The economic conditions in the 1950s and 1960s were great thus reinforcing the perceived superiority of the marketing mix paradigm (Egan, 2008; p10). High consumer trust, effective mass marketing, growing prosperity, homogeneous demand and dominant manufacturers (O’Driscoll and Murray, 1998) further proved that transactional marketing is working successfully (Egan, 2008:p10).
However, over the next decades, marketers started questioning the effectiveness of the dominating marketing mix paradigm (Grönroos, 1994). It was particularly inadequate for those working in the industrial and service sectors, as it seemed problematic for the transactional marketing to be applied outside its original context (Egan, 2008:12). Some attempts were made to solve these inadequacies, but they only expanded on the same approach instead of rethinking the approach as a whole (O'Malley and Patterson, 1998). For example, one of the proposed solutions was to add people, physical evidence, and process (Booms and Bitner, 1981) to form the 7Ps (Egan, 2008). However by trying to simplify it and making it fit different contexts, the concept lost its validity and substance (Gummesson, 1994 cited in O'Malley and Patterson, 1998).
Moreover, USA’s intra-market competition intensified considerably as the number of firms, both local and foreign, increased. Firms had to compete for a static number of customers within a market that was becoming increasingly saturated with products (Egan, 2008:p13). This illustrated to marketers that the transactional marketing theory is designed for markets that are growing and it would be unsuitable for highly competitive and mature markets (Gonroos, 1991 cited in Egan, 2008; 13). The marketing discipline diverted from it’s original customer-oriented perspective and company-wide integration efforts, back to short term profits and marketing departments that had full responsibility for the marketing function (Egan, 2008) (Egan, 2008; Webster, 1992 cited in O'Malley and Patterson, 1998).
Due to the recognition that traditional marketing is no longer a viable option in all markets, a new age of marketing emerged, a paradigm shift known as relationship marketing (Egan, 2008). This significant change in the marketing discipline differs from traditional marketing in the sense that it is more focused on building a long-term, mutually beneficial relationship with the customer instead of focusing on product features and short-term profits (Egan, 2008;p34). There was high emphasis on customer service and strong commitment to retaining and satisfying consumer expectations (Troni, 2013). A great example this is Saturn, which was able to retain majority of its customers by selling a complete shopping experience instead of just ‘cars’. This was obvious in the firm’s advertising, which portrayed the trusting relationship between the firm and the customer, instead of the features of the car (Herron, 1996). And unlike the traditional marketing paradigm, RM’s scope covered the entire spectrum of marketing’s sub disciplines including channels, B2B marketing, services marketing, and customer behavior (Partivyar, 2000 cited in Egan, 2008;36).
Over the past few years globalization and new technologies have created new opportunities and threats for businesses. Recent technological developments have allowed businesses to connect to current and future customers in real-time through the Internet and social media, yet it also increased competition from small and large global firms and created higher expectations from consumers (Zineldin, 2000). As a result, integration of technology and the exchange of information between firms and their consumers has become vital for the success of the business to the extent that some academics have stated that we are moving toward a new paradigm shift in marketing identified as the mobile/technologicalship era (Owyang, 2009; Zineldin, 2000). This new paradigm shift accepts the knowledge and theories of its predecessor, but focuses on utilizing technology, real-time connections, and social exchanges based on relationship driven by the consumers (Hof, 2013).
And in order for marketing to thrive in the continuously evolving environment there are certain things that students, practitioners, and academics need to understand that the function of marketing is not be to manipulate the customers, but treat the customers as if they’re part of the firm. The use of technology to give consumers the chance to participate in the market offering can lead to increased customer satisfaction (O'Malley and Patterson, 1998). For instance, the new John Lewis Christmas ad created a massive social media buzz, and to involve the consumers even further, John Lewis asked its customers to record their own version of the song “Somewhere Only We know” will air on Christmas day (Forde, 2013). This connection between the firm and consumers can lead to a long-term win-win relationship (Zineldin, 2000).
Moreover, marketing discipline should aim at satisfying the individual needs of consumers. Hence using of social media to interact and understand individual customers and their expectations through mutually beneficial dialogue (Zineldin, 2000), thus allowing firms to customize their products, services, and communications according to the individual needs. This is seen in Nike’s personalized shoes, and websites such as Google and Facebook that create personalized web pages for individuals (Smith, 2006).
In addition no single theory or model should be used to practice marketing, as none of them can include all relevant elements and fit every situation, hence they becomes obsolete; even RM isn’t suitable for every situation and every business (Prothero and O'Malley, 2004). For example, RM is not recommended for tourist shops, as they should focus on single sales and product features rather than customer retention.
Finally, “business schools lag businesses in the adoption and implementation of best practices in marketing to the point current marketing education is out of touch with reality” (White, 2010). Even with all the criticism against it and the absence of it in real businesses, schools are still teaching the 4Ps as the basis of marketing (Grönroos, 1994). Although tools such as the 4Ps should be studied, singular-marketing approaches should be abandoned in favor of those which recognize the complexity of society (O'Malley and Patterson, 1998). Practitioners should not just use these common tools, but also create their own tools that apply to their own situations (Vargo and Lusch, 2004).
In conclusion, modern marketing has evolved from a sellers market to a consumers market in order to adapt to previous, current, and future needs of firms, customers, and society. And although we do not know what the future holds, one thing is for sure, and that is marketing should be open, interactive, innovative, flexible and accepting of change. Furthermore price and quality are no longer enough to differentiate products/firms, and therefore businesses need to find competitive advantage through integration of technology, connecting with customers, personalization, and consumer participation (O'Malley and Patterson, 1998).
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