The Marketing Era

From Professional Practice to Global Provisioning

Kalman Applbaum

• Publisher: Routledge
• Year: 2004
• Print ISBN:
  9780415945431
• eBook ISBN:
  9781135943127
• Topic: Business
• Subtopic: Business General
• Index: Business

Marketing has situated itself as an indispensable tool in today's business world-an unavoidable step in the process from production to consumption. This book is the first of its kind to map out the organizing principles and cultural logic of marketing, and trace the profession's ascent to global domination. Applbaum argues that marketing can be seen as a particular set of cultural practices that surfaced in reaction to the affluence of Western society, and not the answer to the call of inherent human needs and wants. In order to understand globalization, transnational corporations, and the spread of consumer culture, one must understand the logic of marketing.

PART I

Marketing and the Capitalist System of Provisioning

CHAPTER 1
Marketing Principles

I open with two formal statements contextualizing marketing as a subject for cultural analysis. First, marketing is a central intelligence and core practice in the capitalist system of provisioning. By system of provisioning I mean the conjunction of what people hold to be human needs and wants on the one hand, and the complex of production, exchange, and consumption that has arisen to satisfy these needs and wants on the other. Other provisioning systems would realize a different relationship between the idea of human needs and the modes of output to service them. A system of provisioning is therefore a culturally constituted entity, and marketing, as a key agent in the capitalist system, is thereby implicated in the meaning creation process of capitalism. Second, under marketers’ guidance, manufactured commodities¹ become stamped with two types of value—commercial and semiotic—at the site of production. Marketers further act upon the environment surrounding exchange, aiming to conjure a meaningful context for the commerce and consumption of their commodities. These statements, which I substantiate in the pages that follow, indicate that there is much more to marketing than the guided launching and promotion of objects for sale in the marketplace—its prevalent characterization.

For the uninitiated, marketing is indistinguishable from other forms of selling. For by the close of the twentieth century marketing has acquired near-universal purchase as a style of selling, thereby camouflaging its distinctive origins and cultural orientation. Because marketing helps constitute a totalizing system of provisioning—a civilization-wide milieu in which, according to Marshall Sahlins, the reproduction of the culture in a “system of objects” is a generalized characteristic of capitalist culture-making; where, George Marcus elaborates, “Economy is the major space…for the valorization of universal reason, systemic order, and formal knowledge”²—it has remained nearly invisible as a subject for cultural analysis. There has been a tendency to either exaggerate marketing agency through conspiratorial models, or to minimize it by tucking it away behind the hefty agencies on either side of it: production and consumption. Heretofore, social scientists have considered the contrast between marketing and other forms of selling, if at all, as a matter of relative difference in magnitude and power evidenced in exchange.

However, marketing is to be distinguished from sales by more than just the measure of its intensity. Norbert Dannhaeuser has considered marketing in terms of its strategic orientation, contrasting active or promotional versus passive forms of selling, in which marketing would conform to the active type.³ This distinction is useful insofar as it exposes a previously unconsidered mechanism in exchange power relations: In the common occurrence in which capitalist marketing (i.e., active selling, in Dannhaeuser’s terms) encounters other systems of exchange (i.e., passive selling), the power differentials exercised between partners to the exchange is a function of activity/passivity. The ability to be actively strategic over the field of one’s operations, in other words, is a technical source of power.

The strategic orientation of capitalist marketing versus other types of selling is also interesting because it has been held to account historically for a gross qualitative difference in the mind-set of its practitioners. Max Weber reported on this feature when he considered the role that changes in marketing practices played in the development of capitalism. The continuing pertinence of Weber’s insight merits the following lengthy excerpt:

Until about the middle of the past century…the peasants came with their cloth, often principally or entirely made from raw material which the peasant himself had produced, to the town in which the putter-out lived, and after a[n] appraisal of the quality, received the customary price for it…. Personal canvassing of customers took place, if at all, only at long intervals. The form of organization was in every respect capitalistic; the entrepreneur’s activity was of a purely business character; the use of capital, turned over in the business, was indispensable; and finally, the objective aspect of the economic process, the book-keeping, was rational. But it was traditionalistic business, if one considers the spirit which animated the entrepreneur: the traditional manner of life, the traditional rate of profit, the traditional amount of work, the traditional manner of regulating the relationships with labour, and the essentially traditional circle of customers and the manner of attracting new ones.

Now at some time this leisureliness was suddenly destroyed…. What happened was often no more than this: some young man from one of the putting-out families went out into the country, carefully chose weavers for his employ, greatly increased the rigour of his supervision of their work, and thus turned them from peasants into labourers. On the other hand, he would begin to change his marketing methods by so far as possible going directly to the final consumer, would take the details into his own hands, would personally solicit customers, visiting them every year, and above all would adapt the quality of the product directly to their needs and wishes. At the same time he began to introduce the principle of low prices and large turnover. There was repeated what everywhere and always is the result of such a process of rationalization: those who would not follow suit had to go out of business.⁴

Weber’s contrast between the traditional and capitalist putter-out resembles Dannhaueser’s distinction between active versus passive selling. While the earliest capitalist-style marketers, in Weber’s portrayal, are roguelike, entrepreneurial, the later ones would have been responding to the unrelenting exigen cies of competition. However, an individual’s position relative to this driving competition was more than merely mechanical in Weber’s view; it was “spiritual.” Weber estimated the mind-set of the later businessman to be so different from his predecessor that the capitalist is described as living his life to work and make money while the “traditional” businessman worked in order to live.⁵ In combination with the fact of the mechanistic, irrepressible dilation of intense competition across and through the geographical and cultural boundaries of context-specific modes of exchange,⁶ Weber’s logic ostensibly takes us a long way to explaining why active selling or, with due modification to the term, marketing, has come to be adopted in other settings. It is because of the co-optive nature of competition for markets and resources that marketing continues to generalize beyond the West in the same manner it had in the West during the second half of the nineteenth century and in the first decades of the twentieth.

Weber’s binary distinction of traditionalist versus capitalist mind-set in marketing practice, however, is embryonic. It provides us a limited tool kit for construing marketing’s role as a principal constitutor of the capitalist system of provisioning economically and culturally. A more up-to-date theory must account for a great many functions in which marketing is implicated, from the proliferating semiotica of commodities, to the symbiotic union of producers and consumers, to the physical and social alteration of environment where commercial exchanges occur, to the industrial conditions that have evolved for marketing’s expanding province within world economy, and finally to the emergence of obstacles to effectively challenge marketing’s totalizing progress.

The Marketing Profession

Marketing is a dedicated profession with roots in early-twentieth-century North America and independently, to a degree, in Britain and France.⁷ Marketing is a systematized set of practices known to and employed by a community of professionals who are trained in the field, typically beginning in business school. I will abide by one of the field’s leading authorities, Philip Kotler’s, definition of what a marketer is: “A professional marketer is someone who (1) regularly works with marketing problems in a specific area and (2) has a specialized knowledge of this area…. A marketer…has mastered the logic of marketing.”⁸ Marianne Lien has argued that corporate marketing is a profession characterized wherever it is practiced by a shared, specialized knowledge. She says, “Marketing may be defined as an expert system, a disembedding mechanism that…operates on a global level.”⁹ My experience supports Lien’s perception of a practical coherence in the field across a broad range of firms and geography. Marketing divisions at competing firms share common goals and operating theaters around the world. Marketing professionals enjoy a shared recognition that they belong to this occupation group.

Within corporations, there exist specifically named marketing departments where people trained in this specialty ascend a semifixed ladder from consumer market analyst to product manager to brand manager to category manager to vice president of marketing. Upper level managers’ shared background promotes intertwining networks and professional (i.e., interfirm) job mobility. Within a given industry there are active networks of people, particularly at the upper echelons, who are familiar with one anothers’ work. It is significant, further, that professional reputation and occupational self-perception cross industry lines. A marketer of potato chips can easily switch to being a marketer of computers—a move describing that of current CEO of IBM Lou Gerstner, formerly of PepsiCo (ever a “chip man,” it is said)—or the marketing master-mind behind a popular gelatin product can be imported and soon rise to chief executive at a pharmaceutical company—a trajectory describing the career of Peter R. Dolan of Jell-O, who is now CEO at Bristol-Myers Squibb. These repositionings are possible because the principles and techniques for managing products are held to be congruent.

What does marketing mean to the professional practitioner? In the native vernacular, I specify some official definitions: The American Marketing Association Board defines marketing as “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.” A version that includes consumers reads: “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others.”¹⁰ Theodore Levitt calls marketing: “The idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally, consuming it.”¹¹ This same author, a feted Harvard Business School professor and long-time editor of the Harvard Business Review, offers an informal version: “Marketing is separating customers from loose change.”¹² While most of the above definitions focus on either the managerial activities and marketing as exchange between producers and consumers, Peter Drucker speaks to the provisioning function of marketing that obtains at the societal level: “In marketing…we satisfy individual and social values, needs, and wants—be it through producing goods, supplying services, fostering innovation, or creating satisfaction…. Marketing is thus the process through which economy is integrated into society to serve human needs.”¹³

Marketing has become the defining practice by which a firm distinguishes itself from its competitors. Successful competition in the marketplace is somewhat less dependent at present than it was in the past upon intra-organizational competencies. Large organizations increasingly enjoy comparable access to operations and production efficiencies or state-of-the-art information, financial and human resource management. Consequently, it has become uncommon for a firm to gain exclusive control over novel technologies that in an earlier time could have resulted in market leadership. What has come to differentiate one company’s chances for competitive success is excellence in externally oriented activities, most notably the ability of a firm to market its product and services to the customer and to assure repeat sales.

The pressure on firms to expand their markets due to the shift in the cost structure of the modern corporate enterprise likewise augments the importance of marketing. Kenichi Ohmae explains: “In a variable cost environment, the primary focus for managers is on boosting profits by reducing the cost of materials, wages and labor hours. In a fixed cost environment, the focus switches to maximizing marginal contribution to fixed costs—that is, boosting sales. This new logic forces managers to amortize their fixed costs over a much larger market base.”¹⁴ Factors raising the ratio of fixed to variable costs include automation, the high cost of research and development, and the growing costs associated with establishing a brand name in the context of excessive advertising clutter. Marketing’s all-encompassing task is to enhance sales. For these reasons Drucker declares: “Marketing is so basic it cannot be considered a separate function. It is the whole business seen from the point of view of its final results, that is, from the customer’s point of view.” Regis McKenna, a leading marketing consultant, affirms, “Marketing is not a new ad campaign or this month’s promotion. Marketing has to be all pervasive, part of everyone’s job description.”¹⁵

It is of paramount importance to recognize that marketing works through more than just advertising messages. Marketing’s role encompasses management of the entire circulatory path from market research to product creation to distribution channel selection and management to pricing to advertising generation to media planning to point-of-sale promotion to merchandising to setting the terms of exchange to administering sales and after-sales service and sometimes to supervising the discarding of the object (trade-ins, for example, or recycling), repurchase stimulation, and more. Kim Sawchuk pithily observes the contrast: marketing is about circulation; advertising is about representation.¹⁶ To cite a contemporary marketing textbook to this effect, Louis Boone and David Kurtz say: “Through the production and marketing of goods, services, and ideas, organizations satisfy their commitments to society, their customers, and their owners. They create what economists call utility— the want-satisfying power of a good or service.”¹⁷ They illustrated the centrality of marketing and its functions in Table 1.1.

This encryption of the utility of marketing is intended to broaden and raise its stature relative to other disciplines of management who likewise, in their textbooks, claim the lion’s share to themselves. My research and training in business management does not place me in a mind to disagree with Boone and Kurtz. Even strategic competitive concerns and organizational control capabilities consume marketing managers directly in their service to the overall objective of the firm.

Table 1.1 Four Types of Utility

McKenna elaborates: “The goal of marketing is to own the market, not just to sell the product.”¹⁸ This may seem a distinction of mere magnitude, or hyperbole altogether. In fact, the distinction is and is taken to be qualitative— distinguishing marketing from sales—and its intent is close to literal. Explaining the so-called marketing concept, Kotler says that sales executives tend to think in terms of sales volumes rather than profits, short-run rather than long-run objectives, individual consumers rather than market segment classes, and fieldwork rather than desk work. Marketers, by contrast, think of long run trends, threats, and opportunities; customer types and segment differences; and how to institute effective systems for market analysis, planning, and control.¹⁹ The modus operandi of consumer marketing is the pursuit of deep understanding and orchestration of consumer behavior, from perception of needs to decision-making processes.

The Marketing Concept as Marketer’s Implicit Social Science

As marketing’s intentions appear to be fulfilled, its practitioners take this success as supporting behavioral assumptions that ground the profession-specific methodologies of their work. These assumptions are consequently naturalized into corporate practices and adopted as the tacit blueprint for extending correspondent organizational systems, managerial culture, and practical dispositions to subsidiaries or affiliated companies abr...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Acknowledgments
• Introduction
• Part I: Marketing and the Capitalist System of Provisioning
• Part II: Naturalization Of Marketing Principles
• Endnotes
• References