WHAT IS MARKETING? THE HISTORICAL BACKGROUND
WHAT IS MARKETING? THE HISTORICAL BACKGROUND
At one time there was no such thing as Marketing. Black-smith, stonemason, saddler, carpenter, hosier and tailor all knew their customers personally. They were in a position to discuss the size, the shape, the design, the colour and the price of the goods they made with the people who bought and used them. A dialogue existed between producer and consumer.
With the coming of the Industrial Revolution this personal contact came to an end. Changes in production led to changes also in distribution. The greatly increased production of goods which resulted from mechanization required a mass market for their consumption, and distribution became a major undertaking. The manufacturer was no longer able to undertake the distribution of his products to the consumer. He invested his capital in premises, machinery and raw materials. He had neither the means nor the desire to become involved in the distribution of the product; nor was it necessary for him to do so. A distributive trade grew up to serve every industry. Wholesalers, with warehouses in London and other major cities, purchased the manufacturer's products in bulk, stocked them and organized their distribution to retailers throughout the country. On the one hand, the wholesaler largely financed the manufacturing operation, whilst on the other, by the extension of credit to retail shopkeepers, he financed much of the retail distribution of consumer products.
One of the major problems facing any manufacturer is to gauge the likely demand and sale for the goods which he proposes to make, Once the direct contact between producer and consumer had been broken, it was upon the distributive trade and in particular the wholesaler, that the producer relied for his market information. This function the wholesale houses performed exceedingly well. Through their teams of salesmen they served retailers in cities and towns throughout the country. The success of the retailer's business depended upon his knowing and anticipating the needs of his clientele and this information was fed back via the 'travellers' to the buyers of the wholesale houses. These buyers therefore had a 'feel' of the market. They were generally greatly experienced in the various commercial aspects of the classes of goods in which they specialized. It was they who decided the particular 'lines' of goods which were to be bought from the manufacturers, the quantities which were to be stocked, subdivided into their natural categories according to the nature of the goods, such as size or width, colour, design and quality. It was they who decided the price at which the goods would be bought from the manufacturer and the price at which they would be sold to the retailer. By so doing, they effectively set the general level of price at which they would be sold to the consumer. The wholesale buyer was, therefore, in many respects the first ONLINE MARKETING Manager.
The heyday of the wholesale distributor was during the latter part of the nineteenth and the early twentieth century. During this period there were, of course, considerable changes in consumer requirements. Apart from the more obvious changes brought about by fashion, all classes of merchandise underwent gradual change as the social habits of the population altered. Such changes were, however, gradual. The pace of life, although speeding up, was still very much slower than it is today. Furthermore, goods were usually made and bought to last. 'Built-in obsolescence' had no meaning in the eighteen-nineties.
It was in the nineteen-fifties, with the arrival of automation on a large scale, that conditions underwent a dramatic change. As mass-production processes were introduced into nearly every industry, outputs increased rapidly. The dream of vast quantities of cheaply made goods at a price within the reach of every man and woman in the country now seemed likely of fulfilment. The national policy of full productivity and full employment resulted in rising wage rates and, by the nineteen-sixties, the so-called Affluent Society had arrived. Ironically, however, it was at this stage that the creation of mass markets-essential to absorb these vast quantities of goods-coincided with a rapid rise in the cost of labour in the distributive trades. A situation had been reached where the savings achieved by mass-production were being eroded by the increasing cost of distribution. Furthermore, production in many industries was at last catching up with demand. The shortages of the immediate post-war years were giving way to abundance. What had been a seller's market since the outbreak of the Second World War in 1939 became, in the early fifties, very much a buyer's market.
For the post-war generation of businessmen this was a novel experience. It was recognized that the scientific approach, which had brought about the revolution in production, must now be geared to devising ways and means of creating and maintaining new markets to absorb the output. A lead had already been given in this direction by the many American-owned companies operating in Britain for whom the ONLINE MARKETING concept had dawned some decades earlier.
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