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The four paradigms of marketing
To understand where marketing is today, you must understand how it has evolved. We take you through the concepts behind marketing in different eras.
To understand marketing today, you must first understand how it has evolved.
Marketing has evolved through four different paradigms until now. Let me walk you through them. The first paradigm has the premise of logic and rationale.
The first paradigm of marketing was literal, rational and almost entirely product-centric. The presumption in this paradigm was that consumers made their purchase decisions logically and rationally. Therefore, if you produce the best product, the thinking was that the consumers will buy it. Marketing’s job, therefore, was to create and leverage a product’s feature set that was different from and better than that of their competitors or by offering a good-quality product at a lower price. Tide got clothes cleaner. Dodge cars had a smoother ride. It was all comparative and superior to competition. The advent of mass production, however, created a level of product parody and commoditization. So every brand’s research and development focused on developing superiority in the product features and quality.
And to convict that superiority, marketers had credible or credible-looking people endorse their brands to make consumers believe the claims that they were making about their product superiority. It’s also very interesting to see that doctors even endorsed the health safety of cigarettes like Lucky Strikes. Correct, doctors endorsed cigarettes. This, of course, was the beginning of the erosion of trust between consumers and brands and advertisements slowly began losing credibility.
This also marked the beginning of advertisements affecting and shaping culture, including, unfortunately, the stereotyping of gender. Then came in the second paradigm, which is all about emotions. Somewhere along the line, marketers realized something very powerful, and that is that people make decisions emotionally more than rationally or logically. In fact, in many cases, it’s almost entirely emotionally. Therefore, marketers began incorporating emotions into their ad campaigns. When TV came on the scene, it brought visual and audio together into a powerful new medium through which stories could be told in a very compelling fashion. Interestingly, emotional claims needed no scientific or data-backed proof. The focus on ingredients and product performance were all replaced by an emotional promise.
Think of Coca-Cola and their promise that, “Things go better with Coke,” or Pepsi, as, “The soft drink for a new generation.” There is nothing there about the product. It is some emotion or some aspiration that marketers were creating in consumers’ minds. Brands and companies began creating emotional spaces in peoples’ hearts and then occupying those spaces. Whereas product features could be matched or even bettered, once a brand occupies an emotional territory, it’s pretty much impossible to dislodge them. They own that space, practically, for good. Understanding and improving the product was still necessary, but now, companies and brands set out to understand consumer mindsets, their motivations, their attitudes and their behavior.
So they launched attitudinal metrics, usage and habits studies, focus groups and psychographic research. As marketers learned more about what consumers aspired to and who their role models were, they started to lean more on celebrities as a way to create emotion connections and aspirational pathways. The stars of the second paradigm were literally the face of the product. Brooke Shields was Calvin Klein. Madonna was Pepsi. Michael Jordan was Nike. Advertising had a clear task, and marketing had a clear approach, which then brings us to the third paradigm. The third paradigm was about Internet and data analytics.
While marketers were coasting along leveraging emotion and identity to reach consumers who are becoming obsessed with both of those things, something was sneaking up on them. It was called the World Wide Web. On October 12th, 1994, a digital-trade information website called HotWired simultaneously published ads from 12 different brands, including AT&T, MCI, Volvo, Club Med, Sprint, IBM and so on. Banner ads were thus created. Digital marketing was born, and everything about marketing, advertising and media changed in an instant.
It was that exact moment at which speed, scale and impact was born, and nothing about marketing has been the same from that point onwards. Web browsers like Netscape, Excite and Yahoo! were the first profitable Internet businesses. At the same time, marketers discovered the power of data, and they saw the jump in the effectiveness that data could produce. The new focus became using data to create more targeted marketing, which is precision marketing, powered by very powerful data analytics. This paradigm saw the rise of data scientists and data-savvy marketers in the commercial world.
The third paradigm also saw a dramatic increase in the promise of the segment of one, which is, every consumer was recognized and treated as being unique, and highly individualized marketing messages could be conveyed to them in customized, memorable and impactful ways. Marketers improve their targeting so much so that consumers warn marketers are getting too close and too invasive. This actually marked the beginning of consumer-privacy issues.
That brought us to the fourth paradigm: the always-on marketing paradigm. It has been defined by further acts of digital environment
but, importantly, by two significant technologies: number one, the mobile technology; and, number two, the social media technology of the platforms. Facebook was born, and from October 2007 to August 2008, this spiked from 50 million to 100 million users. So social media was really born at scale and rapidly so. Alongside this, there was another revolution called the iPhone. It was released on 29th of June, 2007. It became so successful that the entire category of mobile phones and mobile devices became very, very ubiquitous and so indispensable that literally these mobile devices have become an extension of the human body.
Consumers are going to bed with that device, and they’ll wake up with that device, which means marketers now had a medium available to which they could reach the consumers any time. The concept of prime time, which we used to have, it lost its meaning. Any time is prime time. Another interesting fact is that the human attention span started shrinking, and it is now at less than 8 seconds. For reference, our span of attention in the human beings
that is, is less than that of a goldfish: unbelievable but true. People are spending upwards of 6 hours a day on digital devices, multiple screens, multiple platforms, and that constant fragmentation of attention is reducing their span of retention. Along with that, they’re being now bombarded by an average of 5,000 commercial messages each day. Just imagine, 5,000 commercial messages coming at you every day where you already have a low span of attention to begin with. So what would you do as a consumer?
Number one: You learn to tune them out. You learn to tune the ads out.
Number two: You install ad-blockers. And today, there are more than 600 million ad-blockers around the world.
And number three: You go to ad-free environment. You go to Netflix. You go to Amazon Prime. You go to Yahoo! or YouTube Red, all these platforms which are ad-free. Now, that is the extent of consumer reaction to this intensity with which they are being bombarded by the various advertisements. Now, from a marketer’s side, if you see, programmatic advertising, which is very dependent on algorithms and very complex building schemes and processes have become very dominant. More than 65 percent of all advertising in 2019 was estimated to have been purchased and served by an algorithm. The ad ecosystem is now so incredibly complicated that it needs a ton of players just to make sense out of it and keep it going.
It has been estimated that these various intermediaries in the ad ecosystem get 40 percent off ad budgets, which means instead of going to working media, this money is going to the intermediaries in the ad ecosystem. Marketers are forking this money out because they don’t have a clear handle on how to tackle this complex ecosystem with all these intermediaries. Now, as data became the field for marketing, the European Union has instituted the GDPR, the General Data Protection Regulation, in 2018 to require companies to clearly state the purpose of data that they are collecting. They have to get specific permission from consumers for their data collection and, also, allow the consumers to delete that information.
A very similar law now has been passed, and it exists in California too. These kind of regulations are certain to be passed across various parts of the world in the future, and marketers need to be cognizant and learn to operate both by the spirit and the letter of the law.
So there you have the first four paradigms: The first paradigm where the product is the hero, and marketing is rational; the second paradigm where marketing is based on emotions and emotional appeal. The third paradigm is where Internet and data start to expand how marketers can reach people effectively and highly efficiently. And lastly, the fourth paradigm, where digital devices have become extension of human body and mind, and this is the era of connected consumer. It’s important to understand these eras or paradigms in marketing as we talked about where we are right now.
Now, in the next module, we will get to the fifth paradigm, which is “Quantum Marketing.”
In this video, Raja Rajamannar takes an in-depth look at how marketing has evolved over time.
He will take you through the four ‘paradigms’ of marketing up to the present moment. A paradigm is where the ideas or approach underpinning how marketers work shifted in a new direction.
While in later courses on this ExpertTrack, you can learn about formal marketing approaches, Rajamannar explains the shifts seen by working marketers over the last few decades.
He will take you through:
- Paradigm One: Product Marketing
- Paradigm Two: Emotional Marketing
- Paradigm Three: Data-Driven Marketing
- Paradigm Four: Digital & Social Marketing
Can you think of examples of brands today that use these approaches? Which brands are adopting a rational appeal based on the product? Which use an emotional appeal? Share your thoughts with other learners in the comments below.
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