Consumer Behavior and Marketing Principles

• Marketing has been practiced and pondered since ancient times; however, it was only during the 20th century that marketing truly evolved as an academic discipline.
• Most concepts and issues in marketing thought have merged into distinct schools or approaches.
• This article traces the development of 10 specific schools of marketing thought.

Traditional Approaches

• The study of functions, commodities, and institutions emerged as complementary ways to understand marketing at the turn of the 20th century.
• These approaches became known as 'traditional approaches'.
• The interregional trade approach also emerged around this time.

Paradigm Shift and Broadening

• A 'paradigm shift' occurred around mid-century, as new schools like marketing management, marketing systems, consumer behavior, macromarketing, exchange, and marketing history eclipsed traditional approaches.
• In the mid-1970s, marketing management, consumer behavior, and exchange underwent a 'paradigm broadening'.
• This broadening shifted marketing thought from business to human social behavior.
• At the beginning of the 21st century, marketing thought is described as being at a crossroads.

Individual Schools of Thought

• The existing literature is reviewed.
• Articles on the history of individual schools of marketing thought exist, including those about the institutional, commodity, and consumer behavior schools.
• Two books on schools of marketing thought and theory are also discussed.
• Bartels' (1988) The History of Marketing Thought is comprehensive but focuses on sub-areas rather than schools and follows a chronological structure rather than one focused on schools of thought.
• Sheth et al.'s (1988) Marketing Theory: Evolution and Evaluation is comprehensive.
• It centers on theoretical evaluation rather than historical evolution.

Purpose of this Article

• The goal is to update the history of marketing thought schools.
• The article provides new insights into the origins and development of traditional schools.
• It discusses the paradigm shift that occurred in the mid-1950s.
• It examines the current state of marketing thought at the beginning of the 21st century.
• It also explains how the schools are interrelated, describes the crossroads the discipline finds itself at, and suggests a path for the future.

Methodology

• The pioneering work of Sheth et al. (1988) from the beginning, discussing 12 schools of marketing theory.
• The “activist school” is included in “macromarketing”.
• It deals with consumerism or aggregates of consumption.
• The ‘organizational dynamics school' is folded into the ‘institutional school'.
• This is done because the behavioral dimensions of the former should be linked with the economic dimensions of the latter to fully understand the operations of trading firms in distribution channels.
• ‘Functionalism' is excluded because it doesn't fit the definition of a school of marketing thought.
• One single marketing scholar (Wroe Alderson) describes it in two books.
• Functionalism is subsumed within the marketing systems school.
• Marketing history is included as a school, even though it was in an embryonic state when Sheth et al. (1988) wrote their book.

Definition of "School of Marketing Thought"

• A substantial body of knowledge
• Developed by multiple scholars
• Describes at least one aspect of what, how, who, why, when, and/or where marketing activities are performed.

Distinguishing Between Schools and Sub-Areas

• It is important to differentiate general schools of thought from sub-areas within marketing.
• Schools represent a comprehensive perspective on most marketing issues.
• Sub-areas are elements within a school, usually within marketing management.
• Advertising and services marketing are two significant sub-areas discussed peripherally due to space limitations, despite their importance.
• Sub-areas are discussed only to the extent that they impact the development of a school.

Four Periods of Development

• Development can be divided into four periods
• Paralleling Wilkie and Moore's (2003) ‘4 Eras'.
• Pre-Academic Marketing Thought: Prior to 1900
• Traditional Approaches to Marketing Thought: Roughly 1900 to 1955
• Paradigm Shift: Circa 1955 to 1975, marked by Alderson's work.
• Paradigm Broadening: Approximately 1975 to 2000, influenced by Kotler's writings.

Pre-Academic Era

• Thinkers from ancient Greece (Plato, Aristotle) discussed macro-marketing issues.
• Medieval scholars (Augustus of Hippo to Thomas of Aquinas) focused on micro-marketing concerns such as ethical marketing practices.
• Marketing as an academic discipline emerged from applied economics.
• Schools of economics influenced marketing, especially Classical, Neoclassical, German Historical, and American Institutional schools.
• Management also developed as a sister discipline.
• 'Scientific Management' (Taylor, Gilbreth) improved factory efficiency and mass production.
• This efficiency lead to the necessity of improved understanding of mass distribution.

Traditional Approaches Era

• Business boomed in the US at the turn of the 20th century.
• There was increasing migration to cities, the emergence of national brands and chain stores and a growth in newspaper and magazine advertising.
• The transcontinental railroad made transportation easier, which caused larger cities to develop mass transit.
• Development in automobiles and trucks increased.
• These connected rural farmers through agents and brokers with urban consumers.
• Marketing was implemented as a course in American universities by 1902.
• To organize marketing, pioneer scholars developed three approaches: (1) cataloging functions; (2) classifying commodities; and (3) categorizing institutions.
• Used to argue against complaints of 'high price spreads between farmers and consumers' and inefficiencies in marketing.
• Marketing functions showed that activities performed by marketing institutions were socially useful and economically valuable.

Paradigm Shift Era

• This paradigm shift was influenced by military methods of mathematical modeling improvements.
• The shift was also influenced by military production shifting to consumer goods production after the war.
• This created supply surpluses that business firms then needed demand generation activities for.
• Influenced by Ford Foundation and Carnegie Foundation reports that called for business education relevance.
• The thinking of Wroe Alderson was the most important cause of academic shift.
• Resulted or impacted modern schools of thought, including marketing management, marketing systems, consumer behaviour, macromarketing, and exchange.

Paradigm Broadening Phase

• External forces were involved only in consumer behaviour, with researchers in the field (primarily psychology) entering the marketing discipline.
• This era was driven by the thinking of Philip Kotler and his co-authors.
• Resulted in a bifurcation in marketing management, exchange and consumer behaviour.
• Expanded the boundaries of marketing thought from its focus on activities of business to any form of human activity.

Marketing Functions School

• What does the work of marketing include?
• This functional approach to the question was described as the theoretical developments in marketing.
• Few concepts in the field have followed such delineated life cycles.
• Introduction peaked during the 1910s, rapid growth occurred in the 1920s, early maturity occurred in the 1940s, peak in the 1950s, decline in the 1960s, and discard in the 1970s.
• Five functions of middlemen were defined by Arch Shaw: ‘(1) Sharing the risk, (2) Transporting the goods, (3) Financing the operations, (4) Selling the goods, and (5) Assembling, sorting, and reshipping'.
• He developed these ideas as a Harvard student at the business school by studying historical merchant contributions to find a simple concept

Functions are Universal

• L.D.H. Weld recognized that functions are universal and often shift forward and backward in the channel of distribution.
• They're not always performed by middlemen; producers and consumers perform some marketing functions.
• Seven Functions are included in Weld's (1917) list: (1) risk bearing, (2) transportation, (3) financing, (4) selling, (5) assembling, (6) rearrangement, and (7) storage.
• Only one new function (storage) was added.
• Subsequent writers added, dropped, aggregated or disaggregated certain functions.
• Clark (1922) reduced the number to three with sub-functions exchange (buying and selling); physical distribution (storage and transportation); and facilitating functions (financing, risk taking, standardization).
• Ryan expanded the list to 120 functions grouped into 16 categories.
• That different writers could produce such varying numbers of functions presents an obvious problem with the concept.
• It is probably unfortunate marketing functions was ever developed.

McGarry and Attempted Revival

• The concept was reconsidered based on the goal of creating exchanges
• McGarry (1950: 269) believed he had come across six functions: Contractual, Merchandising, Pricing, Propaganda, Physical Distribution, and Termination
• Though attempting to bring new life, Hunt and Goolsby observed that McGarry was sowing seeds of its demise
• The 'functions' or work of marketing however, reemerged as channel 'flows' in the institutional school and as managerial tasks in the school of marketing management

Commodities School

• The commodity school focuses on the characteristics of products and services.
• It addresses the question of how these goods are marketed.
• Most work in commodities involves distinct categories of goods.
• There is a critical importance in establishing the variations in the commodity approach.
• Raw materials and component parts are for manufacturing and 'disappear from commerce to go into individual consumption or into household use'
• Agricultural and manufactured commodities also distinguished between, with commodities available for any good whether material thing or service.
• Breyer (1931) describes marketing of an individual product or service, from original producers to final users
• Cotton, cement, coal, petroleum, iron, steel, automobiles, electricity, and telephone services are examples.

Copeland and Classification of Goods

• Copeland (1924) was the classifier of commodities.
• He separated industrial and consumer goods based on who bought the commodity and it's intended use.
• Demand for industrial goods was based on demand for consumer goods.
• Two involve capital goods, two are used in production, and two are expense items.
• Long term capital items such as buildings and land (1); shorter duration capital items such as trucks and computers (2) are depreciable.
• For example, rubber tires ( 4) produce automobiles.
• Supplies for maintenance (5); services to support business operations (6) include categories to operate the business.
• Copeland's industrial goods classification has barely changed over the course of the 20th century (Perreault and McCarthy, 1996).
• Although the concepts remain the same, the term industrial goods is sometimes replaced with business goods or its shorthand expression B2B.

Consumer Goods Classification

• Most classifying for consumer goods classification is built on Copeland's categories.
• These original three are convenience, shopping, and specialty goods.
• Gardner cited Parlin's (1912) categories as (1) convenience goods, (2) shopping goods, and (3) emergency goods. Parlin's emergency goods are in the convenience category.
• Parlin anticipated specialty goods as well, for which people go some distance to find.
• One of Copeland's colleagues mentioned convenience and specialty goods, with the consumer putting convenience first.
• A specialty adaptation to the consumer is a specialty (good).
• The three categories of Copeland were in the air during the time of organization into a system.
• Copeland defined convenience goods as those customarily purchased at easily accessible stores. The shopping goods are compared on prices, quality, and style at purchase time.
• Specialty goods are called just that as they attract the consumer and include other factors than price for visiting the store and making the purchase.
• It became the specialty goods category that perked the most interest and raised the most questions to follow authors.
• This resulted in small demand that requires the buyer to find relatively few outlets to purchase.

Aspinwall's Classification

• Aspinwall (1958b) has a different way of shopping and including convenience goods.
• A continuous color scheme is red for convenience goods, yellow for shopping goods, and colors in-between.
• Relationship of goods, channel length, promotion type are based on summing the values for each sum.
• Convenience goods have a high channel replacement and are low on others.
• This all depends on whether the good requires advertising or personal selling.
• Red and yellow were meant for blending, which would require mid-length channels.
• A specialty was not specified.

The Consumer Makes the Decision

Rationales appeared in literature to justify Copeland's three classifications. Prior to purchase, the question is asked: Prior to purchase, does the consumer have a mental preference map?

• Low cognitive dissonance and physical effort makes convenience goods.
• There's possible purchase inappropriateness, even though anxiety is high, shopping goods are acquired.
• The product is important, causing high purchase anxiety the location is important so you can get the correct and reduce your anxiety.
• Depending on similarity and buyer, Bucklin subdivided into two types -- low and high intensity.

More Consumer Goods Studies

• A map was also developed by Holbrook and Howard with effort on each axis.
• It builds on the Kaish's work.
• Enis and Roering (1980) produced 4 way classification relating to consumer risk. Murphy and Enis classify according to the two, and marketers employ limited mixes for convenience.
• These supported their conclusion:
• Generalizable through goods,recognizing role of benefit costs, and using familiar teminology.
• Some goods are products and services featuring bipolar alternatives.
• Most attracting marketing scheme is work of Nelson based on relative costs. Search or experience is used at two, with consumers being able to discover prior to purpose for the first and vice versa.

Institutional School

• Those who do the work of marketing, including wholesalers, agents, brokers, and retailers.
• L.D.H. Weld is the founding father due to discussion of middlemen’s value.
• Question is related to having too many middlemen.
• Foundation of institutional is with focus on describing and classifying various marketing types of organization

Nystrom and Wholesaling

• In 1915, Nystrom discussed development of developing institutions.
• He wrote on how most routes may be transferred between producers.
• Beckman is credited for writing the first volume on wholesaling.
• Wholesaling occupies a position in the distribution of goods to have more system.
• Focus on retailing or wholesaling is primarily with the institution itself versus linkages between the two.
• Institutions have to be more than retailers.to have distribution.

Definition of Middlemen

• Include anyone between prime source and consumer. Requires being able to measure the distinction between the concepts of the middleman.
• It is important to know what these specialists can be called, such as railroad workers.
• Institutions are now the middlemen and facilitators.
• Trading concerns exist that sell and non-trading exist that facilitate

Beckman and Engle

• Emphasized definitions of what middlemen were, and defined them.
• Merchant middlemen buy goods versus functional middlemen assisting in ownership changing.
• This is a classical system that defines market transactions.
• There are few improvements of marketing evolving.

Clark and Breyer

• Clark seems to have coined the term ‘channel of distribution'.
• Study of the channels grew with several readings.
• Several concepts such as profit, power and dependence and trust exist in the literature.
• Analytically Lewis identifies seven theories of channels: McInnes, Vaile et al, Aspinwall, Bucklin, Alderson, etc.
• Scholars have added to a general theory of marketing based on channels of distribution.
• Authors explain through multiple terminologies, but constructs are same.
• Terms such as "circuits and obstacles" are common.
• Easier to follow terms involve the concepts of 'separations'.

Understanding Flows

• Is what products separated by customers with increased specialization mean there will be less potential for exchange?
• This potential is not the same as an interaction.
• Opportunities are made for middlemen to bridge the gaps between the buyer and seller.
• Flows bridge gaps or information etc.
• It is not known how the flow is variable.
• The time it takes is determined based on the consumers need.
• The rate of the goods moving is known, you can tell all the other characteristics determining the flow.
• Theory depends on the speed of flow.

More Theories

• Alderson (1957) developed the part with postponement.
• As a result they created today's mass customization with lower costs and less risk.
• A transaction includes all sales from the person to the other member.
• At each depot points are transformed sorted etc.
• Fundamental theories can become synthesized better in the flow of coherent.

Interregional Trade School

• Two approaches to interregional trade (one quantitative/conceptual) Common: The question of which side marketing takes place.
• Quantitative: follows law of gravitation (Isaac Newton.)
• A force attracts inversely proportionate to the masses separate.
• Provides impetus for the gap of marketing.
• Small town attracts more to big cities based on population and the distances between.
• Extended formula also defines that for any area of this kind cities impact the trade off.
• Expanded so you can determine where you are and what to do in this kind of competitive market
• Changed def. from seller to buyer.

Huff's Critique

• Huff criticized the AMA definition of trading area for lacking insights into the “nature and scope of a trading area"
• Resolved nature and focus geographically due to having customers.
• Apperently, no additions to the literature have been released after 1964 article.

Grether's Development

• Credited as the major developer of the inter-regional side of inter-regional trade.
• Explored regional factors: 1). Resource 2.) Regional 3.) reciprocal amount, and 4) the Relative Competition
• Economic region as geographical defined as economic relative with control

Factors impacting trades of wholesaling

• Size - Product Value Distribution Savitt regarded that importance needs social understanding of interdepence.
• Today they're are easy ways to do trade today.
• Largely shoved off the new thought with marketing management's emphasis.

Marketing Management

• How should org market services and products.
• Originally limited to manufacture/ perspective
• As well as business marketing. Because this has increased, thought this has to be included more then a area.
• Impetus comes from books by Alexander Al. (1950) called just marketing. A series focuses on the notion of mixes.
• Elements appear for what is there, such as the channel, and price.

Wendell Smith's core

• Several concepts form the core leading to rapid growth:

• Product Differentiation, segmentation alternative strategies Chester's product life style, Robert's consumer orrientation concept

• Books focus on the 1164 concept expression by Borden that uses his insight to determine the effective marketing mix

• However, Wore's dealt with science also created a swept for a management Also known John's used and focused elements

• 1964 Mnemonic for "P"s

Management VS Marketing

• There's much attention because people are focused on the area.
• A theorem of marketing that there needs to be the potential for coherence and reason. It needs for be clear why they sales and marketing
• So that it can optimize customer segments. This leads to thoughts of how to market to non-profit groups.
• Even though social impact and technique apply is different from different impacts.
• The issues whether or not, can be created by any individual.

Kotler VS Mccarthy

Kotler's books dominate management text

• That is important because book's focused its context on how to broaden management technique to focus on general causes.
• Has changed from its historical because the position of the person has become more synonymous the marketing. As that applies it can go beyond even social norms.
• So discipline, becomes limited. Although webster emphasized broader management. By, saying that there needs and will more.

Research focused mostly on

• Strategy, segmentation, or the mix. Another sub area also receives high interest in 'P' , with many definitions excluded people from being in it
• Also this includes the "form", if the things can not be used. What's unique in "P" most focuses on the center is where and when all of this came from.

Marketing Systems School

• Question: What's does "systems terminology " describe.
• Al. whose book was " organized/ survival .
• Alderson influences by a by the " general system or science" . General's father.
• System of action. functionalism stresses whole system.

Further research for concepts

1969: It could have been from functional to general. In those articles system is only briefly mentioned, and 1964 expressed the importance. There are some textbook/articles about this, although the study has declined with other area becoming better.

Consumer Behavior School Summary

• Deals with human behavior, making it one of marketing's most diverse areas of thought.
• Initially focused on buying/consuming
• Although lumped together, it is more beneficial if separated into being used depending on the scenario.
• Product service vs satisfaction depending on the re purchase rate.
• Also is now far outside the traditional area.

Focus on Consumers

From economics " consumers or maximize their utility, consumers are seen as controlled and overwhelmed by consumer subcultures with much symbolism.

• Sheth Al., mentioned known names that influence them
• As a school, it had growth in integration
• Information output leads consumer interactions depending on feedback as one is more superior over the other one.
• The model was tested and met analysis. Although a clear and understandable division for functional relationships created subsequent research.

Popularity and Boundaries

Consumer behavior is more popular for reading

• It became a lot, then from what it first
• By adding the Journal, made more research. The lines are not well drawn.
• Some were not interested more as stand to sale.

Holbrook's notes states

This group, or identity is too broad, and to all that isn't anything.

• A fraction seems to avoid. So research acceptable the society
• Therefor all the people in the society are consumers from any source, or anything. Also even those giving and receiving.

Models and Findings

There appears to be to all that is done in the world/ it has become. The area included motivation to make perception . There exists theory.

MacroMarketing school

• Macromarketing is all the dimensions of a system scheme: Macro and micro, addresses the key picture in marketing. What can impact a or society? Or system productivity?

• Interaction parts that make contribute is like Breyer. It is a need but does not serve best. Marketing, which is thought too.

• Macromarketing, with Fisk Al., dedicated to the leaders Al. and Breyer. In to the view has given many.

• Those that have been emphasized, have. The marketing as everything it impacts/ all that is. In 1977 a seminar has come and given the idea marketing isn't "micro".

• The marketing has led that to come This is the subject of views 1981.

Exchange School

• Who exchanges ? What the conditions?
• Most theorists are those that argue marketing . As adam stated must be to have labor..
• Marketing asked questions , as one side increased. In order to have that marketing become better.
• Alderson, (1965) A transaction a marketing theory. That people look to make more

However his death caused a focus on exchange So how does all exchanges shift. How do org view the all four for proper conditions Then it used to say that all management / social for certain ones. As said you have to say you will be able to blend those dynamics

Conclusion

• A.w and Adam are always and did not get that much. How bad have thought to get? However, all the way the, society
• This means certain. You can take out those people that don't in many
• How or who ? At which state were all the all the ?

Explore factors influencing consumer attitudes, marketing models, and societal influences on consumption. Understand key elements driving customer purchases and the role of middlemen. Learn about the classification of goods and marketing functions.