The Evolution of the Concept — Marketing. An Application of Systems Thinking
| Published date | 01 July 1981 |
| Date | 01 July 1981 |
| DOI | https://doi.org/10.1108/eb057200 |
| Pages | 17-22 |
| Author | David Cook |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
The Evolution of the
Concept
—
Marketing
An Application of Systems Thinking
by David Cook The Management Centre, University of Bradford
Over the past 5/10 years there has been a strong evalua-
tion of the contribution marketing can make to modern
day society. At times this process has amounted to
rejection of the marketing concept, such evaluations
coming from both within and without the ranks of mar-
keteers. The objectives of this article are threefold:
(a) to briefly review the development of the market-
ing concept;
(b) to outline one particular approach to systems
thinking;
(c) to argue that much of the criticism of the market-
ing concept can be countered and an understand-
ing of the broadening movement developed via the
application of the systems approach.
Origins
In 1960 Keith [1], when discussing the marketing revolu-
tion and in particular its application to the Pillsbury
Corporation, identified four eras which he argued fol-
lowed a fairly typical pattern. These eras, which are
now universally acknowledged, were respectively:
Era 1-production orientation;
Era 2-sales orientation;
Era 3-marketing orientation;
Era 4-marketing control.
The distinction between the ruling philosophy in the
first two eras is fairly obvious and may be summarised
by saying that in Era 1 the emphasis was on volume
production and plant efficiency largely in response to
newly developed technology for mass production and
expanded markets, while in Era 2 the emphasis switched
to more aggressive sales and distributive practices in
response to mounting production saturation. As compet-
ition increased and customers became increasingly
scarce, sales orientation gave way to marketing orienta-
tion. The emphasis, now, was upon consumer satisfac-
tion with the argument being that sales would be that
much easier to obtain if the company concentrated on
making what the consumer wanted rather than on selling
what the company could make.
Originating with the General Electric Company the
marketing concept was quickly adopted by companies
on both sides of the Atlantic. Because companies were
facing increasingly dynamic environments and markets
the marketing function began to assume a predominant
role in guiding and integrating the varying business
functions. Many marketeers were arguing that market-
ing, because of its immediate interface with the market,
was the functional activity to ensure a company adapted
to the changing needs and pressures of the environment.
Hence a company would guarantee itself long-term sur-
vival and a state of dynamic equilibrium via a symbiotic
relationship. Under such conditions marketing is the
predominant managerial philosophy permeating the total
organisation and Era 4 is entered.
With the exception of dates Keith's analysis materi-
ally follows that suggested by McKitterick[2]. Using
1940 as the break point KcKitterick identifies the major
competitive thread between 1920-1940 as being rapid
increases in productivity. As these productivity gains
were not matched by either new product development
or a redistribution of income the result was chronic
underconsumption and unemployment. Companies
attempted to compete by making the same product
cheaper.
... the focus was now upon
what was better rather than
merely what was cheaper
After 1940, however, the direction of competition
changed with companies attempting to make better
and/or new products. As a result there was a significant
increase in R&D. As a consequence of the increased
demand for labour and increased wages, there was a
flood of new products to meet the increased disposable
income. Hence with the adoption of the marketing con-
cept McKitterick argues the focus was now upon what
was better rather than merely cheaper for the customer.
In terms of differential advantage it should be noted
that a lower price rarely offers a long-term competitive
edge as it may be readily copied. For McKitterick the
drive for improved solutions to customer problems was
the key:
"The crux of the marketing concept is expressed . . .
by the application of research and insight to the task
of creating new markets- indeed new business-then
we know that we are dealing with a management that
has fully embraced the marketing concept."
The basic propositions argued by Keith and McKit-
terick were widely accepted, although depending on the
viewpoint adopted marketing was described as encom-
passing a range of activities, e.g. a business activity; a
trade phenomenon; a frame of mind; the creation of
time,
place and possession utilities etc. In an attempt to
.synthesise
those varying viewpoints in 1965 the Market-
ing staff of the Ohio State University[3] published their
own definition of marketing. They argued marketing:
JULY/AUGUST 1981 17
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