The Evolution of the Business Model Concept

 

https://tinyurl.com/yt788awk

Principles of Marketing. Unit 1 Setting the Stage. Chapter 1 Marketing and Customer Value. 1.4 Evolution of the Marketing Concept

 

Figure 1.9 Evolution of Marketing (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)

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

LINK TO LEARNING

The Reckoning

When American cars developed a reputation for not being reliable or dependable, this opened an opportunity for Toyota and other Japanese exporters in the late 1960s and 1970s. Learn more about this issue from David Halberstam’s 1986 book The Reckoning. Read the New York Times 1986 review of this book.

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

The marketing concept was built on the premise that an organization will achieve its goals when it satisfies the needs and wants of the consumer. As a result, firms began 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.37

Knowledge Check

It’s time to check your knowledge on the concepts presented in this section. Refer to the Answer Key at the end of the book for feedback.

1.

The product concept focuses on ________.

1. the quality of the product a company intends to sell
2. the operations of manufacturing the product a company intends to sell
3. the selling strategies a company will use to sell the product
4. the needs of the customer

2.

Which of the marketing eras or concepts is most closely related to sustainability and environmental consciousness?

1. Production concept
2. Marketing concept
3. Societal marketing concept
4. Sales concept

3.

During which marketing era concept would companies not only produce products but also try to persuade customers through advertising and personal selling to purchase those products?

1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept

4.

Which of the following accurately represents the evolution of marketing?

1. Production, product, sales, marketing, societal
2. Product, sales, production, marketing, societal
3. Marketing, production, sales, societal, product
4. Societal, production, sales, marketing, product

5.

During the societal marketing concept, ________.

1. customers’ wants and needs were first identified as essential
2. trustfulness, honesty, and transparency became most important
3. promotional efforts to move inventory were essential
4. the customer was the focus

https://bitly.ws/3frmX

50 Marketing Concepts You Need To Know! Part 2

 Hunger Marketing

Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase

Integrated Communication

Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s

Inbound Marketing

Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered

Integrated Marketing

Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience

Marketing Mix

The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics

Marketing Myopia

Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail

Marketing Personas

Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment

Meme Marketing

Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s

Microtargeting

Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior

Multi-Channel Marketing

Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible

Multi-Level Marketing

Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”

Net Promoter Score

The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others

Neuromarketing

Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data. Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel

Newsjacking

Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure

Niche Marketing

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option

Push vs. Pull Marketing

We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand

Real-Time Marketing

Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand

Relationship Marketing

Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales

Reverse Marketing

Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer

Remarketing

Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation

Sensory Marketing

Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce

Services Marketing

Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value

Sustainable Marketing

Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products

Word-of-Mouth Marketing

Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies

360 Marketing

360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.

Key Highlights

• Account-Based Marketing (ABM): A strategy where marketing and sales create personalized buying experiences for high-value accounts in the B2B sector.
• Ad Ops (Digital Ad Operations): Systems and processes supporting the delivery and management of digital advertisements.
• AARRR Funnel: A simplified model coined by Dave McClure to understand metrics and channels at each stage of the customer journey.
• Affinity Marketing: Partnerships between businesses to sell more products and extend reach and credibility.
• Ambush Marketing: Covert and unexpected brand advertising at events without paying for the right to do so.
• Affiliate Marketing: Affiliates earn a commission for selling another person’s or company’s products.
• Brand Building: Activities to build a recognizable brand identity.
• Brand Dilution: Brand equity diminishes due to an unsuccessful brand extension.
• Brand Essence Wheel: A templated approach to understanding the brand’s essence, including attributes, benefits, values, personality, and more.
• Brand Equity: The premium customers are willing to pay for a brand due to perception.
• Brand Positioning: Creating a mental real estate in the minds of the target market.
• Business Storytelling: Framing the story of the organization to influence its brand and build long-term relationships.
• Content Marketing: Using content to attract and convert a targeted audience.
• Customer Lifetime Value (CLV): Represents the value of a customer to a company over time.
• Customer Segmentation: Dividing customers into sub-groups with similar characteristics.
• Developer Marketing: Tactics to grow awareness and adoption of software tools and platforms among developers.
• Digital Marketing Channels: Marketing channels for reaching potential customers via electronic means.
• Field Marketing: Face-to-face marketing activities performed in the field.
• Funnel Marketing: Marketing strategies aligned with the customer journey stages.
• Go-To-Market Strategy: Marketing strategy to launch new products and reach target customers.
• Greenwashing: Deceptive marketing with unsubstantiated claims about environmentally-friendly products or services.
• Grassroots Marketing: Creating targeted content for a specific niche or audience.
• Growth Marketing: Rapid experimentation to unlock growth quickly and effectively.
• Guerrilla Marketing: Unconventional and high-impact advertising tactics.
• Hunger Marketing: Manipulating consumer emotions by offering attractive prices with restricted supply.
• Integrated Communication (IMC): Coordinating and branding communication strategies across various channels.
• Inbound Marketing: Attracting customers through content and experiences that provide value.
• Integrated Marketing: Delivering consistent and relevant content across all marketing channels.
• Marketing Mix: A complete and effective marketing plan, traditionally including the four Ps: price, product, promotion, and place.
• Marketing Myopia: Focusing on selling goods at the expense of consumer needs.
• Marketing Personas: Overviews of key segments of the target audience.
• Meme Marketing: Using memes to promote a brand.
• Microtargeting: Utilizing consumer demographic data to identify the interests of specific groups.
• Multi-Channel Marketing: Executing a marketing strategy across multiple platforms to reach more consumers.
• Multi-Level Marketing (MLM): Selling products through person-to-person sales and recruiting distributors.
• Net Promoter Score (NPS): A measure of a product or service’s ability to attract word-of-mouth advertising.
• Neuromarketing: Using brain activity data to understand consumer responses.
• Newsjacking: Aligning a brand with a current event to generate media attention.
• Niche Marketing: Targeting a specific subset of potential customers within a niche.
• Push vs. Pull Marketing: Differentiating between promoting a product to consumers (push) and consumers seeking out a product (pull).
• Relationship Marketing: Forming long-term relationships with customers to increase loyalty and engagement.
• Reverse Marketing: Encouraging consumers to seek out a product or company on their own.
• Remarketing: Creating personalized ads for consumers who have visited a company’s website.
• Sensory Marketing: Designing marketing campaigns that appeal to the five human senses.
• Services Marketing: Promoting the intangible benefits delivered by a company.
• Sustainable Marketing (Green Marketing): Investing in social and environmental initiatives as part of a marketing strategy.
• Word-of-Mouth Marketing: Focused on offering a great experience to existing customers to incentivize them to share the brand with others.
• 360 Marketing: Utilizing all available mediums, channels, and touchpoints to maintain a consistent presence.

https://fourweekmba.com/marketing-concepts/