Industrial Management & Data Systems

The Evolution of the Concept — Marketing: An Application of Systems Thinking

David Cook
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David Cook, (1981),"The Evolution of the Concept — Marketing", Industrial Management & Data Systems, Vol. 81 Iss 7/8 pp.
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 The Evolution of the
Concept — M a r k e t i n g
An Application of Systems Thinking
by David Cook The Management Centre, University of Bradford

Over the past 5/10 years there has been a strong evalua- relationship. Under such conditions marketing is the
tion of the contribution marketing can make to modern predominant managerial philosophy permeating the total
day society. At times this process has amounted to organisation and Era 4 is entered.
rejection of the marketing concept, such evaluations With the exception of dates Keith's analysis materi-
coming from both within and without the ranks of mar- ally follows that suggested by McKitterick[2]. Using
keteers. The objectives of this article are threefold: 1940 as the break point KcKitterick identifies the major
(a) to briefly review the development of the market- competitive thread between 1920-1940 as being rapid
ing concept; increases in productivity. As these productivity gains
were not matched by either new product development
(b) to outline one particular approach to systems or a redistribution of income the result was chronic
thinking; underconsumption and unemployment. Companies
(c) to argue that much of the criticism of the market- attempted to compete by making the same product
ing concept can be countered and an understand- cheaper.
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ing of the broadening movement developed via the

application of the systems approach.

Origins
In 1960 Keith [1], when discussing the marketing revolu- . . . the focus was now upon
tion and in particular its application to the Pillsbury
Corporation, identified four eras which he argued fol- what was better rather than
lowed a fairly typical pattern. These eras, which are merely what was cheaper
now universally acknowledged, were respectively:
Era 1-production orientation;
Era 2-sales orientation;
Era 3-marketing orientation; After 1940, however, the direction of competition
Era 4-marketing control. changed with companies attempting to make better
and/or new products. As a result there was a significant
The distinction between the ruling philosophy in the increase in R&D. As a consequence of the increased
first two eras is fairly obvious and may be summarised demand for labour and increased wages, there was a
by saying that in Era 1 the emphasis was on volume flood of new products to meet the increased disposable
production and plant efficiency largely in response to income. Hence with the adoption of the marketing con-
newly developed technology for mass production and cept McKitterick argues the focus was now upon what
expanded markets, while in Era 2 the emphasis switched was better rather than merely cheaper for the customer.
to more aggressive sales and distributive practices in
response to mounting production saturation. As compet- In terms of differential advantage it should be noted
ition increased and customers became increasingly that a lower price rarely offers a long-term competitive
scarce, sales orientation gave way to marketing orienta- edge as it may be readily copied. For McKitterick the
tion. The emphasis, now, was upon consumer satisfac- drive for improved solutions to customer problems was
tion with the argument being that sales would be that the key:
much easier to obtain if the company concentrated on "The crux of the marketing concept is expressed . . .
making what the consumer wanted rather than on selling by the application of research and insight to the task
what the company could make. of creating new markets- indeed new business-then
Originating with the General Electric Company the we know that we are dealing with a management that
marketing concept was quickly adopted by companies has fully embraced the marketing concept."
on both sides of the Atlantic. Because companies were
facing increasingly dynamic environments and markets The basic propositions argued by Keith and McKit-
the marketing function began to assume a predominant terick were widely accepted, although depending on the
role in guiding and integrating the varying business viewpoint adopted marketing was described as encom-
functions. Many marketeers were arguing that market- passing a range of activities, e.g. a business activity; a
ing, because of its immediate interface with the market, trade phenomenon; a frame of mind; the creation of
was the functional activity to ensure a company adapted time, place and possession utilities etc. In an attempt to
to the changing needs and pressures of the environment. .synthesise those varying viewpoints in 1965 the Market-
Hence a company would guarantee itself long-term sur- ing staff of the Ohio State University[3] published their
vival and a state of dynamic equilibrium via a symbiotic own definition of marketing. They argued marketing:

JULY/AUGUST 1981 17
 " . . . is the process in a society by which the demand needs and build a programme of communications to
structure for economic goods and services is antici- express the organisations' purposes.
pated or enlarged and satisfied through the concep- Lazer[6] too saw marketing's application as being
tion, promotion, exchange and physical distribution of beyond the profit motive. "Marketing shares in the
such goods and services." [3, p.43]. problems and goals of society and its contributions
extend well beyond the formal boundaries of the firm."
Such a definition suggests three points: He accepted that because of the materialistic ethic mar-
keting was strongly bound to the business organisation
• That marketing is of broader scope than the simple but argued for an extended application to include mar-
compilation of the functions and activities fre- kets based on social value, markets of the mind and
quently identified as being a marketing responsibil- markets concerned with self actualisation. He therefore
ity in profit based organisations; required marketeers to assume a sense of social pur-
• Marketing possesses a dynamic quality and sense of pose, social commitments and obligations, or in other
purpose emphasising the continual interaction be- words to accept that marketing possesses a societal
tween the producer, the wholesaler, the retailer, the responsibility.
facilitating agent and consumer;
• If the inferred total or holistic view is accepted then
it follows that marketing is neither purely a
management responsibility within a company nor a
technology via which the marketing function is " . . . marketing possesses a
planned, organised and controlled. societal responsibility"
Two years later Kotler published the 1st Edition of
his text "Marketing Management Analysis Planning and
Control"[4]. A review of the definition* included in that
text shows that at that stage Kotler would not appear to
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have accepted the above three points and yet he was to Luck[7] objected to such an extension arguing that, as
be initially the catalyst and subsequently a major pro- the essence of marketing was the market transaction, it
ponent for the argument to broaden the marketing con- should limit itself to activities related to the eventual or
cept. intended offer to buy or sell a product or service. In a
rejoinder Kotler and Levy[8] subsequently diagnosed
Broadening the Marketing Concept that Luck was suffering from a particular form of mar-
Kotler and Levy[5] expressed concern that traditionally keting myopia. If marketing boundaries were so
marketing was regarded as a business activity and sug- restricted specialist skills and resources would be denied
gested that it was a persuasive societal activity that to the fastest growing segment of the economy and the
went considerably beyond the selling of toothpaste and enrichment of marketing thought and practice via cross
steel. Pointing to the increasingly large percentage of fertilisation would be retarded.
the gross domestic product that was non-business orien- The crux of marketing was the general idea of
tated they argued that all non-business organisations exchange rather than the narrower concept of market
have to perform certain basic business functions, e.g. transaction. Traditional marketing had been restricted to
finance, personnel, production, purchasing and market- the business world and regarded the producer or seller
ing. Therefore, it was said non-business organisations as the marketeer. It was now opportune to extend the
require to use nine major marketing orientated concepts. boundaries to include non-business organisations and
adopt a different view, e.g. a house buyer in a period of
(1) Generic product definition,
housing shortages will attempt to market himself as the
(2) Target group, ideal tenant or customer in just the same way as an
(3) Differentiated marketing, organisationsal buyer, facing a period of difficult supply,
(4) Customer behaviour analysis, will attempt to elicit an appropriate response from the
(5) Differential advantage, supplier. Under this type of thinking marketing becomes
(6) Multiple marketing tools, a universal response of individuals, groups or organisa-
(7) Integrated marketing planning, tions attempting to win the support of others via offering
(8) Continuous marketing feedback, value.
(9) Marketing audit.
Ferber[9] insisted that the scope of marketing should
The use of such a set of tools would prevent non- be spread to include social and public policy while
business organisations losing sight of their original man- Lavidge[10] argued for an increase in marketing's
date and becoming self serving, e.g. hopitals that offer a responsibility suggesting two key future roles: firstly, to
perfunctory treatment of the sick; schools that regard assist in the drive for increased efficiency, with particu-
students as nuisances and city officials that behave like lar reference to under-developed countries and secondly
petty tyrants. Marketing was seen as a function and to help in the drive for social justice, which was replac-
philosophy enabling organisations, business and non- ing the drive for security and increased efficiency in
business to keep in constant touch with their consum- developed countries.
ers, read their needs, develop products to meet these The five areas of particular relevance and possible
applications are shown in Table I. As a result of the
evaluation of such questions the basic question to be
*"Marketing is the analysing, organising, planning and controlling of asked is not can a product be manufactured and sold but
the firm's customer impinging resources, policies and activities with should it be manufactured and sold and what is the
a view to satisfying the needs and wants of chosen customer groups overall cost to society? Such an approach to marketing
at a profit" (p.12). questions would entail the adoption of the systems

18 INDUSTRIAL MANAGEMENT + DATA SYSTEMS

 approach rather than the use of a restricted entre- searching more deeply to establish meaningful
preneurial view. benefits to gain the adoption of a product, service or
The assessment of the contribution of the car to programme and would need to work with a channel
modern society would not therefore just be in terms of system that was less clearly defined and financially
economic growth, employment and income generation motivated.
but would have to include a range of other factors such It would therefore appear that there might have
as the use of scarce resources, death on the roads, been a split in the marketeers' ranks but Kotler[I2]
pollution and the boredom of manufacture. subsequently developed a generic concept of market-
ing, arguing that marketing was specifically concerned
Table I. Areas of Increasing Relevance to Marketing with how transactions were created, stimulated, facili-
tated and valued. The philosophical and functional
Area of Relevance Application aspects of marketing could be enacted at one of three
levels depending on the viewpoint adopted. The ulti-
1. Consumerism Consumerism normally deals with two mate acceptance of the generic concept would indi-
types of sin: cate operating at Level 3. The three levels of con-
(1) Commission, e.g. fraudulent packaging; sciousness are shown in Table II.
pricing; advertising: credit. Although a
significant amount has been achieved
Table II. The Three Levels of Marketing Consciousness
over the the last 5/10 years it is
reasonable to anticipate further efforts
Level Application
in this area. There is a tendency for
activities to move along a
Level 1 Marketing is seen as a business subject and is therefore
continuum-unethical-immoral-illegal.
concerned with buyers, sellers and economic goods and
(2) Ommissions e.g. lack of information: services. A market transaction would therefore involve
problems about warranties and the transfer of the ownership and/or use of a good or
guarantees: handling complaints. service in return for payment.
Marketeers should not see consumerism as Level 2 Marketing is considered as relevant to all organisations
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a threat but as an opportunity and therefore because they all possess customers and
offer a lead. products/services. Payment, per se. is no longer
regarded as relevant because marketing is required by all
2. Subsistence In the developed world the struggle for organisations producing a good or service for an intended
subsistence has largely been overcome but customer group. Under this broader concept of
two-thirds of the world's population live at organisational-client transactions the emphasis is no
or below this level. longer on the two way transfer of economic resources.
Organisations that could be grouped at this level would
3. Social & Cultural Particularly within the developed include museums, political parties, universities and the
Activity world marketing can make a contribution to church.
the enrichment of life, e.g. the development Level 3 At this level, marketing is not restricted to client groups
of education and health programmes, but is applied to all of an organisations publics, e.g.
religious service, the conservation of scarce general public, the government, competitors, supporters,
resources and the enjoyment of fine arts. employees, suppliers etc.

4. Pollution Marketing practices in the next decade will

have a major contribution to make to As the argument is developed from Level 1 to 2 to 3 it
society's solution to the problems of waste,
can be argued there is a movement along a continuum
pollution and the use of scarce resources.
from a functional to philosophical and on towards a
5. Human Needs Within developed countries as the level of systemic, total view of general applicability. Using the
affluence increases opportunities will arise generic concept developed at Level 3 it can be seen that
to concentrate on the higher levels of marketing is concerned with the creation of desired
Maslow's hierarchy of needs, e.g. self responses in free individuals by the development and
esteem and self actualisation. offering of values required by the chosen public. In such
a way an organisation's market offering could well com-
prise of a portfolio of individual offerings aimed at
The idea of social marketing was given a boost by specific publics which when aggregated offer synergetic
Kotler and Zaltman[11] who offered the following defin- benefits. As was noted earlier a value could be created
ition: in one of four ways each of which approximates to one
"The design, implementation and control of prog- of the standards 4 P's, viz.:
rammes calculated to influence the acceptability of Valuation Price
social ideas and involving considerations of product
planning; pricing; communication; distribution and Symbolisation Promotion
marketing research"[11, p.5]. Facilitation Place
They maintained that marketing skills could help Configuration Product
bridge the gap between the possession of knowledge Feldman[13] certainly would appear to be sympathe-
and the application of that knowledge in the pursuit of tic towards the idea of marketing operating at Level 3.
socially beneficial goals. Possible applications could In evaluating the need for marketing to adapt to meet a
include pollution control, drug abuse, education, birth changing societal environment a vital dilemma confront-
control, anti-smoking, safer driving and public trans- ing marketing is apparent at Level 1, viz an apparently
port. Compared to business marketing, social market- limitless and ever expanding set of individual needs and
ing would be dealing with core beliefs and attitudes wants as compared to finite material and environmental
rather than superficial preferences and opinions. resources.

JULY/AUGUST 1981 19
 Faced with the possibility of certainly limited and was recognised as an agent of social influence.
probably decreasing resources and maybe also negative • That the study and practice of the discipline paid
and zero economic growth, companies can reasonably active consideration to social problems and hence
anticipate an increased governmental role possibly operated in a humanistic way (see Davison,
insisting on a licence for production before manufacture. L.M.[16]).
Companies may therefore be requested to submit a
report assessing the societal impact of their production Certainly it would appear historically that different
proposal to an independent panel. Conforming with actions have used sequentially predominant views and
such a request would deepen the organisation's market- further that each group presented a restrictive rather
ing operation to Level 3. than holistic view. Table III presents indicative stereo-
In an attempt to be seen to be operating in a respons- types and outlines the pre-eminence of a particular type
ible way an organisation may consider demarketing of thinking. Largely it is argued that the practitioner's
whereby attempts are made to discourage customers in view held sway prior to 1960, the academic view pre-
general or a certain group of customers in particular, dominated in the 1960s to be superseded by the critics in
either on a temporary or permanent basis[14]. In such a the 1970s.
situation attempts would be made to control both the Although not accepting totally the suggested time
level and composition of demand. scales and wondering about the distinction between
academic and critic, the basic stereotypes can be ack-
nowledged as well as the resultant concession of the
Evaluation need for marketing to adapt to changing circumstances
Whereas the early 1970s had seen a number of major and that each development is complementary to the
contributions in the debate as to the extent, and indeed preceding "state of the art". Indeed not only is there a
as to whether the marketing concept should be need for marketing to be in symbiosis with its environ-
broadened, by the mid 1970s a number of critics were ment but also that both the practice and theory be
arguing that it was time to take stock and search for a essentially internally consistent operating from the same
synthesis rather than accept the position of thesis/ set of basic definitions and assumptions.
antithesis. The fact that such a debate had occurred was
not surprising for as Ferber[15] had pointed out at the
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Table III. Orientations Toward Marketing

beginning of the decade there were a series of factors
present suggesting an expanding role for marketing in
Indicative Stereotype
the 1970s. Environmental changes affecting marketing's
role and development Ferber noted included: Characteristic Practitioner Academic Critic

• The increased size and complexity of business com- Ideal model Executive Scientist Intellectual
Primary goal Organisational Knowledge Social
panies stimulated by an increase in world population
success criticism
and purchasing power. Challenge
Value Advocacy Neutrality
• Increased communications particularly in the form of perspective
television. Relevance Corporate Theoretical Social
criterion viability importance importance
• Increased literacy. determinant
• A realisation of the need to emphasize the role of Philosophical Pragmatism Functionalism Humanism
marketing in corporate planning because of the accep- perspective
tance of the fact that the key to corporate survival lay Modus Cost/benefit Logic: Insight
not in short term profitability but in the retention of operandi analysis mathematics:
statistics
existing markets and the development of new ones.
Adequacy Utility Validity Social
• Rapid technological development, particularly of the criterion awareness
computer, which facilitated the use of sophisticated Product Strategy Generalisation Social .
marketing techniques. engineering

• Along with, and to some extent, as a result of tech- Time Period Pre 1960 1960-1970 Post 1970
nological developments, the ever increasing flow of Source: Kerman. J.B., "Marketing's Coming of Age", Journal of Marketing, Vol. 37.
new products. October 1973, p.36.

• The emerging realisation of the applicability of mar- Enis[18] readily agreed that the marketing concept
keting techniques to social and societal problems. could be broadened in three ways but also suggested the
Kerman[17] suggested that the broadening debate may need for deepening. The three ways for broadening he
be withholding marketing from reaching maturity but identified are respectively:
that it was not necessarily harmful provided it was
appreciated that the different views expressed were (1) To broaden the nature of the product exchange
indeed complementary and that what might appear to be from economic goods and services to anything of
devisiveness was no more than the failure of given value;
proponents to appreciate this complementarity. He (2) To broaden the objective of the product exchange
argued that marketing could be considered mature if from profit to any type of payoff;
three conditions were true:
• That marketing study was scientifically based and (3) To broaden the target audience of the product
subject to criticism both as regards its findings and exchange from the customer to any public that
methodology, i.e. the application of the scientific relates to the organisation.
method. As seen in Table IV there are eight possible cells but as
• That the practice of the discipline was not restricted to it is necessary in each cell to specify operationally the
any one problem area of application (e.g. business) but meaning and implications of the concept, Enis maintains

20 INDUSTRIAL MANAGEMENT + DATA SYSTEMS

 Table IV Three Dimensions along which the Marketing Concept can be "Broadened"
Objective
Profit Other Payoffs
Product Target Audience Target Audience
Customers Other Publics Customers Other Publics
Economic goods An automobile The manufacturer A museum charges The museum holds a
or services manufacturer buys TV time or a nominal fund-raising drive
advertises on borrows working entrance fee
television capital
The manufacturer The manufacturer's A hospital opens a The hospital desires
lowers prices at president testifies new, sophisticated to recruit a noted
the end of the before Congress heart clinic heart specialist to
model year administer the clinic
Other things The manufacturer's The manufacturer The museum conducts The museum director
of value integrated ads contributes to the special tours hosts a formal
promote racial museum fund for students reception for donors
tolerance at no charge
Safety features of One of the The hospital serves The hospital sponsors
the manufacturer's manufacturer's dealers indigent patients a voluntary blood
cars promote sense wins sales contest, donation program
of security tours Europe

there is also a need to deepen the concept particularly in such factors as social improvement, human aspirations,
the newer applications, i.e. provide operational validity. conservation, intrinsic worth and consumers and com-
After noting the developments as to the nature and panies as entities, rejecting and amending the older
scope of marketing, with particular reference to the five
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concerns and notions of economic gain, human needs,

years 1969-1974, Shuptrine and Osmanski[19] propose consumption, price and regarding consumers and com-
the 3 C's as major explanatory variables concerning panies purely as economic phenomena.
marketing's changing role. They argue that Consumer- Even though starting from a different premise Car-
ism is concerned with the movement towards truth in son[20] agrees with such a conclusion insisting that
inter alia advertising, labelling, product safety and qual- should the. 1980s prove to be a decade of shortages, a
ity and generally with human welfare; the Clean-up decreased raw material supply and declining income as
campaign concentrates on the disposal of waste, the widely forecast there will be a need for not less but
recycling of basic materials and ecology; while Conser- more sophisticated marketing. Specifically he offers
vation concentrates on the long term abuse, misuse and marketeers four pieces of advice:
overuse of natural resources.
According to their analysis, the 3 C's can in part (1) That they should lay greater stress on the con-
explain the movement from a pre-1960 position with tinuous monitoring of consumer income, expendi-
sales orientated producers attempting to increase con- ture, life styles and market segments;
sumption essentially via advertising to the post-1970 (2) That they should build flexibility into their mar-
situation in which interest has shifted to attempts to keting plans considering radically different alter-
conserve resources via demarketing and demand man- natives to cope with a volatile environment;
agement as shown in Table V. It is interesting to
superimpose on Shuptrine and Osmanski's analysis (3) That there should be greater co-operation between
Kernan's notion that the pre-1960, 1960-1970 and the various business functions, e.g. purchasing, R
post-1970 period corresponded respectively with the & D; production and finance and marketing to
predominance of the practitioner, the academic and allow more rapid adjustments in the market offer-
finally the critic. ing to meet changing circumstances;
Table V. Stages in the Evolution of the Role of Marketing (4) That they should liaise closely with government
bodies and agencies which can be expected to
Role play an increasing role in economic affairs.
Facet Pre-1960 1960-1970 Post-1970
At the opposite extreme to Shuptrine and Osmanski
Focus Producers Consumers Resources are Sachs and Benson[21] who argue that as the market-
Emphasis Selling Marketing Demarketing ing concept as described in the marketing literature is
Objective Consumption Customer Conservation
not operated by businessmen it is time to discard the
satisfaction
concept. Using Drucker's idea that the aim of marketing
is to make selling superfluous by knowing the cus-
Method Advertising Product Demand tomer's needs so well that the product/service is a
development management
perfect fit and hence sells itself, the authors indicate a
Source: Shuptine. F.K. and Osmanski, F.A.. "Marketing's Changing Role. Expanding or
number of areas where this is patently not the case and
Contracting?". Journal of Marketing. Vol.39. April 1975. therefore conclude it is possible to say that companies
are following their own commercial interests and not
those of the customer. The areas indicated include,
In concluding their argument Shuptrine and Osmanski persuasive advertising and promotion; mutative and par-
forsee a broadening, deepening and enriching role for ity products; the proliferation of brands and product
marketing as marketeers become increasingly attuned to differentiation via doubtful distinctions in quality.

JULY/AUGUST 1981 21
 The Systems Approach equilibrium or symbiosis. Should such an adaptation
It is not the concern of this article to argue the merits or process not be forthcoming then the relevance of the
demerits of any of the views considered so far. but to system itself will wither and it will eventually die via the
argue that the whole broadening/deepening controversy process of entropy. Those critics who argue against the
represents no more than marketeers pondering a sys- broadening, deepening and enriching of the marketing
tems problem and in particular wondering where to concept could be regarded as saying that marketing's
draw the boundary. A widely used definition of the boundary is inviolate. Should this position be widely
concept system is comprised of four statements[22]. accepted there is a danger that the interpretation and
application of marketing will increasingly become
(1) A system is an assembly of parts or components
inward looking and ultimately will decline in its rele-
connected together in an organised way:
vance to society. One answer to this potential problem
(2) The particular assembly has been identified by a would be for marketing practitioners and academics to
human being as being of special interest; adopt a holistic view using the systems approach to
(3) In general, the parts are affected by being in the business, social and societal problems never totally
system and they are changed if they leave it; accepting the position of the current boundary fence.
(4) The particular assembly of parts does something.
In other words a system may be regarded as " a set of References
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changes in the environment thereby achieving a state of Aldine Publishing Co. 1968.

22 INDUSTRIAL MANAGEMENT + DATA SYSTEMS