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62
Journal of Marketing, April, 1969
portant question becomes: what alternatives are
there to controlled experiments for the testing of
hypothesis in ascertaining meaningful theory? If
the answer is negative, then it would be difficult to
hold that general theory is possible because marketing knowledge could not be subjected to the rigors
of the scientific method.
Fortunately, in addition to experimentation with
controls, there are two other means for testing
hypotheses. The first involves the reexamination of
all the evidence used in formulating the hypothesis
to insure that it can explain each observation. A
second approach is to use the hypothesis under consideration for the purpose of foretelling new observations which can be subsequently accepted or rejected with the passage of time. Recognizing that
there are alternatives to experimentation and that
marketing data can be subjected to reexamination or
prognostication, then it logically follows that a general theory for the di.scipline can be formulated
through use of a scientific method.
As one observer notes:
To be sure, certain variations in applying it
[scientific method] to the social sciences are necessary. But this is equally true of various parts of
the natural sciences. These variations are mo.st
needed in testing hypothesis. Even in the natural
sciences we frequently cannot use two of the three
kinds of testing; we cannot use forecasting in the
study of earthquakes or geology in general; we
cannot use controlled experiments in these fields
or astronomy. But these deficiencies do not pre-
vent us from regarding geology or astronomy,
seismology or meteorology as sciences. Nor
should similar deficiencies, especially difficulty in
forecasting and the impossibility of controlled
experimentation, prevent us from applying the
scientific method to the social sciences.*
Because the nature of marketing phenomena approximates an organismic system made up primarily
of human actors, it is felt that future formulation
of general theory must rely heavily on an anti-positivistic base. More .specific theories, however, particularly those pertaining to decision making in a
developed economic environment, will undoubtedly
find positivistic methodology helpful.
Conclusion
An organismic viewpoint highlights the social
nature of marketing phenomena. It also stresses the
fact that the organic component of marketing systems is action normatively regulated by the institutional relationships in a particular social order.
Because of this, any general statement regarding the
patterns peculiar to marketing action must depend
considerably on knowledge generated through research that emphasizes introspection and an understanding of marketing performance in its social
context. Anti-positivism as an epistemological base
is destined to make significant contributions to the
development of a general theory.
Carroll Quigley, The Evolution of Civilizations (New
York: The Macmillan Company, 1961), p. 10.
Exploring the Commodity Approach
in Developing Marketing Theory
PETER R. MOUNT
Increasing attention is being given to the development of theory in
marketing. Theorists have used functional, managerial, and institutional
approaches with relatively little emphasis on the commodity approach
during the past decade. In this article, the author explores the role commodities might play in formulating hypotheses which could lead to better
theory in marketing.
ARKETING, a function of organized behavior
systems embodies a wide range of activities, institutions, and commodities.! -phe field of marketing
can be perceived as the total system of interacting
activities which result in the planning, pricing,
promotion, and distribution of want-satisfying
M
Reavis Cox, Wroe Alderson, and Stanley J. Shapiro,
Theory in Marketing (Homewood, 111.: Richard D.
Irwin, Inc., 1964), p. 94.
products and services to consumers.- Since it is
such a complex system, it is difficult, though necessary, to divorce the approaches to marketing in
order to derive a theoretical basis for explaining
marketing phenomena. This paper attempts to
evaluate the possible role of the commodity approach
in the development of theory in marketing.
2 William J. Stanton, Fundamentals of Marketing
(New York: McGraw-Hill Book Company, 1964), p. 5.
Marketing Notes and
63
Communications
Marketing theory, as considered in this article,
is a statement of irrefutable truth that is logically
consistent and based on experimental validation.'
Such a statement can be utilized to explain the outcome of various marketing services as the basis for
further understanding the marketing process and
for predicting behavior patterns.
The institutional approach is one area for theory
development. It consists of the .study of marketing
institutions which are instrumental in the movement of goods from conglomerate heterogeneity
through the production, di.stribution, and merchandising functions to the systematic heterogeneity
of the final consumer assortment.^ After their
establishment, however, institutions tend to persist,
often remaining stagnant in a dynamic environment.
Thus, they do not inspire creative innovations in a
dynamic sense. The functional approach to marketing is the most widely used in the development of
theory; however, there is not complete accord
among theorists as to what the functions should be,
how they are defined, or how they can be used to
explain consistent market behavior."' In addition,
the variety of functions performed by individual
firms makes this type of analysis difficult to utilize
in developing marketing theory.
The Commodity Approach to Marketing
One fruitful area for theorists to explore is the
commodity approach for the development of marketing theory. This approach had its inception in
the early 1930s at the University of Wisconsin
where Ralph Breyer advanced the notion of commodities as a means to explain the marketing process.'' Breyer's early marketing textbook utilized
the study of commodities to explain supply and demand, product characteristics, channels of distribution, agencies, functions, pricing, distribution
costs, trade practices, and associations. Thus, most
of the recognized aspects of marketing were related
to the study of commodities."
Like other marketing terms, the word commodity
has undergone an evolution in meaning. Originally, a commodity was considered either a producer
good or a consumer good. The difference between
the two was that the producer good was sold to
•* Same reference as footnote 1, pp. 8-9.
* Wroe Alderson, "The Analytical Framework for Marketing," Delbert J. Duncan, editor. Proceedings: Conference of Marketing Teachers from Far Westem
States (Berkeley, Cal.: University of California Press,
1958), pp. 15-28.
••'F. M. Nicosia, "Marketing and Mr. Alderson's Functionalism," Journal of Business, Vol. 35 (October,
1962), p. 411.
«Robert Bartels, The Development of Marketing
Thought (Homewood, 111.: Richard D. Irwin, Inc.,
1962), p. 174.
7 Ralph Breyer, Commodity Marketing (New York:
McGraw-Hill Book Company, Inc., 1931).
an indu.strial market for u.se in the construction or
assembly of another product, and the consumer
good was sold for final consumption. Thus, the
term commodity evolved into the second stage of
connotation in which it referred to industrial and
consumer goods, with the latter being subdivided
into convenience, shopping, and specialty goods.
The various functions :md institutions of marketing were explained in terms of these classifications.
Later the term commodity came into a third stage
in which it assumed the meaning of a relatively
homogeneous group of products which serve the
same end use in the eyes of the consumer. To an
economist a commodity represents a homogeneous
bundle of satisfactions with each item in the bundle
having a high degree of cross elasticity of demand.
This means that items in a given commodity class
are readily substitutable for one another.
During the third phase of commodity analysis,
there have been many developments which have not
been applied to marketing theory. The work of
Leontief"" which utilizes commodities to construct
an input-output model of the economy, the United
States Department of Commerce which utilizes a
commodity classification to construct the Standard
Industrial Classification tables," IBM in preparing
its new Business Data Systems, and many researchers in forecasting future trends on the basis of
commodity analysis are all examples of current applications of the new meaning of commodity.
Theorists have not utilized to full advantage this
excellent opportunity for quantification and understanding of marketing phenomena by use of the
commodity approach.
If an individual commodity were selected for
analysis, it would be probable that within the confines or boundaries of this commodity class both the
institutions and functions would tend to become
stabilized.
Using this approach,
commodities
should serve as a basis for decision making instead
of solely utilizing existing institutions and functions. The search for sufficient homogeneity within
''Wassily W. Leontief, Input-Output Economics (New
York: Oxford University Press, 1966).
" United States Technical Committee on Industrial
Classification, Standard Industrial Classification Manual (Washington, D.C: Bureau of Budget, Executive
Office of the President, 1957).
• ABOUT THE AUTHOR. Peter R. Mount
is Assistant Professor of Forest Economics at West Virginia University.
Professor Mount received his PhD in
Forest Science from Colorado State University where his area of specialization
was the marketing of forest products.
64
the total heterogeneity as proposed by Alderson'o
should serve as a building block for further explanation and prediction.
Suggested Hypotheses Using the
Commodity Approaches
Some of the avenues of investigation which might
prove fruitful to theory are:
(1) All new entrants into an existing commodity classification will tend to behave (function)
as those producers already established within
that classification. Thu.s, it is possible to predict
that a new entrant into a manufacturing field
will assume the same functions, contactual actions, distribution patterns, and organizational
structure. How then does one account for differential advantage? A new entrant will only break
away from the pattern of existing producers of
the commodity when there is evidence of potential
financial gain. If the pattern is successfully
broken, other producers in the commodity class
will tend to follow the example and to pattern
their actions after the newcomers.
(2) It may be possible to derive a concept of
disproportionate promotional returns from analysis of input-output tables. If expenditures for
media exposure directed at all existing consumers
of a given commodity (as determined from an
input-output table) are not weighted on the basis
of percent of the market which a given consumer
group comprises, there may not be effective utilization of advertising dollars. An attempt to
balance the advertising budget with the model of
the commodity should result in increased sales,
whereas movement away from this balance should
decrease sales. How then does one explain pioneer advertising or attempts to sell within a new
field? This does not contradict the statement
of the current effectiveness of advertising, for
Same reference as footnote 4, p. 2.
Journal of Marketing, April, 1969
pioneer advertising is developmental with no
immediate hope of return.
(3) It might be possible, through closer analysis of input-output relationships, to derive quantitatively proper apportionment of sales efforts. If
a regional input-output model is in balance with
another regional or national model, the sales of
the commodity should assume the same pattern
between models. If a dissimilarity of sales exists between similar regions, then one sales effort
is out of adjustment and a reallocation of effort
is needed. Thus, the commodity approach also
provides a means of documenting market opportunity by reallocation of sales efforts.
As marketers continue to refine the terminology
associated with the word commodity, the number
of commodities will proliferate, making construction of input-output tables increasingly difficult.
However, this should not be viewed as a limitation
but rather as a challenge to future students. With
the increasing refinement of commodity analysis,
there should be even greater opportunity to test
suggested hypotheses which in turn should lead to
new theories.
Conclusion
Marketers should make greater use of the commodity as the basic building block in theory. The
consumer relates his differential advantage to the
individual commodity and not the institution which
provides it or the function which creates it. Thus,
both the institutions for the creation of time and
place utility and the functions for the creation of
time, form, and place utility should be subordinated
to commodities which pass through all four forms
of utility—form, time, place, and possession. If one
can understand and quantify the relationships pertaining to a commodity as it is converted from meaningless to meaningful heterogeneitv, then this understanding can be broadened to encompass the wide
field of marketing and can be fruitful in the search
for theory.