How Has Marketing Changed over the Past Half-Century?

With the publication of the 16th edition of Marketing ManagementIn this article, we sat down with Kellogg marketing professors Philip Kotler and Alexander Chernev — co-authors of this edition — to get their insights into how marketing is changing and where it might go.

This interview has been edited for length and clarity.

insight: How new thinking in marketing is reflected in the latest edition of Marketing Management? What has changed and what has remained constant over time?

Coates: The term “marketing” appeared in the twentieth century to describe the activities and institutions that take place in markets, and early marketing textbooks largely described these activities and institutions. Marketing Management, published in 1967, was the first text to use an analytical approach to marketing and to include the results of scientific studies. The book brings together ideas from economics, the behavioral sciences, organizational sciences, and mathematics to provide breadth, depth, and precision in addressing marketing issues.

One of the basic basic ideas presented in the first edition of the book was that company actions should be driven by customers and their needs. This basic principle of customer focus has remained the central theme throughout all editions of the book. The emergence of big data, social media and evolving e-commerce has not changed the fact that the primary purpose of any company is to create value for its customers.

Draft: Creating value is the core of our approach in the new edition. Marketing is about understanding, designing, communicating, and delivering value. This is the basis of marketing strategy and has not changed over time. What has changed are the tools companies use to create value. Data analytics, automation, and artificial intelligence are very powerful tools in value management, but they are just tools. Without a sound strategy guiding its use, it can become a distraction from the company’s primary mission.

However, not all changes are tactical. One of the important changes affecting the business philosophy of many companies is to redefine their ultimate goal. As a result, an increasing number of companies are embedding societal value creation in their mission statements. This is an important development that is likely to have long-term consequences for the way these companies behave in the marketplace and the way they organize their business operations.

insight: Glad you brought it. It is now central to a lot of enterprise marketing strategies that brands not only be profitable, but that they have a purpose. How has this idea evolved over the years?

Coates: In the old days, the brand simply told you what the product is, what it does and how it is priced. But today, a brand is a company’s promise to provide a specific benefit that meets a specific need of its customers. Moreover, the promise of many brands goes beyond functionality and reflects certain aspects of customer identity.

Take what Unilever did with Dove soap. Now it’s not just a way to cleanse your skin but to remind you that all women are beautiful. When it really works, the brand takes a higher view of the buyer and tries to make a promise that will help the buyer progress in some way.

Draft: As more and more products become a commodity, customers are looking beyond functionality for something meaningful. It is no longer just about the product. It also comes down to who the company is behind this product and what this company stands for. As companies realize this, they realize that to succeed in the marketplace, they may have to reinvent their culture and realign it with the values ​​held by their customers.

Having a purpose also helps companies attract and retain employees. If you stand for something, you have a better chance of getting and retaining the right people, which will ultimately boost profitability. This also extends to corporate partners. For example, companies like Whole Foods prioritize suppliers who use environmentally friendly and socially responsible business practices.

insight: What is the impact of social media on marketing theory and practice, and how do you see it presenting new opportunities for marketers?

Draft: On a very basic level, the theory remains the same: the ultimate goal is value creation. But at the tactical level, there were many changes. One such change is the spread of information.

In the past, advertising was the main tool for informing customers about products. Now, customers can obtain detailed product information from a variety of sources, both from the company and from other customers. The same goes for companies. The proliferation of social media and advances in data analytics allow companies to know in real time not only what customers are doing but also how they feel about their brands. So the primary goal is still value creation, but the way a company can achieve this has changed.

Coates: It is important to realize that consumers today are different. They are connected to many people from many other parts of the world and can find information with a simple click, without the need for a seller or an advertisement. Anyone who will buy a car will likely end up seeing a salesperson at the dealership, but most have done a lot of their work figuring out their options. We have to realize that there is such an intelligent and informed consumer, which means that companies have to make major changes to their traditional marketing tools. For example, are companies wasting money by having large sales forces? Is it as effective as it used to be when there wasn’t a lot of knowledge available to consumers?

insight: What changes do you see shaping the future of traditional retail?

Coates: I wonder what will happen to the store shopping. It is conceivable that you can have everything you want without going to the store, so the store should be special. You have to design a good experience. Then you have to ask: How many stores will we need? What types of stores will be necessary?

Draft: People tend to shop in traditional stores for various reasons. Some go for purely utilitarian reasons. They appreciate the fact that they can see what the product actually looks like and will eventually be able to buy it right away and take it home. Others go for more fun reasons; For them, it is more about the shopping experience. They don’t go to traditional stores to save time but to pass the time. For many, it is also an opportunity to socialize with friends and family.

The Internet can make the shopping experience more efficient, but it cannot replace, at least not yet, the role that traditional stores play as a place for social interaction. So it’s likely that more and more traditional retail spaces are turning into experiential places where customers go to spend time interacting with others, eating a meal, and eventually buying a product or two.

insight: How do you see the changing role of marketing in organizations? Are there ways that marketing functions can have a greater impact, or a different type of impact, within organizations?

Coates: In the past, marketing was not a part of product development. It was only recalled after the product was manufactured. Then the marketers’ job was to sell as much as they could. But marketing is now involved in product development. Marketers can offer design ideas and features. Engineers are masters of what is possible, but it is marketers who can better assess value because they are better at understanding customers’ criteria for purchasing the product.

Recently, some companies have relinquished the position of Chief Marketing Officer in favor of Chief Growth Officer or Chief Customer Officer. But the vast majority of companies appoint a marketing director to manage the marketing and sit down with other officials in the executive suite.

Draft: The challenge for marketing is that in some companies it is viewed too narrowly and is limited to advertising and communication. This creates a problem because marketing is a much broader field. It’s really about the science of markets and how to create value. As such, it should be a central function in organisations. Some companies tackle this misperception of marketing by devising different labels, whether it be the CEO of Growth or the Chief Customer Officer. But these are fundamentally different aspects of what marketing does.

Another big change is the need for transparency and, most importantly, accountability. As technological developments enable companies to track the impact of their activities, managers are expected to be able to document the return on marketing investment for the company. This has advantages and disadvantages. On the positive side, it enables the company to better allocate its marketing resources to the areas where it will have the greatest impact. On the downside, however, this may focus the company’s marketing efforts on activities that produce short-term effects, at the expense of activities such as brand building that have long-term payouts.

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