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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Throughout the ages marketing has undergone countless battles to stay relevant in a society that almost renounced its existence. Its unmistakable presence in the world today is due partly to the skill of adaptation. In order to fully utilize opportunities this skill is crucial. The 1950's-1980's are seen as the time period that marketing adopted an approach that can be described as the transactional paradigm. Key theories and factors driving this approach included Kotlerism, the four P's, marketing management, and transactional marketing. However, this success would not have occurred without the socio-economic factors that made the transactional approach possible. The next transition occurred after the 1980's, where it shifted to a relationship approach due to the need for a new paradigm.

At the beginning of the twentieth century, in the time period that is referred to as ‘the age of the mass market', marketing emerged as a branch of descriptive micro-economics. As a result of this, the early schools of marketing thought were established (the descriptive schools). These included ‘The Commodity School', ‘The Institutional School', and ‘The Functional School'. All of these focused on their own respective areas of marketing and did not bring things together in a coherent way. Marketing was not seen as a process, rather little pieces of disparate activities, unrelated to one another. In 1950 there was a shift from being descriptive-explanative to rather being prescriptive, this shift is known as 'The Managerial Turn'. Along with this change came a new approach where matters regarding separate sectors of marketing were handled in a more integrated way than before. “An alignment between marketing management and academia was founded in order to translate into business and its actionable marketing management principles.” (McCole P. , 2004) The managerial turn was made possible because of intellectual change in a context of social and commercial change. This, as well as socio-commercial reasons such as the fact that consumers were reaching out for something more than the essentials of life. Another factor is that “consumption was increasingly concerned with emerging lifestyles that emphasized freedom and social identity.” (Professor Alexander, 2018) The Managerial Turn led to the triumph of Scientism. This entailed replacing the purely academic approach that was being taken, with a managerial approach. It was decided that students needed to gain analytical skills and prepare themselves for responsible management positions. This shift promoted concepts such as McCarthy's ‘Four P's' or ‘The Marketing Mix'. In McCarthy's book, ‘Basic Marketing: A Management Approach', he discusses the tool's function. It was designed by McCarthy himself to be used for “consumer analysis, as well as the analysis of product, channels, promotion and pricing.” Due to the desire to work only with the fundamental variables, this broad framework was ideal as it emphasized consumer importance and reduced the major variables to four. In the chapter of his book titled ‘Marketing Management and the Consumer' he goes onto discuss what he calls “The Marketing Manager's Variables”. There he discusses the uncontrollable factors surrounding his framework for the business in the macro environment. Amongst the six factors that he created, the economic environment factor was an especially relevant one at that time. The American economic strength went unmatched globally, holding the highest gross domestic product rate, meaning that they possessed the power to increase the rate of production in the country. Production oriented businesses thrived as a result of a combination of the scarcity and need for mass-produced offerings. A higher GDP also means that consumers hold a higher spendable income to use on non-essentials leading to increasing company profits. Whilst one must acknowledge that in the future, consumer spending became more selective due to a variety of new competitors and suppliers in the market, the significance of the post war economic boom cannot be ignored. World War 2 left Europe crippled whilst America's infrastructure and economy remained secure. Therefore, it was only natural that American citizens had more disposable income in consequence. Many developments in The United States were occurring which ultimately changed the nature of distribution for all natures of businesses as a whole. “The completion of the transcontinental railroad generated ever-increasing trunk lines to even small cities, while larger cities developed mass transit, and growing numbers of automobiles and trucks travelled on ever-expanding roadways.” (Maclaran P, 2011) This system was extremely effective and efficient in connecting rural farmers to urban consumers and retailers through intermediaries via communication. During the period of the late 1960's to 1980's, marketing managers relied on a new source to lead them into the future, as opposed to McCarthy's book, which mainly emphasized the problems of the marketing manager. Kotler's first edition focused rather on what the function of a marketing manager should be, and therefore replaced McCarthy's book. “The study and teaching of marketing has to move beyond the structure that has traditionally been imposed on it, reflecting the so-called core marketing functions: advertising, distribution, strategy, sales, product development, and so on.” (Saren, 2007)

The 1980's and onwards adopted a completely new approach to marketing. Consumers were becoming increasingly savvy when it came to purchasing. Suddenly the marketing of services began emphasizing the ‘customer relationship life cycle', with an overall goal of reducing the cost to serve customers through the length of each relationship. They started turning away from transactional selling where the goal was focused purely on individual sales, rather than developing a relationship with the consumer. “Marriage is both necessary and more convenient. Products are too complicated, repeat negotiations too much of a hassle and too costly. Under these conditions, success in marketing is transformed into the inescapability of a relationship. Interface becomes interdependence.” (Levitt, 1985) Thus, the transactional paradigm shifted towards the relational paradigm. Transactional marketing was seen as rigid and inflexible, as well as manipulative, not fitting in with the changing consumer markets. The nature of goods began to change in accordance with a shift in market structure, principally from mass markets into fragmented and global markets. Along with the developing of micro-economic thinking came the desire to improve customer retention, with the hopes of lowering their price sensitivity whilst still strengthening their brand loyalty. What came along with the paradigm shift was the concept of the ‘augmented product', where a product was believed to have the potential to consist of more than merely the physical good or offering. “The suggestion was that desire could be increased and manipulated by factors (e.g. distribution, advertising) other than the mere existence of supply (Bartels, 1976) and value added beyond that of production (Wilkie and Moore, 1999)." (Egan, 2011)  The next paradigm shift to occur was known as the relationship paradigm, and could not even be ignored by Kotler himself. “Companies must move from a short-term transaction-oriented goal to a long term relationship building goal.” (Kotler, 1992) (Gronroos, 1994) Kotler's understanding of the importance in the marketing shift is reflected in the new versions of his textbooks. Amongst the adaptations in his new editions ‘Holistic Marketing' could perhaps be one of the most important additions. This refers to the various activities in marketing and their interdependencies. Holistic marketing can be divided into four parts: relationship, internal, integrated and performance marketing. A Holistic marketing approach is essential in a world containing postmodern consumers, who outwardly reject marketing that comes across as overt. Holistic marketing believes that everything in marketing matters and often needs to be analyzed in a broad sense. It's focus is on delivering value whilst still being conscious of their financial and societal impact. In the 1990's relationship marketing became the new form of marketing. Contextual drivers that pushed the relationship paradigm include the technological revolution that occurred and is still currently occurring today, affecting not only the consumer's ever-growing knowledge on the market, but also their desire for innovation. A cause at the heart of relationship marketing is concern for the environment as well as regulations that protect it. Businesses today cannot get away without solidifying their relationships with customers- they are central to many things including co-creation in the process of product development. Their feedback drives companies to constantly improve and innovate. Customer involvement and communication are invaluable assets to a company, as collaboration with a company's direct audience results in a significant competitive advantage. The customer's importance is reflected in marketing's current themes- market offerings need to be customizable, experiential, participative and environmentally conscious. All of these aim to improve the consumer's overall experience and strengthen the concept of the augmented product. An example of a company attempting to innovate on an experiential and personalization basis, is Lush. They have launched their own till system that results in customers' shopping experiences becoming more personalized, convenient and simple. This new system includes an app that has been built on an android system that allows sales advisors to offer mobile checkout points to customers- this along with any further information on personalized products.

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