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THE REVIEW ON THE DEVELOPMENT OF MARKETING THOUGHT,
CONCEPTS, DEFINITIONS AND ITS CHANGING NATURE
Karimov Farhod Pulatovich,
Westminster International University in Tashkent
Deputy Rector, Doctor in Applied Economics (PhD)
Abstract:
This paper studies the history of marketing science as a discipline and
discusses the development of early marketing paradigms throughout the different
epochs. It also provides the snapshot of marketing definitions speculates on the
innovative ways of marketing communication and possibilities for both businesses and
customers.
Аннотация:
В этой статье изучается история маркетинга как научная
дисциплина и обсуждается развитие ранних маркетинговых примеров в разные
эпохи. Также, приводятся образцы маркетинговых определений отражающих
инновационные способы маркетингового общения и возможностей для бизнеса
и клиентов.
Аннотация:
Ушбу мақола, маркетинг тушунчасини фан сифатида
ривожланиш тарихини, турли даврлардаги ривожланиш босқичларини ва унга
берилган турли таърифларидаги ўҳшашлик ва фарқларни шархлайди.
Шунингдек, бугунги кунги инновацион коммуникация воситаларидаги жадал
технологик ривожланишлар корхоналар ва мижозлар учун қандай
имкониятларни яратаётганлигини муҳокама қилади.
Key words:
marketing thought, marketing concepts, marketing paradigms,
marketing definitions
Introduction
Marketing science has evolved more than a century ago - during the 1900s. The
first college courses in marketing were offered in 1901- 1902 at the Universities of
Illinois and Michigan and the first text-books appeared in the years 1911 - 1915 [1].
Such scholars as Hollander et al. [2] and Enright [3] have explained that the
contradictory dates for the evolution of marketing can be described by issues
surrounding the approach that marketing has been defined - whether reference to
‘modern marketing’ as a professional practice including activities such as
segmentation, product differentiation, positioning and marketing communications
versus ‘marketing’ as a simple form of distribution and exchange. It is only during the
early twentieth century that the study of the history of marketing as an academic field
emerged and marketing concepts advanced into an academic discipline. The
foundations of marketing discipline take its roots in American management literature
between the 1950s and the 1960s, when some scientists started to explore some
management practices and, above all, the origin of market success [4].
In this paper, we study the history of marketing science as a discipline and
discuss the evolution of early marketing concepts. This will help us to understand how
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the discipline have evolved as a science and to comprehend the baselines upon which
marketing research practices have been documented as it progressed throughout the
different epochs. We provide the snapshot of keywords that are used to define
marketing to depict the central focus of the concept for many decades. Subsequently,
we discuss the most recent emergence and advances of new technology that is
transforming marketing by offering new ways of communication and possibilities for
both businesses and customers.
Literature review
Historians of marketing tend to distinguish between two separate branches of
marketing history -
the history of marketing practice
and
the history of marketing
thought
. Accordingly:
(a) the
history of marketing practice
refers to an investigation into the ways that
marketing has been practiced; and how those practices have evolved over time
as they respond to changing socio-economic conditions.
(b) the
history of marketing thought
refers to an examination of the ways that
marketing has been studied and taught.
These two branches are usually profoundly separated and have very diverse
origins. The history of marketing practice is based in management and marketing
studies, while the history of marketing thought is based in economic and cultural
history. This means that the two branches ask very different types of research questions
and employ different research tools and frameworks [2]. Although the history of
marketing thought, and the history of marketing practice are separate areas of study,
they might cross over at different stages [4; 5;].
Marketing practitioners can be involved in the innovative activities that attract
the attention of marketing professors who organise and publicise such practices.
Concurrently, marketing academics frequently develop novel research approaches or
models that are subsequently implemented by practitioners. Thus, advances in
marketing theory enlighten marketing practice and vice versa. Therefore, the history of
marketing will be inadequate if the academia is isolated from practitioners.
Marketing has been developed largely from the fields of economics, scientific
management, psychology, and accounting. Several academics claim that marketing
practices can be found in ancient times while others propose that modern marketing
practices have emerged along with the rise of consumer culture in seventeenth and
eighteenth century in Western Europe. Scholars of marketing science have undertaken
substantial investigation into the evolution of marketing. However, up till now there is
little agreement about when marketing first began
.
The view of scientists on the classification of the development of marketing
thought vary. Some researchers suggest that contemporary marketing was only fully
understood after the industrial revolution in Britain from where it later penetrated to
Europe and North America, when technological advances and production growths lead
to the decease of companies’ individual customer interaction and issues with surplus
goods [2].
Providing a modern definition of marketing, describe practices involved with it
and brief review about major transformations in this field, would be logical step before
moving to the analysis of the historical evolution of the marketing concept. Marketing
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is defined by the American Marketing Association Board of Directors as
“the activity,
set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at
large”
. Majority of scholars discuss marketing as performance expressed by
performing marketing practices such as market research, product research and
development, design, pricing, distribution and advertising. Moreover, authors consider
consumer behaviour, manipulations in price, packaging, mode of distribution and
display of products, music, size of advertisings, and other marketing environment as a
part of marketing practices, applied to affect firm’s performance.
Simultaneously,
commercial
architecture,
branding,
advertising
and
promotional activities, building relationship and customer loyalty as well as identifying
consumption patterns, values, tastes, preferences, needs, desires, trend of consumer
behaviour are a part of marketing implications. Additionally, cross-cultural research is
also assumed as an essential part of marketing practice since the latter differs under the
impact of people living in different countries.
In this paper we review the historical development of different thoughts on the
evolution marketing as a scientific discipline. We provide comparative analysis of
prevalent views of different scholars on the development of marketing thought,
concepts, definitions and its changing nature.
Comparative analysis of the scientific thoughts on marketing
Marketing has been practiced since ancient times and has been thought about almost
as long. Yet, it is only during the last century that marketing ideas officially evolved
into an academic discipline.
The world’s society and the marketing field have
experienced colossal changes equally throughout this time. The form of marketing
practices is equipped with much enhanced technology and this growth initiating
changes in several realms quantitatively, behaviourally and strategically on a global
scale. Across the span of the last century, many thought-provoking insights on the
domain of marketing and its broader relationships with society have been developed.
Therefore, it is meaningful to question what is the threat of being left behind.
Based on the review of scientific thoughts of marketing across the last century, this
article depicts a widespread description of the general course that has been taken by
the div of marketing thought over the different stages of its evolution. The view of
scientists on the classification of the development of marketing thought also vary. For
instance, Wilkie and Moore [6] discuss the "4 Eras" of marketing thought development.
Table 1 outlines the "4 Eras of Marketing Thought" since the field’s formal beginnings.
Table 1.
The "4 Eras" of Marketing Thought
Era
Distinctive characteristics
"Pre-Marketing”
(Before 1900)
-
No distinguishing field of study; issues are embedded within the
field of economics.
I. "Founding the Field"
(1900-1920)
-
Development of the first courses with "marketing" in title.
-
Emphasis on defining purview of marketing’s activities as
economic institution.
-
Focus on marketing as distribution.
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II. "Formalizing the
field” (1920-1950)
-
Development of generally accepted foundations or "principles of
marketing.
-
Establishment of knowledge development infrastructure for the
field: professional association (AMA), conferences, journals
(Journal of Retailing and Journal of Marketing).
III. "A Paradigm Shift-
Marketing,
Management, and the
Sciences” (1950-1980)
-
Growth boom in U.S. mass market and marketing div of thought.
-
Two perspectives emerge to dominate the marketing mainstream:
(1) the viewpoint and (2) the behavioural and quantitative sciences
as keys to future knowledge development.
-
Knowledge infrastructure undergoes major expansion and
evolution.
IV. "The Shift
Intensifies-A
Fragmentation of the
Mainstream" (1980-
present)
-
New challenges arise in business world: short-term financial focus,
downsizing, globalization, and reengineering.
-
Dominant perspectives are questioned in philosophy of science
debates.
-
Publish-or-perish pressure intensifies on academics.
-
Knowledge infrastructure expands and diversifies into specialized
interest areas.
Source: Adopted from Wilkie, W. L., & Moore, E. S. (2003). Scholarly research in marketing: Exploring
the “4 eras” of thought development. Journal of Public Policy & Marketing, 22(2), 116-146.
As indicated in Table 1, “Pre-Marketing” era (before 1900) is described as the
period of public policy toward economic pursuits of central interest and laissez-faire
versus government constraints.
The first era (1900-1920) of formal marketing thought began just in the
beginning of the twentieth century, when the academics have started to pay more
attention to this field of science which is known as “the area of market distribution”.
Therefore, the marketing domain began acquiring its own exclusive identity when
professors at many universities across the United States autonomously started to
introduce new courses to scrutinise several facets of the marketing system, including
“distributive and regulative industries” (University of Michigan), “the marketing of
products” (University of Pennsylvania), “methods of marketing farm products”
(University of Wisconsin), and “mercantile institutions” (New York University) [7].
This era focused on value of distribution and the role of marketing agents was
perceived as contributing to economic growth and efficiency. According to Wilkie and
Moore [6] consumers’ possibility to choose goods have increased significantly with
the invention and mass production of handy packaged goods, supplied in new retail
mode such as the supermarket. These social changes opened new prospects for
manufacturers as well as carried diverse challenges requiring them to have more
refined and mixed distribution systems and a more proficient comprehension of tools
to stimulate mass consumer demand.
During Era II, the business schools began to develop on a widespread basis, the
functional approach obtained extensive acknowledgment amongst marketing thinkers,
and the textbooks was on the process of establishing the generally accepted marketing
principles. Therefore, according to Wilkie and Moore [6], this era also continued with
the emphasis on economic efficiency of marketing functions such as (1) physically
supplying the market, (2) creating opportunities for exchange, and (3) auxiliary or
facilitating functions.
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Era III has witnessed the burst of significant new concepts. Specifically,
marketing started to be seen from the managerial perspective and the quantitative and
behavioural sciences have emerged into the marketing mainstream. A new think tank,
the Marketing Science Institute (MSI) was formed in 1961, and in 1962, U.S. President
John F. Kennedy announced the Consumer Bill of Rights within the framework of U.S.
society [8]. According to this important declaration, consumers have the rights to
expect product safety, to be fully informed, to have freedom of choice, and to have a
voice in the rules for the marketplace. During this period consumer behaviour’s
impetus was enormously enhanced by the appearance of textbooks such as Gerald
Zaltman’s [9]
“Marketing: Contributions from the Behavioural Sciences”
; Engel,
Kollat and Blackwell’s [10]
“Consumer Behaviour”
; John Howard and Jagdish
Sheth’s [11]
“The Theory of Buyer Behaviour”
; and Harold Kassarjian and Thomas
Robertson’s [12]
“Perspectives in Consumer Behaviour”
.
Wilkie and Moore [6] described the Era IV as a paradoxical evolution and
comprehensive coverage of marketing and society. Accordingly, Era IV, which ranges
from 1980 to present, takes the managerial perspective and the major focus of academic
effort should be to improve the effectiveness of managers’ marketing decisions. Era IV
has witnessed such focal shifts as a massive globalisation of business education and
business concepts. During this era new academics came into marketing field and entire
blocs of nations (republics under former Soviet Union) have moved toward market-
based economy and away from centralized command and control. The field of
consumer research has advanced with the growth in computers, as it allowed for large-
scale consumer surveys and the diffusion of new empirical research findings, their
causes, and their implications.
Keith [13] also presented a new view on the evolution of marketing thought by
dividing it into four eras such as
“production oriented era”
(1869-1930),
“sales
oriented era”
(1930s),
“marketing oriented era”
(1960s), and the 4th era is
“marketing
control”
. However, Keith’s [13] historical theory of a marketing revolution has been
criticised by several authors (cf. [14]; [15]; [16]. According to Fullerton [14], Keith
[13] relied exclusively on his knowledge of Pillsbury’s [17] history and cannot be
generalised. Several scholars such as Fullerton [14 and Jones and Richardson [16] well
documented that there is no evidence of sales-era and/or marketing-era ideas during
the period Keith [13] referred to as the production era.
Shaw and Jones [5] also divide the development of schools of marketing thought
into four periods that roughly parallel with Wilkie and Moore’s [6] ‘4 Eras’. They are
presented in Figure 1.
As shown in Figure 1, Pre-Academic Marketing Thought, prior to 1900, is
characterized as the debates held on macro-marketing issues such as how marketing
was integrated into society by various thinkers dating back to the ancient Greek
Socratic philosophers as Plato and Aristotle [19]. Throughout the Middle Ages, the
Medieval schoolmen, from St Augustus of Hippo to St Thomas of Aquinas, wrote
about micromarketing concerns, such as how people could practice marketing ethically
and without sin [20]. Most scholars came to an agreement that marketing as an
academic discipline emerged as a branch of applied economics. Several schools of
economics, particularly the Classical and Neoclassical schools ([7], as well as the
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German Historical and American Institutional schools [21], contributed to the
development of marketing science at that time.
Figure 1. Four periods of the development of schools of marketing thought [18]
During the second period roughly from 1900 to 1955, traditional approaches to
Marketing Thought were developed. At the turn of the 20th century business entities
prospered in the United States. People started to migrate to cities massively, national
brands and chain stores have emerged, free mail and package delivery services have
appeared, and newspaper and magazine advertising have increased dramatically. The
creation and expansion of the continent-wide railroad engendered ever-increasing
trunk lines to even small cities, larger cities developed mass transit, and growing
numbers of automobiles and lorries travelled on ever-expanding highways. These
developments connected rural farmers through agents and brokers, and allied producers
with intermediary traders, and wholesalers with vendors. As a result, not just small
specialty stores ultimately could reach household consumers, but the new giant
department stores and national mail order houses too [5]. These changes demanded
substantial enhancements in market distribution system.
The first marketing courses in American universities were offered in 1902, along
the boom of the academic schools of business at the end of the 19th century [7]. To
organize marketing’s distinct subject matter, pioneer scholars in the newly emerging
discipline developed the first three approaches to the scientific study of marketing
phenomena: (1) cataloguing functions; (2) classifying commodities; and (3)
categorizing institutions.
Period three, approximately between 1955 and 1975, is called a Paradigm Shift
(analogous to the expression used by Wilkie and Moore [6]). The paradigm shift from
traditional approaches to modern schools of marketing thought evolved from more than
a few stages of development. Throughout the Second World War, it was influenced by
military achievements in mathematical modelling such as linear programming.
Immediately following the end of a war, the shift in capacity from military production
to consumer goods stimulated economic progress in the United States creating supply
surpluses, and this has made business firms to think seriously about the demand
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generation activities. The most significant source of the paradigm shift in academic
thought, however, was the thinking of the leading scholar of his time – Wroe Alderson.
Banking on his numerous articles (cf. [22]; [23] and presentations, marketing theory
seminars, newsletters, and two seminal books (cf. [24]; [25], the paradigm shift gave
rise to the most modern schools of thought eclipsing the traditional approaches,
including: the marketing functions school, commodity school, the institutional school,
the consumer behaviour school, and others. These schools characterise some
perspectives of marketing overall, and can be a thought-provoking theme for a different
discussion.
The fourth period, from about 1975 to 2000, is called the Paradigm Broadening.
During this epoch, various academics from outside the field (particularly psychology)
started conquering the marketing discipline with diverse types of empirical studies in
consumer behaviour domain [26]. In other schools, the major push for extending the
paradigm was again a well-known scholar Philip Kotler [27] and his various co-authors
(cf. [28]; [29]. This drive led to a separation in three schools: marketing management,
exchange, and consumer behaviour. This paradigm broadening has amplified the
margins of marketing thought from its conservative focus on business activities to a
wider perspective comprising all forms of human activity related to any generic or
social exchange.
In his book, Bartels [30] also regarded marketing not merely as a business
practice, but as a social institution. Accordingly, marketing is basically a means of
meeting and
satisfying certain needs of people in the development of market economy.
Table 2 summarises Bartel’s [30] classification of the development of marketing
thought.
Table 2.
Bartel’s (1976) classification of the development of marketing thought
Year
Periods
1910-
1920
Period of conceptualization - many marketing concepts were initially
developed, and concepts were classified, and terms were defined.
1920-
1930
Period of integration - principles of marketing were postulated, and the general
div of thought was integrated for the first time.
1930-
1940
Period of development - specialized areas of marketing continued to be
developed, hypothetical assumptions were verified and quantified.
1940-
1950
Period of reappraisal - the concept and traditional explanation of marketing was
re-appraised in terms of new needs for marketing knowledge.
1950-
1960
Period of reconception - increasing emphasis upon managerial decision
making, the societal aspects of marketing, and quantitative marketing analysis.
1960-
1970
Period of differentiation - as marketing thought became expanded, new
concepts such as managerialism, holism, environmentalism, systems, and
internationalism took on substantial identity as significant components of the
total structure of thought.
1970
Period of socialization - social issues and marketing became much more
important, as the influence not of society upon marketing, but of marketing
upon society became a focus of interest.
Source: Bartels, R. (1976).
The History of Marketing Thought,
Columbus, Ohio, Grid.
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The scientific debates provided above confirm that the concept of marketing has
been discussed and appraised frequently since marketing was acknowledged as a
distinctive subject area. Many definitions of marketing have been introduced over the
years as each generation tries to capture what marketing is and what it means to them.
Over the past 70 years, description of marketing has been revised and redefined to fit
new contexts such as not-for-profit, political and social sectors. In more recent years,
the entry of new technology and interactive mass media to our everyday life, such as
the television, internet, electronic scanning devices, mobile shopping, made it possible
to apply different techniques in managing marketing activities and have brought with
them more opportunities for re-defining marketing.
Gamble et al. [31] made comprehensive analyses of various definitions of
marketing ranging from the 1960s to the present, and discussed each in the context of
the sociocultural, technological and organisational changes. In Figure 2, based upon
Gamble et al.’s chronology, we present a snapshot of the lexicon that used most
frequently in several commonly cited definitions of marketing since its progression as
a scientific discipline.
Figure 2. The keywords used in marketing definitions through 1960s to 2015s
The different classifications or paradigms have been proposed throughout the
development of marketing thought. However, relying on the snapshot in Figure 2, we
can see that “exchange” has arguably been the foundational construct in marketing for
several decades. In the most recent definition Kotler and Armstrong [32] refer to it as
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“the science and art”:
“The science and art of exploring, creating, and delivering value
to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs
and desires. It defines, measures and quantifies the size of the identified market and
the profit potential. It pinpoints which segments the company is capable of serving best
and it designs and promotes the appropriate products and services”
.
The definition of marketing, which is approved by the American Marketing
Association Board of Directors [33], is developed from the original meaning which
referred literally to going to a market to buy or sell goods or services:
“Marketing is
the activity, set of institutions, and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and society
at large”
. In 2007, The Chartered Institute of Marketing [34] has proposed another
definition of marketing for the first time in 30 years which currently describes
marketing as
“the management process responsible for identifying, anticipating and
satisfying customer requirements profitably”
. According to this redefinition,
marketing is not just about advertising or selling, but it is a key managerial activity that
ensures producers of goods and services to predict and understand consumer
wants/needs and match, or exceed them.
Conclusion and future research avenues
To conclude, the changing nature of marketing might be characterised by the
recent globalisation of markets and technological advancements. In this conceptual
review of marketing thought, we saw that over the past decades, marketing academics
and practitioners have witnessed major transformations in the field of marketing.
Today, the global environmental issues have also shaped both business practices and
public life throughout the world. The global environmental issues and the rapid
advances in the technology is continuing to change the way we live, consume and
communicate at fast pace.
These issues have shaped business practices and public life throughout the world
by generating threats or opportunities such as green marketing, eco-friendly products,
organic food, renewable energy etc. Keeping the environment safe is now a new
concern of all stakeholders, governments, businesses, public and customers. It is
extremely important to acknowledge that green marketing becomes a central focus with
the threat of global warming. Modern customers are more careful to choose eco-
friendly products to maintain the environment safe.
In addition to environmental factors, the rapid advances in the technology is
continuing to change the way we live, consume and communicate at breakneck speed.
Marketing is influenced by the development and popularization of several new
innovative technologies such as augmented reality, virtual reality, personal digital
assistants, big data, social media, Interest-based advertising, and the Internet-capable
interconnected devices such as smart ovens, smart TVs. These promising new
technologies may yield countless new opportunities for marketers. Marketing is
influenced by the development and popularization of several new innovative
technologies such as:
▪
Augmented reality - marketers are already racing to develop new AR apps or
take advantage of AR games to find new ways to bridge the gap between the physical
and virtual worlds.
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▪
Virtual reality such as second-life can dramatically change advertisements and
messages and online shopping capabilities.
▪
Personal digital assistants – the systems capable of communicating with users
enabling us to rely on voice-based queries in finding a reliable information and
performing functions both on the web and on-device content.
▪
Machine learning algorithms – Google’s RankBrain is a self-updating machine
learning algorithm, capable of gathering and interpreting information about its own
functionality and improving itself over time. It supports to better understand the
semantics of user queries and produce search results that cater to a user’s perceived
needs.
▪
Data visualization - Big data gives access to insane amounts of consumer data
and insights about consumer behaviour which subsequently leads us to make tailored
marketing campaigns.
▪
Marketing automation platforms that allow the scheduling and syndication of
social media posts to software programs that can write content from scratch and sound
like a human wrote it.
▪
The Internet-capable interconnected devices such as smart ovens, smart TVs,
and appliances that can be remotely programmed and integrated into the same overall
system can enable marketers to advertise a product as consumers are using a similar
product, or communicating with consumers immediately within their homes.
▪
Social media gave marketers the chance to monitor and contribute to the
conversations that consumers have online in real-time. The social-networking
platforms such as Facebook, and widespread consumer adoption of “smart” mobile
devices have transformed marketing communications, offering new ways to reach
target customers, engage in public-relations, sell products, learn about consumer
insights, and provide service to customers. Just as the rapid progress in mobile adoption
has opened new ways of marketing communications for retailers, the social media also
has changed how buyers share information with each other and interact with brands.
▪
Search engine optimization is one of the most important and cost-effective
ways to attract customers on the internet.
▪
Interest-based advertising - behavioural targeting allows ads to be more
relevant, valuable and thus persuasive to the consumer.
Based on the above speculations of the promising new technologies that may
yield countless new opportunities for marketers, we assume that while creating value
and customer satisfaction might stay as a central focus, marketing concept may develop
further by broadening into the different new paradigms in the future.
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