INTRODUCTION TO MARKETING

 · Origin of service marketing

· Marketing Organizations

· Marketing environment

· Marketing today

Let us look at the origin of service marketing. Prior to the time of the Industrial Revolution, virtually all trade and exchange processes involved some personal contact. Between suppliers and their customers. This meant that individual producers could cater to the needs of their customers, and most trade was very local in nature. The increase in overseas trading and the advent of the industrial revolution heralded the start of new types of trading practice, and the introduction of some of the processes, which are part of marketing today. Initially, producers and manufacturers were concerned mainly with logistical issues - transporting and selling goods to widespread markets, often located far away from the point of

production. The focus here was in production, with consumption and consumers being seen as the end result of a production and distribution chain. For as long as demand outstripped supply, which was generally the case as western countries started to go through periods of dramatic growth in economic activity and technological change, producers could all exist profitably simply by producing more efficiently and cutting costs. Little attention was given to the role of the consumer in exchange processes. In the early twentieth century the realization that marketing was, in itself, an important part of the business process led to the founding of the American Marketing Association and the development of the earliest aspects of marketing theory and practice. It was much later, however, that the need for a marketing orientation was recognized, with a clear focus on the needs of the consumer. This chapter charts the progress of key developments in marketing from these early stages to the present, providing the basis for understanding marketing within a service context.

Developments in Marketing Theory

The greatly increased production of goods, which arose out of mechanization following the industrial revolution, was matched by increased levels of demand in the mass market. The problem for producers lay in getting their products to the market. Manufacturers were investing heavily in premises and machinery in pursuit of better and cheaper production. They did not want to be involved in the distribution of the product. A distribution trade grew up to serve every industry.

First Generation Marketing:

 Wholesalers opened warehouses in major cities and bought products in bulk from the manufacturers. They stored the products and organized their distribution to retailers and other smaller organizations throughout the markets. This was the development of channels of distribution, still crucial to successful marketing today, and is recognized as a first generation market-in. At this stage, the main concern was getting the product to marketing selling all that was produced.

Second Generation Marketing:

 It was only during the second half of the twentieth century that the focus began to shift towards the notion that producers should look at what consumers actually wanted - produce what can be sold to the market, rather than try to sell what is produced. This was the start of second-generation marketing. The early stages of the second generation saw the development of the idea that firms should take on a marketing orientation - marketing should become the integrated focus of their business policy. Firms should seek to satisfy their profit needs by identifying and satisfying consumer needs. New ideas in the 1960s also pressed the need for a broader orientation with a focus on consumer needs and criticized .Firms which were still too product orientated. By defining their business in terms of their products, firms could constrict their own growth and development - even survival- as consumer needs and technologies were changing rapidly. The essential task for firms was to analyze their business from the consumer’s perspective - to look at their market offerings in terms of the needs satisfied, rather than the products offered.

Third Generation Marketing:

From the mid-1960s onwards, marketing thought grew and matured. There was increasing awareness of the role that marketing played, not only in business but also through its influence and impact on consumers and society as a whole. Marketing began to be seen as something, which was not only relevant to commercial organizations, actively seeking profits at the end of the day. Marketing could be equally important for organizations and services, which were not necessarily traditional, profit-led businesses. Schools,’ health programs, charities and other types of not-for-profit organization could benefit from a marketing orientation. Even political parties could employ marketing programs to win voters. Marketing was viewed as being applicable across a very broad spectrum of commercial and social activity. From this realization came the emergence of fire generation marketing. This hinged on the idea of a broader application of marketing within society, across all types of organization, and for greater benefit to society. Society’s needs should be considered in line with those of consumers, and profits should not be sought at an unacceptable cost to society. This has led to a call for firms to engage in ethical marketing practices and, increasingly, to adopt environmentally sound, ‘green’ policies. In moving towards the development of a body of marketing theory, much has been drawn from other academic disciplines. This is especially true of the behavioral sciences, economics and management science. A debate exists as to how much actual marketing theory has been established to date. What is generally accepted, however, is the marketing is evolving as a discipline with a wide base of knowledge, concepts and techniques and areas of theory, which may ultimately croon together to provide an integrated base of marketing theory. One of the main reasons for this is the entrance into the marketing arena of a vast number of academics from other disciplines. Social psychologists, economists and statisticians, for example, have all entered the field, together with practicing marketers from a range of specialists such as advertising, distribution and product management. Marketing is, in itself, a complex subject covering a very wide area, rich in its diversity.

Marketing Today

External factors in the political, social and business world, which have shaped the role and development of marketing. Some of the types of influences, which have

an impact on the development of marketing is as follows:

Political/legal

Changes in government policy towards business enterprise. The growth of global trade and the impact of trade barriers and currency agreements, for example .Privatization, De-regulation of advertising for the professions. Legislation on environmental issues. Consumerism, and the power of consumer pressure groups.

Economic

World economic trends. Levels of consumer affluence, spending power. The imposition or relaxation of price controls. Inflation levels. Attitudes to, and increases in, consumer borrowing: The importance of the service economy.

Socio-cultural

Increased numbers of women in the workplace. Cross cultural issues in international marketing. Increased leisure tile, and the wide scale pursuit of leisure interests. Higher levels of education, and increased participation. Growth in consumer travel and tourism.

Technological

The impact of technology on business processes; the use of scanning systems (EPOS) in retailing and the use of automatic cash dispensers (A TMs) in banking, for example. Technological developments in consumer products. Telecommunications impacts on business and society through developments such as telesales, telemarketing, tele working. Awareness and use of technology in the home. The above lists are examples of the factors, which have impacted on the development of marketing today. New modes of marketing have come about because of social and technological changes, such as the dramatic growth of direct marketing, which can be very finely tuned to customer wants through the use of sophisticated databases. Tele shopping via dedicated satellite TV channels is another new concept. Marketing education is increasing, and the recognition of marketing as a profession is growing.

 The role and influence of marketing in almost every sphere of society today should not be underestimated.

Green Marketing

The advent Green, or environmentally conscious, marketing is almost wholly due to pressure from consumers. Although some organizations, particularly in manufacturing, may have started to clean up their act because of legislation against pollution, it is consumers who have made the greatest impact through their demand for greener products. Continued pressure, however, has meant that firms throughout the supply chain have also had to develop green marketing practices.

Perhaps the most obvious developments have taken place in the household goods area. Supermarkets now stock a whole range of’ environmentally friendly’ products ranging from pump action sprays for anything from hairspray to air fresheners,

toilet tissue made from recycled paper, detergents and washing powders without harmful chemicals and recyclable packaging for many items. Service providers have also entered” this race to satisfy the new green consumer by a number of

tactics. Fast food restaurants have promoted recycle and urging them to switch unnecessary lights off, and to indicate whether towels need to be laundered or may be used again; road transport providers ensure that vehicle emissions are

monitored as part of regular maintenance. Although it can be more difficult to envisage appropriate green marketing strategies within a service organization, as opposed to retailing or manufacturing, there are steps firms can take to ensure that their operations, at least, are environmentally friendly. A green audit can be undertaken which should cover

Several aspects, including:

Activity Audits

These involve a study of activities undertaken, especially activities which may impact on many areas of business, such as storage and distribution.

Compliance Audits

Undertaken to ensure that companies meet legal requirements in all areas from pollution to packaging and labeling. These aspects seem most relevant to services marketing, although there are many more ways in which organizations can

undertake an environmental audit, some appropriate to a particular industry or sector. Looked at in this light, it is fairly easy to see how many service organizations can develop business strategies which are based on green thinking, and which may impact on marketing programmes. A busy hospital, for example, under-taking activity and site audits may find many ways of becoming more energy- efficient and of reducing waste. If this were achieved, it could feature in publicity and other material presented to patients and the public, enhancing the hospital’s image and potentially saving money for re-investment into the service.

Offices can encourage the introduction of the paper-free office through the use of electronic mail and telecommunications, and organize collection of waste paper for

recycling where appropriate. They can undertake ethical investment, investing their clients’ funds only in businesses, which are themselves run on environmentally sound lines. Leisure providers in the public sector can focus on conservation and

nature in parks, for example, and promote projects to protect the environment in green belt areas and land reclamation schemes.

However, it is undertaken, it is clear that green marketing is here to stay, and environmental performance may become an important measure of an organization’s success and standing in the future. Service organizations need to think ‘green’ in all areas of activity - especially in services marketing.

Tutorials

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