefabric,getmeasuredandthedresswouldbecustommadeto
herproportions.Therewerenostandardsizessuchasasizesix,eight,ortendress.Standardsizes,
suchasshoesizes,aretheresultofmodernmassmanufacturingprocesses.

TheSimpleTradeEra
Priortotheindustrialrevolution,peoplemademostofwhattheyconsumed.Anyexcesshousehold
productioncouldbebroughttotownandsoldortradedforothergoods.Thistypeofeconomyis
commonlyreferredtoasapuresubsistenceeconomy.Inapuresubsistenceeconomy,thereislittle
needformarketing(tofacilitateexchanges)sinceeachhouseholdproduceswhatitconsumes.
Withtheadventoftheindustrialrevolution,however,theproducersofmanytypesofgoodswerenot
householdsbutbusinesses.Whentheproducersofproductsarenottheconsumersofthose
products,exchangesmusttakeplace.Thefollowingsectiondescribesgeneralcompanybusiness
thinkingabouttheexchangeprocessbeginningwiththeperiodoftheindustrialrevolution.

MODERNDAYMARKETINGEVOLUTION
Theevolutionofmarketingintothemostimportantbusinessfunctionwithinmanybusinessfirmswas
firstrecognizedbyRobertKeith,anexecutiveatPillsbury,in1960,andwassubstantiatedbyother
businessleadersatotherfirms.AccordingtoKeith,marketingevolvedintoitspresentday
prominencewithinfirmsduringfourdistincterasthroughoutAmericanhistory.Theseerasincludethe
productionera,thesalesera,themarketingera,andthemarketingcompanyera.

TheProductionEra
Theproductioneraissonamedbecausethemainpriorityofmanycompanieswasthereductionof
thecostofproduction.Companiesbelievedthatexchangescouldbefacilitatedmerelybylowering
manufacturingcosts,andinturn,passingalongthecostsavingstocustomersintheformoflower
prices.
Thisfocusonproduction(whichlastedfromjustaftertheCivilWar[18611865]andcontinuedinto
the1920s)wasfueledbymilestonessuchasHenryFord'semploymentoftheassemblylineand
moreefficientworkprinciplesadvancedbyFrederickW.Taylor'sscientificmanagementmovement.
Thesetwoinnovationsmadebusinessmanagersawarethatmassproductionresultedinsteeply
decliningunitcostsofproduction.Inturn,thedecliningunitcostsofproductionmadeprofit
possibilitieslookfabulous.
Therationaleformassproductionseemedsoundatthetimeoftheproductionera.Accordingto
MichaelPorter,reducedproductioncostscanleadtoreducedsellingpricesandthusappealtothe
largestsegmentofcustomers.Unfortunately,turbulenteconomicconditionsassociatedwiththelate
1920sthroughthe1940scausedmanycompaniestofaileventhoughtheyhadadoptedthis
productionorientedphilosophyofdoingbusiness.Asaresult,companieslookedforotherwaysto
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facilitatetheexchangeprocess.

TheSalesEra
Thenexteraofmarketingevolutioniscalledthesaleserabecausemanycompanies'mainpriority
wastogetridoformovetheirproductsoutthefactorydoorusingavarietyofsellingtechniques.
Duringthesalesera,companiesbelievedthattheycouldenhancetheirsalesbyusingavarietyof
promotionaltechniquesdesignedtoinformand/orpersuadepotentialcustomerstobuytheir
products.Thistypeofthinkingwasinitiatedbytheeconomicclimateofthetime.
HerbertHooverwaselectedpresidentin1928andthemoodofthegeneralpublicwasoneof
optimismandconfidenceintheU.S.economy.Fewpeoplehadanyreasontobelievethatprosperity
wouldnotcontinue.InhisacceptancespeechfortheRepublicanpresidentialnomination,Hoover
said,"WeinAmericatodayarenearertothefinaltriumphoverpovertythaneverbeforeinthehistory
ofanyland.Thepoorhouseisvanishingfromamongus."
Nevertheless,Tuesday,October29,1929,BlackTuesday,markedthebeginningoftheGreat
Depression.ThiswasthesinglemostdevastatingfinancialdayinthehistoryoftheNewYorkStock
Exchange.Withinthefirstfewhoursthatthestockmarketwasopen,pricesfellsofarastowipeout
allthegainsthathadbeenmadeinthepreviousyear.Sincethestockmarketwasviewedasthe
chiefindicatoroftheAmericaneconomy,publicconfidencewasshattered.BetweenOctober29and
November13(whenstockpriceshittheirlowestpoint)over$30billiondisappearedfromthe
Americaneconomy(comparabletothetotalamountAmericaspentonitsinvolvementinWorldWarI
[19141918]).
Theamountofdisposableanddiscretionaryincomethatconsumershadtospendonnecessitiesand
luxuriesalsodecreaseddramaticallyastheunemploymentrateapproached25percent.Companies
foundthattheycouldnolongersellalltheproductsthattheyproduced,eventhoughpriceswere
loweredviamassproduction.Firmsnowhadtogetridoftheirexcessproductioninordertoconvert
productsintocash.
Inordertogetridofproducts,manyfirmsdevelopedsalesforcesandreliedonpersonalselling,
advertisingsigns,andsingingcommercialsontheradioto"move"theproduct.TheodoreLevitt,a
prominentmarketingscholar,notedthatthesefirmswerenotnecessarilyconcernedwithsatisfying
thecustomer,butrathersellingtheproduct.Thissalesorientationdominatedbusinesspractice
throughthe1930suntilWorldWarII(19391945),whenmostfirms'manufacturingfacilitieswere
adaptedtomakingmachineryandequipmentforthewareffort.Thewar,ofcourse,dramatically
changedtheenvironmentwithinwhichbusinesswasconducted.Thisalsochangedcompanies'
philosophiesofdoingbusiness.

TheMarketingDepartmentEra
Afterthewar,mostofthemanufacturingcapabilityofindustrializedcountrieswasdestroyed,except
forthatintheUnitedStates.U.S.firmsonceagainfounditrelativelyeasytoselltheproductsthey
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manufacturedbecausetherewaslittlecompetitionfromabroad.Armedwithsalesconcepts
developedduringthesalesera,aswellasnewmanufacturingcapabilitiesandlargeresearchand
developmentdepartmentsdevelopedduringthewar,firmsrealizedthattheycouldproducehundreds
ofnewanddifferentproducts.
Firmsdeterminedthattheyneededasetofcriteriatodeterminewhichproductswouldbe
manufacturedandwhichwouldnot,aswellasanewmanagementfunctionthatwouldincorporate
manyrelatedfunctionssuchasprocurement,advertising,andsalesintoonedepartment,the
marketingdepartment.Itwasalsoatthistimethatmanyfirmsrealizedthatthecompany'spurpose
wasnolongertomanufactureavarietyofproducts,buttosatisfytheircustomers.
Changingcompanythinkingorpurposefromthatofmanufacturingproductstothatofsatisfying
customerswastrulyevolutionaryandhadmanyimplicationsforfirms.Firmsthatseethemselvesas
manufacturersofproductsusesellingtechniquesthatarepreoccupiedwithconvertingproductsinto
cash.Firmsthatseethemselvesasmarketersfocusonsatisfyingtheneedsofthebuyerthroughthe
productsthataresold,aswellasallofthosefunctionsassociatedwithdevelopingtheproduct,
deliveringtheproductandconsumingtheproduct.Inshort,sellingfocusesontheneedsoftheseller
marketingfocusesontheneedsofthebuyer.
ThepopularinsightbyLevittconcerningFord'sadaptationoftheassemblylineillustratesthe
differencebetweenfirmsthatfocusonproduction(i.e.,aproductionorientation)andthosethatfocus
oncustomers(acustomerorientation).Fordiswidelyknownasaproductiongeniusforincorporating
theassemblylineintoautomobileproduction.Manyincorrectlybelievethattheassemblylinereduced
thecostofmanufacturingautomobilesandthereforeFordcouldsellmillionsof$500cars(a
productionorientation).
Ford'sthinking,however,wasactuallythereverse.Heemployedtheassemblylinebecausehe
concludedthatmillionsofbuyerswouldbewillingtopay$500foranautomobile(acustomer
orientation).Hismaintaskwastoreducemanufacturingcosts(inwhateverwaypossible)sothathe
couldsellcarsat$500andstillmakeaprofit.Theassemblylinewastheresult,notthecauseofhis
lowprice.AsFordhimselfputit:
147">
wefirstreducethepricetothepointwherewebelievethatmoresaleswillresult.Thenwego
aheadandtrytomaketheprices.Wedonotbotheraboutthecosts.Thenewpriceforcesthecost
downbecausewhatearthlyuseisittoknowthecostifittellsyouthatyoucannotmanufacture
atapriceatwhichanarticlecanbesold?Butmoretothepointisthefactthat,althoughonemay
calculatewhatacostis,andofcourseallofourcostsarecarefullycalculated,nooneknowswhat
acostoughttobe.Onewayofdiscoveringistonameapricesolowastoforceeverybodyin
theplacetothehighestpointofefficiency.(Ford,1923,pp.146147)
Inshort,duringthemarketingdepartmentera,manycompanieschangedtheirthinkingorpurpose
fromthatofmanufacturingproductstothatofsatisfyingcustomers.Firmswithacustomerorientation
attempttocreatevaluesatisfyingproductsthatcustomerswillwanttobuy.Somefirmshave
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implementedthiscustomerorientedphilosophytothepointwherethemarketingdepartmentsetsthe
agendafortheentirecompany.Thesetypesoffirmsarereferredtoasmarketingcompanies.

TheMarketingCompanyEra
Firmsthathavemovedfromsimplyhavingamarketingdepartmentthatfollowsacustomer
orientationtoonewherethemarketingdepartmentguidesthecompany'sdirectionarecalled
marketingcompanies.Inmarketingcompanies,themarketingdepartmentsetscompanyoperating
policy,includingtechnicalresearch,procurement,production,advertising,andsales.Anexcerptfrom
Amazon.com's2004annualreportexemplifiesthestrategyofamarketingdrivenfirm:
Fromthebeginning,ourfocushasbeenonofferingourcustomerscompellingvalue.Werealized
thattheWebwas,andstillis,theWorldWideWait.Therefore,wesetouttooffercustomers
somethingtheysimplycouldnotgetanyotherway,andbeganservingthemwithbooks.We
broughtthemmuchmoreselectionthanwaspossibleinaphysicalstore(ourstorewouldnow
occupy6footballfields),andpresenteditinauseful,easytosearch,andeasytobrowseformat
inastoreopen365daysayear,24hoursaday.Wemaintainedadoggedfocusonimprovingthe
shoppingexperience,andin1997substantiallyenhancedourstore.Wenowoffercustomersgift
certificates,1ClickSMshopping,andvastlymorereviews,content,browsingoptions,and
recommendationfeatures.Wedramaticallyloweredprices,furtherincreasingcustomervalue.
Wordofmouthremainsthemostpowerfulcustomeracquisitiontoolwehave,andwearegrateful
forthetrustourcustomershaveplacedinus.Repeatpurchasesandwordofmouthhave
combinedtomakeAmazon.comthemarketleaderinonlinebookselling.(Amazon.com)
AscanbeseenwithAmazon.com,marketingisthebasicmotivatingforceforallactivitieswithinthe
corporation,withtheobjectiveofsatisfyingtheneedsofthecustomer.Firmsthatpracticethis
philosophyofbringingalldepartmentstogetherwiththeobjectiveofsatisfyingtheircustomersare
practicingthemarketingconcept.
Themarketingconceptstatesthatifalloftheorganization'sfunctionsarefocusedoncustomer
needs,profitscanbeachievedbysatisfyingthoseneeds.Thesatisfactionofcustomerneedscanbe
accomplishedthroughproductchanges,pricingadjustments,increasedcustomerservice,distribution
changes,andthelike.
Today,somefirmstakethemarketingconceptonestepfurtherbyestablishinglongterm
relationshipswiththeircustomers.Thefollowingsectiondiscusseshowfirmsattempttosatisfytheir
customersevenfurtherbyenteringintolongtermrelationshipswiththem.

TheRelationshipMarketingEra
Relationshipmarketingtakesthemarketingconceptonestepfurtherbyestablishinglongterm,
satisfyingrelationswithcustomersinordertofostercustomerloyaltyandencouragerepeatbuyingof
thefirm'sproducts.PhilipKotler,anotedauthorofseveralbooksandarticlesonmarketing,pointed
outthattheneedforcustomerretentionisevidentbecausethecostofattractinganewcustomeris
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estimatedtobefivetimesthecostofkeepingacurrentcustomerhappy.

CONCLUSION
MarketingintheUnitedStateshasevolvedsincetheCivilWarandcontinuestoevolveinthetwenty
firstcentury.Manycompanieshavedeterminedthatinordertobesuccessful,theymustbecomeless
internallyfocusedandmoreexternallyfocused(onthecustomer).Thistrendincompanythoughthas
extendedtothepointwheremanyfirmsnowseethemselvesaslongtermpartnerswiththeir
customers.
Asinformationtechnologybecomesmoreadvanced,marketerswillbeabletobecomemoreacutely
awareoftheircustomers'needsandmorequicklyabletoprovidegoodsandservicestosatisfythose
needs.Anewtrendinmarketingthatincorporatesadvancesininformationtechnologyismass
customization.Masscustomizationisthecustomizationandpersonalizationofgoodsandservicesfor
individualcustomersatamassproductionprice.Oneexampleofafirmpioneeringinmass
customizationisNike.WithNike'siDWebsite,themassescanbuyselfcustomizedsneakers.
seealsoMarketing

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Ford,Henry(1923).Mylifeandmywork.NewYork:Doubleday.
Haber,Samuel(1964).Efficiencyanduplift.Chicago:UniversityofChicagoPress.
Keith,RobertJ.(1960).Themarketingrevolution.JournalofMarketing,24,3538.
Kinnear,ThomasC.,Bernhardt,KennethL.,andKrentler,KathleenA.(1995).Principlesofmarketing
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Levitt,Theodore(1960,JulyAugust).Marketingmyopia.HarvardBusinessReview,4556.
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JamesE.Stoddard

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