Before the industrial revolution, single individual produces – farmers, artisans, family based cottage or small enterprises — dominated the exchange process. They produced goods for nearby customers and secured orders for making ornaments, furniture etc. Further, producers and their customers were generally known to each other because they were all living in the same village or town. Therefore, selling was not a problem for
producers.
producers.
The situation began to change fast as industrial revolution broke out in the last quarter of the eighteenth century. The invention of steam engine, electricity, telephone etc. propelled further development of human society. Newly built factories came up and they produced goods at cheaper costs in larger quantities. Factory production resulted in the emergence of towns and cities.
People who lived in the villages hitherto migrated to towns and their way of living underwent dramatic transformation. They started buying factory made products. Companies and business enterprises came in all shapes and sizes in the last quarter of the nineteenth century. For instance, most of the multinational companies (MNCs) of today were born during the beginning of the 20th century. In India, many companies were founded during the second and third quarters of the twentieth century.
For example, Birla group of companies came to exist during 1937-38 and they entered in many businesses after 1947-48. The TATA’s ventured into three major Industries – Tata electric companies, Tata Steel companies and Indian Institute of Science – at the beginning of the last century.
Companies were organised as single proprietorships, partnerships, family owned companies and large corporations. They were either owned privately or publicly and were operated for making profits or providing service to the public. At the same time, companies also began to feel that the administration of all phases of a business operation was beyond the capabilities of a few individuals in the company.
Therefore, authority was delegated to others and separate departments were created for different functions of a business operation. The sales department, for example, looked after sales and market expansion. Companies also shifted a portion of their marketing functions to middlemen – retailers, wholesales, agents and brokers came to exist.
The marketing activities conducted by the producers’ sales department grew in importance as competition increased in the market and the task of sales department became increasingly complex. Marketing research, planning of advertising campaign, personnel selling, sales promotion etc. became inevitable functions of the sales and marketing division of a company. Companies also obtained specialised services from agencies for advertisement planning or marketing research. In this way, marketing research agencies, advertising agencies and media agencies came to exist.
Today, marketing is a complex activity. The single most reason that can be attributed for this complexity is rapid advancements in science and technology. The revolution in telecommunication and computer technology has changed the whole facet of the market exchange process. In order to generate and maintain demand, companies employ novel and sophisticated communication techniques to reach the target customers.
In certain sectors, for example in the service sector, there is no face-to-face interaction between the service providers and the customers. The Internet medium has created digital relationships between customers and sellers. Online shopping is gaining momentum in recent times. Shopping complexes, supermarket chains, franchise retail chain outlets are emerging as important institutions in the marketing exchange process.
The model of the modern complex marketing system outlines that many institutions participate and facilitate a firm’s marketing function. For example, institutions such as advertising agencies, marketing research firms, retailing channels, banking and insurance companies, transport organisations and other innumerable service providers all play vital roles in the marketing efforts of a firm.
In fact, today’s marketing manager has to coordinate several jobs before putting his company’s products in the target market place. Let us consider a brief discussion on how the above said institutions make up the complex marketing system.
