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Text 1: A BRIEF HISTORY OF MARKETING

Marketing has not always been so focused on consumer wants and needs as today. In fact, marketing philosophy has changed dramatically over the last century.

From the time the first settlers began their struggle to survive in America, until after the Civil War, the general philosophy of business was, "Produce as much as you can because there is a limitless market". Given the limited production capability and the vast demand for products in those days, such a philosophy was both logical and profitable. Business owners were mostly farmers, carpenters, and trade workers who were catering to the public's basic needs for housing, food, and clothing. There was a need for greater and greater productive capacity, and businesses naturally had a production orientation - that is, the goal of business centered on production rather than marketing. This was satisfactory at that time, because most goods were bought as soon as they became available. As we noted earlier, the marketing need was for distribution and storage.

During the period from 1890 to 1920, businesses developed mass-production techniques. Automobile assembly lines are a prime example of this development. Production capacity often exceeded the immediate market demand. The business philosophy turned in the from a production orientation to a sales orientation. Businesses turned their attention to promoting their products and mobilized much of the firm's resources in the sale effort. That was the era in which the salespeople were trained to "get your foot in the j door, overcome objections, and close the sale". Much time and money was spent on such selling strategies.

After World War II (1945), there was a tremendous demand for goods and services among the returning soldiers who were starting a new life with new families. These post-war years launched the baby room (the sudden large increase in the birth-rate after the war) and a boom in consumer spending. Competition for the consumer's dollar was fierce. Business owners recognized the need to be more responsive to consumers, and a new orientation emerged called the marketing concept.

 

The marketing concept that emerged in the and dominated marketing thought for 30 years had three parts:

1.    A consumer orientation; that is, find out what consumers want and give it to them.

4. The co-ordination and integration of the firm so that everyone in the organization has the same objective – consumer satisfaction.

5. A profit orientation; that is, market those goods and services that will earn the firm a profit and enable it to survive and expand to serve more consumer wants and needs.

Text 2: CONSUMER ORIENTATION

Henry Ford is reported to have said, "You can have any colour car as long as it's black". He seemed more interested in production than in adapting to consumer wants and needs. He felt that the best car was a good, reliable, inexpensive one. In fact up until 1926 Ford

sold half the new car made in this country. But the people in General Motors talked with consumers and found a basic desire for individuality and status. They began making cars in all colours and shapes and eventually took away much of Ford's market. This is an example of a consumer orientation at work. Today, all the car companies are working harder than ever to be more responsive to consumer wants and needs. Foreign competition has become fierce, and only those firms that give consumers what they want will servive. But is it enough to give individuals what they want? Don't firm have some obligation to society as well?

There is some evidence today that organizations are adopting a broader societal orientation that includes a consumer orientation. For example, many large business firms and non-profit organizations have become involved in programs designed to train the disadvantaged, improve the community, reduce the use of energy, cut back pollution; provide consumer information and consumer education, involve employees in community projects, and generally respond to the broader needs of society. A consumer orientation thus has become only one of the many social goals of today's progressive organizations and marketing managers.

Text 3: CO-ORDINATION AND INTEGRATION OF THE FIRM

To provide optimum consumer satisfaction, all elements of marketing (product, place, promotion, and price) must be coordinated and integrated with other departments in that cause. For example, sales people often promise delivery on a certain date, and then the delivery people fail to show up. Such lack of co-ordination annoys the consumer and prevents consumer satisfaction. Similarly, salesperson may write up a sale and promise credit terms, only to find that the credit department turns down the customer's application. Again, this may cause resentment. Similar examples all show that marketing functions should be co-ordinated and integrated with other business functions.

A solution to achieving the goal of co-ordination and integration is to have one person responsible for all marketing activities - a marketing manager or vice president of marketing. Since the early 1950 there has been a consistent trend toward having such a position in larger firms.

Text 4: PROFIT ORIENTATION

The purpose of adopting a new business philosophy was to improve consumer relations because better relationship would also benefit the firm and increase profits. One goal of all business firms is to optimize profits. This is called a profit orientation. Profit enables a firm to grow and hire more people, to provide even more satisfaction to consumers, and to strengthen the economy as a whole.

Some people believe that profits are the only or the major goal toward which businesses should work. But most firms have many goals, including providing a pleasant atmosphere for employees and managers. This is called a human orientation. All these goals of an organization, however, depend on the firm's survival and long-term growth, and these are not possible with out profits.

 

Text 5: APPLYING THE MARKETING CONCEPT IN THE 1980s

Everyone knows the troubles the automobile market had in the late 1970s and early 1980s. What did they turn to for solutions to their problems? Marketing. Lee Lacocca at Chrysler emphasized product quality. Advertising Age said of his success, "While he denies any claim to being a marketing genius, he nevertheless epitomizes that most important marketing fundamental, the very backbone of sound business practice: create a quality product; deliver it to the marketplace; and make sure you let everyone know about it".

Polaroid is a leading name in photography, yet from 1978 to 1982 sales and earnings collapsed. It was time for a reassessment. What did they decide? "I think it is fair to say that as the company broadens, it is becoming more consumer-driven", said M. Carl Johnson III, a Polaroid vice president. An industry analyst observes, "Now Polaroid is marketing versus product-directed. It is trying to find out what the consumer wants, to do market research as it never did before."

Text 6: BROADENING CONCEPT OF MARKETING

In the 1870s markets broadened the scope of their activities to include the marketing of non-business organizations. No longer is the objective simply to "find individual needs and fill them". Rather, the goal is to meet the broader needs of society as well. Standard marketing practices were applied to tasks such as promoting public hospitals and universities, museums, associations, government programs, and more. But more sophisticated tools were needed to create new social attitudes and behaviours for such programs as stopping smoking, driving 55 miles per hour, wearing seat belts,! picking up litter, and so on. Much future growth in marketing will be in this area.

Furthermore, more attention in the future will be given to Industrial marketing; that is, marketing from business to business. Marketing to consumers had reached a high level of effectiveness and efficiency. Marketing to business needs more development.

Text 7: INDUSTRIAL MARKETING

As consumers, we have a tendency to think of marketing as a system designed to satisfy our needs. On the other hand, there is¹ another side of marketing that we know must exist, but do not encounter as often. That market consists of all the exchanges that go on among major organisations in society. For example, somebody] has to sell coal to the electric utilities. Someone else sells electricity" to the major manufacturers of cars, trucks, machinery, and computers. Then someone sells these manufactured goods to farmers, government agencies, and other large organizations. Using all the resources provided by these exchanges, producers, farmers, arid government agencies begin the process of satisfying the needs of consumers. But there are still many middlemen who must be contacted before goods and services reach the final consumer. There are wholesalers who provide transportation and storage services; communications firms who keep the information flowing among the organisations (for example, ad agencies); and retailers who store the merchandise until we are ready to buy.

The marketing of goods and services to manufacturers, institutions (for example, hospitals or schools), commercial operations (retail stores), and the government is called industrial marketing. The basic principle of this kind of marketing is still "Find a need and fill it", but the strategies are different because the buyers are different. Some of the things that make industrial marketing different are as follows:

1.The market for industrial goods is a derived demand, that is, the demand for consumer products such as automobiles creates the demand for industrial goods and services including tires, batteries, glass, metal, plastics, and engine.

2. The demand for industrial goods is relatively inelastic; that is, the demand does not always change significantly with minor changes in price. The reason for this is that industrial products are made up of so many parts that a price increase for one part is not usually a significant problem.

6.The number of customers in the industrial market is relatively few; that is, there are just a few construction firms or mining operations compared to the consumer market of 70 million or so house holds.

7.The size of Industrial customers is relatively large; that is, a few large organisations account formost of the employment and production of various goods and services.

5. Industrial markets tend to be concentrated, for example, oilfields tend to be concentrated in areas such as the Southwest and

Alaska. Consequently marketing efforts often may be concentrated or a particular geographic area, and distribution problems are often minimised by locating warehouses near industrial "centres".

1.Industrial buyers generally are more rational in their selection of goods and services; they use specifications and carefully weigh the total product offer" including quality, prices, and service.

2.Industrial sales tend to be direct. Manufacturers will sell]products such as tires directly to automobile manufacturers, but would]tend to use wholesalers and retailers to sell to consumers.

Industrial markets are often more complex than consumer markets because the products are sold many times before they reach the ultimate consumer. Be sure to consider industrial marketing when you evaluate marketing careers; the opportunities are many and the pay is relatively good.

5. C omprehension questions. Завдання 5. Підготуйте письмові відповіді на питання:

 

1. What were the changes in marketing philosophy over time?

2.What is the marketing concept?

3.What is the future direction of marketing?

4.What about industrial marketing?

5.What is a human orientation?

6.What does "broadening the concept of marketing mean?

 

6. Discussion questions. Завдання 6. Підготуйте коротку інформаціюб використовуючи запитання як план:

What were the orientations businesses had before the marketing concept? Why?

7. G roup activities. Завдання 7. Підготуйтесь до бесіди, використайте задану ситуацію:

1. Imagine you are the president of a business college. Enrolment has declined dramatically. The college is in danger of closing. Show how you might revive the college by applying the marketing concept. How would you implement the three phases: (I) a consumer orientation; (2)co-ordination and integration among departments; and (3) a profit orientation? Would you recommend a more societal orientation as well? How would you do it?

2. Businesses began with a production orientation, producing what they wanted and selling it later. Discuss how some colleges continue that orientation. What would happen if colleges switched to the marketing concept? How would their interaction with consumers differ?