The focus of business today is to develop a marketing plan that emphasises customer satisfaction. However, the idea of the marketing concept only evolved in the early 1960’s. Prior to this, there were two different approaches to marketing: production and sales.
The Production Approach: 1820s to 1910s
The burst of industrial growth during the Industrial Revolution, saw demand for products exceed the production capabilities of many businesses. Up until World War I, business concentrated their efforts on the production of goods and services. Businesses were normally able to sell all of their output. Marketing consisted simply of taking orders and delivering the products. Business was production-oriented.
The Sales Approach: 1920s to 1960s
After World War I, production became more efficient and productivity increased. Slowly the output of businesses started to catch up with demand. High quality, mass-produced products came on to the market and competition between businesses increased. A business could no longer rely on selling all that it produced.
Because customers’ basic needs were satisfied, businesses had to develop a new marketing approach – one that was sales-oriented. Businesses increased their advertising, making use of newly developed electronic communications systems, such as radio and film. Businesses were now faced with the challenge of persuading customers to buy a specific brand. Sales representatives were hired and trained, and marketing departments took a more dominant role in the business organisation.
The Marketing Approach: Stage One – 1960s to 1980s
During the 1960s, businesses realised that simply spending more money on advertising did not always result in increased sales. People’s incomes were improving and were demanding a much wider range of products to satisfy their wants. Business men and women finally began to realise that they were not just solely producers or sellers, but were in fact in the business to satisfy customers’ wants. The strategy was to discover what customers appeared to need or want before producing the product. This shift in focus to a customer-oriented approach brought about significant changes to marketing, especially the need to undertake market research and develop a marketing concept.
A marketing concept is a business philosophy which states that all sections of the business are involved in satisfying a customer’s needs and wants while achieving the business’s goals. The business should direct all of its policies, plans and operations to achieving customer satisfaction. Therefore, the marketing plan needs to become integrated into all aspects of the business. It is also important to analyse the marketing plan and market that both can work in an integrative way.
The marketing concept in marketing analysis is based on four principles. It must be:
- customer oriented
- supported by integrated marketing strategies as well as promotions
- aimed at satisfying customers
- integrated into the business plan so as to achieve the business’s goals.
The Marketing Approach: Stage Two – 1980s to Present
Changing economic and social conditions over the last five decades as well as the internet have made modifications and changes to the marketing approach. With the growing public concern over environmental pollution and resource depletion, came a shift in the emphasis of marketing plans. Marketing executives now realise that their organisations have a social responsibility. External pressures from customers and environmental organisations, as well as political forces, continue to influence the marketing plans of many businesses. One major change has been the increase in demand for ecologically sustainable products.
To disregard the ‘quality of life’ issues when developing a marketing plan could lead to a customer backlash. Businesses need to stay in tune with the changing political, economic and social scene and modify their marketing plans accordingly. They also have to cater to a much more global vision. There markets may be not only be local or national, but they may be international and in which case the analysis needs to be global as well.