DEVELOPMENT OF MODERN MARKETING 1. Period of vo exchange.—We can understand modern marketing only by knowing the conditions out of which it has grown. From the standpoint of marketing there have been three periods in the world's commercial history. The first was the period of no exchange. Each family was practically a self sufficient economic unit. There was no trade because there was nothing to exchange. Man's wants were few, and, such as they were, he satisfied them by direct effort. Eadh man did his own hunting, his own fish ing, his OWII tilling of the ,soil and his own crude manufacturing. There was no specialization in in dustry. As a characteristic stage of industry, this period probably disappeared long before the begin ning of historical times:and yet we still find an echo of it in some parts of the United States. The isolated frontier families who a generation and more ago founded the present thriving communities of our newer states, were in many instances obliged to live under such conditions; and even today some of the mountaineers of the South have progressed little beyond them. Nevertheless, the lack of specialization and the absence of exchange of this early period arc encountered only rarely in modern business.
2. Period of direct exchange, and its survivals.— The second period may be called the period of direct exchange. Limited specialization appeared. One man devoted himself perhaps mainly to hunting; an other to fishing, another to weaving, still another to agriculture. The advantages of concentrated effort on one activity were dimly recognized, and we fmd the various members of the community each doing chiefly the kind of work for which he was best fitted or to which he was most attracted. As a result of this limited specialization, some exchange became neces sary. The man who devoted himself primarily to the raising of sheep called upon the metal worker to supply him with such manufactured articles as he might need, and the man who was chiefly a weaver went to the sheep raiser for his supply of raw ma terial. The exchanges were carried on directly—the producer of one commodity exchanged it directly with the producer of another. Middlemen bad not ap peared. There was no necessity for the highly com plicated market organization that we have today.
Direct exchange is not wholly a thing of the past. Business men who sell chiefly services, either alone or in connection with goods—merchant tailors, custom shoemakers, blacksmiths, for instance—must usually deal directly with those who utilize their services. There are, too, many enterprises manufacturing a great variety of goods that elect the method of direct dealing with consumers in preference to any other marketing plan. Direct exchange between producer and consumer is a common fact in modern marketing. Some people contend that it is the only economic method, and there are many movements afoot to in crease its use in all kinds of business activities. -Nev ertheless, direct exchange is not the characteristic method of twentieth century selling. The overwhelm ing majority of the many things that the consumer buys to eat, to wear and to use come to him not di rectly from the manufacturer, but thru a series of one or more middlemen.
3. Period of indirect third, and present, period may be called the period of indi rect exchange. It is the period of the middleman. There are many reasons for the change from the sec ond to the third period. The following are sugges tive: 4. Increased specialization in peo ple today are engaged either directly or indirectly in the production of more than one article or more than one group of allied articles. General production such as was engaged in on the old-fashioned farm, is no longer typical. Nearly everyone must buy from others most of the things he consumes. Ordinarily he cannot do this directly. He is too busy working at his own specialty to spend much time hunting around for the many (Efferent manufacturers of the large number of things he must buy; if nothing else, the necessity of saving time demands some clearing house arrangement of middlemen which will help him to find what he wants. For the manufacturer as well as for the consumer, there is a necessity for mid dlemen. The manufacturer is frequently a specialist in manufacturing alone, without either the training or the means to devote himself to the search for the market for his goods. Consequently, he is often glad to use the services of a specialist in marketing.