Earlier approaches to marketing

Today, the importance of the universal marketing function is well understood by marketing managers. Moreover, the modern marketing approach holds that a business firm must focus its resources, talent, and energy on identifying and satisfying consumer needs at a profit. However, it was not always that way. Before World War 11, most managers operated under either a production-oriented or a sales-oriented philosophy; even today a few firms hold on to these outmoded approaches.

The Production-Oriented Approach

The nineteenth-century producer had little concern for selling his product. Most assumed, rightly or wrongly, that anything manufac­tured could be sold. Management's task was simply to keep production costs down, which would therefore keep profits up. Little or no advertising was carried out by producers of goods, and the sales functions were very often "farmed out¹⁰" by industrial and consumer goods producers to independent agents or brokers. Producing firms did little more than take orders and ship goods. Regard for the needs of customers was minimal. They could buy or not—but they did buy as the demand for the wider range of goods and services continued to grow.

The production concept still exists where management's attention is focused on engineering, manufacturing processes, research and development, and—most importantly—on the product or products which the firm sells. Managers who adopt this perspective feel that the customer is simply interested in buying products; they fail to recognize that the consumer is truly interested in solving problems and satisfying needs.

2.Give the summary of the text what's happening to the american consumer1?

Until about a decade ago, most marketing special­ists had a cheery, uncom­plicated view of American consumers. After all, for almost thirty years after World War II, both consumer spending power and the number of consumers continued to grow at a comfortable rate. The middle-income, consumer-oriented family of Mom, Pop and the 2.3 kids was a reliable marketing constant. By the 1980s, however, it was apparent that the average American consumer was developing a new and more complicated demographic and economic profile.

Although an examination of all of the demographic shifts of the past few decades would more than fill this article, a number of salient² changes can be summarized very quickly. First, the nation's population growth rate has fallen to about half what it was during the soaring³ Sixties. Second, as a result, the average age although still com­paratively young (under 30), is rising and will continue to rise quite swiftly over the next few decades. Third, the old nuclear family of Mom, Pop and the kids is changing in favor of households headed by women or single-person households. Fourth, the locational shift of Americans toward the suburbs continues, but at a dribble⁴ compared to the flood of the 1950s and 1960s. Fifth, population movement away from the Northeast to the South and West continues, although not at the rate of a decade ago.

The disappointing economic performance of the country over the past 15 years reflects—and in many cases is the cause of—these trends. Disposable (after tax) income and overall income averages have shown little improvement. But this fact obscures real shifts in the incomes of certain segments of the population. Relatively speaking, incomes have risen in the South and the West and fallen in the Northeast. The disparity between the incomes of blacks and whites, which not so long ago seemed to be closing, has increased. The raw numbers of Americans who fall into the economic category of "poor" (an average family of four with an income of under $10,000) is growing; but, the incomes of the upper 20 percent of the population are growing faster than in the recent past. Although women have made some eco­nomic gains (mostly in those segments of the population with higher levels of education), most still earn consider­ably less than their male counterparts. The decade and a half of economic contraction⁵ and high interest rates has forced many American families to abandon their "home in the suburbs" dream. Yet, even with the average price of a new home reaching $80,000 in 1982, some Amer­icans could still buy new houses and outfit them hand­somely.

For the marketing expert, these shifting and some­times contradictory trends require more thoughtful ap­proaches to targeting and segmenting markets than were necessary in the not too distant past. In particular, the "middle-class bias" which was so prominent in the devel­opment and marketing of consumer goods must be rethought. This middle-class emphasis focused on a large, and for many years, growing segment of the pop­ulation which was composed of predominantly subur­ban, nuclear families with a male head-of-household and steadily rising real income. Women in this group were mostly housewives, and, as the advertising for floor waxes and detergents stressed, were presumably personally concerned about "waxy yellow build-up⁶" and "ring around the collar." Children were similarly stereotyped as upward bound through elementary and secondary school, with a high probability for college attendance— and apparently on to lives just like those of their parents. This average, middle-class, American family bought appliances, furniture, cars, vacation paraphernalia⁷, ra­zors, pens, clothes, aspirin (especially children's aspirin), cosmetics, housewares, and prepared foods in ever-increasing quantities and improving qualities.

Now, however, abundant⁸ evidence suggests that "middle-class America" no longer aptly⁹ describes the majority of American consumers. Rising numbers of divorces and separations have greatly reduced the num­ber of male-headed households. With more than half of all women over the age of 16 working full- or part-time, the full-time American housewife has become a vanish­ing¹⁰ species. At the same time, more men and women are living as singles, nearly three times as many as in 1960. Meanwhile, the under-16 population has declined by 15 percent over the past 15 years. Over the same period, the over-65 population has grown by 40 percent. Median real income, which doubled between 1952 and 1972 has scarcely grown at all over the past decade, indicating that the growth of "discretionary spending" for all those "mid­dle-class" commodities has about stopped.

Obviously such shifts in the economic and demo­graphic characteristics of the population will affect mar­keting decisions for different products in different ways. What types of products do you feel are most vulnerable to the recent changes in our consumer profile? Which prod­ucts are likely to be least affected?

The demographic characteristics of the population change constantly. In less than two decades, we have gone from a child-and-family oriented society to one dominated by young singles and growing numbers of retirees. Over the last thirty years, we have moved from farm to city and then to suburbs, from East to West, from North to South, from blue collar to white collar, and from high school graduates to college graduates. Keeping a keen eye on these trends is important. For instance, recognizing the decline in the birth rate a decade ago, John-son & Johnson began to proclaim that its baby shampoo provided adults with "thick and healthy hair," and Gerber, "the baby food people," became Gerber, "the insurance people." On the other hand, the premier toymaker of the 1920s to 1960s, Lionel Corporation, watched its upper- and middle-income children's market for toy electric trains shrink till the company had to cease its toy train production, lease its Lionel name to General Mills, and continue operations as a real estate holding company.