MARKETING MATERIAL

7300 MEG96 Marketing Philosophies

PAPER TO MEG (Marketing Educators Group) 1996

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MARKETING PHILOSOPHIES IN THE 1990s

David Mercer

Open University Business School

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ABSTRACT

On the basis of responses from 566 managers/professionals, this research explored the marketing philosophies embraced by a range of organisations. The key result was that 71% of respondents thought that marketing should drive strategy in general, though only 33% believed that this was actually the case in their own organisation. A quarter (26%) reported that their organisations had a customer driven philosophy overall and a third (32%) that their basic orientation was marketing led. Almost all organisations (90%) were committed to marketing as a customer centred philosophy and, beyond this, the great majority (86%) were committed to long term relationships with customers.

MARKETING PHILOSOPHIES IN THE 1990s

Introduction

Marketing is simultaneously, at one extreme, a philosophy which applies to all parts of an organisation and, at the other extreme, a set of practices which apply to selected functions within the organisation. This part of our large-scale research is intended to provide a contemporary context for the debate as to what, within these extremes, marketing philosophies are, and should be. It is purely descriptive, and deliberately does not set out to test any of the hypotheses which have been put forward. It only maps the current position of individual managers, and of their organisations, in terms - here - of their acceptance of the various philosophies.

Philosophy

For more than three decades, the classic Western definitionxe " marketing: classic western definition", derived from economic theory and as summarised by Kotler (1976), has been;

`Marketing is human activity directed at satisfying needs and wants through exchange processesxe "exchange processes".'

On the other hand, this simple definition fails to emphasise the long term aspect of marketing; that of building xe "long-term relationships, definition of marketing"relationships with customers. Grönroos (1990) summarises more recent European developments in his definition;

"Marketing is to establish, maintain and enhance long-term customer relationships at a profit, so that the objectives of the parties involved are met. This is done by mutual exchange and fulfilment of promises."

It is indeed generally accepted that a key element of all marketing is now, as reflected in the above definitions, that (unlike almost all other business activities) it represents an outward looking philosophy; which is firmly centred on the customer. 

Practices

The definitions at the other extreme look at marketing in terms of the 'functions' marketing incorporates; and, hence, the practices it involves. Baker (1985) nicely summarises the overall position, whilst pointing out one frequent source of confusion, when he states that "marketing is both a philosophy of business and a business function...a state of mind concerning the optimum approach to business, and the activities whereby such ideas are translated into practice..."  

The range of approaches which are possible within the wide spectrum which lies between two extremes is a potential source of some strength for marketing practitioners as well as academics. On the other hand, there is a consequent tension, which emerges when teaching, or writing about, marketing. Much of the debate over the past two decades has tended to gloss over this tension, in favour of the 'philosophical' approach, where that previously had tended just as much to concentrate on the practical. In common with a number of other marketing academics, we wish to move to a balanced position which more accurately reflects the current priorities of practitioners.

In this context, therefore, the research was simply intended to see where practising managers presently saw their own, and their organisation's, use of marketing; in terms of both philosophies and (in a separate paper) practices. As already stated, the intention was not to test individual theories or hypotheses, or even general explanations. It was simply to describe what managers thought their current position was; and to map this across a wide range of managerial functions and industry sectors. We offer this as a resource from which others may form their own hypotheses.

Research Methodology

In order to ensure that the respondents would be able to give meaningful answers to the wide range of detailed questions involved in the survey, they were drawn from a population made up of those Open University Business School (OUBS) students who had already completed at least one marketing course with the School.

To collect the range of data needed, an unusually large questionnaire was used, containing 100 separate multi-part questions. Of these questions, 7 were used to provide classification data on the respondent and a further 11 classification data on the organisation. Of the remainder, 31 questions were designed to map the philosophical aspects and 50 to report on marketing practice. These questions were developed from comments recorded during four separate group discussions with a total of 35 students, and the questionnaire was piloted with 50 students randomly selected from the population.

The final questionnaire was mailed to 1,000 OUBS students, chosen at random from the population. Completed questionnaires were received from 566 students (57% response). The size of the sample was such that the results had an accuracy (for this population) of better than ±4% (at the 95% confidence level). It also allowed for some statistically significant results for the larger sub-groups. There was no follow-up.

In practice, the main result of the literally thousands of cross tabulations, on these sub-groups and by the other factors investigated, was a negative finding. With the few exceptions reported in the following sections, there no consistent patterns emerged. In very general terms, the approach to marketing, philosophies and practices, seemed to be relatively homogeneous. The major exceptions were the government sector, only 29% of whose managers for instance reported the existence of a department of marketing, and - paralleling this - those organisations driven by a philosophy of 'community needs', only 19% of which were reported to have marketing departments.

Results - Customer Centred Philosophy

The first part of the overall research investigated how well accepted, by their organisations, were various aspects of the marketing philosophy. As indicators of the overall position, it investigated a number of related topics. In general, with the specific exceptions identified later, these were all reported by respondents as the factual positions which they perceived that their organisations occupied, not their own opinions - though their recent marketing education would have provided the framework for such deductions.

Organisational Philosophy

The first of these was the overall philosophy itself. It was not unexpected, however, that nearly a third of managers (following the long standing tradition set by economic theory) reported profit to be the major overall driver for their organisation. But, as can be seen from Table 1, this was very closely followed by the quarter of respondents who believed their organisation was marketing led.

The 'product driven' category was also not unexpected. On the other hand, the 'community needs' philosophy, discussed earlier, has not featured in most debates - though Bennett (1988)  has referred to a 'societal marketing orientation', which may be similar.

Business Orientation

If the question is posed in a slightly different way, much the same answer is received - in terms of the organisation's orientation as the managers think it is seen by their senior management - with, indeed, 'marketing led' coming top of the list shown in Table 2.

This was one of a number of questions where the respondent was asked to contrast the 'official' (senior management) view with his or her own. As can be seen from the above table, the managers here clearly disputed the official line. Thus, in their own view, 'marketing led' was in practice demoted by almost half and 'product led' increased to double; thus completely reversing the order of the first three categories. Indeed, when the results were investigated in more detail it was found that 59% of the respondents disagreed in one way or another with their senior management's view. These managers seem to be very sceptical of the degree to which their senior managements have really made a deep commitment to marketing.

Customer Needs

To investigate the uptake of the philosophies in more detail, the next three categories of question did ask for personal opinions.

Thus, the position on organisational philosophy is strongly supported by the most important personal question posed the research. In response to a question which simply asked "What do you think marketing is?" two thirds of informants chose the aspect of matching customer needs. Within this they split almost equally between looking directly for a match with the products and that of looking for a match with the benefits; as can be seen from Table 3.

The general applicability of these particular results has to be qualified by the observation that all the respondents had previously taken at least one OUBS marketing course; and their responses would have, at least in part, reflected what was taught on this. On the other hand, all the courses which they might have taken emphasised the practice rather than the philosophies and, as can be seen from the more detailed results in this table, these other (internal) elements barely figured at all. Indeed, when the more general aspects of customer needs are allowed for, the response - in favour of a 'customer centred philosophy' - rose to 90%; evidence that the message (of customer needs being paramount) has reached this audience at least.

Most Important Ingredient

A very similar result was recorded, Table 4, in terms of their personal view of what elements go to make up marketing; with 81% once again choosing a customer focus as the distinctive element (88% if marketing research is added in). The basic marketing message was clearly understood by almost all respondents - though, again, the caveat as to more general applicability has to be recognised.

Marketing Versus Sales

One of the other traditional tests of 'marketing' is how it stands up against 'sales'. Interestingly, the main response of respondents, again in response to a question as to their personal opinion, would seem to have been that this debate is now effectively over. About half the respondents simply saw sales as a subordinate part of marketing. The other major comments, Table 5, which once more emphasised that marketing was not product focused, again took the total to nearly 90%.

Customer Plan Horizon

Returning to a focus on the organisation, as reported in Table 6, the great majority (86%) of the organisations were committed to long term relationships with their customers, at least in terms of the pronouncements by senior management.

Even though the managers in the survey were more cynical about their own view, and once again 25% disagreed with their senior management, more than two thirds (69%) still confirmed that - in their own view - the organisation was indeed committed to long-term relationships.

Client Relations

Following much the same theme, and again as 'seen by senior management', directly collaborative relationships or partnerships were reported by a third (36%) of organisations. To this, though, can probably be added those (27%) committed to client service; giving an overall total of nearly two thirds (63%) again. Less than a fifth (18%) of the organisations subscribed to more traditional selling approaches - Table 7. In this context, though, 'client support' and 'expert advice' appear mean something rather different; more related to the organisations' own internal workings.

Once more, managers are more cynical in terms of the practical results they see, with 41% disagreeing with their senior management. Even so, the partnership/collaborative/client service approaches were seen to apply in 57% of the organisations. On a similar issue, nearly half of the respondents saw relations with their competitors as also being non-combative in one way or another (31% as stable or collaborative and 16% as regulated).

Discussion

The most important result to be derived from this part of the research seems to be the degree to which it is possible that the 'battle for the minds' of managers - at least of those responding to this survey - has already been won. Indeed, they probably already go beyond the point of accepting the basic philosophy of marketing, to subscribe to long term (partnership) relationships with their customers.

The key observation here is the extent to which managers think marketing should drive strategy in general (71% of respondents - see Table 8); though they are, once more cynical about the practice (less than half of these, only 33%, believing that this is the case in practice - with 22% reporting that it is subservient to sales or publicity).

This offers a very positive basis for progress, since - as the related research shows - such strong commitment by management may well be the main ingredient of success.

Public Sector Agnostics

As already indicated, the one group of respondents which does not subscribe to this viewpoint is made up of some of those from the public sector organisations. They may subscribe to a 'public service' philosophy which, paradoxically though, does not seem to allow for the views of their clients to be taken into account. Their alienation from marketing seems general, excluding its practices as much as its philosophies. This was, though, the only sub-group which showed consistent deviation from the average across most of the factors investigated.

References

Kotler, P. (1976) Marketing Management, 3rd edn. Prentice Hall International

Grönroos, Christian (1990) Marketing Redefined, Management Decision Vol 28 No 8

Baker, Michael J (1985) Marketing Strategy and Management, Macmillan

Bennett, P. D (1988) Marketing, McGraw-Hill

Mercer, D  (1992), Winning the Brand Leadership by Uncompetitive Means, paper presented to the British Academy of Manageement Annual Conference

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