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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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The Evolution of Marketing Thought

Marketing has gone through significant changes over the last decades, mainly owing to businesses trying to increase sale of goods and services while formulating different marketing concepts and strategies to do so.

“Through the 1950s and 1960s, there was a huge growth and interest in the subject of marketing, as the frameworks and concepts of transaction marketing were developed (Borden, 1964).”

PART A

Factors leading to the Transactional Approach of Marketing between the 1950s and 1980's

Conventional Marketing (or the 4Ps) was initially used by businesses to sell their products or services. Increase in disposable income meant that consumers were starting to have increasing demands and producers had to meet this growing demand. “A production orientation business dominated the market from the beginning of Capitalism to the mid 1950's.” The main focus of the businesses in this era was to increase the production of goods and maintain low costs to meet these demands. This approach was highly successful during this era mainly because demand exceeded supply by very high levels.

“In the first part of the Era, in 1920s through the 1950s, technological advances accelerated production, however, the United States was in the middle of the great depression, during which unemployment nearing 30%, and people bought only what they absolutely needed.” Marketers then devised a method of using aggressive selling tactics, also known as the sales concept. “This sales orientation dominated business practice through the 1930s until World War II (1939–1945), when most firms' manufacturing facilities were adapted to making machinery and equipment for the war effort”.

The war completely changed the face of marketing and the way companies did business as they now changed they philosophies of their business.  Now instead of trying to persuade customers into buying products, marketers had to focus on making products what consumers wanted to buy.

“Concepts such as elasticity of demand (developed by Alfred Marshall 1842–1924) were being used by marketing writers as a theoretical basis for developments in selling, advertising and promotions as well as marketing in general”.  Factors based on elasticity of demand such as how a specific good affects the demand such as consumer goods, essential goods etc determined the theoretical marketing strategy and promotional activities

“The series of oil crises of the 1970s brought about significant change, however, the continual rise in consumer demand was halted due to the economic problems experienced, and high inflation that followed acted to alter consumers' perceptions.” This event led to a complete shift in the marketing policies of the business as supply began to exceed demand, also customers realized that they were was now a power shift as there was competition among buyers and they could now influence the manufactures. This lead to the introduction of the ‘The Marketing Concept Era'

Customers began to attach value to the product and look not just at meeting basic needs but instead focused on other factors like status symbol, quality etc. Businesses realized that in order to separate their product/services from other consumers, product differentiation was vital. “When the generic product is undifferentiated, the offered product makes the difference in getting customers and the delivered product in keeping them.” (Harvard Business Review,1980)

PART B

Change in Marketing Discipline post 1980s and key challenges for Marketers in the modern era and the future

PART B

Change in Marketing Discipline post 1980s and key challenges for Marketers in the modern era and the future

Marketing Strategies after 1980s focused more on the needs and wants of the consumers. It wasn't about satisfying the basic generic needs anymore but involved meeting the increasing expectations.

“The ongoing nature of services and the growing complexity of technology will increasingly necessitate lengthy and involved relationships between buyers and sellers” The seller could no longer say the job is done after selling but instead had to focus on maintaining customer satisfaction after. Customer service was needed to ensure customers remain loyal after purchasing the product or service.

"One of the surest signs of a bad or declining relationship is the absence of complaints from the customer.” If a consumer doesn't complaint about your product it means the consumer has begun to lose trust in the company and that is the very start of deteriorating relationship between a consumer and retailer.

“The use of the marketing mix management paradigm and the Four Ps has made it very difficult for the marketing function to earn credibility.”. Marketing mix management as a separate function of the company would be disastrous to the overall marketing function as people working in other departments would lose interest in any of the existing customers they had. Having such a system would involve all the marketing activities carried out only by the marketing department and thus alienating the rest of the departments from any marketing. This form of marketing has become obsolete now and is being replaced to ensure that all departments have a marketing mindset.

Marketing strategies began to evolve over the years with new market research being conducted. “Relationship building and management, or what has been labelled relationship marketing, is one leading new approach to marketing which eventually has entered the marketing literature”. Globalization, increasing technological developments, changing market economies and various other trends have led to the change in marketing strategies being implemented. The Traditional Marketing Mix had to eventually evolve to a new form of marketing strategy known as Relationship Marketing.

“The essential aim of relationship marketing strategies is of course value creation for both parties through relationships and even partnerships in the marketplace.”  Companies have realized that relationships with customers need to be managed effectively to gain loyalty, satisfaction and strong engagement. However, experimental marketing will soon replace any form of traditional marketing strategy such as relationship marketing.

The emergence of experimental marketing was a new and exciting strategy that was being looked into. “The crux of experiential marketing is that a marketer should not only be concerned with customer satisfaction. He or she should be (more) concerned with making the consumer emotionally attached to the product/service.” Experimental marketing involves not just building a strong relationship with the customer but also making the consumer emotionally attached to the product. It involves the company having a brand essence that is divided into 2 functions: an emotional one and a functional one. The functional one involves what the brand does and the emotional part mainly focuses on how the brand makes the consumer feel.

Apple is one of the most successful examples of this marketing strategy as they focused on making their consumers feel great and making easy to use products.

Fig.1 shows the central focus behind Apples Experimental Marketing Strategy. They focused more on the emotional part of their product instead of the functional part while marketing their product. This method worked really well as Apple portrayed itself as a company that understands the basic needs of the consumer and how they are able to help them meet those needs by providing those products to satisfy them. This was followed by making their products designed in a beautiful manner and making it user friendly and finally, what their company stood for and how they were different from their competition. Apple always focused on anticipating customers changing needs and fulfilling them and ended up becoming the master of this.

What are some of the biggest challenges faced by Marketers now and into the future?

1) Production of Content-  

“You need an idea that is not only original but also appealing to the target demographic, as well”. Content made my marketing professionals had to not just be creative but also had to be clear about the message they were sending out.

2) Reaching Customers in a meaningful manner-

“Stewarding these creative, intellectual and emotional elements safely across territories is one mighty task.”  Marketers have to put out a message that adapts to diverse cultures and languages while still maintaining the meaning behind the message and that remains one of the biggest challenges marketers face till date and into the future.

3) Marketing towards Millennials

“Millennials grew up on the internet and are used to fast service, multiple companies competing for their business, and the atmosphere of being a "VIP".

Marketers are aware that the future of marketing is all based on millennials. Millennials are quick to change to competitors if they feel their demands aren't being satisfied. Social Media Influence is one of the important tools marketers must master to successfully gain the market of millennials.

4) Customer Loyalty

Maintaining customer loyalty in today's fast paced technologically advanced environment where people are quick to be critics and praise is the by far up there as the biggest challenge faced by marketers. Customer Loyalty can be gained through great customer service and quality in product/service offering.

Marketing Disciplines and strategies have been influenced and changed over decades ever since the Production concept all the way to relationship marketing and experimental marketing.

Transaction marketing/ conventional marketing is deficient in todays environment as producers are in a completely different era as compared to the early 1990s which led to the development of the marketing discipline. Fig 2 shows the gradual shift from transaction marketing to relationship marketing over the decades and how marketing went from focusing on customer gain to customer retention.

Different socio-economic factors, technological developments, significant moments in history and change in the consumer mindset have all led to these changes. Marketing has led to the development of living standard as people have begun to have increasing demands and marketing professionals have realized that it's important to meet these demands to gain loyalty, satisfaction and brand engagement which results in better products and services being offered. Many factors have caused marketing going from getting new customers to retaining customers and as marketing research evolves over time new strategies will always be implemented to ensure the growth of businesses and society as a whole

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