MSc BUSINESS DEVELOPMENT AND INNOVATION
Department of Marketing, Entrepreneurship and Strategy
Ulster Business School
University of Ulster
Eoin Killian Costello
Student Number B00570977
Coursework Assessment: Marketing Management
March 2011
Word count: 2560 (excluding references, appendices, bibliography, diagrams and cover page)
Towards a précising definition of Marketing
Introduction
The objective of this paper is to propose a précising definition of marketing. The paper will commence by presenting the proposed definition and then explaining the rationale of this definition by reference to ten definitions selected on the basis of their contribution to the proposed definition.
Précising (where vagueness is undesirable) was selected as the approach due to the Oxford Dictionary (Oxford University Press 1981) interpretation of the term definition, that it is “an exact statement or description of the nature, scope, or meaning of something from Latin verb definire ‘set bounds to’ ”. Set against this boundary setting function is Zinkhan’s (2007) statement that a discipline’s definition should be relevant to both practitioners and academics and must balance the objectives of description and prescription.
Definition proposed by this paper
Marketing is a universal process in human activity, the aim of which is the achievement of targeted goals, which are aspirational and behavioural in the case of consumers, commercial in the case of organisations, through the medium of exchange of co-created hedonic value (associated with goods and services created in a holistic manner). The process is ideally based on a lifelong trust relationship where the parties self select based on shared meaning with the benefit in the case of the consumer being satisfaction of branded wants, for the organisation the maximum utilisation of its core competences and resources in the pursuit of profit (or minimum cost for non-profit organisations), and for society that the objectives of all parties are met without generating excessive externalities.
The proposed definition is extracted from ten definitions which were selected for how each contributes a key concept to the overall definition.
Rationale for the Components
In order to identify the themes and components of a definition of marketing the methodology of Harker (1999) was adapted and applied to the selected definitions (which, in addition to the ten, include further definitions supplied by practitioners in order to satisfy the requirements of Zinkhan (2007). The results of the frequency analysis are provided in the table below.
Figure 1: Frequency of conceptual phrases in selected definitions (with themes in bold)
Location of activity / Actors / Temporal – single event or continuum / Basis of Interaction / Objectives / Medium of Exchange8 / 11 / 7 / 8 / 7 / 7
Please see appendix 2 for full details of the methodology and analysis.
Three key themes were identified by the frequency analysis in addition to three other relevant descriptors found most commonly in the examined definitions (location, actors and temporal aspect).
Rationale for the Words
Three themes arising from the Definitions
Basis of interaction - Value in the exchange
Bartles (1968) sees exchange as an objective of marketing. For an exchange to take place there must be two or more parties each of whom can offer something of value of each other. Bagozzi (1975) discusses symbolic and functional exchange and states that exchange is a dynamic social process functioning under economic and psychological constraints.
Bagozzi (ibid) claims that the most important determinant of exchange outcomes is the social influence (comprising specific actions, communications and information transmitted between the parties in the transaction) exercised by the actors and that the key decision rule is utility maximisation. This social influence role is supported by Edvardsson et al (2011), their paper states that value should be understood as value-in-social-context and that value is a social construction. A key element of value in the exchange is psychological and this “social influence” is derived from the information provided by the organisation’s marketing based on their chosen marketing strategy (Smith and Colgate 2001).
Medium of interaction – Relationships and Exchange
According to the Market Oriented Approach marketing revolves around customer relations, where the objectives of the parties involved are met through various kinds of exchanges. Gronroos (1989) claims that exchanges take place in order to establish and maintain such relationships.
Relationships can be strengthened by keeping “promises” (Gronroos 1994), this concept draws on the commitment-trust theory which maintains that those networks characterised by relationship commitment and trust, engender increased cooperation (Morgan and Hunt 1994) “strong customer relationships” (Kotler 2010) suggests an emotional bond at the core of the relation.
Objectives - Mutual satisfaction
Kotler and Levy (1969) require that customer satisfaction be the driver for product development (a clear break with the Product and Selling Concept of marketing) in order to align the satisfaction of the consumer’s needs with the profit needs of the organisation. Vandermerwe (1996) sees “lifelong customer solutions” as the objective of this alignment of needs satisfaction. Barwell (1965) distinguishes between “customer needs” and “desires” indicating the marketers potential for converting generic needs into desires based on “aspirational motivations” (Dahlen et al 2009) via information (“advertising, public relations, and brand management” Smith and Colgate 2007) provision in the relationship and the exchange.
Rationale for words used
The Harker (ibid) frequency approach can provide the main themes however key elements remain necessary to capture Zinkhan’s “description and prescription” requirement, namely how an organisation should seek receptive customers, how is society incorporated and how does the organisation align its marketing and other activities with their best target market of consumers.
The proposed definition is explained below (and which definition they are drawn from) in its three main constituent parts: Aim, Objectives and Benefits (the use of the terms exchange, relationship and satisfaction are used in the meaning outlined in the section above):
Aim: “Marketing is a universal” (drawing on Drucker (1955) and Bagozzi (ibid) definitions for the location of activity, due to marketing’s pervasive nature the universal concept is preferred to the Management Function or Academic Discipline concept) “process” (drawing on Bartles for the temporal aspect being a continuum)” in human activity” (included because marketing activity is not restricted to commercial as charities engage in marketing and secondly human included as activity is motivated by human needs(Maslow 1943)),” the aim of which is the achievement of targeted” (drawing on Kurzbard and Soldow’s (1987) requirement that marketing activity have clear, measurable objectives) “goals, aspirational” (drawing on Edvardsson et al (2011) “value is a social construction” which suggests that marketing’s role is most effective higher up Maslow’ hierarchy of needs where the relevant added value is hedonic (Smith and Colgate 2007)) “and behavioural in the case of consumers and commercial in the case of organisations” (drawing on Kotler (2010) for the terms describing the actors, consumers rather than “customers” (term draws excessively on the Production and Selling Concept being “a person who buys goods or services from a shop or business” (Oxford University Press 1981) organisations rather than “firms”,”corporations” in order to include government or non-profit bodies, “society” is included later in the definition).
Objectives: “through the medium of exchange of hedonic co-created value” (this approach is based on the claim that in addition to the physical, functional aspects, value also takes a psychological aspect which the consumer and the organisation co-create (Sheth and Uslay 2007)) “(associated with goods and services created in a holistic manner)”- (in order to minimise negative societal consequences (Bhattacharya and Korschun 2010)).”The process is ideally based on a lifelong” (the objective is long term rather than single transactions) “trust” (drawing on the commitment-trust theory (ibid Morgan and Hunt 1994)) “relationship where the parties self select based on shared meaning” (serves to direct the marketing effort of organisations by creating a dialogue with receptive consumers where marketing goals can be accomplished (Fill 2005)).
Benefits: “the benefit in the case of the consumer being satisfaction of branded wants” (denotes the role of marketing in contributing the psychological element that converts generic needs into branded emotional wants , the act of “converting the buyer's general resource needs into supplier specific wants” (Ramsay 1996), “for the organisation the maximum utilisation of its core competences and resources”(drawing on the Resource Based View of Vandermerwe (1996)) “in the pursuit of profit (or minimum cost for non-profit organisations), and for society that the objectives of all parties are met without generating excessive externalities” (reflecting Bhattacharya and Korschun’s (ibid) concern that marketing reflects the broad, network impacts it creates, an externality being “any indirect effect that is not captured in the price of a either a production or a consumption activity” (Laffont 1988)).
Critical evaluation of a minimum of ten different definitions
Generic definitions and definitions of “marketing approaches” (Dacko 2008) have both been used in compiling this list where they contribute to the advancement of the proposed definition. Detailed assessment of each is included in Appendix 1
Definition 1 Included for “exchange” concept
In this definition the aim is efficient economics in distribution, the objective is the creation of economic transactions and flows which result in the benefit of creating exchange and consumption. The focus is the market as a clearing house.
Criticisms: While the definition mentions exchange, society and participants it is excessively an organisation and transaction centric view of marketing.
Definition 2 Included for “satisfying needs” concept
In this definition the aim is profitable sales as a result of satisfying customer needs and desires by "customer satisfaction engineering" (Kotler and Levy 1969) yielding the benefit of returns on investment. Its “consumer” focus moves marketing from an internal view (“organisational structure”) to an external market view.
Criticisms: However the definition does not draw any explicit limit to “satisfying” customer desires which risks falling into the Production and Product Concept weaknesses.
Definition 3 Included for understanding of inter-dependency
In this definition the aim is to develop “closeness” to organisation’s consumers with the objective of communication which yields the benefit of consumer satisfaction. Its focus returns to the organisation with its “needs” pre-eminent however it deviates from the production concept in that “create products to satisfy” is the starting point for new products rather than the company’s inherent manufacturing advantages. The role of marketing in shaping consumer needs into wants is suggested by inclusion of the word “influencing” drawing on Packard’s (1960) depiction of advertisers manipulating consumers’ "compelling needs”.
Criticisms: Is still in the production and distribution tradition in use of words such as “product”, “program of communication”. Furthermore Baker (2000) notes that it is not clear why marketing should be restricted to being an organisational function.
Definition 4 Included for dimensions of exchange
In this definition the aim is to facilitate exchanges with the objective of need-satisfying with the benefit being “hope or anticipation of future rewards” (ibid 1975). Its focus is exchange and moves from transactional marketing (“exchange is more than the mere transfer of a product or service for money” (ibid)) to a recognition of the respective power of different parties “at least a willing buyer and a seller must exist before a market exchange can occur” (Sheth and Uslay 2007).
Criticisms: It is not sufficiently prescriptive, while it offers some understanding of why humans engage in this symbolic versus utilitarian exchange behaviour it does not give adequate guidance as to where marketing value ultimately resides (i.e. how variables such as “social actor, influence and situation” (ibid) actually affect exchanges).
Definition 5: Included for Marketing as a Function
Grönroos believes that ‘Customers should get value from the actions and activities of marketing’ (Grönroos 2006, p. 398). Information is key to trust (Morgan and Hunt 1994) and trust is key to exchange therefore a key value that marketing adds is the creation and management of information in the relationship. In this definition the Marketing as a Function role is highlighted in respect of the key role information plays in value creation particularly in respect of creating hedonic value which is represented in the brand and serves as the psychological component that converts a generic need to a branded want (ibid Ramsay 1996).
Criticisms: Sheth and Uslay (2007) argue that this hedonic value is a co-creation of value rather than value creation or value exchange.
Definition 6: Included for strategy guidance
In this definition the aim is “alignment” with the objective for the firm to “become the gateway” yielding the benefit of “solutions” for the customer. Vandermerwe provides guidance to the organisation on choosing where to direct its marketing efforts. Not only is success dependent on understanding the size and changes expected in the market, the issue of whether the company has the right unique “Genuine Assets” (Frigo 2004) to execute on the strategy better than other companies is also key.
Criticism: This definition does not make it clear what the benefit to the organisation is beyond having “lifelong customers”.
Definition 7: Included for Relationship
In this definition the aim is “relationship” with customers and other stakeholders to meet “the objectives of all parties” yielding the benefit “a profit”. This definition moves the focus of marketing from the traditional four P's to the interface/relationship between the company and its customers. In Gronroos model the exchange occurs in order to establish and maintain the parties’ relationships, rather than the opposite.“the keeping of promises” hints at the psychological nature of the hedonic component of the value exchange.
Criticisms: The definition does not establish how “identify” and “establish” will evolve from the universe of “customers” and “other stakeholders”. Fill (2005) provides some guidance on this with the concept of “shared meaning” and “brands” that “create a dialogue” whereby marketing goals be effected successfully with the target market of consumers.
Definition 8: Included for balance in the relationship
In this definition the aim is “obtain what they need and want” with the objective: “create value for customers” yielding the benefit to the firm of “to capture value from customers”. This definition makes it clear that marketing must recognise the balance of interests between the organisation and the consumer in the pursuit of needs and wants.