The Marketing Concept in Perspective John C. Cox, Ph.D and D. Wayne Norvell, D.B.A. Western Kentucky University A re-evaluation of the marketing concept appears to be in the making. The focus of research designed to facilitate this re.evaluation is likely to be of considerable importance to the future development of marketing theory. Research designed to better define the role and scope of the marketing concept seems to offer the most promise. Such research would be an aid to determining where the marketing concept should fit into a comprehensive theory of marketing. THE ROLE OF THE MARKETING CONCEPT The marketing concept is subject to the general rule that theory based on abstract logic should meet the test of empirical verification and validation. Available evidence suggests that, although the marketing concept represents a significant advance in the body of marketing theory, a comprehensive theory of marketing must encompass considerably more than the marketing concept (Bell and Emory, 1971). A broader concept is conceived of as sufficiently flexible to focus on an entire system of economic activity and not merely on the individual firm (Bowersox and McCarthy, 1970). But no effort has been made to determine if such a system would be characterized by a focus on customer needs as is the marketing concept. In fact, the possibility that a new approach to marketing theory would not be based on the doctrine of consumer sovereignty appears to have been generally overlooked. Yet the evidence suggests that the concept of consumer sovereignty is not sufficient to provide a framework for a general theory of marketing. If this is true, then it is important that we accept the responsibility for fitting the existing marketing concept into a comprehensive theory of marketing. Limitations of the marketing concept are well documented in the literature (Cox and Norvell, 1973; Bell and Emory, 1971; Kalder, 1971). However, it is common practice to confine an analysis of apparent limitations to the question of the operational effectiveness of the marketing concept. Little attention has been devoted to testing the 223 224 COX AND NORVELL assumptions underlying the marketing concept in spite of the fact that such testing could result in new assumptions that might serve as the foundations of a much broader marketing theory. The essential difference in the two approaches lies in the fact that the questioning of currently accepted philosophy represents a maior departure from the traditional operational-effectiveness orientation in empirical tests of the marketing concept. The data resulting from an evaluation of current beliefs might indicate not only a need for a more comprehensive framework of marketing theory but also some ideas as to the form such a framework would take. Investigators to date have consistently failed to question the assumptions underlying the marketing concept in the face of evidence which suggests a need for such an approach (Cox and Norvell, 1973). PROBLEMS DERIVED FROM THE BASIC ASSUMPTIONS UNDERLYING THE MARKETING CONCEPT According to the concept of consumer sovereignty, tile essential purpose of a firm is to provide consumer satisfaction. All of the firm's resources should be organized to achieve this objective. Certain unavoidable problems are inherent in attempting to implement such a philosophy. First, it has not been generally admitted, at least by academicians, that overemphasis of the marketing concept can cause serious difficulties for the firm. When the objectives of consumer satisfaction and corporate profits come into direct conflict, as they inevitably will in the short run, the practical effect of overemphasis of the doctrine of consumer sovereignty may be a complete subrogation of consumer satisfaction for the profit objective of the firm. Available evidence indicates that many firms may have already experienced this situation. Subrogation of the profit motive renders control difficult since there are then no economic criteria with which to measure performance. A second problem is constraint on the firm which attempts to satisfy the diverse demands of its consumers. Since consumers and their needs are not homogenous, some attempt is necessary to identify and satisfy specific needs. However, there is no provision in the marketing concept to deal with the fact that consumer satisfaction acts as a constraint as well as an objective (Abercrombie, 1973). No clear line of demarcation exists between market segments. The neatly divided market segments shown by an analyst are usually in reality composed of core and fringe markets. Consumers in the fringe market area are not likely to be fully satisfied with products designed for consumers in the core market area. Also, there are limits as to how far the segmentation process can be carried in practice. At the point when the law of THE MARKETING CONCEPT IN PERSPECTIVE 225 diminishing returns becomes operative, it is unprofitable to further segment the market. Economics aside, the resulting proliferation of products is often self-defeating in terms of consumer satisfaction. Shoppers experience confusion, irritation, and resentment as they become less and less able to make prices and quality comparisons among competing products. Third, the marketing concept is too limited in scope to deal effectively with the entire consumption process. The products of conversion growing out of the "consumption" of marketable commodities are externalities in the marketing concept. There are no commercial outlets for the products of conversion. A comprehensive marketing theory would take into account the true nature of consumption as well as the need for efficient utilization of resources. The marketing concept abdicates both of these responsibilities. It has been shown that implementation of the marketing concept can be associated positively with the occurrence of certain internal and external problems frequently encountered by firms (Cox and Norvell, 1973). Problems such as consumerism, internal organizational stress and government regulation were shown to be related in the minds of management to the adoption of the marketing concept by the firm (See Table 1). NEED FOR A G E N E R A L T H E O R Y OF M A R K E T I N G Effort should be devoted to developing a broader, more general marketing theory, one that would encompass the true nature of the consumptive process, the need for efficient organization and utilization of resources, the doctrine of consumer sovereignty, and the constraint nature of consumer satisfaction. The theoretical framework should be sufficiently flexible to include all of these basic considerations and be applicable to entire systems of economic activity as well as individual firms. The concept of functionalism as developed by Alderson offers considerable promise as a point of departure for developing a general theory of marketing. Alderson's functionalism would appear to account for all of the necessary factors. Functionalism as envisioned by Alderson is grounded in the precept that function determines structure (Alderson, 1957) a seemingly simple notion once stated, but potentially powert\d nevertheless. Alderson's brand of functionalism also incorporates systems theory. Combination of these two ideas represents a significant step towards developing a comprehensive general theory of marketing. For example, the idea of 226 No COX AND NORVELL 0 0 0 0 ~ o 9 0~ Influence Contribute to d d S S d O N dgSd 0 0 0 0 d 0 d o~ m o .~ o~ ~ O 0 o Alleviate ZZ~d S .~ ~ a . ~ m ~ No 0 ~r~ m m 0) Influence Contribute to tl3 ",.0 113 o~ ~ ~" Z Om ~m L) -M ~ 0) Alleviate 9 ~ ~ ~ ~ z o ~.~ - ~ = ~ L) 4~ 0 9 No ~ 9 ~ . 0~ ~ o~ ~f' ~.~ ~ .~ .-~ < ~ ~.~ Influence 0 ~ D- ~ . o ~ ,N e N '5 e m N ~ Contribute tO o 9 ~ ~ . o o o . . . o 0 o ~ ~ o ~ o 00 (M o~ Alleviate 0 ~0 0~ ~ ~-~ o~ m m O N 0~ _~o .o ~ .~o~ o ~ ~ o - ~ 0) ~ o ~s ~ .~ o~ ~?~~ THE MARKETING CONCEPT IN PERSPECTIVE 227 consumption systems is a usefut theoretical idea. Products are not made, consumed, and discarded in a vacuum; they are created from limited resources, used in conjunction with other products, and then after use are injected as residue back into the environment from which the resources were originally taken. The idea of consumer sovereignty, upon which the marketing concept is based, is broad enough to provide for a consumption system, but the marketing concept hardly seems adequate to take into consideration the fact that the consumption system is a subsystem of a larger system. The parent system is a conversion system by nature taking inputs from the environment and generating outputs in the form of residues back into the environment. The process should be circular in nature so that the residue can be used again as future inputs into the system. Otherwise, pollutants will accumulate in the environment, The disposal or recycling of the products OF consumption must be planned as carefully as the marketing of products FOR consumption if the system is to operate efficiently in the long run. Stated in another way, once the function of the system is understood, structure can be applied to the solution of marketing problems. Herein lies the power of theory. Theory allows us to express relatively complex concepts in terms of simple ~olationships. These relationships then serve as a basis for creating structure for effective marketing systems. Thus, theory applied to function guides the creation of structure. Academicians, whose lot is generally to be proponents of theory, have eagerly seized and espoused the marketing concept. However, practitioners to whom is generally relegated the task of developing structure from theory, have shown a decided reluctance to embrace the marketing concept unreservedly. Their reservations about adopting the theoretical posture of the marketing concept should be a signal that the marketing concept is inadequate to fill the role of a general philosophy of business. It is as if practitioners are saying to academicians that this theory often does not translate into good business practice and that sometimes structure developed from it is insufficient to deal with or even incompatiiAe with function. THEORY BASED ON F U N C T I O N All of the forces, conditions, and institutions involved in the functioning of the market system must be reflected in the structure of the system. Moreover, the structure of a particular organization within the system must reflect the fact that it operates as a functional subset of a more inclusive system. The precise elements of structure to be included in 228 COX AND NORVELL any organizational system depend on the nature of the functions being performed by it (Bowersox and McCarthy, 1970). A firm can be very narrow or very general depending upon the definition of the boundaries of the subsystem. A subsystem can include firms that are vertically and/or horizontally integrated. Within these confines some are loosely-coupled systems and others are tightly-knit. Separately defined subsystems are not unrelated entities; the operation of one has considerable effect upon the others. The efficiency of the overall system is more than simply a composite of the functioning individual firms. The activities to be undertaken in each firm will be determined by its relationship to the overall economic or market system. As function changes within the parent system, mutual adiustments must be made at each level to compensate for the changed nature of activities performed by each member. "As an illustration of this, one might consider the issue of the appropriate market location for the task of cutting up a side of beef into small parts ready for purchase fresh by the ultimate consumer. At one point in time this task was undertaken by the household itself. Then the retail butcher took over this work and held the job for many centuries. Today, slaughter houses are experimenting with a shift of this task farther back to the wholesale level. Chain stores, in like vein, may centralize much of their meat cutting. Is it possible that in the future the cattle grower might undertake this function?" (Bucklin and Stasch, 1970). "The reasons behind the movement of this function among markets can only be resolved from a study of their joint behavior. One market is interdependent with the next. Feedback among the different firms operating at each market level occurs and mutual operating adjustments are made." (Bucklin and Stasch, 1970). Only by understanding the functioning of the overall system will we be able to identify and specify the nature of activities to be carried out by each individual member. Any philosophy of business, which by nature must be applied operationally by individual members of the economic system, must also be relevant when applied on a macro basis as well. The marketing concept has not been shown to possess this characteristic. Another question that relates to the adequacy of the assumption of consumer sovereignty as a basis for a general business philosophy has received little attention. Does the marketing concept imply that management should seek to "maximize" consumer satisfaction or "satisfice" with respect to achieving consumer satisfaction'? As economists have noted with respect to the profit drive, the answer is critical to the functioning of the firm. Maximization implies a goal. Satisfying implies a constraint. At any rate, such questions are subject to empirical determination and have been neglected too long. Strictly interpreted, the THE MARKETING CONCEPT IN PERSPECTIVE 229 marketing concept hardly allows such questions to be raised, let alone empirically tested. CONCLUSION 11 seems imperative that academicians accept the challenge to advance beyond the marketing concept and develop a more comprehensive theory of marketing which will be relevant to both the micro and macro concepts of a functioning system. Such flexibility is a minimal requirement. REFERENCES Abercrombie, C. L., 1973. "Is tile Consumer a Target or a Constraint?" The Marketing News. Vol. 6, No. 13 (January) 8. Alderson, Wroe, 1957. Marketing Behavior and Executive Action. Homewood: Richard D. Irwin, Inc. Bell, Martin L. and Emory, C. William, 1971. "Faltering Marketing Concept." Journal of Marketing. Vol. 6, No. 1 (January) 75-84. Bowersox, Donald J. and McCarthy, E. Jerome, 1970. "Strategic Development of Planned Vertical Marketing Systems," ed. Bucklin, Louis P. Vertical Marketing Systems. Glenview: Scott, Foresman and Company. Bucklin, Louis P. and Stasch, Stanley F., 1970. "Problems in the Study of Vertical Marketing Systems." ed. Bucklin, Louis P. Vertical Marketing Systems. Glenview: Scott, Foresman and Company. Cox, John C. and Norvell, D. Wayne, 1973. "Consumerism, Corporate Profits, and the Marketing Concept." Unpublished paper presented at Marketing Section-Public Policy No. 1 Session, of the Southwestern Social Science Association, 1973 Annual Meeting. Kalder, Andrew G., 1971. "lmbricative Marketing." Journal of Marketing. Vol. 35, No. 4 (October) 37-42. A B O U T THE A U T H O R S DR. JOHN C. COX is Assistant Professor of Marketing, Western Kentucky University. He received his B.S.E.E. degree in 1966; M.B.A., 1969; and Ph.D., 1973, from the University of Arkansas. Dr. Cox served as a design engineer for Central Transformer Corporation for two years. He taught at the University of Arkansas before joining the faculty at Western Kentucky. Dr. Cox is professionally active in sales and marketing organizations. He has written several papers in the marketing and sales area. DR. D. WAYNE N O R V E L L is Assistant Professor of Marketing, Western Kentucky University. He earned the B.S. degree, 1964, from Arkansas Polytechnic College and M.B.A., 1966, from the University of Arkansas. Dr. Norvell received the D.B.A. degree, 1973, from Mississippi State University. He has served as a marketing consultant to a variety of small and large firms. He has written several papers and articles in marketing. Dr. Norvell is presently co-authoring a basic marketing textbook.