Today marketing is not the same as it was in the '60s or '70s, because there are enough products to satisfy customer's needs. In fact customers are "hyper-satisfied"! Companies have segmented the market until it has become almost too small to service profitably.
Distribution is now largely in the hands of giant corporations such as Wal-Mart and Costco. There are more brands and fewer producers, products "life" have been shortened, and it's cheaper to replace than to repair - all complicating the process further.
Marketing has always started with identifying the needs of your customer, but many companies are now focusing on the product. They focus on what category it falls into, and then what sub-category (for instance pudding and then what flavors). By focusing on the product, companies then focus on who'll use the product, and those considered "not using" are excluded from the picture. In doing this, you've just given your competitor a target market.
A firm may have captured 75% of its "user market" because they have a USP (unique selling position) i.e.; more flavors, more convenient packaging, longer shelf life, etc. But why can't they also take care of the other 25% instead of their competitor?
To do that, requires a new way of thinking known as "Lateral Marketing". Stop thinking about how you can keep the 75% in love with your service, think about drawing in the 25% of the market that wasn't your customer. This is done by innovative thinking. This may be seen as further "segmenting" the market-place, but at the same time it's making it bigger.
Interesting points you have there regarding this OP. In fact, I've never really looked at it this way. Likewise, you're also right that marketing is no longer what it used to be a few decades ago. I think the idea of companies focusing more on their product really holds much water. Take for instance Apple, after years of redefining their products and driven by the desire to dominate the market, well guess what? They've achieved this and just look what good things have come from this company.