Hi, it's great to see you again. In our last lesson, we shared a fun story. The mousetrap one that explores one of the four key marketing theories, Kotler's Four Ps. Today, we will have a slightly more formal class, talking about the marketing basics. I always like to start any topic by giving a historic perspective. It is hard to know where you are going if you don't know where you've been. In reality, the first marketing book is published in 1920. It is called Marketing Problems, and it is written by Melvin Thomas Copeland. It already gives a definition of what marketing I read the first phrase, the rest you can read on the screen. Marketing maybe defined as a study of the principles that govern the policies of business management in the distribution of commodities from producer to consumer. This is not the way we know marketing nowadays. It does not mention the customer in the equation, but it already mentions the matters of distribution, promotion, advertising. So let's take a few steps back. According to Nick Ellis and colleagues in the work Marketing, A Critical Textbook, we could split the history of commerce in three parts. First, production error. From 1870 til 1930 approximately, it was characterized by a demand that exceeded supply. There are shortages, and a great desire for all kinds of goods. In the reduction era, there is almost no competition talking about the same categories of product. Pretty much you had almost a monopoly of whatever you are manufacturing. The company is the center of focus for a business and customers or customers. Companies make whatever they can make, and try to solve the many problems of production. Also in the production era the products sell themselves. Wholesalers and retailers are rudimentary in their practice. The profit generated is almost an afterthought. It comes naturally if our company is reasonable good at production. From the 1930s till approximately the 1950s, the sales era takes place. And it was characterized by the following. First, supply exceeds demand. And for the first time in human history it seems abundance for all has finally arrived. People start to realize they can choose from two or three different products and competition is born. If companies don't pay attention, they may end up with huge inventories. So they would have to unload their total production, heavily focus being made on selling. Also some advertising starts to appear on the map. Companies make limited number of product versions. Remember Henry, Ford's quote they can have my car in any color they want as long as it's black. That's pretty much it. Another thing companies should for sales often. Profits will derive from scale meaning, if you don't sell what you make, you're in big trouble. Around 1950, marketing era is born. Supply now greatly exceed demand. And the competition is fierce within product segments. In the marketing era, businesses found out that attending to customer needs and wants is the key to success. Let's say business realized that it was in their best interest to have customers best interest cared for. Companies actively listen to customer wishes and as a result they produce extensive product lines. Lastly, in the marketing era, firms have started to focus on profit instead of sales more and more. Since high volume of sales output became increasingly difficult. Let's now talk about the definition of what marketing is. Marketing thinkers have always tried to first draw a line between sales and marketing approaches. Theodore Levitt, the author of a seminal article called Marketing Myopia, differentiates the two disciplines in the following fashion. The difference between selling and marketing. In selling getting people to exchange their cash for your offering. Marketing, it is about satisfying the needs of customers by means of a product or service. Mr. Philip Kotler by his turn defines what marketing is like this, marketing is not the art of finding clever ways to dispose of what you make. It is the art of creating genuine customer value. We can say that what defines marketing it is the customer centricity. So never mind when someone promotes customer centricity as the new marketing. Marketing has always been customer centric. Hope you have enjoyed our class today. I hope to see you next time.