Evidence of marketing practices can be traced back as far as 7000 B.C. (Parvatiyar and Sheth, 1995). Nevertheless, Monieson and Jones (1990), in their study of the philosophic origins of marketing thought, argue that it was only in the latter part of the nineteenth century that marketing was acknowledged as a distinct discipline. The dawn of the twentieth century portrayed the discipline as primarily focused in the exchange process, in which two or more parties engaged in value transactions to satisfy their respective felt needs (Boone and Kurtz, 1977). In other words, the primary focus of marketing function was on transactions and exchanges. Throughout the twentieth century, the marketing function has undergone dramatic shifts. This assertion is reinforced by Sheth, Sisodia and Sharma (2000) who stressed that the marketing function had gradually shifted from mass marketing to segmented marketing in the twentieth century.
As companies enter the twenty-first century, characterised by technological dynamism and intensive competition, the problems of customer retention and profitability have become paramount for the success of any business (Kristensen and Martensen, 1999). According to Porter (1985), the key to a company’s success is developing a sustainable competitive advantage, and the key to developing a competitive advantage is to consistently create superior value for customers (Narver and Slater, 1992; Narver, Slater and Tietje, 1998). According to Sheth, Sisodia and Sharma (2000), this twenty-first century phenomenon may witness a shift toward customer-centric marketing, in which the marketing function seeks to fulfill the needs and wants of each individual customer. Under these conditions, the analysis and management of the concept of customer focus becomes the salient objective in securing the long-term success and profitability of the company (Gurau and Ranchhod, 2002).
The purpose of this paper is to examine the evolution of customer focus as a marketing and business philosophy, predominantly examining the shifts in marketing’s orientation, and subsequently the probable factors influencing the shift toward customer-centric marketing. The following section discusses the meaning of customer focus and its significance in the development of marketing as a study and practice. Subsequent sections will discuss the shifts in marketing’s orientation, and the probable factors influencing the shift toward customer-centric marketing. Prior to the paper’s conclusion, an argument will be presented to challenge Alan Mitchell’s perspective.
What is Customer Focus?
In the new millennium, companies are experiencing more complex market situations. Customers are becoming more sophisticated and multifaceted, and competition is escalating. As mentioned previously, companies are struggling with the problems of customer retention and profitability. In order to survive, companies must become aware of how value is generated for customers to be able to satisfy their needs (Langdon and Bruce, 1997). This perception is echoed by Brown (1993) and Mudie (1997), who stressed that the firm which would be most likely to prevail, in an intensively competitive business environment, is the one which fully embraced the concept of customer focus. In other words, few organisations can afford to ignore customers’ expectations and needs (Keith, 1960; Bell and Emory, 1971).
Although the notion of customer focus has achieved extensive acceptance and respect in the development of marketing as a study and practice, as well as companies worldwide, minimal literature and texts have attempted to define what customer focus is. On the contrary, research in marketing has, to a large extent, been focused on consumer marketing, in which generalizations were formulated to explicate the concept of customer focus (Aijo, 1996; Bejou, 1997; Brown, 1993; George and Weimerskirsch, 1994; Goldzimer, 1989; Langdon and Bruce, 1997; Sheth and Parvatiyar, 1995; Sheth, Sisodia and Sharma, 2000). Despite the difference in approaches to derive a definition for customer focus, the essence of customer focus is essentially about organizing to deliver customer satisfaction. In other words, customer focus relates to the satisfactory delivery of customers’ needs and expectations (Brown, 1993; Langdon and Bruce, 1997).
As argued by Mitchell (2003), embracing customer focus is a marketing practice concerned with retaining profitable customers and facilitating future marketing activities. Supporting this contention are Sheth and Parvatiyar (1995) who emphasise that marketing has always been concerned with these objectives, and that companies embrace customer focus to realise these objectives. However, Mitchell (2003) presented an alternative perspective and argued that companies are still struggling with the concept of customer focus, despite their lucid objectives. Henceforth, in an attempt to enhance the understanding of the notion of customer focus, the following question needs to be addressed.
“If companies recognise the significance of satisfying customers’ needs and expectations, why are they still struggling with embracing the concept of customer focus?”
The Evolution of Customer Focus: Shifts in Marketing’s Orientation
Prior to addressing the proposed question, it is worthwhile to examine the origins of customer focus. Although customers have always been a part of business, their importance has varied greatly in the history of marketing. Boone and Kurtz (1992), Keith (1960), Sheth and Parvatiyar (1995), and Webster (1988) identified three distinct eras in the history of marketing: (1) the production era, (2) the sales era, and (3) the marketing era. Pillsbury Company’s progress in the history of marketing will be used as an exemplification of the shift in marketing’s orientation. Table 1 illustrates the three eras in the history of marketing, and the prevailing attitude associated with each respective era.