Maybe I’m late to the game, but as I continue my exploration of the history of marketing – I discover many things that enlighten me. For example: in actual fact there are two different methods to studying the history of this field:
- “The history of marketing thought, giving theoretical accounts, and
- Marketing history, focused on the history of marketing practice”
When I think back to my marketing education, the focus was squarely on the 2nd of those bullet points: marketing practice. Recall the lessons on the infamous 4 Ps of marketing? Of course when you study marketing to become a marketer, learning the practice is – not only important – but a basic need for entry. I would argue though, that as we become a more educated and a more connected society, this practice evolved over a period of 100+ years needs do a deep dive to truly understand how it got here, and then look at revolutionizing what we do today. As I mentioned in my earlier post, understanding where you came from is critical to setting a path for where you want to go.
I simply wanted to use this preface to explain my choice of focus for these posts on the history of marketing thought. I confess: these are my “open thoughts” as I work through what – I believe – will be a paradigm shift for the marketing practice. Your company on the journey is welcome and appreciated.
The term marketing has been used for centuries – mostly for defining the simplest of transactions: buying and selling. In its original form, marketing’s purpose was simple: to move a product (services were not considered separate at the time) from the seller to the buyer. Some of the 4Ps were experienced, but not as we know them. And, the most critical 5th P – people – wasn’t even a thought!
Though there are arguments against some of the thoughts and theories put forward by Robert Bartels (1913-1989), he is still considered one of the pioneers of marketing thought. Bartels explains that early students of marketing were in actuality – economists – but that they brought forward divergent theories, which set them apart from traditional economic science.
Economy vs. Marketing
In the early 1900s, economic science was still putting forward that demand was driven by purchasing power. (Put simply: the more you can buy, usually based on the amount of money you have, the higher your purchasing power.) Marketing thought however, challenged the notion that only purchasing power drove demand and suggested that human desire combined with the ability to purchase had a much deeper impact on demand than the simpler suggestion offered by economists.
The notion that humanity had anything to do with moving products from seller to buyer was a revelation in and of itself! For business owners the question was: how can I move more product and make more money? For early marketers, the question was: how can we use the economic methods we already know to take advantage of this revelation and move more product – to make more money?
Enter: Behavioural economics
The early days of behavioural economics saw a drastic shift in belief of how people made choices for what they buy. Early behavioural economists were just skirting the issue of rationality vs. irrationality suggesting that given a number of (predictable) parameters, people would make the most rational choice. There were lots of limitations in this proposed theory.
Herbert Simon (1916-2001) put forward the notion of bounded rationality. The theory of bounded rationality suggests that people always intend to be rational, but due to lack of information or lack of time, they cannot and make the best decision with the parameters they are given. “One may think of any decision as arising from two sources. One is the external environment—how we respond to the incentives facing us. The other is the internal environment—those parts of our internal make-ups that cause us to deviate from the demands of the external environment.” (Simon 1996b) Consideration for someone’s emotional and genetic make-up as an influencer of consumption behaviour was finally in the books – it was 1996! Now, Simon had been discussing these shifts in decision-making as early as 1935, but they didn’t really take-off until much later.
Even today however, I still find myself hearing commentary and participating in discussions highlighting the “old way of doing things” where bottom-line is the only thing driving business, but somehow not the only thing driving the people running those businesses.
If businesses are run by people and produce goods & services for people, then why are they still guided by rules and regulations born out of science and mathematics? Look, I’m not trying to be naïve: I’m well aware that no one goes into business to lose money. But, let’s go back to the first post of the new-year. In particular, I want to draw attention to Simon Sinek’s concept of “Start with Why”.
We can all agree that no one goes into business to lose money, but can we also all agree that no one actually goes into business to make money? People go into business because of passion – passion they have for their art, their industry, their values and their beliefs. Agreed?
OK, so if people are in business because of passion – then they are not driven by the laws of science and math. They are not driven by their brain; they are driven by their heart. And, if that’s true of people who run businesses – wouldn’t we also believe that the people who influence business success – i.e. employees & customers – are also driven by their hearts & passions? (OK, granted that’s a rational explanation and I’m arguing this point here…)
Are we all on the same page? Back to the argument that marketing needs a revolution…
If people are driven by emotions then why do we still rely on logical and rational arguments to make marketing decisions? How can we consider criteria/parameters that empower us to take account for our own irrationalities and those of our consumers in order to make the best decisions possible? How can we ensure that our products, services and messages speak to the passions of our consumers? And, how can we allow our emotional self into business to make more natural/human choices & decisions?
Folks – there is much more to the history of marketing thought than I can cover in any one post. Your input and dialogue can only build the case more strongly. And, as I continue to uncover nuggets of enlightenment, I promise to share them. These posts will only scratch the surface, and hopefully start a conversation about how we can move to the next level – one much more in tune with what the world needs today.
I re-iterate my thoughts:
The true marketing revolution will elevate the role of the business from making money to satisfying consumer needs and desires to making genuine contributions in their communities (local, national and global).