Marketing Management

The Evolution of Marketing

So now you’ve gotten the bird’s-eye view of marketing as a practice, and you now know what marketing is. However, let’s take a trip back through time to look at the

evolution of marketing practices and how many of today’s marketing strategies came to be. As you can see from Figure 1.9, and to use an old TV commercial tagline, you’ve

come a long way, baby!

The Production Concept

In order to understand the production concept, it’s important first to understand the history of technology and mass production. Spurred on by the use of steam power,

the Industrial Revolution began in the United States by the middle of the 19th century. Although much of the population was still employed in agriculture, the expansion

of commerce and industry drew millions of factory workers into cities and towns. Suddenly, an abundance of manufactured goods was available to households at a rate

never experienced before.

The production concept assumed that consumers were mostly interested in product availability and price, not necessarily product features. As a result, companies

concentrated on high production, low costs, and mass distribution. In other words, to use the oft-used line from the movie Field of Dreams, “If you build it, they will

come.” People were so hungry for mass-produced goods that companies didn’t have to do a lot of sales or marketing. The production concept is thought to have lasted from

just after the Civil War (1861–1865) until the 1920s.35 For example, inventor Samuel Colt’s company began mass -producing revolvers in 1835. The Waltham Watch

Company (founded in 1850 in Waltham, MA) was the first to use division of labor to mass produce watches and clocks.

The Product Concept

From the 1920s until the 1950s, the product concept dominated. With product availability a thing of the past, consumers began to favor products that offered quality,

performance, and/or innovative features. As a result, companies concentrated on making superior products and improving them over time. One of the problems with this

type of thinking is that marketers may fall in love with a product (known as “marketing myopia”) and may not realize what the market truly wants or needs. Consider the

manner in which railroad marketers overlooked the growing competition from airlines, buses, and automobiles. In his book Marketing Myopia, author Theodore Levitt

writes, “The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because

that need was filled by others (cars, trucks, airplanes and even telephones) but because it was not filled by the railroads themselves. They let others take customers away

from them because they assumed themselves to be in the railroad business rather than in the transportation business.”36

The Sales Concept

By the 1950s, mass production had become the norm rather than the exception. Competition had increased over the years, and there was little unfulfilled demand in the

marketplace. Marketing evolved from simply producing products that customers wanted to trying to persuade customers to buy through advertising and personal selling.

The basic premise of the sales concept was that consumers and businesses need to be “coaxed” into buying, and the aim of companies was to sell what they made rather

than make what consumers wanted.

The Marketing Concept

to focus on customer needs before developing products, rather than developing products and then trying to “sell” them to consumers. The marketing concept was also the

start of relationship marketing— fostering long-term relationships with customers in order to ensure repeat sales and achieve stable relationships and reduced costs.

The Societal Marketing Concept

In a nutshell, the societal marketing concept is simple. Companies make good marketing decisions by considering not only consumers’ wants and needs but additionally

the balance between those wants and needs and the company’s capabilities and society’s long-term interests. The concept emphasizes the social responsibilities that

companies bear. This means meeting consumers’ and businesses’ current needs while simultaneously being aware of the environmental impact of marketing decisions on

future generations’ ability to meet their needs.

Identifying Consumer Needs and Wants

We’ve repeatedly mentioned satisfying customer needs. But understanding those needs and/or wants isn’t always as simple as it sounds. For example, some customers

have needs of which they’re not fully aware; others can’t articulate their needs, or the words require some degree of interpretation. Consider this: what does it mean

when a customer asks for a “restful” hotel, an “attractive” bathing suit, or a “powerful” lawn mower?

Let’s consider an example to illustrate this concept. A customer comes into your car dealership and indicates that she wants to purchase an inexpensive hybrid vehicle.

That description is broad and subject to interpretation, so it’s essential that the marketer probe further, because there are really five types of customers needs38

Stated Needs. Stated needs are those that are clearly specified by the customer. It’s what the customer requests. For example, you go into a big box store such as
Best Buy and tell the sales associate that you “need a new phone.”
Real Needs. Real needs are one level above stated needs; they are more specific and define the parameters that are immediate to defining and fulfilling the need. In
other words, real needs are what the stated needs actually mean. What are our phone buyer’s real needs? Are they looking for a phone with long battery life, a
high-resolution camera, or a lot of internal memory?
Unstated Needs. Unstated needs are what the customer also expects but doesn’t ask for. Once again, using our phone example, the consumer may expect but not
express the desire for good service from the carrier and/or the big box store.
Delight Needs. Delight needs are those that provide the “wow” factor. These needs, like unstated needs, can make some products more desirable than others if
they meet those needs. Going back to our phone example, delight needs can be something like a phone case or other promotional gift.
Secret Needs. Secret needs are those that a customer may not state or realize but can be one of the main reasons for choosing a particular product to fulfill the
basic stated need. Do customers want a new cell phone as a status symbol but won’t admit that status is important to them?

The bottom line is that responding only to a customer’s stated need may not satisfy the customer. The marketer needs to understand what the customer really wants.

Satisfying Consumer Needs and Wants

You may be asking yourself at this point, “Does marketing satisfy needs, or does it create needs?” Some people feel that marketing creates needs and pressures consumers

into buying unneeded products or services. However, marketing does not create needs; rather, it opens consumers’ eyes to their wants, and it’s up to marketers to

understand those wants in order to guide consumers on the path to purchasing their products or services.39Marketing creates value, and value speaks to the satisfaction

of customer needs and the benefits customers receive from the product. It’s the customer, however, who ultimately determines how well the product fulfills their needs

and how much value the product creates.

The challenge for the marketing team is to succinctly and compellingly articulate a value proposition that speaks directly to the benefits your product or service delivers.

The Value Proposition

A value proposition identifies the quantifiable benefits that customers can expect when they choose to purchase your company’s product or service. A value proposition

is, in effect, a promise from the company to the customer, and it can serve as a competitive differentiator to motivate customers to purchase your company’s products or

services. In other words, your value proposition should bring together in a brief, concise statement what your customer wants and/or needs and how your product or

service will meet those wants and needs better than your competitors.40
That’s a bit abstract, so we thought we’d include a few examples of some good value propositions:

Bill Ragan Roofing: “Let us take the stress of roof repairs or a roof replacement off your shoulders.”41
Applied Educational Systems (AES): “Spend your time connecting with students, not planning and grading”42
DuckDuckGo: “Tired of being tracked online? We can help.”43
HelloFresh: “Take the stress out of mealtime.”44

The Exchange Process

Marketing facilitates what is known as the exchange process—the act of obtaining a desired product or service from an individual or business by providing in return

something of value, as illustrated in Figure 1.10.

Figure 1.10 The Exchange Process (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)

The buyer (or customer) initiates the exchange process. The buyer (who has a want or need) is the individual or business who is willing to pay money or provide other

personal resources to satisfy this need or want. Let’s simplify that definition with an example. When lunchtime rolls around and you’re on campus or at your job, you’re

hungry; you have a need for food and drink. You go to the dining hall or a nearby restaurant to order lunch, and you’re willing to pay money in exchange for your meal.

Simple, right?

Keep in mind here, however, that there is a difference between a customer and a consumer. The customer is the individual or business that purchases the product or

service. The consumer is the user of the product or service. To put this concept in simple terms, if a grandmother buys a toy for her grandson, she is the customer; her

grandson (who will use the product) is the consumer. In the case of going out for lunch, you’re both the customer and the consumer.

The desired object is the product or service itself. It may be a physical good, service, or experience that consumers expect will satisfy their wants and/or needs. Let’s go

back to our lunch example. The desired object is the meal. The seller is the individual or organization that supplies the need-satisfying product, service, or experience.

Once again, in the lunch example, the seller would be the dining hall or the restaurant.

Inherent in the exchange process is what’s known as value—the benefit to the customer or consumer relative to the cost in the exchange. In other words, value is the

monetary worth of the benefits the customer receives in exchange for the product or service. Let’s go back to our backpack example a few sections ago. You may really

want that backpack because it keeps your “stuff” organized and it’s lightweight (the benefits), but if the cost is too high, either in terms of the monetary cost or the time

you’d have to spend going to the store to buy it, that backpack won’t have value for you. No sale!