History of Relationship Marketing

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Since the early beginnings of the formalization of the modern industries a need for a sales approach that addresses the specific requirements of different industries from their suppliers’ side emerged. In the early stages all efforts in this arena were individual, not formulated and depend largely on the situation, personal influences and relations.

2.1.1The past
As early as late 19th century and the beginnings of the 20th century the need to serve mass markets started to influence, and sometimes burden, the industrial community. This situation was driven by, as well as driving at many cases, the advancements in technology and production capabilities of industries across the board. This created a production driven environment where whoever can produce and supply will be selling and profitably. By mid 20th century (post WWII) the production driven scene was changing; technological advancements pace was getting faster and the world started to see products that have comparable performance, specifications, and simply serves the purpose and this created what we know now as commoditization and fired the first bullet in modern price wars. Producers realised this shift and started to concentrate on sales and marketing activities on their quest to capture bigger market share and ensure continuity and profitability. Again there was an upwards trend in the sales and marketing theories and concept evolution, the same what happened with production earlier. This trend was driven by, and again driving at many cases, how markets perceive products and react towards certain approach. Till this point in time marketers and academics were not distinguishing between consumer markets and industrial markets; serving mass markets was the main focus. As O’Malley and Patterson (1998) note ‘there was a great need to formalize marketing; to guarantee that it worked every time’. In 1954 Borden introduced what is considered to be an early version of what we know now as the marketing management mix; a 12 variable list that marketers would have to consider in any specific circumstance of market encounter and translate them to an integrated marketing program. By 1960 McCarthy reconstructed the original variables of Borden into our well-known 4P’s framework (Price – Product – Placement – Promotion). Although this model has been heavily questioned and criticized for the fact that it is an oversimplification of market realities which is by definition complex, the same simple nature of the 4Ps ensured its increasing popularity and the rise of the ‘Marketing Mix’ theory. As a result of consolidating it under the (P) of ‘Promotion’, sales also followed the same transactional paradigm of marketing and the focus was on the transactional nature of the customer encounter; simply finishing the sales transaction in favour of the product was the target. Other marketing theories that was developed within the same period of time and took different approaches than the transactional one had no chance for survival due to the dominance of the marketing mix theory. The marketing mix (transactional theory) was developed in rather specific circumstance; it was developed in the United States to address the consumer goods markets in post (WWII) period, so it was tailored based on the needs and conditions of a specific geographical market, a specific segment, and a specific time zone with very high growth rates. Primarily, criticism originated from people operating within environments that are different from those that influenced the development of the theory, for example from Europe, especially the Nordic school, and from marketers working within the industrial (business-to-business) and service sectors. As time passed and markets evolved, pressure on the marketing mix theory started to come from the United States itself. The intra-market competition intensified considerably as the number of firms increased and the consumer goods markets changed from a growth status to one of...
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