By Henry Kyambalesa
1. Introduction
This article is devoted to a survey of the following themes: (a) the evolution of marketing; (b) criticisms and observations against the marketing concept’s relevance and practicability; and (c) the emergence of what may be referred to as the “market-driving era.”
It is designed to ponder the practicability of the “marketing concept,” and to proclaim the emergence of a new era in the evolution of marketing referred to as the “market-driving era.”
The article is intended for Marketing students, instructors, researchers, theorists, practitioners, as well as casual readers who may have an interest in gaining an understanding of the nitty-gritty of what is commonly referred to as the “marketing concept.”
2. Evolution of Marketing
Marketing in industrialized economies of the Western world has not had the status it is accorded today from beginning. It has evolved through several distinct eras discussed below—that is: (a) the production era; (b) the sales era; (c) the customer-orientation era; and (d) the “market-driving era.”
2.1 The Production Era:
The Industrial Revolution, which came into full swing just after the 1850s, brought new life to industrial performance with its use of specialization of labor, the assembly line, and other advanced industrial facilities. Producers were able to increase both the quality and quantity of industrial outputs at reduced costs with these facilities.
The marketing function received little or no status then as producers were preoccupied with production to satisfy the intense consumer-demand for industrial products that characterized this particular period.
2.2 The Sales Era:
Increased sophistication in production techniques which followed the burst of the Industrial Revolution brought about even higher levels of output, culminating in excessive supply around the 1920s. This situation prompted firms to resort to advertising and personal selling as means of increasing sales and profits, as well as securing repeat sales.
Therefore, advertising and personal selling were viewed as the major marketing activities during this period. Firms would produce products they were capable of producing and then use personal selling and advertising as tools for persuading consumers to buy the products.
2.3 The Customer-Orientation Era:
During the Great Depression of the 1930s, demand for industrial products dwindled drastically as a result of declining personal incomes. The dwindling purchasing power prompted consumers to seek only products that were necessary for subsistence, rendering personal selling and advertising of products impotent as means of increasing sales.
This compelled marketers (around the 1950s) to determine the needs of customers and concentrate on the production of products for which consumers had expressed a need.
The realization that organizational goals could best be achieved through the satisfaction of consumers’ needs resulted in the emergence of a customer-oriented philosophy called the marketing concept.
But in much of the developing world, as pundit Okra (1982:12) has observed, marketing can be said to be still in the production era. He has advanced his argument in the following words:
“Most of the developing countries … are still at the production stage of development. It is only when sufficient goods and services are produced that these countries can move into an aggressive sales-oriented era. Further, surplus of production is needed in order for them to become consumer oriented. The never-ending shortages currently experienced in these countries show that production problems have not yet been overcome, and that the road to prosperity still lies ahead.”
There are many reasons why organizations in emerging nations, especially ‘parastatal’ companies, are still in the production era. In much of the developing world, these reasons include state monopoly over the supply of most goods and services, as well as chronic shortages of most, if not all, essential commodities. These two factors are explained in the ensuing paragraphs.
(a) State Monopoly. Most commodities (especially those considered to be essential) in much of the developing world are produced by state-run and/or state-controlled enterprises. These enterprises are made monopolies, and are strictly controlled, by state or national governments. This means that marketing mix decisions (that is, product, costing, promotion, and distribution decisions) in these companies are generally influenced and manipulated by various government agencies (Fubara, 1985:60).
Being the only ones charged with the responsibility of meeting domestic demand for specified “essential” commodities and services, the monopolistic, government-controlled firms usually concentrate on improving their productive capabilities. Less or no attention is paid to the needs and desires of customers.
In these circumstances, marketing in most emerging economies (especially socialist economies) cannot generally be said to have passed the production era.
(b) Chronic Shortages. Due to a chronic inadequacy of goods and services (which are largely caused by inadequate foreign exchange for importing production inputs, the limited number of producers, and the antiquated technology often used in most companies in emerging economies), emphasis is normally laid on production to meet demand. As such, customer need-satisfaction is, by and large, an unimportant consideration in the world’s developing economies.
3. An Impractical Concept
In affluent, free enterprise economies, the quality of product offerings and customers’ needs and desires have long been primary considerations in the decisions and operations of most producers, who have found that they cannot be successful unless they are customer oriented.
This has culminated in a business philosophy cited earlier in this article as the marketing concept, which may be defined or described provisionally as “an organization-wide commitment to the assessment and satisfaction of consumers’ needs, with the objective of attaining stipulated organizational goals.”—adapted from definitions by Kurtz and Boone (1984:13) and Dalrymple and Parsons (1980:5).
In developing countries, on the other hand, customer orientation may not be a relevant and practical philosophy mainly because producers are more generally concerned with production to meet the usually unmet local demand, with little or no attention paid to the quality of products and the needs and desires of customers.
The slack production and the resulting chronic shortages in such countries can be attributed to such factors as the following:
(a) Application of archaic production technologies;
(b) Inefficient application of financial and material resources; and
(c) Insufficient foreign exchange for importing the necessary machinery and inputs to improve the quality and quantity of industrial output.
An additional factor in some developing countries is the prevalence of monopolistic companies, which generally exist by design—that is, they are created by national governments to be sole suppliers of certain classes of products considered to be essential. Due to limited government funding, among other things, these state monopolies seldom have modern production facilities for boosting industrial output.
Also, the monopolistic positions they hold make them complacent and less efficient. This usually results in their failure to produce enough for local markets as well as for export to earn foreign exchange.
And, in general, the marketing concept has drawn several criticisms from various observers in its original version. One criticism concerns the philosophy’s lack of emphasis on public welfare. Many people have questioned its usefulness to society as a whole; they have criticized it for its emphasis on customer need-satisfaction at the expense of society’s long-term interests.
It is often argued, for example, that concentration on the satisfaction of short-term consumer needs may pose problems for consumers and the rest of society in the long run. For instance, consumers may desire canned foodstuffs, but unless producers take the necessary measures to dispose of empty cans discarded after contents are consumed, society’s quest for a junk-free environment may be thwarted.
As a result of this criticism, many marketing pundits have long heralded the coming of what is commonly called the “societal marketing concept,” which may be described as follows:
“A customer orientation backed by integrated organization-wide efforts aimed at the satisfaction of customers’ needs as the key to achieving organizational goals, while protecting the long-term interests of customers and the general public.”—adapted from a definition by Kotler (1977:27).
Another criticism is directed at the marketing concept’s practicability. Over several decades of proclamations by organizations and executives worldwide that they are customer-oriented have passed by, but consumer dissatisfaction has continued to be on the increase. The following is a contribution by Drucker (1973:64–65) to this criticism:
“That after … [decades] of marketing rhetoric consumerism could become a powerful popular movement proves that not much marketing has been practiced. Consumerism is the shame of marketing.”
Thus, marketing managers and their organizations seeking to practice the marketing concept as a means of attaining their work-related goals and aspirations should simultaneously consider such factors as the following in order to succeed in their prescribed or stipulated pursuits and endeavors:
(a) The needs of consumers;
(b) The long-term effects of the organization’s operations on society at large;
(c) The probability of attaining long-run profitability through the application of the marketing concept; and
(d) Their ability to accurately gauge and satisfy the specific needs of consumers.
Because these factors are cardinal to the long-term success, survival and public image of any and every organization, it seems inevitable here to broaden the marketing concept by defining it as follows:
An organization’s practically centered commitment to gauge and satisfy (within its means and resources) the needs of customers in a deliberate effort to attain stipulated organizational goals, while safeguarding the long-term welfare of customers and society at large.
Essentially, this definition is an adaptation of the antecedent, traditional definition of the marketing concept to the internal and external constraints that limit the scope of any given organization’s marketing operations. Clearly, this is a more realistic business philosophy because it takes into account the broader expectations of society and the technological and resource constraints that are brought to bear on any and every business undertaking in modern times.
4. The ‘Market-Driving Era’
In the light of the foregoing observations, what can be said about the future of the marketing concept in affluent, free enterprise economies? Is it going to maintain its present status in the years ahead? Deliberations at the first joint Marketing Society and Confederation of British Industrial Conference held in London in 1988 cast doubts about continued prominence of the customer-orientation philosophy.
The following are some of the highlights from the conference (Mitchell, 1988:1&2):
“Traditionally, it has been held that marketing is finding out what consumers want and meeting their needs profitably. But that is old hat now. To be consumer led is to be always reacting…. It means that you will always be one step behind your market leading competitors.”
And
“Driving the market and leading the consumer is the way that companies which get to the top can make sure that they stay there. And those who stick to the old formula could be in for a shock—especially people like market researchers who make their money from those who believe in the ‘find out what the consumer wants and meet it profitably’ dogma.”
And Brandtner (1994:6H) thinks that “asking the customer” is, by and large, a dangerous approach because, in his contention, the customer is generally not creative. He has argued that consumers do not always know what they want because they cannot envision how a totally new product can change their lives, and that he does not know of any real marketing breakthrough that has directly or otherwise evolved from marketing research.
This reverse conception has perhaps come to stay. Its coming should be celebrated especially by small and large business organizations operating in the very volatile market, technological, and other conditions, such as those obtaining in industrialized free enterprise economies. In this article, this new business concept is referred to as market-driving strategy, and is defined as –
An organization’s corporate effort aimed at developing, within available means, a product that will satisfy an assumed need, and then aggressively creating for it a customer base that will yield protracted profitability and market prominence for the organization, while safeguarding society’s long-term interests.
This, of course, is not a new idea at all; what is new is the term used to describe an old idea. We very well know, at least from experience and common sense, that customers do not know, nor can they describe, their exact needs for products which they have never seen or heard about.
For example, consumers worldwide may not possibly have had a conceived need for television; they came to appreciate their need for it only after they had been exposed to it. Drucker (1974:61) has made the following observation in this regard:
“[No] … one knew that he wanted a Xerox machine or a computer until these [products] became available. There may have been no [need or] want at all until business action created … [them]—by innovation, by credit, by advertising, or by salesmanship.”
And, as buyers of consumer products, we have all, at one time or another, noticed products totally new to us (and for which we have had no conceived need) displayed in windows of retail outlets and have had a need for the products suddenly elicited in us.
Therefore, an organization in a competitive economy that expects customers to express their product needs can, at best, only gauge the customers’ needs for versions of existing products. In fact, if gauging customers’ needs had been every producer’s approach, today’s products could not possibly have been so radically different from medieval products; rather, they could, at best, have been improved versions of the products of medieval times.
At this point, we have a fourth era to add to the evolution of marketing discussed earlier in this article—that is, the “market-driving era.” We can then speak of marketing as having evolved through the following eras: (a) the production era; (b) the sales era; (c) the customer-orientation era; and (d) the “market-driving era.”
Business institutions which are in the “market-driving era” are generally those which have an exceptional innovative capacity and high research and development (R&D) skills. Advanced technology enables such companies to convert “human imaginations” into actual goods and services that were inconceivable in previous civilizations.
In industrialized economies, therefore, more and more suppliers of products are spontaneously drifting away from the age-old concept of identifying needs to that of creating needs.
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