The Fascinating Field of Marketing: Some Issues That Confront Us… William L. Wilkie, Nathe Professor of Marketing University of Notre Dame AMS Review Theory Forum Indianapolis, IN May 20, 2014 Overview of Issues I’d Like to Raise Today Issue # 1: The AMA Definition of Marketing Issue # 2: The pressing need for aggregate perspectives in academic Marketing… (a brief reprise of the “Aggregate Marketing System” )… Issue # 3: Is knowledge being lost from our field? (a very brief reprise of the “4 Eras” of Marketing Thought)… Closing comments regarding our conceptions of scholarship in Marketing I. AMA’s Definition of Marketing Over Time… 1935 “(Marketing is) the performance of business activities that direct the flow of goods and services from producers to consumers.” 1985 “(Marketing is) the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.” 2004 “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” OBSERVATIONS… Note That the Focus has Narrowed Over Time (in keeping with Eras 3 and 4 in Wilkie & Moore 2003). Until 1985, definition was pluralistic – easily translated to aggregate issues such as competition, system performance, and consumer welfare. In 1985, a clear turn of focus to manager’s tasks as embodied in the 4P’s (making aggregate perspectives more difficult). The new 2004 definition extended this spirit – now a sole focus on the individual organization “What we (now) have is more strategic. Now it says marketing is really something that makes the organization run.” (Greg Marshall, Head AMA Academic Division) AMA’s Definition (continued) This 2004 definition brought controversy (re: ‘marketing management,’ not the field of marketing). AMA appointed a review committee under Donald Lehmann, including Shelby Hunt and me. This committee proposed a new definition, adopted in 2007 by AMA (retained in 2013): “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” My Extended Effort: to Try to Discover for Myself “What is Marketing, Anyway?” Working for 17 years on various dimensions of how to conceptualize our field of study… primary outcomes … -- 1999: “Marketing’s Contributions to Society” Journal of Marketing (Millennium Issue 1999), with Elizabeth Moore -- 2003: “Scholarly Research in Marketing: Exploring the 4 Eras of Marketing Thought Development” Journal of Public Policy & Marketing (Fall 2003), with Elizabeth Moore -- 2006- 2009: Several articles aimed at improving the AMA Definition of Marketing (with Greg Gundlach and Elizabeth Moore) -- “Why is Marketing Controversial?” (in process w/ E. Moore) *** All papers are available for download from my homepage at Notre Dame (nd.edu) The Aggregate Marketing System: A Larger Look at Our Field (1999: “Marketing’s Contributions to Society” Journal of Marketing (Millennium Issue 1999), W. Wilkie and E. Moore 2 Background Issues: -- Most elements of Marketing are “hidden from view” for anyone but the persons participating. This is a challenge for understanding (and appreciation). -- Today in Business Schools we’re not looking at Marketing as a larger system. -- So, here is an illustration of the Aggregate Marketing System in action … “Breakfast at Tiffany’s” Please picture Tiffany Jones in her New York apartment having breakfast with her family. She blows across her cup of coffee… THE SYSTEM AT WORK PANEL A: COFFEE Retail Store (A1…n) Retailer’s Warehouse (T) Retail Store (B1…n) (T) Exporter (T) Grower’s Depulping Mill Coffee Grower Manuf. Regional Distribution Center Manuf. Roasting Plant (T) CONSUMERS Large Chain Retail Store (C1…n) (T) Large Chain Retail Store (D1…n) Mass Merchandiser (E1…n) (T) (T) (T) (T) Grower’s Warehouse Mass Merchandiser (F1…n) (T) Retail Store (G1…n) Wholesaler’s Warehouse Retail Store (H1…n) (T) THE SYSTEM AT WORK PANEL B: BREAKFAST PASTRY Wheat Farmer Apple Grower Milk Proteins Manufacturer’s Plant Fruit Flakes (T) Corn Farmer Sweeteners NOTE: SAME DISTRIBUTION CHANNELS AS IN PANEL A CONSUMERS Intermediate Ingredient Production System Dairy Farmer Wheat Flour THE SYSTEM AT WORK PANEL C: FAMILY BREAKFAST Family Breakfast Items Tiffany - Coffee - Non-Dairy Creamer - Sugar - Breakfast Pastry Robert - Coffee - Equal Jim - Corn Flakes - Orange Juice - Skim Milk - Frozen Waffles - Banana - Butter - Maple Syrup Laura - Orange Juice - Microwaveable Oatmeal - Skim Milk - Daily Vitamin Kitchen Support System Cooking - Automatic Coffeemaker - Coffee Filters - Toaster Oven Service - Microwave Oven - Electricity - Cooking Utensils Housewares - Ceramic Mugs - Plates, Bowls - Flatware - Tablecloth - Napkins - Table and Chairs - Piped Water - Water Purifier - Lighting Maintenance - Refrigerator - Freezer - Dishwasher - Dish Detergent - Sponge, Dish Towel PANEL D. SELECTED MARKETING SYSTEM ACTIVITIES (present in the coffee and breakfast pastry examples) The Classic Functions of Distribution - Transportation - Storage - Financing - Risk-Bearing - Assembly - Selling - Standardization - Market Information Knowledge Development/Intelligence Purchasing and Use Sales and Delivery (2) (2) (2) (2) (1) (1) (2) (1) N.B., Detailed Levels of Activities Exist: (e.g., Transport Activities) - Truck to Depulping Mill - Beans to Drying Area …..……. - Ship to New Orleans - Hopper Truck to Roasting Plant …..……. - Truck to Retail Store … additional steps in text Organizations: - Sourcing Raw Material Supply - Quality Specifications - Purchase of Capital Equipment - Outsourcing: Specialist/ Expert Services - Purchase for Resale - Assortment Building - Bulk Breaking - Order Processing - Negotiation: Terms of Sale - Transfer of Ownership (2) (1) (1) (2) (2) (1) (2) Consumers: - Product Acquisition - Product Preparation - Product Consumption - Product Maintenance/Repair - Product Disposition (2) (3) (3) (2) (2) (2) (2) (3) Organizations: - Market Analysis - Market Demand Assessment - Analysis of Competitive Strategies - Market Segmentation - Market Forecasts - Performance Monitoring - Program Evaluation Consumers: - Consumer Education - Information Search - Word of Mouth - Store Visits - Post-Purchase Analysis Marketing Plans and Programs/Government Actions (1) (1) (1) (1) (1) (1) (1) (2) (2) (3) (2) (3) Numerical Key: Organizations: - Financial Projections (2) - Board of Directors Approval (2) - Product Design (2) - Product Line Decisions (1) - Budget Setting (2) - Distribution Planning (1) - Brand Name Selection (1) - Packaging (1) - Market Testing (1) - Positioning Strategy (1) - Pricing Decisions (1) - National Advertising (1) - Direct Marketing (1) - Consumer Promotion (1) - Trade Promotion (1) - Trade Advertising (1) - Communication to (1) Sales Force - Point of Purchase Materials - Publicity - Warranty Terms - Customer Service - Retailer Assortment - Merchandising - Retail Advertising - Inventory Management (1) (2) (2) (2) (1) (1) (1) (2) Government Agencies: - Standard Setting Export/Import Controls Trademark Protection Financing Arrangements Nutritional Labeling Inspections Regulatory Rules and Guidelines (2) (2) (2) (2) (2) (3) (2) Centers of Little or No Marketing Involvement (1) = Largely or entirely controlled by marketing managers (2) = Largely controlled by others, but influenced by or coordinated with marketing managers (3) = Little or no influence by marketing managers (n) = Activity does not involve marketing Organizations: - Internal Management of Work Force - Management of Plant & Equipment - Financial Mgmt., Accounting & Control - Basic Research, etc. (n) (n) (n) (n) Government: - All non-commerce/non-consumer sectors (n) Consumers: - All non-consumer aspects of daily life (n) PANEL E. DEPICTING THE ENTIRE AGGREGATE MARKETING SYSTEM Brand Coffee System (Panel A) (Multiplicative Increase) All system activities given for the cup of coffee, beginning with harvest of beans on left, ending with consumer use and disposition on right. (2) (2) (2) (2) (1) (1) …… (note: not all activities controlled by marketers, see key in panel D) …… (2) (3) (3) (2) (2) Add all coffee systems (Similar sets of activities, participants and forms of value creation) All system activities given for pastry beginning with creation, storage and transport of 15 pastry ingredients and ending with consumer use and disposition. “ (Large Geometric Increase) Add all breakfast systems, on-premise restaurants and home kitchen systems “ (Larger Geometric Increase) Add all other food and beverage systems “ (Huge Geometric Increase) Add all product systems and all service systems “ (Huge Geometric Increase) Add all not-for-profit marketing activities “ (Huge Geometric Increase) Add all government and all consumer marketing system activities “ Brand Pastry System (Panel B) Panel D: Essential Points Selling, purchasing and use occur throughout system. Note the significance of infrastructure, careful planning, coordination and repetition … this system is very structurally sophisticated, and routinely provides breakfasts for 100 million households every day. The Government is an important behind the scenes facilitator of business (marketing) activity. A surprisingly large number of marketing system activities in just a simple illustration (over 75 listings). Key Lessons From the Project… (Re: Today’s Symposium): From Panel D we see that Marketing managers control only some (30 of the 75) of the AGMS activities: other activities are controlled by persons who do not consider themselves in marketing. This property of the system demands a perspective on Marketing that reaches far beyond a sole focus on a marketing manager’s controllable decisions. An inclusive appreciation of organizations and processes is clearly required. Overall, the U.S. AGMS is Huge, Practiced, and Powerful. It is composed of both extensive physical infrastructure and a massive, trained and experienced workforce (we estimate that some 30 million U.S. adults are directly employed in carrying out the activities of the AGMS). In my view, it deserves much more directed attention in our Ph.D. programs, and from our college of marketing thinkers more generally. III. Is Knowledge Being Lost From our Field? 2003: “Scholarly Research in Marketing: Exploring the 4 Eras of Marketing Thought Development” Journal of Public Policy & Marketing (Fall 2003), with Elizabeth Moore Background: -- An Historical look across the last century. -- Just as the real world of marketing has changed, so has its body of academic thought. Conceptual Offering: The “4 Era’s” of Marketing Thought (“Pre-Marketing”) (Before 1900) I. “Founding the Field” (1900-1920) II. “Formalizing the Field” (1920-1950) III. “A Paradigm Shift…Marketing, Management, and (1950-1980) the Sciences” IV. “The Shift Intensifies: A Fragmentation of the (1980- present) Mainstream of Thought” Era I. “Founding the Field” (1900-1920) Academic Field of Marketing 1st Courses with “Marketing” in Title Emphasis on Purview of Marketing’s Activities as an Economic Institution Focus on Marketing as Distribution Attention to Aggregate Issues Willingness to Raise Larger Questions (e.g., Are there too many middlemen? Does distribution cost too much? Does advertising raise or lower prices to consumers?) Key Criteria: Based on Economic Efficiency Era II: “Formalizing the Field” (1920-1950) Academic Field of Marketing Development, and Integration of Marketing Thought Aimed at “Marketing Principles” Creation of Organized Infrastructure for Knowledge Development and Dissemination Some General Characteristics of the Period Economic & Social Upheaval (e.g., prosperity of early 1920s; Depression, WW II, Post-war) New Product Choices, Technological Developments Resurgence of Consumer Movement (in 1920s and 1930s) Academic Journals & Proceedings 1925: Journal of Retailing Begins at NYU 1936: Journal of Marketing Debuts Diverse Contributors: -- 40% Academics, 45% Business, 15% Government Papers Tend to be Brief, Non-Empirical 90% Articles Single-Authored Considerable Coordination of AMA Conferences and JM -- (41% of JM articles originally presented at AMA) JM A Communication Forum: Commentaries Encouraged Becomes Center for Advancing Marketing Thought Era II: Some Observations…. Relative to today, a Different Approach to Marketing. Descriptive Orientation, Not Problem-Solving at Firm Level. Significant Attention to External Developments and the Exigencies of the Times. Later in Period, Substantial Attention to Wartime Issues, then Planning for Post-War Economy. ***Academics Seemed to Have a Willingness to “Stand Outside,” Observe, and Critique. Era III: “A Paradigm Shift: Marketing, Management, and the Sciences” (1950-1980) “The Boom Arrives” “The Field Evolves” -- Two Emerging Perspectives Come to Dominate the Mainstream -- “Marketing as Science” (Behavioral - Quantitative) -- “Marketing as Management” “Growth in the Academic Infrastructure” FIGURE 6 SOME EXAMPLES OF KNOWLEDGE DEVELOPMENTS IN MARKETING (1952-1977) Managerial Frameworks and Approaches Discipline-Based Theories Research Methods, Models, and Measurement Market segmentation Marketing concept Marketing mix - 4 P’s Product life cycle DAGMAR Development of marketing cases Stage approaches to strategy development New-product development process Physical-distribution management Marketing information systems Product positioning & perceptual mapping General and middle-range theories of consumer behavior Image and attitude theory Theories of motivation, personality, social class, life style, and culture Expectancy-value theory Theories of advertising processes and effects Information-processing Attitude-change theories Segmentation strategies New marketing organization concepts (e.g., brand management) Territory design & sales force compensation Marketing audit Demand-state strategies Creative approaches and styles New search & screening approaches Refinements in testmarketing approaches Attribution theory Perceptual processes Distribution theory Refutation and distraction hypotheses Theories of diffusion, newproduct adoption and personal influence Prospect theory Adapted from Myers, Massy and Greyser (1980) Data Analysis: Broad & Specific: – Causal models – Weighted belief models, determinant attributes – Bayesian analysis – Sensitivity analysis & validity tests – Response functions – Marginal analysis & linear programming – Multidimensional scaling & attitude measurement – Forecasting – Econometrics – Time-series analysis – Trade-off analysis & conjoint analysis – ANOVA – Multivariate dependence methods: multiple regression, multiple discriminant analysis canonical correlation – Multivariate interdependence methods: cluster and factor analysis, latent structure analysis Data Gathering: Adoption and Refinement – Advances in survey research – Focus groups, depth interviewing – Experimental & panel designs – Motivation research & projective techniques – Hypothesis formulation, inference, sign. tests – Psychographics & AIO studies – Unobtrusive measures, response latency, nonverbal behavior – Physiological techniques: (e.g., eye camera, GSR, CONPAAD) – Probability sampling Marketing Models – – – – – – – Advertising (e.g., Mediac, Brandaid, Adbudg) Sales management (e.g., Dealer, Callplan) New-product (e.g., Demon, Sprinte, Steam) Product planning: Perceptor, Accessor Bid pricing models Stochastic brand choice Market-share models Marketing Cases and Simulations – Simulation & marketing games – Computer-assisted marketing cases Era III: (con’t.) In conclusion, Notice also that the training required to contribute to the Marketing Body of Thought had changed dramatically during Era III, compared to the end of Era II. The Paradigm had Shifted - - The Field of Marketing had Changed. Era IV: “The Shift Intensifies – A Fragmentation of the Mainstream” (1980-present) Major Dislocations in Real World of Marketing. “Publish or Perish” Pressures Intensify. The Two Dominant Perspectives Continue. -- Managerial Focus Persists. -- Scientific Approach Persists as Well. But, Tensions Burst, Much as an Overfull Dam, So That Waters Can Find their Course. Knowledge Infrastructure Expands Rapidly to Accommodate Diverging Interests. Trend 1: Business Education Goes Global - Many New Scholars Huge Jump in MBA Programs Worldwide (e.g., 50 in Russia, 60 in China, >100 in Cen./Eastern Europe, almost all w/in 15 years). Plus, MBA’s in U.S. have doubled. So, more demand for business academics. But largest impact has been in number of internationally-related scholars…. Trend 2: An Outpouring of New Publication Outlets A Remarkable Period from 1980 – 1984: in five short years the number of research-based marketing journals more than doubled (from 7 to 15). See Figure… Early 1990’s: Development of AMA “SIG’s.” Figure 9 MARKETING JOURNALS INTRODUCED DURING THE 1980’S Date 1980 1981 1982 1982 1983 1984 1984 1984 1987 1989 Publication Journal of Personal Selling and Sales Management Journal of Macromarketing Journal of Public Policy & Marketing Marketing Science Journal of Consumer Marketing Psychology & Marketing Journal of Product Innovation and Management International Journal of Research in Marketing Journal of Interactive Marketing Marketing Letters Trend 3: Research Specialization and the Fragmentation of the Mainstream “It is troubling to realize that Knowledge does not necessarily accumulate in a field -- that Knowledge can disappear over time if it is not actively transmitted and received.” (Wilkie, 1981 ACR Presidential Address) “… this risk has now increased – knowledge outside a person’s speciality may first be viewed as non-instrumental, then as non-essential, then as non-important, and finally as nonexistent, in terms of meriting attention.” (Wilkie, July 2002 Journal of Marketing Essay) The Crucial Question? Will future young marketing scholars even know they have a choice? What is (will be) their conception of the field of Marketing? Conclusions -- #1. Marketing scholars should be monitoring the impacts that marketing is having on the world., and should be developing knowledge from this. -- #2. The Aggregate Marketing System – its characteristics, size, power, and capacities to both improve and injure the world in which we live – belongs as an intrinsic part of the mainstream of marketing thought. -- #3. Fragmentation of marketing thought is powerful -perhaps irresistible – but this causes knowledge to be lost from our field... It calls for revised Ph.D. education. -- #4. This forum’s attention to theoretical issues is highly appropriate: It is past time for another hard look at ways to enhance scholarship in our field . Concerns… -- Doctoral students as immediate Producers (not learners, at least not on topics unrelated to their production area). -- High reinforcement in placement (multiple publications a huge plus, Lack of publications a barrier). -- Increasing (?) gaps between CB and Quant … healthy for Marketing scholarship? (only 3 articles in the first 20 years of JCR with “Marketing” in the title). -- “Status” increasingly sought, reliance on metrics (schools requiring “A” publications).