Welcome to our series of marketing articles, this is the introduction and looks at the history of Marketing and how it became what it is.
MARKETING: AN INTRODUCTION
This series has come from my own misadventures within the world of marketing. I have made innumerable mistakes by assuming that just because I’m interested in something, that everyone else is too. Prejudging consumer attitudes is a risky venture. A lot of time, effort and money can be wasted on unproductive campaigns that eventually miss the mark. This occurs when not fully appreciating the customer requirements or choosing the best methods to reach them.
In writing this series on an “introduction to marketing” I have found that limiting marketing simply to “advertising” or “Sales” prevents a wider appreciation of the process’s involved in bringing goods and services to end users. In these series of articles we will explore some of the history of marketing, current trends, a look at some disasters and hopefully give some tools in how to navigate this all important minefield.
HOW MARKETING DEVELOPED:
An appropriate definition of marketing comes from The UK Chartered Institute of Marketing (CIM): ‘Marketing is the management process, responsible for identifying, anticipating and satisfying customer requirements profitably.’ Simple enough, but the “management process” involved can be quite sophisticated in bringing this about. There are many tools available but not all of them are right for each sector or distinct customer base. To appreciate today’s trends it is important to understand how this phenomenon has developed.
If we all lived in rural villages, with the capacity to be self-sufficient, then that would limit our need for trade. If we got to a stage of producing more than we needed, then we could sell the residual goods to other villages which may grow a different crop than our own. With the onset of the Industrial revolution more people became urbanised, and required more items and services that they could no longer make for themselves. As society began to expand and its needs become more complex, people became more specialised in making goods and services to meet the needs of these new markets.
In previous centuries, many goods where handcrafted and the producer would be a member of a guild to provide a stamp of approval. The marketing concept was pretty simple. “We have produced Hammers since 1865” (You can see this on many buildings in the High Street) so the longer one has been established, it must be good.
It wasn’t until the advent of the modern era with the move towards mass production, cost control and time management, that these traditions where undermined. This was epitomised by Henry Ford’s development of the T-model vehicle which coincided with the development of the production line. One of his executives, Mr HG Sloane, came up with the idea of the “Annual model”. Basically if the essence of the product hasn’t changed, then you can promote some aesthetic variations to boost sales. This was the original “style over substance”. So a car may still get you from A to B, but you have to replace it with “this years” model as it has fancy door handles.
Previously most purchases where for materials that people needed and were appreciated for their quality and resilience. Now anything old was to be discarded and replaced with the next best thing. Long term quality was less of an issue as everything now had a transitory value. The modern era changed the emphasis from citizens to consumers with “Progress” as its catch cry.
In my home town in Australia, they made hydraulic pumps for reservoirs all around the world for over a hundred years. As a kid I can remember the main street being blocked off by a huge semi-trailer as it was making a delivery of one pump that was two stories high. One of the workers told me that he had been to a dam in Middle East which still used the original pump made over 80 years ago.
The firm eventually lost out on orders and it was taken over by an American firm which consequently “redesigned” the pump with “design flaws” so that it only had a 5 year life span. There was now an economic imperative to lower standards as expectations changed.
This is not necessarily a bad thing as a number of items which would have been out of reach of the general public years ago are now taken for granted as the economies of scales took hold. Most people now would expect to own a car or a phone where if it was hand produced it would only be accessible to the very wealthy.
As western societies became more prosperous the logic was that customers would buy whatever goods were available if the price was right. If you produced a good quality product then customers would find you. The problem with that approach was that quality may not necessarily be utmost on the mind of the consumer. Quality would sell itself was no longer the sole criteria of people spending habits.
A number of established companies went to the wall as they were not able to adapt to this new environment, even though they were the best in their field. As mass production took hold people began to purchase not only their day to day needs but things they wanted. Advertising changed from quality and longevity to the latest and most fashionable.
Advertising began to move from what is the essence of the product, to how to identify your self image with that brand. “Keeping up with the Jones’s” was a 50’s catch phrase as peer pressure and psychological methods were used to manipulate buying habits. The message changed from convincing people of the quality of an item, to an associated experience.
Coca Cola did a survey of young people in the 1970’s and found that people where searching for what was “real” so they adopted the slogan “Coke, The real thing”. This had nothing to do with the taste, ingredients or the cost of the product, just associating the brand with the mood of the time and it paid off. Increasingly the message became almost religious by selling instant gratification which had nothing to do with the product at all.
I have yet to see a scientific explanation for the orgasmic experience of using Herbal essences shampoo apart from the fact that the advertisers watched “When Harry met Sally” one too many times. This escape into fantasy went into overdrive with the advent of cheap credit which allowed consumers to spend more than they could earn. This coincided with the west dispensing with manufacturing goods that we bought to the emerging economies.
The bubble finally burst with the crash of 2008 and consumers are now recovering from their credit hangover and reviewing their discretionary spending. Consumers are now much more savvy of the manipulating effect of advertisers and as people’s real incomes are falling, the old methods are not as efficient as before. Surveys have shown that people don’t believe advertisements so marketing executives are now choosing more self-effacing content, (Skodas first TV advertisements).
The move had changed from being focused on product quality to artificially stimulating demand by mass consumption. In these challenging times the emphasis is now on re-orientating an enterprise to focus on the customer’s needs. The tone is changing from giving advice to engaging with potential clientele. This allows industries to be much more aware of the customers’ requirement which, in turn, engages customers with their product lines.
This approach develops trust in the brand, which promotes long term affiliation and ensures equally long term income streams. All of this leads to sustainable business models and ultimately, a broader based economy. The rest of this series will deal with this later model. See link to http://it-ebs.co.uk/news/marketing-series-customer-orientated-marketing/
Malcolm Ford: has worked for the past five years within Systems Implementation upgrading business’s from Accounting Packages to Enterprise Level. He has had 25 years’ experience of business experience in a wide variety of sectors on two continents. He also runs training courses on how to run business’s more efficiently.