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© Dr. Stephen Fanning

[ a theoretical perspective]We will discuss The evolution of marketing theory How prevailing COMP factors have

influenced research To introduce and communicate the 3

dominant business concepts Highlight a number of notable events

Directions

For thousands of years people have done business with those they know and trust

We know this as

organisations that best satisfy their customers’ needs are best placed to

satisfy their own needs

bestsatisfy

bestsatisfy the marketing concept

Author’s comment: When people fail to see marketing as a process it is often because they see the two processes as distinct unrelated processes [as in the selling concept].

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father of modern economics & marketing

Adam Smith

Francois QuesnayFrench surgeon and economist

2The industrial revolution lead to 2 new business concepts

new business conceptsthe production concept – the selling concept+

Emphasis on:- value through lower price, zero defects, domination of suppliers, limited view of profit, limited

social responsibility

Emphasis on:- selling to maximise exchange profit. pre-purchase short-term, one off, build switching

barriers, complaints as an unfortunate part of business

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Organisations often evolve from the production concept to the selling concept to the marketing concept

Emphasis on:- satisfaction through value and product qualities, emphasis on 3 time zones, emphasis on

zero defects & defections

Within the marketing philosophy the sequence has been on improving design, quality, brand, services, relationships, experiences and responsibility & consequences

the production concept is still practiced

generally has a one dimensional view of profit1

People, society, & the environment are given little consideration

Milton Freidman

The production concept

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a production philosophyOnly if an organisation has a

sustainable low-cost advantage should they compete on a low-price basis

Guess who made this car

Once Japan was seen as a low cost producer

The selling concept is

Life’s a pitch and then they buyAn emphasis is on overcoming objections

the selling concept is still practiced

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Revisiting the selling philosophy can make us cringe What were they thinking – or were they thinking ?

a selling philosophy is still aliveBut a selling philosophy is still aliveBut

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Not all organisations survive the evolution from Production<>Selling<>Marketing

according to Sako (1992) [seminal paper]according to Sako (1992) [seminal paper]

British manufacturers declined in the 1960s through a lack of product differentiation, inter-firm collaboration, & consumer trust adapt - best satisfy or die

Google the history of LG or ASUS

Marketing is something you do with a customer

not to a customer

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lifetime value of a customerSynergistic Symbiotic, Strategic, & Sustainable

ThinkMarketing is not about warfare

Is to reduce the dependence onprice, selling, advertising,

& sales promotional tactics

An objective of marketing

creating a product6 so good it sells itselfMarketing is about An overall marketing objective

140 billion apps since 2008

a product so good it sells itself

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Howard Schultz [founder of Starbucks] credits ‘Word of Mouth’ for the success of Starbucks

Marketing is aboutCustomers so loyal they only consider you

Marketing is about

Customers so satisfied they tell their friends they will tell their friends & maybe the whole world

Keep in mindwhether customers love you or hate you

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Buying[not selling]

sales are a measure of buying activity – ‘create buying moments’

Marketing is about

Why is the term‘marketing’

incorrectly used

An organisation may ‘go to market’ & not be practicing a marketing philosophy.

It is important to remember that

They may not have customer satisfaction uppermost in their mind

Communication tools and technologies are available to all organisations

It is important to remember that

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Same communication tools - different philosophies

a production philosophy

a selling philosophy

a marketing philosophy

All 3 philosophies use communication tools to reach their goals, HOWEVER

the application and the intent is quite different[Some even call it marketing]

People [even those who should know better] often use the term ‘Marketing’ incorrectly.

Often they really mean promotion advertising selling communication

This is a common annoyance for marketers

Change of direction

Evolution of marketing [key events]

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The Marketing mix

Product Planning Pricing Branding Channels of distribution Personal Selling Advertising

Promotions Packaging Display Servicing Logistics Research & Analysis

Consumer , trade, competitors, government

Neil Borden (1964)

12X4 structure

Theory also has a life cycleJust as car manufacturers have adapted with the times so to has theory

Marketing is also about listening

I have learned, based on my experience, that everything is dominated by the market. So whenever we are faced with an obstacle or difficulties, I always say to myself: ‘Listen to the market, listen to the voice of the customer.’ That is the fundamental essence of marketing. Always we have to come back to the market, back to the customer. That is the Toyota way…we always go back to the basics…We cannot determine anything. The customer does that. That is the essence. (Yoshio Ishizaka cited by Roberts, 2004, n.p.)

Think like Lexus

[unique value proposition in the consumers’ mind]

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