History of Marketing

Customer Purchase Funnel


The study of the history of marketing as an academic field emerged only recently with the publication of ‘The History of Marketing Thought’ by Robert Bartels in 1976. Broadly defined marketing is any activity that connects producers with consumers, which was previously considered a subtopic of economics. Wroe Alderson’s book, ‘Marketing Behavior and Executive Action’ (1957) is also considered a break-point in the history of marketing thought. After Alderson, marketing began to incorporate other fields of knowledge besides economics, notably behavioral science, developing into a multidisciplinary field.

Marketing historian Jagdish Shethhave identified three schools of marketing: Managerial (systematized marketing emerged during the late 1950s and became arguably the predominant and most influential school of thought in the field), Consumer/Buyer Behavior (the use of behavioral science to market goods and services was popularized in the second half of the twentieth century), and Social Exchange (recently, ‘exchange’ has been forwarded as the fundamental concept of marketing).

In pre-modern economies, the predominance of small enterprises militated against the recognition of marketing as a separate field of expertise. Changes in the patterns and intensity of economic activity, as well as the rise of economics as a science, particularly in the 19th century, paved the way for studies of marketing. The growth in size and scope of national and international economies in the course of the Industrial revolution led eventually to a transcendence of ad hoc retailing and advertising innovations and eventually to systematization. Marketing emerged as a separate technical field only in the late 19th century. The OED traces the abstract usage of the word only as far back as 1884.

Producers seek to create, grow, maintain, defend, and own markets by developing relationships with consumers and anticipating and satisfying their needs. At the micro level, marketing is simply a method for getting as many customers as possible. At a macro level, it is the process of raising the standards of living, by identifying the existing problems and unsatisfied needs of people and then satisfying that need with a product/service that delivers value to the customer. Traditional authorities on marketing concentrated on products and on the sale and purchase of goods and services. Recently, more attention is being paid to areas like after-sales service, and social responsibility and accountability.

Much of traditional marketing practice prior to the twentieth century remained hidebound by rules-of-thumb and lack of information. Information technology, especially since the mid-twentieth century, has given the marketeer new channels of communication as well as enhanced means of aggregating and analyzing marketing data. Specializations have emerged (especially sales versus marketing and advertising versus retailing) and re-combined (business development) over the years.

Some of the milestones in the history of marketing include the first paid advertising in a newspaper (1704), the earliest recorded use of the telegraph for advertising (1864), the first billboard rental (1967), the first radio ad (1922), and the first TV ad (1941). By the 1950s telemarketing was becoming systematized. The 1970s saw the emergence of E-commerce, and a decade later the first electronic junk mail or spam. In the 1990s two new processes were codified, CRM (Customer Relationship Management, managing a company’s interaction with current and future customers) and IMC (Integrated Marketing Communication, the application of consistent brand messaging across both traditional and nontraditional marketing channels and using different promotional methods to reinforce each other). The 2000s and 2010s have been marked by the emergence of viral marketing and social media.

The chronology of marketing can also be divided into seven areas of focus or eras: Production, Product, Sales, Market, Customer, Relationship, and Social/mobile. A production orientation dominated business thought from the early days of capitalism to the mid-1950s, and still exists in some industries. Business concerned itself primarily with production, manufacturing, and efficiency issues. ‘Say’s Law’ encapsulated this viewpoint, stating: ‘Supply creates its own demand.’ To put it another way, ‘If somebody makes a product, somebody else will want to buy it.’ This orientation rose to prominence in an environment which had a shortage of manufactured goods relative to demand, so goods sold easily.

Starting in the 1990s, a new stage of marketing emerged called relationship marketing with a focus on a long-term relationship that benefits both the company and the customer. The relationship is based on trust and commitment, and both parties are inclined to shift their activities to be able to work more efficiently together. One of the most prominent reasons for relationship marketing comes from marketing scholar Philip Kotler’s idea that it costs about five times more to obtain a new customer than to maintain the relationship with an existing customer. While relationship marketing is largely held as the most recent stage of marketing, there is speculation that we are now entering into a new era of marketing called the social/mobile marketing era where companies are connected to customers 24/7.

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