His†ory of Marketing

In the marketing paradigm, Marketing Mix as one of the foundations of transactional marketing, concentrates on the implementation of price identification procedures, customer’s demand, efficient distribution and satisfaction of the customer’s necessity with maximizing returns to reach the final objectives. However, due to the fierce competition in the marketing and criticizing of its practicability, the paradigm shifts into a relationship in the dynamic business environment. This newer paradigm emphasizes on establishing long-term trustworthy relationship with customers aiming to gain repeated purchases and more returns (Egan, 2011). This essay will explain the changes of marketing paradigm and discuss its transformation and potential future tendency.

Modern marketing as an academic course was initially taught by Edward David Jones in 1950 in U.S.A (Kavanagh, 2014). The emergence was stimulated by the efforts from numerous individuals and associations, attempting to make it more ‘scientific’ in the sense of define marketing as a theory in a mathematical approach. It is noticeably that the development of modern marketing cannot separate from the financial supports from the Ford Foundation and Paul Lazarsfeld who applied mathematics into sociology (Kavanagh, 2014).

Say’s law states that the production alone is the source of demand, this theory has dominated economic world for rather long period (Baumol, 1999). It fails to justify itself any longer after 1930s because of the occurrence to the combination of social and technological transformation. The acceleration of urbanization and popularization of TV stimulate the adverting industry. At the same time, the market is full of resembled products which are selling in large scale, accompanied by growth of wealthier population (Egan, 2011). These facts have significant impacts on the business sales as the extra demands trigger the related marketing, which is a contradiction to Say’s law. The downfall of dominated economic theory gives the archer point for establishing modern transactional marketing.

McCarthy in 1960s established a model named as 4ps including price, place, product and promotion, which was from Borden’s 12 variables established in 1954(Egan, 2011). Many tried to add new parameters into this model, such as the attempt of adding service, however, little results achieved and got undermined because many believed that the company will be more inclined to deviate their delegation of serving the customers to departments instead of individuals. The 4ps model steadily adopted as the marketing paradigm due to its simplicity application (Grönroos, 1994). Moreover, it enabled the business necessity to classify its competitive position (Chai Lee, 2009) which was the primary issue faced by most businesses at the time, by integrating the marketing mix elements.

The flourish of marketing mix has always been accompanied by questioning and doubts. Journal of Marketing Management (Malley and Patterson, 2002) argues that market mix is a barrier for innovation and adaptation of the rapid change market. Therefore, the market mix cannot help people in business make better decisions in the dynamic environment and systemize their thinking process, which will limit the creation ability in the market planning. Moreover, there is not an obvious gap between the statuses of different social classes as before, adding the complexity of demographic profiling. Thus, various difficulties are confronted while determining the ‘right’ mix of ‘ingredient’, because target audience can’t be easily and accurately identified as before. Another major criticism asserted by Gronroos (1994) argues that customer has been put into a passive role, whereas sellers are placed at the centre, whose prioritization occurs to be opposite to the customer-oriented approach to the marketing (Malley and Patterson, 2002). The separation of the buyers and sellers as two isolated units without involvement of any interaction cannot make the customers receive any help while purchasing, which means there is no relationship establishment. This becomes an obvious contrast to the service marketing and fails to describe the service marketing which is developed and popularized in 1980s as well (Rust and Huang, 2014).

In 1990s, more companies sought for short-term returns and earnings with the rapid consumer power and market maturity. Marketers were challenged to measure its success and the large expenditure spent on them, their answers disappoints numerous people. It is obvious that the paradigm needs to change to some degree (Egan, 2011). Kotler (1999) suggests changing from 4ps into 4cs (cost to customer, convenience, customer needs and wants, communication) will compensate the missing consumers perspective of 4ps model and can cope with rising consumer power. However, Grönroos (1994) argues that updating the marketing mix model will give little help to get out of the market dilemma (Egan, 2011). It is argued that marketing in the application has turned into a management tool rather than its real meaning, which needs to be considered (Grönroos, 1994).