Question

Marketing has gone through three distinct stages. Explain them in brief.

Explain 'Sales-Oriented Stage' and 'Marketing-Oriented Stage' of Marketing.

Answer 1

1. Production-oriented Stage (1869-1930):
   1. In this stage, the motto was to 'sell what can be produced.' There was an acute shortage of goods, and there was no need to create demand.
   2. The product was the focus of attention, and communication with the buyer was not needed. Products were manufactured on the assumption that customers would search and buy well-built and reasonably priced products.
   3. This was based on Say's Law. 'Supply creates its own demand.' It was believed that customers were capable of selecting products from among the competing brands.
   4. The firms that follow the production stage make efforts to make their products inexpensive and widely available through mass production and mass distribution.
   5. In this stage, production and engineering departments shaped the company's goals and strategy. Marketing was dependent on production capacity, and marketing consisted of mere distribution. There were no marketing departments. 
   6. There were sales departments to manage and control sales and sales force. The philosophy of this stage was that customers buy products which are low-priced and easily available. High production efficiency is required to reduce cost and price, and wide distribution coverage would ensure easy availability of a product.
   7. This philosophy is used when demand exceeds supply. Production-oriented stage lasted till the Great Depression. Its main drawback is that customers do not always buy products which are inexpensive and easily available.
2. Sales-oriented Stage (1930-1950):
   1. The Great Depression resulted in a situation that questioned the thinking/strategy of business firms. Drastic changes in buying habits and consumer behaviour, technological advancements in transportation and communication, and the growth of corporate organisations have also changed thinking.
   2. The focus shifted from production to selling. How to sell became a problem, and the new motto was to 'get rid of what you have'. Producers began to realise that consumers would not buy enough unless approached with substantial selling and promotional efforts.
   3. The focus was on increasing sales rather than on consumer satisfaction. Demand outstripped supply, and it was still a seller's market. Thus, the sales-oriented stage was characterised by hard selling. In the process of aggressive selling, unscrupulous practices occurred.
   4. Salesmanship was the focus of marketing activities because products could not be sold without an effective sales force. The customer's importance was realised but only as a means of disposing of the goods produced. The selling philosophy is still used in insurance, charity fundraising and other unsought products/ideas.
3. Marketing-oriented Stage (1960-1980):
   1. The emergence of keen competition and consumer awareness forced producers to rethink the philosophy of marketing. They realised that business policies and programmes should be built around the goal of customer satisfaction.
   2. Management should think of itself not as producing products but as providing value satisfaction to customers. The aim of marketing should be to know and understand the customer so well that the product or service fits him and sells itself. As a result, marketing became the heartbeat of business and marketing considerations the key to business planning and decision-making.
   3. Customer satisfaction is the principal reason for corporate existence. The modem concept of marketing recognises the role of marketing as a direct contributor to profits as well as sales volume.
   4. In order to survive and grow in this highly competitive world, a company must first determine what consumers want. Then, produce that will satisfy consumers. The consumer is considered the 'king' in this stage.