The Emergence of Modern Marketing

The Emergence of Modern Marketing

The Emergence of Modern Marketing

The Emergence of Modern Marketing

Synopsis

The 20th century saw the cultural phenomenon of consumerism extend to almost the whole world. The emergence of modern marketing began almost a century earlier. These essays highlight important innovations in marketing whilst underlining some surprising continuities.

Excerpt

In entitling this collection of essays 'The Emergence of Modern Marketing' we are referring to the characteristics of persistent, systematic, and increasingly widespread marketing methods adopted by businesses from the nineteenth century onwards. In addition to selling, therefore, the term includes advertising, branding, pricing, promotion, market research, and product planning and development, all of which figure in the articles that follow. 'Modern marketing' also encompasses increasingly complex distribution systems, another major theme developed by several authors in this collection. In the history of modern business, historians have paid much greater attention to the emergence of the modern corporate form and managerial structures, technological innovation, and business finance, than to marketing. To a large extent this reflects the ambivalence of economists in treating the subject of marketing, tending to emphasise causal relationships with industrial concentration and therefore its anti-competitive aspect, though the degree has varied, even in recent times, between industries, market segments, and countries. But even if advertising expenditures are interpreted as barriers to market entry, they may be regarded in the same light as other fixed costs. Historically, certainly before World War II, firms which succeeded in clearing the barrier, especially when in conjunction with the introduction of a new product or brand, have become competitors, in many cases replacing existing market leaders.

Theorists of international business have adapted the transaction costs framework to emphasise that contractual relations dealing with firm-specific assets, such as product brands and reputation, show that transferring such assets between countries is costly. Given that a firm's reputation, or added value incorporated in its brand, represents tangible assets, effective pricing becomes hazardous and increases the risk of opportunistic behaviour among contracting parties. Transaction costs theory strongly suggests that much multinational activity in the past has been led by marketing rather than by technology. This is the framework in which Kim has offered a reinterpretation of the rise of the corporate form in the USA. Using census data, Kim's analysis is the first systematic attempt to understand why some firms in some industries possessing many plants and employing a majority of the workforce grew to dominate the American economy. His conclusion challenges the Chandlerian emphasis on the

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