1. Marketing & Distribution

2. Marketing & Distribution Origins
Modern marketing and distribution systems are a result of:
 rise of living standards  new spending habits
 technology advances  wide variety of products
 inter-firm competition  substitute goods
 transportation advances  national markets
Companies need to shift focus from „optimizing“ to „creating“ markets by:
 investing in customer loyalty
 developing techniques of mass marketing
 developing wider distribution networks

3. Marketing & Distribution Three distinct time periods
I. „The Emergence of the Mass Market“ (1880 - 1920)
II. „The Maturing of the Mass Market“ (1920 - 1940)
III. „Reconstruction, Economic Growth and Consumer Boom“ ( after 1940 )

4. Marketing & Distribution „The Emergence of the Mass Market“ (1880-1920 )
 marks the beginnings of modern marketing & distribution
Characteristics:
• large-scale companies & national markets
• high volumes, low margins, large profits
• department stores, mail-order companies
Strategies:
• diversification and expansion of consumption
• change of life habits & consumption patterns
• shift from price & production to product, advertising & branding

5. Marketing & Distribution 1880-1920: Great Britain
Conditions:
• growth of urban population
• increase in real wages
Marketing:
• focus on quality, product identity and branding to secure customers loyalty
• advertising in urban areas & through mass newspapers
Distribution:
• long-distance deliveries
• development from fixed shops & multiples to national retailers: Marks & Spencer,
Sainsbury, W.H.Smith
• department stores in cities: Harrod„s, Selfridge„s

6. Marketing & Distribution 1880-1920: U.S.A
Conditions:
• extensive railway system  national markets
• increase in urban population
• high living standards
Marketing:
• focus on mass adversiting campaigns: Coca-Cola, Royal Baking Powder, Sapolio
soap
• shift from product-orientation to customer-orientation:
values, status, prestige, desirable lifestyles
Distribution:
• general stores in small towns and rural areas
• chain stores, department stores and mail-order companies in cities
• big manufacturers operated own wholesaling networks: P&G, Colgate, Gillette, Heinz

7. Marketing & Distribution 1880-1920: Continental Europe
Conditions:
• population more scattered in rural areas
• focus on other industries than consumer goods (Germany, France)
• differences in living standards between regions (Italy)
 no national markets & less advanced mass consumption
Marketing:
• few transformations in branding, packaging, advertising
Distribution:
• department stores in cities: Wertheim (Germany), Au Bon Marche, Le
Printemps, Galleries Lafayette (France)
• regional mail-order companies (Italy & Germany)

8. Marketing & Distribution 1880-1920: Japan
Conditions:
• high level of urbanization
• expanding demand for goods (BUT not like G.B. or U.S.A.)
Marketing:
• first attempts to use advertising and brand identity for traditional products: rice,
soy sauce, sake
Distribution:
• extensive network of general stores, later specialist stores and department stores
in urban areas

9. Marketing & Distribution 1920-1940: „The Maturing of the Mass Market“
Characteristics:
• USA – leading world economy
• higher segmentation of markets
Strategies:
• expanding marketing operations
• value-based pricing
• psychological understanding of consumers through marketing research
• techniques to forge a consumer culture based on choice, lifestyle, prestige
rather than price & basic wants
• emotive, associational advertising

10. Marketing & Distribution 1920-1940: U.S.A.
Conditions:
• USA – leading world economy
• booming consumer demand
• large-scale companies
Marketing:
• marketing becomes a key business function within the company
• advertising focuses on emotional wishes rather than basic wants, uses radio, TV
• advertising & market research agencies use statistical testing & demographics to
understand consumers
Distribution:
• department stores in cities
• chains like A&P, Woolworth, J.C. Penney expand

11. Marketing & Distribution 1920-1940: Great Britain
Conditions:
• far behind the USA in terms of living standards
• consumption patterns change
Marketing:
• focus on statistics to plan output & distribution
• focus on sales efforts and intensive advertising
Distribution:
• concentration of retailing outlets & supermarkets like Tesco, Sainsbury 
advantages in bulk purchase, price & image

12. Marketing & Distribution 1920-1940: Japan
Conditions:
• concentration of the population in urban areas
Marketing:
• need for new approach in marketing  beginning of the „modern marketing
era“ in Japan
Distribution:
• arrival of station terminal shops that competed with small retailers for the
urban middle class
• producers establish own wholesale & retailing networks

13. Marketing & Distribution 1920-1940: Continental Europe
Conditions:
• different development pace of countries
• focus remains on technology & production (Germany)
• increase in consumption (France)
Marketing:
• foreign brands enter Germany (Rama, Coca-Cola)
• imitation of marketing techniques from U.S. (Holland, Italy, France)
• advertising intensifies, using slogans & illustrations, psychology of consumer
• sophisticated advertising campaigns: Pirelli, Ollivetti, Cirio
Distribution:
• department stores start operating on national scale

14. Marketing & Distribution after 1940: „Reconstruction, Growth & Boom“
Characteristics:
• USA – international lead in marketing techniques
• huge gap between US and Europe/Japan (war costs, reconstruction)
• post war boom narrows the gap, European & U.S. life standards become
similar
Strategies:
• shift from statistics-based to psychological analysis of human desires –
„motivational research“
• TV becomes an important medium for advertising
• supermarket chains like Auchan, Metro, Edeka become dominant suppliers
(Germany, France)
• new low-cost chains & discount stores threaten traditional multiples
• shopping mall – center of life outside home (U.S.)

15. Marketing & Distribution
Thank you for your attention!
Reference:
Fitzgerald, R.: „Chapter 17 – Marketing and Distribution“, in
Zeitlin, J. & Jones, G. (eds.): „The Oxford Handbook of Business
History”, Oxford University Press, New York, 2009.