AN INQUIRY INTO THE RELEVANCE OF
'“THE MARKETING CONCEPT" AS A MANAGEMENT GUIDE

TO THE MOBILIZATION OF CORPORATE EFFORT

BY

ROBERT LEROY KING

AN ABSTRACT

SUBMITTED To THE SCHOOL FOR ADVANCED GRADUATE STUDIES
OF MICHIGAN STATE UNIVERSITY IN PARTIAL FULFILLMENT
OF THE REQUIREMENT FOR THE DEGREE

DOCTOR OF PHILOSOPHY

DEPARTMENT OF MARKETING AND TRANSPORTATION ADMINISTRATION

I960

BUSINESS PUBLICATIONS AND CONFERENCES OF BUSINESSMEN
AND BUSINESS ACADEMICIANS HAVE BEEN VERY EFFECTIVE IN GENERATING
INTEREST IN, AND CONCERN WITH, THE MARKETING CONCEPT. IT APPEARS,
HOWEVER, THAT THEY HAVE BEEN LESS EFFECTIVE IN DISSEMINATING THE
MEANING OF THE CONCEPT. DEFINITIONS OF THE MARKETING CONCEPT ARE
FEW AND GENERALLY VAGUE. MOST ARE CONCERNED WITH THE BASIC ROLE
OF CONSUMER AND PROFIT ORIENTATIONS, OR WITH THE PRESENCE OF A
SERIES OF PHYSICAL MANIFESTATIONS BY WHICH SOME PERSONS APPARENTLY
JUDGE THE DEGREE TO WHICH A FIRM HAS IMPLEMENTED THE CONCEPT.
MANIFESTATIONS MOST FREQUENTLY NAMED ARE: CREATION OF FORMAL MARKETING
DEPARTMENTS, HEADED BY VICE-PRESIDENTS IN CHARGE OF MARKETING OR
MARKETING DIRECTORS, WHO COORDINATE STRONG CENTRAL MARKETING
STAFF5; FORMAL WRITTEN MARKETING PLANNING, WITH EMPHASIS ON
PRODUCT PLANNING AND DEVELOPMENT AND PROFIT PLANNING AND CONTROL;
AND INCREASED USE OF THE MARKETING RESEARCH FUNCTION. A NUMBER OF
WRITERS APPEARS To BASE IMPLEMENTATION OF THE CONCEPT SOLELY ON
THE ORGANIZATIONAL STRUCTURING OF THE MARKETING OPERATION.
MARKETING CONCEPT LITERATURE CONTENT MAY BE SUMMARIZED AS CONCERNED
PRIMARILY WITH IMPLICATIONS OF THE CONCEPT To MARKETING MANAGEMENT,
AND WITH PHYSICAL MANIFESTATIONS WHICH ALLEGEDLY INDICATE
IMPLEMENTATION OF THE CONCEPT. WHILE LITERATURE DISCUSSION OF
THE PRECEDING ASPECTS HAS SHED SOME LIGHT ON THE CONCEPT'S
MEANING, ITS FAILURE To PROVIDE WIDESPREAD UNDERSTANDING IS BASED
UPON ITS LACK OF COMPREHENSIVENESS OF SCOPE, AND LACK OF INTEGRATION

OF REPORTED DATA INTO A MEANIILNGFUL TOTAL SYSTEM.

BASED UPON REVIEW OF MARKETING CONCEPT LITERATURE, A
SERIES OF INTERVIEWS WITH MEMBERS OF CORPORATE MANAGEMENT, AND THE
WRITER'S INTERPRETATIONS, THE MARKETING CONCEPT IS DEFINED IN THIS
THESIS AS A MANAGERIAL PHILOSOPHY CONCERNED WITH THE MOBILIZATION,
UTILIZATION, AND CONTROL OF TOTAL CORPORATE EFFORT FOR THE PURPOSE
OF HELPING CONSUMERS SOLVE SELECTED PRoBLEMS IN WAYS COMPATIBLE
WITH PLANNED ENHANCEMENT OF THE PROFIT POSITION OF THE FIRM.

MORE SPECIFICALLY, THE MARKETING CONCEPT INVOLVES:

I. COMPANY-WIDE MANAGERIAL AWARENESS AND APPRECIATION
OF THE CONSUMER'S ROLE As IT IS RELATED TO THE FIRM'S EXISTANCE,
GROWTH, AND STABILITY.

2. ACTIVE COMPANY-WIDE MANAGERIAL AWARENESS OF, AND CONCERN
WITH INTERDEPARTMENTAL IMPLICATIONS OF DECISIONS AND ACTIONS OF
AN INDIVIDUAL DEPARTMENT.

3. ACTIVE COMPANY-WIDE MANAGERIAL CONCERN WITH INNOVATION
OF PRODUCTS AND SERVICES DESIGNED TO SOLVE SELECTED CONSUMER PROBLEMS.

A. GENERAL MANAGERIAL CONCERN WITH THE EFFECT OF NEw-PRODUCT
AND SERVICE INTRODUCTION ON THE FIRM'S PROFIT POSITION, BOTH
PRESENT AND FUTURE.

5. GENERAL MANAGERIAL APPRECIATION OF THE ROLE OF MARKETING
INTELLIGENCE AND THE OTHER FACT-FINDING AND REPORTING UNITS WITHIN,
AND ADJACENT TO THE FIRM, IN TRANSLATING THE GENERAL STATEMENTS~
PRESENTED ABOVE INTO DETAILED STATEMENTS OF PROFITABLE MARKET
POTENTIALS, TARGETS, AND ACTION.

6. COMPANY-WIDE MANAGERIAL EFFORT, BASED UPON PARTICIPATION

AND INTERACTION OF COMPANY OFFICERS, IN ESTABLISHING CORPORATE AND

DEPARTMENTAL OBJECTIVES, WHICH ARE UNDERSTOOD BY, AND ACCEPTABLE
TO THESE OFFICERS, AND WHICH ARE CONSISTENT WITH ENHANCEMENT OF
THE FIRM'S PROFIT POSITION.

7. FORMAL SHORT- AND LONG-RANGE PLANNING OF CORPORATE
GOALS, STRATEGIES, AND TACTICS, RESULTING IN DEFINED AND COORDINATED
EFFORT OF THE FIRM‘S FUNCTIONAL AREAS.

8. CREATION, ExPANSION, TERMINATION, DR RESTRUCTURING
OF ANY CORPORATE FUNCTIONS AS DEEMED NECESSARY IN MOBILIZING,
UTILIZING, AND CONTROLLING TOTAL CORPORATE EFFORT TOWARD THE
SOLUTION OF SELECTED CONSUMER PROBLEMS IN WAYS COMPATIBLE WITH
ENHANCEMENT OF THE FIRM'S PROFIT POSIION.

THE RELATIONSHIP OF THE MARKETING CONCEPT TO MANAGERIAL
DECISION-MAKING AND ACTION IS ILLUSTRATED IN THE THESIS BY A
CLOSED-SYSTEM MODEL. THE MODEL INVOLVES:

I. ESTABLISHMENT OF THE FIRM'S MARKET OFFERING IN ACCORDANCE
WITH THE PRECEPTS OF THE MARKETING CONCEPT, NAMED ABOVE.

2. CONTINUOUS MONITORING OF THE MARKET OFFERING - MARKET
PLACE DEMAND BALANCE.

3. AUTOMATIC FEEDBACK OF INTELLIGENCE RELATED TO EXISTING
OR PREDICTED IMBALANCE AND NEW MARKET OPPORTUNITIES.

h. MANAGERIAL DETERMINATION AND IMPLEMENTATION OF CORRECTIVE
ACTION, BASED UPON THE MARKETING CONCEPT PRECEPTS, RESULTING IN

RESTORATION OF BALANCE.

AN INQUIRY INTO THE RELEVANCE OF
"THE MARKETING CONCEPT" AS A MANAGEMENT GUIDE

TO THE MOBILIZATION OF CORPORATE EFFORT

BY

ROBERT LEROY KING

A THESIS

SUBMITTED TO THE SCHOOL FOR ADVANCED GRADUATE STUDIES
OF MICHIGAN STATE UNIVERSITY IN PARTIAL FULFILLMENT
OF THE REQUIREMENT FOR THE DEGREE

DOCTOR OF PHILOSOPHY

DEPARTMENT OF MARKETING AND TRANSPORTATION ADMINISTRATION

I960

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ACKNOWLEDGMENTS

THE WRITER WISHES To EXPRESS HIS SINCERE APPRECIATION
To THE CHAIRMAN OF HIS GUIDANCE COMMITTEE, DR. WARD J. McDOWELL,
FOR HIS DIRECTION, INTEREST, AND ENCOURAGEMENT THROUGHOUT THE
COURSE OF THIS INVESTIGATION. TO DR. EDWARD M. BARNET AND
DR. OLE S. JOHNSON, MEMBERS OF THE GUIDANCE COMMITTEE, THE WRITER
EXPRESSES HIS GRATITUDE FOR THEIR MANY HELPFUL SUGGESTIONS AND
CRITICISMS.

GRATEFUL ACKNOWLEDGMENT IS ALSO DUE DR. THOMAS A. STAuDT,
HEAD OF THE DEPARTMENT OF MARKETING AND TRANSPORTATION ADMINISTRATION,
AND TO DR. EUGENE J. KELLEY AND DR. WILLIAM LAZER FOR THEIR
HELPFUL COMMENTS DURING THE EARLY STAGES OF THE INVESTIGATION.

FINALLY, To HIS WIFE, HELENE, FOR HER PATIENCE, UNDER-
STANDING, AND MORAL SUPPORT, AND TO HIS SON, TODD, FOR HIS
CONTAGIOUSLY CHEERFUL DISPOSITION, WHICH CONTRIBUTED SIGNIFICANTLY
To THE ACCOMPLISHMENT OF THE STUDY, THE WRITER Is PROFOUNDLY

GRATEFUL.

TABLE OF CONTENTS

AC KNOIILEDQ’IENTS o o o o o O o o o o o o o o o o o o o O o o o o o 'I

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . III

CHAPTER
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . .

BACKGROUND OF THE THESIS

PURPOSES OF THE STUDY

METHODOLOGY

SOURCES OF INFORMATION

SCOPE AND LIMITATIONS OF THE STUDY
SIGNIFICANCE OF THE STUDY
TERMINOLOGY

ORGANIZATION OF CHAPTERS

II. EVOLUTIONARY AND ENVIRONMENTAL BASES OF THE MARKETING
COMEPT O O O C O O O O O O O O O O O O O O O O O O O 9

INTRODUCTION

HISTORICAL STATUS OF THE TRADESMAN

PRODUCTION ORIENTATION IN BUSINESS, I900 - I930

THE SALES MANAGEMENT EMPHASIS, I930 - I950

EMPHASIS ON THE MARKETING CONCEPT, I950 - PRESENT

SOME FACTORS AFFECTING EVOLUTION OF THE MARKETING
CONCEPT

SUMMARY

III. LITERATURE OF THE MARKETING CONCEPT . . . . . . . . . . . 5.

INTRODUCTION

DEFINITIONS OF THE MARKETING CONCEPT
CONSUMER ORIENTATION

ORGANIZATIONAL ASPECTS

IV. LITERATURE OF THE MARKETING CONCEPT (CONTINUED) . . . . -II0

MARKETING PLANNING

PRODUCT PLANNING AND DEVELOPMENT
PROFIT PLANNING AND CONTROL
MARKETING RESEARCH

OTHER AREAS

SUMMARY

V. AN INTERPRETATION OF THE MARKETING CONCEPT . . . . . . . . . .

VI. SUMMARY AND CONCLUSIONS . . . . . . . . . . . . . . . . .

BIBLIOGRAPHY

I76

INTRODUCTION
INADEQUACY OF THE LITERATURE AS A BASIS FOR UNDER-

STANDING THE MARKETING CONCEPT
RECONSTRUCTION OF THE COMPONENTS OF THE MARKETING
CONCEPT
OTHER ELEMENTS NECESSARY FOR UNDERSTANDING THE

MARKETING CONCEPT
A RESTATEMENT OF THE MEANING OF THE MARKETING CONCEPT

A MODEL OF THE MARKETING CONCEPT
SUMMARY

THE NATURE OF THE STUDY: A RESTATEMENT
GENERAL SUMMARY AND CONCLUSIONS
IMPLICATIONS OF THE STUDY

SUGGESTIONS FOR FURTHER RESEARCH

235

CHAPTER I
INTRODUCTION

BACKGROUND OF THE THESIS

DURING THE PAST FIFTEEN YEARS, AND ESPECIALLY SINCE I955,
IT HAS BECOME APPARENT THAT MARKETING PROBLEMS IN AMERICAN BUSINESS
ARE ASSUMING SIGNIFICANCE AND COMMANDING MANAGERIAL ATTENTION
To AN EXTENT HERETOFORE UNREALIZED. CONTENT OF BUSINESS PUBLICA-
TIONS AND ISSUES DISCUSSED BEFORE GENERAL BUSINESS AND TRADE
CONFERENCES REFLECT THIS INTEREST. MANAGEMENT EVIDENCES CONCERN
WITH THE ACADEMICIAN'S QUEST FOR A MARKETING SCIENCE AND SUPPORTS
A GROWING NUMBER OF INDEPENDENT MARKETING CONSULTING FIRMS IN
ADDITION To MAINTAINING ITS OWN MARKETING INFORMATION STAFFS.
FURTHER, ANNOUNCEMENTS OF CREATION OF THE POSITION OF VICE-
PRESIDENT IN CHARGE OF MARKETING HAVE BEEN FREQUENT DURING THIS
PERIOD IN WHICH A GROWING NUMBER OF CORPORATE CHIEF EXECUTIVE
OFFICERS HAVE BEEN APOINTED FROM MARKETING POSITIONS. ACADEMICIANS,
TOO, HAVE EVIDENCED A GROWING INTEREST IN DEVELOPMENT OF THE
STUDY AND PRACTICE OF MARKETING, AND HAVE DIRECTED THEIR EFFORTS
TOWARD IMPROVING THE TOOLS AND TECHNIQUES OF MARKETING MANAGEMENT.

ACCOMPANYING THESE DEVELOPMENTS HAS BEEN THE APPEARANCE
AND WIDE-SPREAD DISCUSSION OF THE TERM, "THE MARKETING CONCEPT."
THE TERM HAS BEEN GIVEN VARYING INTERPRETATIONS BY DIFFERENT USERS:

SOME SUGGEST THAT IT IS A WAY OF MANAGERIAL THINKING; OTHERS, THAT

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IT IS A PATTERN OF CORPORATE ORGANIZATION; STILL OTHERS, THAT IT
MEANS MARKETING DOMINATION OF THE COMPANY OPERATION. GIVEN ITS
MULTI-DEFINITIONAL NATURE, THE MARKETING CONCEPT IS CONSIDERED

BY SOME PERSONS TO BE A PANACEA FOR ILLS OF THE COMPANY AND

THE ECONOMY; OTHERS DEEM IT TO BE A DIRECT THREAT TO NON-MARKETING
FUNCTIONAL AREAS OF THE FIRM, OR AS ANOTHER POPULAR, ALTHOUGH
VAGUE, EXPRESSION WELL ADAPTED TO BUSINESS PUBLICATION AND
CONVENTION USAGE. HOWEVER, IT IS PROBABLE THAT MOST ACADEMICIANS
AND BUSINESS EXECUTIVES REJECT BOTH EXTREMES AND, INSTEAD, SEEK
AFTER THE VITAL AND BASIC MESSAGE WHICH THEY SENSE IS EMBODIED IN
THE MARKETING CONCEPT. SUCH A SEARCH IS COMPLICATED BY THE LACK
OF A DEFINITIVE WORK REGARDING THE MEANING AND NATURE OF THE
CONCEPT, AND FURTHER, BY THE LARGE NUMBER OF DISPERSED AND

FRAGMENTARY COMMENTS CONCERNED WITH THE CONCEPT.

PURPOSES OF THE STUDY

THIS STUDY REPRESENTS AN INQUIRY INTO THE RELEVANCE OF
"THE MARKETING CONCEPT" AS A MANAGEMENT GUIDE TO THE MOBILIZATION
OF CORPORATE EFFORT. GENERALLY STATED, IT IS THE PURPOSE OF THIS
STUDY TO PROVIDE ACADEMICIANS AND BUSINESS EXECUTIVES WITH A
‘BASIC UNDERSTANDING OF THE MARKETING CONCEPT THROUGH CONSTRUCTION
OF A THEORETICAL MODEL OF THE CONCEPT, BASED UPON RECOGNITION OF
THE CONCEPT'S ORIGINS, EVALUATION OF CURRENT INTERPRETATIONS OF
IT, AND INTEGRATION OF THOSE PORTIONS OF CURRENT USAGE DEEMED
VALID WITH THIS WRITER'S INTERPRETATION. SPECIFICALLY, THE PURPOSES

OF THIS STUDY ARE:

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I. TO EXAMINE BRIEFLY THE EVOLUTIONARY AND ENVIRONMENTAL
BASES OF THE MARKETING CONCEPT,

2. TO DISCOVER THE BASIC NATURE OF ACADEMICIANS' AND
BUSINESSMEN'S INTERPRETATIONS OF THE MARKETING
CONCEPT,

3. TO EXAMINE THE COMPLETENESS AND COHERENCE OF SUCH
INTERPRETATIONS, AND

h. To PRESENT AN EXPANDED STATEMENT OF THE MARKETING

CONCEPT AND A MODEL, BASED UPON INTEGRATION OF

SUCH ACCEPTABLE INTERPRETATIONS WITH INTERPRETA-

TIONS OF THE WRITER.

METHODOLOGY
IN ORDER TO ACCOMPLISH THE SEVERAL PURPOSES OF THIS STUDY,

AS INDICATED ABOVE, THE FOLLOWING ACTIVITIES WERE CONDUCTED BY
THE WRITER. FIRST, AN EXHAUSTIVE REVIEW OF MARKETING CONCEPT
LITERATURE AND A SURVEY OF GENERAL BUSINESS LITERATURE RELATED
TO THE PROBLEMS OF THIS STUDY WERE MADE. SUMMARIES OF BOTH
CATEGORIES OF LITERATURE, BASED UPON STUDY OF THE REVIEW AND SURVEY,
WERE THEN WRITTEN. A SERIES OF PERSONAL INTERVIEWS WITH CORPORATE
EXECUTIVES, PRIMARILY MARKETING OFFICIALS, FOLLOWED. WHILE
THESE INTERVIEWS FOLLOWED NO RIGID PATTERN, SIMILARITY AND
COMPLETENESS WERE ASSURED BY USE OF AN OUTLINE OF QUESTION AREAS.
FINALLY, A DEFINITION AND THEORETICAL MODEL OF THE MARKETING
CONCEPT WAS CONSTRUCTED, BASED UPON THE LITERATURE REVIEW AND
SURVEY, INTERVIEWS WITH CORPORATE OFFICIALS, AND THIS WRITER'S
INTERPRETATIONS. THUS, THE MODEL IS THE PRODUCT OF SUBJECTIVE
EVALUATION AND DEDUCTION. No ATTEMPT HAS BEEN MADE WITH REGARD

TO LOCATION OR QUANTIFICATION OF FIRMS WHOSE OVERALL OPERATIONS

CONFORM TO THIS MODEL, ALTHOUGH COMPANY EXPERIENCES ARE CITED

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REGARDING SPECIFIC ASPECTS OF THE MODEL.

SOURCES OF INFORMATION

DATA UPON WHICH THIS THESIS IS BASED HAVE BEEN DERIVED
FROM BOTH PRIMARY AND SECONDARY SOURCES. FOR THE MOST PART,
INFORMATION RELATIVE To SHIFTING MANAGERIAL ORIENTATIONS IN
AMERICAN BUSINESS DURING THE PERIOD I900-l950 HAS COME FROM
A SURVEY OF BOOKS CONCERNED WITH VARIOUS ASPECTS OF BUSINESS
MANAGEMENT AND PUBLISHED DURING THIS PERIOD, AND FROM SELECTED
ISSUES OF SEVERAL BUSINESS PERIODICALS POPULAR AT THE TIME.

DATA RELATED TO THE MARKETING CONCEPT COME FROM A
VASTLY WIDER RANGE OF SOURCES. THE LARGEST QUANTITY OF THIS
MATERIAL IS REPRESENTED BY NUMEROUS, BRIEF ARTICLES APPEARING IN
BUSINESS PUBLICATIONS DURING THE PERIOD I950-I959. A SMALLER
NUMBER OF MORE SUBSTANTIAL ARTICLES, WHICH APPEARED IN BUSINESS
AND PROFESSIONAL JOURNALS, Is INCLUDED. FURTHER, SEVERAL NATIONAL
BUSINESS AND PROFESSIONAL ASSOCIATIONS HAVE CONCERNED THEMSELVES
WITH THE MARKETING CONCEPT. ADDRESSES AND PAPERS READ BEFORE
THESE GROUPS AND PUBLISHED IN THEIR PROCEEDINGS, AS WELL AS
OCCASIONAL PAPERS NOT PUBLISHED, HAVE BEEN INCLUDED.

MANY USEFUL OBSERVATIONS HAVE BEEN GAINED AS THE
RESULT OF A SERIES OF PERSONAL INTERVIEWS WITH CORPORATE
EXECUTIVES CONDUCTED BY THE WRITER. AN ENUMERATION OF THESE
INTERVIEWS IS LOCATED IN THE BIBLIOGRAPHY. ALSO, OCCASIONAL
INTRA-COMRANY MEMORANDA AND OTHER PAPERS RELATED TO MANAGEMENT

CONCERN WITH THE MARKETING CONCEPT ARE SO USED AND RECORDED.

SCOPE AND LIMITATIONS OF THE STUDY
IN THIS STUDY NO RESTRICTIONS HAVE BEEN IMPOSED BY THE

WRITER REGARDING THE SOURCES OF THE LITERATURE REVIEWED. REFERENCES
TO THE MARKETING CONCEPT, WHEREVER LOCATED, HAVE BEEN STUDIED.
SPECIFIC COMPANY EXAMPLES, HOWEVER, ARE LIMITED TO THOSE REPORTED
IN THE LITERATURE, AND TO THOSE DERIVED FROM A LIMITED NUMBER
OF PERSONAL INTERVIEWS. THEREFORE, EXAMPLES, WHEREVER USED,
SHOULD BE CONSIDERED AS ISOLATED INSTANCES RATHER THAN AS THE
NORM.

'FURTHER, AS THE STUDY IS CONCERNED WITH CHE CONSTRUCTION
OF A GENERAL THEORETICAL MODEL, AND As THE THESIS SUGGESTS
PERTINENCE OF THE MARKETING CONCEPT TO ALL CLASSIFICATIONS OF
BUSINESS ENTERPRISE, No SUCH CLASSIFICATIONS HAVE BEEN ARTITRARILY
EXCLUDED FROM THE STUDY. THEREFORE, EXAMPLES ARE CITED REGARDING
FIRMS ENGAGED IN THE MANUFACTURE AND MARKETING OF CONSUMER AND
INDUSTRIAL GOODS, AS WELL AS THOSE ENGAGED IN THE SERVICE
INDUSTRIES. ALTHOUGH MOST EXAMPLES CITED IN THE LITERATURE
REFER TO LARGE ORGANIZATIONS, IT IS SUGGESTED THAT THE GENERAL

FINDINGS ARE APPLICABLE TO SMALLER FIRMS AS WELL.

SIGNIFICANCE OF THE STUDY
WIDESPREAD UNDERSTANDING AND EFFECTIVE IMPLEMENTATION
OF THE MARKETING CONCEPT, OF WHICH THE FORMER IS AN IMMEDIATE
OBJECTIVE AND THE LATTER A POSSIBLE CONSEQUENCE OF THIS STUDY,
“OLD GREAT PROMISE FOR BUSINESS MANAGEMENT, THE INDIVIDUAL CONSUMER,

AND THE ECONOMY GENERALLY. AS NOTED BY PHELPS:

THE INTENSE INTEREST NOW MANIFESTED IN WHAT HAS
BEEN CALLED "THE NEW MARKETING CONCEPT" STRONGLY
SUGGESTS THAT MANY COMPANIES ARE LOOKING IN THE SAME
DIRECTION FOR GUIDANCE. THE THINKING OF ECONOMISTS
AND BUSINESS LEADERS, AND NOW THE PRACTICAL EXPERIENCE
OF SOME OF OUR MOST SUCCESSFUL COMPANIES, LEADS TO
THE CONCLUSION THAT THIS APPROACH IS THE PATH OF
WISDOM AND THAT IT HOLDS GREAT PROMISE FOR A BETTER
ECONOMY FROM WHICH ALL WILL BENEFIT.I
TO BUSINESS MANAGEMENT THIS STUDY OFFERS A FRAMEWORK WITHIN
WHICFI POLICY DECISIONS MAY BE MADE IN A MANNER COMPATIBLE WITH
CONTEMPORARY MARKET CONDITIONS AND WITHIN WHICH ENHANCEMENT OF
THE: F IRM'S PROFIT POSITION IS EMPHASIZED.
OF CONSEQUENCE TO THE CONSUMER IS THE PROPOSAL TO BUSINEss-
MEN <DF' A FRAMEWORK FOR MANAGERIAL ACTION LEADING TOWARD INNOVATION
AND 'hrTRODUCTION OF PRODUCT AND SERVICE OFFERINGS MORE CONSISTENT
V'TH CONSUMER WANTS AND NEEDS.
OF CONSEQUENCE TO THE ECONOMY GENERALLY IS THE PROPOSAL
T
o BUSINESSMEN OF A FRAMEWORK FOR MANAGERIAL ACTION WHICH SHOULD
RE '
S"LNT IN HIGHER EMPLOYMENT, FULLER UTILIZATION OF NATIONAL

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SOLIRCES GENERALLY, GREATER STABILITY AND GROWTH POTENTIAL, AND

TH
E AI‘TTAINMENT OF A HIGHER NATIONAL STANDARD OF LIVING.

TERMINOLOGY

THE MARKETING CONCEPT. USAGE OF THIS TERM BY BUSINESSMEN

‘SCADEMICIANS CONFERS UPON IT MANY AND DIVERSE MEANINGS. ONE

OF
THE IMPLICIT PURPOSES OF THIS STUDY IS THE CONSTRUCTION OF A

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PERTINENT, MEANINGFUL DEFINITION OF THE MARKETING CONCEPT. HOWEVER,

WIDESPREAD USAGE OF THE TERM IN ARTICLES AND CONVENTION ADDRESSES,

ALTHOUGH VARIED AND VAGUE, DOES CONNOTE SOME COMMON THOUGHT. THERE

IS AGREEMENT THAT THE TERM REFERS TO THE MANAGERIAL EMPHASIS ON

MARKETING PROBLEMS, WHICH HAS OCCURRED DURING THE PAST DECADE.

FURTHER IT IS CONSIDERED TO BE A BASIC POINT OF VIEW FOR COMPANY

MANAGEMENT, INVOLVING CONSUMER ORIENTATION AS THE DIRECTIONAL

FOCUS AND FORCE OF COMPANY EFFORT, WITH SUCCESS OF SUCH EFFORT

BEING MEASURED IN TERMS OF PROFIT AND RETURN ON INVESTMENT. IT

'3 'N THIS SENSE THAT THE WRITER USES THE TERM PRIOR TO THE

DEVELOPMENT OF A MORE COMPLETE STATEMENT IN CHAPTER V IN WHICH

THE MARKETING CONCEPT MODEL IS PRESENTED.
LITERATURE OF THE MARKETING CONCEPT. SINCE THERE IS ONLY

L'M' TED AGREEMENT REGARDING THE MEANING OF THE MARKETING CONCEPT,

A
TTENTION MUST BE GIVEN TO THE PROBLEM OF DETERMINATION OF THE

L|Ml TS OF MARKETING CONCEPT LITERATURE. THE PROBLEM IS FURTHER

°°MPLICATED BY SOME AUTHORS' ABHORRENCE AND NON-USE OF THE TERM,
ALTHOUGH THE CONTENT OF THEIR ARTICLES IS BASICALLY SIMILAR To

THAT OF OTHERS WHO EMPHASIZE THE TERM. FURTHER, As THE LITERATURE
5‘” DENCES CONSIDERABLE MANAGERIAL CONCERN WITH METHODS AND
TECHNNUES av WHICH THE CONCEPT MAY BE IMPLEMENTED, SOME QUESTION

AR ' SE5 REGARDING THE DISTINCTION BETWEEN ARTICLES CONCERNED

PR ' MARILY WITH IMPLEMENTATION OF THE CONCEPT AND THOSE WHICH REPRESENT
'SQLATED DISCUSSIONS OF INDIVIDUAL METHODS AND TECHNIQUES. THE WRITER

"A
S ACCEPTED A BROAD INTERPRETATION OF THE CONTENT OF MARKETING

CONCEPT LITERATURE SO AS TO MINIMIZE POSSIBLE EXCLUSION OF
PERTINENT SOURCES DEALING WITH BOTH DEFINITION AND IMPLEMENTA'
TION OF THE MARKETING CONCEPT.

AS MENTIONED PREVIOUSLY, SUCH SECONDARY SOURCES AS BUSINESS
PERIODICALS, PROFESSIONAL AND BUSINESS JOURNALS, ADDRESSES AND
PAPERS READ BEFORE ACADEMIC AND BUSINESS CONFERENCES, BOTH
PUBLISHED AND UNPUBLISHED, AND VARIOUS UNIVERSITY STUDIES AND
INTRA-COMPANY MEMORANDA HAVE BEEN STUDIED AND CITED IN THIS PAPER.
ALL OF THE ABOVE HAVE BEEN REFERRED TO, COLLECTIVELY, AS THE

LITERATURE OF THE MARKETING CONCEPT.

ORGANIZATION OF CHAPTERS

THE MOST SIGNIFICANT EVOLUTIONARY AND ENVIRONMENTAL BASES
°F THE MARKETING CONCEPT HAVE BEEN OUTLINED AND DESCRIBED IN
CHAPTER II. IN CHAPTERS III AND IV AN EXHAUSTIVE SURVEY OF
MARKETING CONCEPT LITERATURE IS PRESENTED, ACCOMPANIED BY
3""MARIES OF PREVAILING THOUGHT AND SIGNIFICANT EXCEPTIONS.
'" CHAPTER V A THEORETICAL MODEL OF THE MARKETING CONCEPT IS
DEVELOPED INDICATING SOME FALLACIES IN CURRENT INTERPRETATIONS
or THE CONCEPT. A SUMMARY OF THE MAJOR FINDINGS AND CONCLUSIONS

'8
PRESENTED IN CHAPTER VI.

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CHAPTER II
EVOLUTWCMMRY AND ENVIRONMENTAL BASES OF THE MARKETING CONCEPT

INTRODUCTION

IT IS THE PURPOSE OF THIS CHAPTER, FIRST, TO DEMONSTRATE

BRIEFLY THE EVOLVING NATURE OF MANAGERIAL ORIENTATION, WITH SPECIAL

EMPHASIS ON TWENTIETH CENTURY AMERICAN THOUGHT; SECOND, TO
I

PROPOSE THAT DISCUSSION AND ALLEGED ACCEPTANCE OF "THE MARKETING CONCEPT'

“AVE DEVELOPED QUITE NORMALLY WITHIN THE FRAMEWORK OF
“'STORICAL CHANGE IN MANAGERIAL ORIENTATION; AND THIRD, TO

'NDICATE AND BRIEFLY DESCRIBE SOME OF THE FEATURES OF CONTEMPORARY

MA
F"‘5'“ch MOST INSTRUMENTAL IN CREATING INTEREST IN, AND CONCERN

WI
T“: THE MARKETING CONCEPT.

IN ORDER TO EMPHASIZE THE RAPIDLY CHANGING EVALUATION OF
MAR
KETING ACTIVITY, IN THIS CHAPTER FOUR AREAS OF EMPHASIS HAVE
BEEN
DEVELOPED: HISTORICAL STATUS OF THE TRADESMAN, PRODUCTION

ORI E
NTATION IN BUSINESS, EMPHASIS ON SALES MANAGEMENT AND SALES

VOLU
ME) AND DEVELOPMENT OF THE MARKETING CONCEPT. THE ASSUMPTION IS

MADE
THAT THE HISTORICALLY SUBORDINATE ROLE OF THE MIDDLEMAN IS

RECQ
GNIZED AND ACCEPTED BY STUDENTS OF ECONOMIC AND BUSINESS

HIST
ORV, ACCORDINGLY, THIS AREA HAS BEEN LESS EXTENSIVELY DEVELOPED

HERE
MOST SIGNIFICANT FOR PURPOSES OF

THAN HAVE THE OTHER AREAS.

3
IS THE DISTINCTION BETWEEN THE SALES MANAGEMENT AND

FPAPER

'<
E‘rlNG CONCEPT ORIENTATIONS. IT SHOULD BE RECOGNIZED THAT

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ESTABLISHMENT OF THESE AREAS OF EMPHASIS AND CONTENT DEVELOPMENT

OF THESE AREAS AREPRDDUCTS OF THIS WRITER'S INTERPRETATION OF

LITERATURE DESCRIPTIVE OF AMERICAN BUSINESS DURING THE PERIOD

I900 11>I960. THE LITERATURE UPON WHICH THESE INTERPRETATIONS

ARE BASED INCLUDES BOOKS CONCERNED WILL VARIOUS ASPECTS OF BUSI"

NESS ORGANIZATION AND OPERATION, ARTICLES CARRIED BY SOME LEADING
PROFESSIONAL AND BUSINESS PUBLICATIONS, AND ADDRESSES CONCERNED

WITH BUSINESS OPERATION, MADE BY PUBLIC FIGURES AND REPORTED IN

SEVERAL NEWS MANAGAZ I NES.

HISTORICAL STATUS OF THE TRADESMAN

CENTURIES' BEFORE MASS PRODUCTION AND MASS DISTRIBUTION

PRESSEDVTED CHALLENGES AND OPPORTUNITIES TO THE BUSINESSMAN, OPINION

WA
S WELL FORMULATED REGARDING THE STATUS OF THE MIDDLEMAN AND THE

v
AL*JE:» OR LACK THEREOF, OF HIS CONTRIBUTION TO SOCIETY. THE

MU
TUALITY OF BENEFITS EVOLVING FROM AN EXCHANGE OF GOODS INVOLVING

A
MI DDLEMAN WAS QUESTIONED BY MEDIEVAL PHILOSOPHERS. DURING THIS

I3E
R‘00 THE CHURCH, SEAT OF POWER REGARDING MORAL AND ETHICAL
ASp
E(ITS OF LIFE, DEEMED TRADESMANSHIP TO BE DISPLEASING TO GOD,

AS.
T'R'ADING INVOLVED SELLING AT PRICES ABOVE THE "JUST PRICE,"

I.
E ‘ THE VALUE OF A GOOD MEASURED IN TERMS OF THE LABOR REQUIRED

IN
I TS MANUFACTURE. EVEN EARLIER THE VALUE OF THE TRADESMAN'S

CC)
N1‘IRIBUTION TO SOCIETY, AS WELL AS HIS CHARACTER, WAS QUESTIONED

714E GREEK PHILOSOPHERS. FOR EXAMPLE, CICERO WROTE:
THOSE WHO BUY TO SELL AGAIN AS SOON AS THEY CAN

ARE TO BE ACCOUNTED AS VULGAR; FOR THEY CAN MAKE NO
PROFIT EXCEPT BY A CERTAIN AMOUNT OF FALSEHOOD, AND

II’ P

NOTHING Is MEANER THAN FALSEHOOD!

THE FUNCTION AND CHARACTER OF THE TRADESMAN WERE DESCRIBED SIMILARLY

BY PLATO, AS FOLLOW5:

SUPPOSE, NOW, THAT A HUSBANDMAN, OR AN ARTISAN,
BRINGS SOME PRODUCTION TO MARKET, AND HE COMES AT A
TIME WHEN THERE IS NO ONE To EXCHANGE WITH HIM - IS
HE TO LEAVE HIS CALLING AND SIT IDLE IN THE MARKET

PLACT?
NOT AT ALL; HE WILL FIND PEOPLE THERE WHO, SEEING THE

WANT, UNDERTAKE THE OFFICE OF SALESMAN. IN WELL-ORDERED
STATES, THEY ARE COMMONLY THOSE WHO ARE THE WEAKEST

IN BODILY STRENGTH, AND THEREFORE OF LITTLE USE

FOR ANY OTHER PURPOSE . . .

SIMILARLY, ARISTOTLE NOTED:

OF THE TWO SORTS OF MONEY-MAKING . . . ONE IS A
PART OF HOUSEHOLD MANAGEMENT, THE OTHER IS RETAIL TRADE:
THE FORMER IS NECESSARY AND HONORABLE, THE LATTER A KIND
OF EXCHANGE WHICH IS JUSTLY CENSURED; FOR IT IS
UNNATURAL, AND A MODE BY WHICH MEN GAIN FROM ONE

ANOTHER.

IT APPEARS THAT AMERICAN OPINION AT THE TURN OF THE PRESENT
CENTUR I H
Y WAS IN ACCORD WITH EDWARDS OBSERVATION THAT FROM
TH
E DAYS OF ADAM SMITH, DISTINCTION HAS BEEN MADE BETWEEN

PR
ODUCERS, WHO ARE CONCEIVED AS NECESSARY PARTS OF AN ECONOMIC SYSTEM,

"h

AN
‘3 ‘TRADERS, WHO ARE CONCEIVED As PARASITES UPON IT. MUCH OF

\ __

WI ICICERO QUOTED IN HISTORY OF ECONOMIC THOUGHT, CITED BY

AN'SL'AM T KELLEY, "THE DEVELOPMENT OF EARLY THOUGHT IN MARKETING
F’ROMOTION," THE JOURNAL OF MARKETING, XXI (JULY, I956), 6h.

"1. 2PLATO, THE REPUBLIC, BOOK II, CITED BY WILLIAM T. KELLEY,
HE‘S: DEVELOPMENT OF EARLY THOUGHT IN MARKETING AND PROMOTION,"
IT‘§~‘<QOURNAL OF MARKETING, XXI (JULY, I956), 62.

 

KE 3ARISTOTLE, POLITICS, BOOK I, NO. IO, CITED BY WILLIAM T.
TH El‘LIEY, "THE DEVELOPMENT OF EARLY THOUGHT IN MARKETING AND PROMOTION,

‘\“E“90URNAL OF MARKETING, XXI (JULY, I956), 63.

Ac MCORWIN D. EDWARDS, HMARKETING, THE ANNALS OF THE AMERICAN
T‘S~1E£1EMY OF POLITICAL AND SOCIAL SCIENCE, CLXXIII (MAY, I93h), 86.

H

.—

U
.IP
I‘I

.
‘I
n.

THE LITERATURE CONTENT DURING THE PERIOD I900 TO I920 WAS CONCERNED

WITH INEFFICIENCIES OF THE DISTRIBUTION SYSTEM, POSSIBLE ELIMINATION

OF THE MIDDLEMAN, EFFICIENCIES ATTAINABLE THROUGH CREATION AND
WIDESPREAD USE OF MUNICIPAL MARKETS AND CATALOG HOUSES, COLLECTIVE

BUYING CLUBS, AND EVEN GOVERNMENTAL OPERATION OF BUSINESS

ENTERPRISES.

A CONTEMPORARY EVALUATION OF THE "MARKET-MAN" WAS REPORTED
IN ITAJRPER'S WEEKLY DURING THE WEEK OF CHRISTMAS, I90I, IN WHICH THE

NEW YORK CITY MARKETER WAS DESCRIBED, AS FOLLOWS:

HE HAS WHAT NOBODY CAN GET ALONG WITHOUT, AND HE Is KING,
CROWNED, IN THE POPULAR IMAGINATION, WITH A CHRISTMAS WREATH
. . . . THE POPULACE FLOCKS TO HIM, AND FIGHTS FOR HIS
NOTICE, AND GOES AWAY ELATE . . . BY-AND-BY, WHEN CHRISTMAS
AND NEW YEARS HAVE COME AND GONE, THERE ARE ONLY THE
LEAVINGS, THE DEBRIS, AND THE MARKETMAN. HIS SMILE IS
UNDIMINISHED, UNDIMMED; HIS POCKETS ARE HEAVY WITH DOLLARS,

BUT HIS CROWN IS WITHERED AND SERE.
IN I9I2 MRS. JULIAN HEATH, PRESIDENT AND ORGANIZER OF

T
HE: FHDUSEWIVES LEAGUE OF NEW YORK, ESTABLISHED A WEEKLY MARKET

DA

‘V IN WASHINGTON MARKET IN NEW YORK CITY AS PART OF HER PROGRAM

PC)
I‘ ‘THE RETURN OF HOUSEWIVES To "THE MARKETBASKET." MRS. HEATH

RE

COMMENDED THE ESTABLISHMENT OF MUNICIPAL MARKETS, BLAMING
MI

[3E3LEMEN WITH DEPRIVING THE POOR OF GOODS AS WELL AS MAKING THE

RICH ,.. .
PAY MORE. SHE STATED. YOU CAN PUT THIS DOWN AS AN AXIOM.

HI
(3‘1 PRICE MEANS UNDER CONSUMPTION."6 THE MARKET DAY PROGRAM WAS

SA
.‘<:TIONED BY MAYOR WILLIAM J. GAYNOR OF NEW YORK CITY, WHO APPEARED

\
(I) "WHEN THE MARKET-MAN IS KING," HARPER'S WEEKLY, XLV
ECEMBER 28, I9OI), I338.
6E. LESLIE GILLIAMS, "BEATING THE MIDDLEMAN," HARPER'S

“I:
T“~§L§§I, LVI (AUGUST I7, f9|2), 22,

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BEFORE THE PARTICIPATING HOUSEWIVES AND NOTED!

I'M GLAD YOU ARE HERE. I WISH MY WIFE WOULD COME,
TOO. SHE COULD SAVE FIFTY PERCENT OF WHAT IT COSTS TO
LIVE. ALL WOMEN OUGHT TO COME HERE. WHY, IF THE WOMEN-
FOLKS WOULD DO THEIR BUYING THEMSELVES INSTEAD OF ORDERING
BY TELEPHONE AND HAVING GOODS DELIVERED INTO THEIR
CELLERS, THE MEN-FOLKS MIGHT BE ABLE TO PUT A LITTLE
MONEY IN THE BANK.

THE STATUS OF THE MIDDLEMAN AND ONE METHOD BY WHICH HE COULD
BE CIIRCUMVENTED IN PART BY THE CONSUMER, WERE REPORTED BY
PRESIDENT J. OGDEN ARMOUR OF ARMOUR AND COMPANY, AS FOLLOWS:

THE CATALOG HOUSES HAVE GIVEN US THEIR MOST
CAPTIVATING EFFORTS IN THEIR FERVID APPEAL TO "CUT
OUT THE MIDDLEMAN." MANY OF US HAVE NOT ACCEPTED
THEIR CATALOGUES AND MERCHANDISE As A PREFERABLE
ALTERNATIVE To THE MIDDLEMAN; BUT THE IDEA THAT THE
MIDDLEMAN MAY BE A USELESS PARAS TE HAS FOUND A
PERMANENT LODGMENT IN OUR MINDS.

FINALLY, A PROGRAM WITH FAR-REACHING CONSEQUENCES IS SET

FORTH IN ALLAN BENSON'S SOCIALIST POINT OF VIEW. HE NOTES THAT

T
HE PFSOFIT SYSTEM THAT 'HAS ROBBED A WORLD FOR MORE THAN A CENTURY

IS
NOT GOING TO WILT SIMPLY BECAUSE WOMEN CHOOSE TO CHANGE THE

HA
Nh‘EF! OF THEIR BUYING," THEREFORE, HE SUGGESTS THAT OTHER

AC
T ' 0N Is NEEDED:

INSTEAD OF TALKING ABOUT COLLECTIVE BUYING THROUGH
CLUBS, CITES OR EVEN STATEs, SUPPOSE WE WERE TO TALK A
LITTLE WHILE ABOUT COLLECTIVE MANUFACTURING? SUPPOSE THE
GOVERNMENT, FOR INSTANCE, INSTEAD OF SPENDING $M37,000,000
FOR THE PANAMA CANAL HAD SPENT THIS MONEY FOR WHEAT
LANDS AND FLOUR MILLS? . . . IF THE GOVERNMENT CAN BUILD
WARSHIPS AND THE PANAMA CANAL, IT COULD ALSO, IF WE WANTED
IT TO, MAKE SHOES AND WEAVE CLOTH. IT COULD ALSO BAKE

 

 

7IBID., 2I.
((3‘\ 8BUSINESS LEADERSHIP: A SERVICE IN BUSINESS MANAGEMENT
'RtaEN CITY: DOUBLEDAY, PAGE AND COMPANY, I9I9), B.

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BREAD AND RUN TRAINS.

ALTHOUGH MOST WRITINGS OF THIS PERIOD PROPOSED ACTION FAR

LESS DRASTIC THAN THAT SUGGESTED ABOVE, IT APPEARS THAT GENERAL
DISSATISFACTION WITH THE EFFICIENTY OF THE DISTRIBUTION SYSTEM WAS

PREVALENT, AND THAT THE MARKETER WAS HARDLY ESTEEMED BY HIS FELLOW
CITIZEN.

PRODUCTION ORIENTATION IN BUSINESS, I900 - I930

CONTENT OF BUSINESS LITERATURE IN THE UNITED STATES FROM

I900, AND ESPECIALLY SINCE THE END OF WORLD WAR I, THROUGH I930

MAY BE CHARACTERIZED AS PRODUCTION-ORIENTED. ALTHOUGH THE LITERATURE

DEMONSTRATES THAT DISTRIBUTION PROBLEMS WERE RECOGNIZED BY MANY

PERSONS AND EVEN DEEMED THE MOST SIGNIFICANT PROBLEM AREA OF

BUSINESS BY A VERY SMALL BUT IMPORTANT MINORITY, MOST WRITINGS

0'" THIS PERIOD EMPHASIZED TECHNICAL AND HUMAN PROBLEMS RELATED

To MASS PRODUCTION. IT IS DURING THIS PERIOD THAT TAYLOR,

TMERSON, GILBRETH, AND OTHER STUDENTS OF MANAGEMENT MADE THEIR

CONTRIBUTIONS TO "SCIENTIFIC MANAGEMENT." THE PERIOD OF PRODUCTION

OR' EN‘rATION CLOSED DURING THE DEPRESSION YEARS, ALTHOUGH THE
s"GNIF-ICANCE OF AN ENGINEERING-RODUCTION APPROACH TO BUSINESS

S
'TUATIONS WAS BEING EMPHASIZED BY THE "TECHNOCRATS."

AN EXAMPLE OF BUSINESS ORIENTATION DURING THIS PERIOD IS

p
ROVIDED BY ROBERT J. KEITH, A VICE PRESIDENT OF PILLSBURY COMPANY,

 

\

L. 9"MAKING WAR ON THE MIDDLEMAN AND THE HIGH COST or
V I NG," CURRENT LITERATURE, LII (MARCH, I9|2), 29I-292.

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WHO NOTES THAT DURING THE PERIOD I869 TO I930 THE MANAGERIAL
PHILOSOPHY OF HIS COMPANY COULD HAVE BEEN STATED, AS FOLLOWS:

AS PROFESSIONAL FLOUR MILLERS, BLESSED WITH A SUPPLY
OF THE FINEST NORTH AMERICAN WHEAT AND WITH EXCELLENT
MILLING MACHINERY, WE TURN OUT FLOUR OF THE HIGHEST
QUALITY. WE KNOW OUR PRODUCT IS GOOD BECAUSE IT
MEETS OUR PROFESSIONAL STANDARDS OF QUALITY. OUR
FUNCTION Is TO MILL HIGH-QUALITY FLOUR AND OF COURSE,
WE MUST HIRE SALESMEN TO SELL IT I

IN DESCRIBING THE HISTORICAL DEVELOPMENT OF THE PILLSBURY COMPANY,

KEITH DESCRIBES THIS FIRST PERIOD AS "THE ERA OF MANUFACTURING."

HE NOTES:

IT IS SIGNIFICANT THAT THE IDEA FOR THE FORMATION
OF OUR COMPANY CAME FROM THE AVAILABILITY OF HIGH-
QUALITY WHEAT AND THE PROXIMITY OF WATER POWER -

NOT FROM THE AVAILABILITY AND PROXIMITY OF GROWING
MAJOR MARKET AREAS, OR THE DEMAND FOR BETTER, CHEAPER,
MORE CONVENIENT FLOUR PRODUCTS.

THE: FIRST NEW PRODUCT OFFERED BY PILLSBURY COMPANY, MIDDLINGS,

TwIE BRAN REMAINING AFTER MILLING, WAS DEVELOPED As A RESULT

OF IATTEMPTS AT FINDING WAYS OF DISPOSING OF THIS BY-PRODUCT,

N01'IAS A RESULT OF MARKET ANALYSIS CONCERNED WITH DETERMINATION

0F NLITRITIONAL NEEDS OF CATTLE. ACCORDING TO KEITH: "THE NEW

PRODUCT DECISION WAS PRODUCTION-ORIENTED, NOT MARKETING-ORIENTED."l2
SIMILARLY, ANSHEN HAS DESCRIBED THE ORIENTATION OF THE BELL

\

C. 'OROBERT J. KEITH, "AN INTERPRETATION OF THE MARKETING
ONCEPT," ADVANCING MARKETING EFFICIENCY, PROCEEDINGS OF THE FORTY-
'RST NATIONAL CONFERENCE (CHICAGo: AMERICAN MARKETING ASSOCIATION,

'959) , IO5-IO6.

'IIBID., I05

 

JO I2ROBERT J. KEITH, "THE MARKETING REVOLUTION," THE
...~£i£1§AL OF MARKETING, XXIV (JANUARY, I960), 36. -—-

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TELEPHONE SYSTEM, UNTIL RECENTLY, As A TRADITIONAL ENGINEERING-

MANUFACTURING ORIENTATION. HE NOTES:
ONLY A FEW YEARS AGO - CERTAINLY UP TO I950 -
THE BELL SYSTEM WAS LARGELY IGNORANT OF, AND INSENSITIVE

To, THE MARKETING PHILOSOPHY . . .
UNPARALLELED CONSTRUCTION PROGRAM
THE END OF THE SECOND WORLD WAR, THE SYSTEM WAS STILL
UNABLE TO SERVE THE NATURAL DEMAND FOR COMMUNICATION

As FAR AS Mdfl'SYSTEM MANAGERS WERE CONCERNED,
PRODUCTS,

IN SPITE OF ITS
IN THE YEARS FOLLOWING

FACILITIES.
THE PRIME PROBLEM WAS FINDING THE MONEY,

AND MATERIALS NECESSARY TO FURNISH TELEPHONE SERVICE
THOSE WHOSE DESIRE FOR SERVICE WAS REALIZED WITHOUT

TO
MARKETING STIMULATION.I3

WHEN ATTEMPTS WERE MADE RECENTLY TO IMPLEMENT THE MARKETING

CONCEPT INTO THE SYSTEM'S OPERATION, ANSHEN REPORTS THAT ONE OF
THE: GREATEST DIFFICULTIES To OVERCOME WAS "A DEEPLY-ROOTED
EN<;INEERING ORIENTATION THAT APPRAISEO EVEN THE QUALITY OF

CUSTOMER SERVICE BY ENGINEERING STANDARDS RATHER THAN USER

IIII-I

STANDARDS.

ANOTHER EXAMPLE OF CONTINUANCE OF A PRODUCTION ORIENTATION

'NTWD RECENT YEARS Is REPORTED BY HUGHES. FORMER PRESIDENT DOUGHTY

0" BURROUGHSB ADDING MACHINE COMPANY, WHO RETIRED IN I9II6, SERVED

AS FACTORY MANAGER BEFORE ASSUMING THE PRESIDENCY. I'IIS BUSINESS

pH'L-OSOPHY IS SUMMARIZED BY HUGHES, As FOLLOWS:

UNTIL HE RETIRED HE WAS PRIMARILY INTERESTED IN

PRODUCTION. DOUGHTY'S REACTIONS AND CAREER SEEMED TO

\
I3MELVIN ANSHEN, "INTRODUCING THE MARKETING CONCEPT

T .
pZROUGH MANAGEMENT DEVELOPMENT," ADVANCING MARKETING EFFICIENCY,
OCEEDINGS OF THE FORTY-FIRST NATIONAL CONFERENCE (CHICAGo:

AMERICAN MARKETING ASSOCIATION, I959), 25%.

III

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HAVE BEEN STAMPED IN LARGE DEGREE BY A FRIEND AND
FELLOW MECHANIC NAMED HENRY FORD. IF BURROUGHS BUILT
WELL ENOUGH, AND SOLD AT A LOW-ENOUGH PRICE, THE
CUSTOMERS WOULD HAVE TO BUY. THE BUILDING WAS WHAT
MATTERED.I5

THE SITUATIONS DESCRIBED ABOVE ARE CONSISTENT WITH THE
ORIENTATION OF PRIMACY OF PRODUCTION TECHNIQUE AND THE RESULTING
PRODUCT, WIDELY EXPRESSED IN THE LITERATURE OF THE PERIOD. SUCH
A FOCUS OF ATTENTION ON FACTORY OPERATION RATHER THAN ON SALES
EFFORT OR CONSUMER NEED AND WANT IS INDICATED IN THE FOLLOWING
STATEMENT, CONCERNING THE SIGNIFICANCE OF THE PRODUCT:

. . . BEFORE TAKING UP A DISCUSSION OF THE QUESTIONS

WHICH ARE PRIMARILY WITHIN THE FIELD OF FACTORY

ADMINISTRATION, IT IS NECESSARY TO CONSIDER CERTAIN

FACTORS WHICH ARE OF VITAL IMPORTANCE TO ALL THE PRINCIPAL

FUNCTIONS OF A MANUFACTURING BUSINESS. ONE OF THE

MOST CONSPICUOUS OF THESE ELEMENTS I: THE FINISHED

PRODUCT, FOR IT REPRESENTS THE UNDERLYING REASON FOR THE

VERY EXISTENCE OF THE BUSINESS IN QUESTION. IT IS,

OR SHOULD BE, ONE OF THE FUNDAMENTAL FACTORS IN

THE DEVELOPMENT OF THE MA KETING AND FINANCIAL

POLICIES OF THE COMPANY.l

A FEW SCHOLARS_OF THE PERIOD IDENTIFIED MARKETING PROBLEMS

‘3 TIIE AREA OF MOST PRESSING CONCERN, HOWEVER, EVEN WHEN THE MAJOR
FOPUS OF ATTENTION WAS ON MANUFACTURING ASPECTS OF "SCIENTIFIC
MANAGEMENT." NOTING THAT THE "CHAOTIC CONDITION" OF DISTRIBUTION
"OULD SERVE AS A CHECK UPON FURTHER DEVELOPMENT OF PRODUCTION, AS
W’

EI-L- As CREATE INCREASING SOCIAL WASTE, SHAW WROTE:

THE MOST PRESSING PROBLEM OF THE BUSINESSMAN TODAY . . .

\

53k, l5LAWRENCE M. HUGHES, "'TOTAL SALES! TAKEN OVER AT
RROUGHS," _S_A_LES MANAGEMENT, LXVII (FEBRUARY l5, I952), 26,

PR '6PAUL M. ATKINS, FACTORY MANAGEMENT (NEW YORK:
EIPVTICE-HALL, INC., I926), 2-3.

 

I8

Is SYSTEMATICALLY TO STUDY DISTRIBUTION, AS PRODUCTION
IS BEING STUDIED . . . . HE MUST APPLY TO HIS PROBLEMS
THE METHODS OF INVESTIGATION THAT HAVE PROVEN OF USE
IN THE MORE HIGHLY DEVELOPED FIELDS OF KNOWLEDGE. HE
MUST INTRODUCE THE LABORATORY POINT OF VIEW.I

SHAW FURTHER EMPHASIZED THE DISCREPANCY WHICH EXISTED BETWEEN
THE STUDIES OF THE FIELDS OF PRODUCTION AND DISTRIBUTION, NOTING
THAT THE WAY TO COMPANY SUCCESS LAY IN EXPLORATION AND DEVELOPMENT

OF THE LATTER:

WHILE WE ARE ONLY UPON THE THRESHOLD OF THE POSSIBILITIES
OF EFFICIENCY ON PRODUCTION, THE PROGRESS THUS FAR MADE
HAS OUTSTRIPPED THE EXISTING SYSTEM OF DISTRIBUTION.
IF OUR PRODUCING POSSIBILITIES ARE TO BE FULLY UTILIZED,
THE PROBLEMS OF DISTRIBUTION MUST BE SOLVED. A MARKET 8
MUST BE FOUND FOR THE GOODS POTENTIALLY MADE AVAILABLE.

HOWEVER, MOST WRITINGS OF THE PERIOD SUGGEST PRIMARY CONCERN
WI‘rH PROBLEMS OF PRODUCTION AND LEND CREDENCE TO DRUCKER'S POSITION
THAT "FIFTY YEARS AGO THE TYPICAL ATTITUDE OF THE AMERICAN
BUEBINESSMAN TOWARD MARKETING WAS STILL: ITHE SALES DEPARTMENT
V'ILJ. SELL WHATEVER THE PLANT PRODUCES.'"'9 THE PRODUCTION ORIENTA-
T'<>N Is DESCRIBED BY MCKITTERICK AS EXTENDING INTO THE I930'S,

‘5 l"OLLOWS:

INDEED, THE PROBLEM OF WINNING OUT OVER COMPETITION
SEEMED To BE CONCEIVED ESSENTIALLY IN TERMS OF SUBTRACTING
FROM THE COST OF PRODUCTION, AND DELIVERING AN EQUIVALENT
PRODUCT AT A LOWER PRICE. 30 IT WAS QUITE FITTING THAT
IN THE I930'S MANUFACTURERS STUDIED THE ECONOMICS OF
SCALE, ECONOMISTS EXPLORED MARGINAL CONCEPTS FOR

\

 

(<2 I7ARCH W. SHAW, SOME PROBLEMS IN MARKET DISTRIBUTION
AMBRIDGE, MASSJ HARVARD UNIVERSITY PRESS, I9I5), IIII.

I8IBID., A3.

 

(f5. l9PETER F. DRUCKER, THE PRACTICE OF MANAGEMENT
EV YORK: HARPER 8. BROS., I951IT: 3K

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Ilia

F'II-
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I9

20
SETTING THE VOLUME OF PRODUCTION . . .

CASTENHOLz, WRITING IN I930, ALSO EMPHASIZED THE DEFERENCE WHICH
HAD BEEN SHOWN THE PRODUCTION AREA; HE BRIEFLY SUMMARIZED THE
PERIOD OF PRODUCTION ORIENTATION AND MADE A PLEA FOR GREATER
MARKETING EMPHASIS IN MANAGERIAL THINKING, As FOLLOWS:
GOODS ARE MADE TO BE SOLD. PRODUCTION IS THE

FIRST DISTRIBUTION PROBLEM. IT IS UNFORTUNATE THAT MANY

MANUFACTURERS DO NOT REALIZE THIS. IN FACT, THE DESIRE

TO MANUFACTURE THINGS WITHOUT FIRST STUDYING THE POSSIBLE

AND LOGICAL MARKETS, THAT IS, THE WANTS AND DESIRES OF

CONSUMERS, HAVE BEEN RESPONSIBLE FOR AN ENORMOUS DEGREE

OF WASTE IN OUR ECONOMIC STRUCTURE . . . . QUITE NATURALLY,

PRODUCTION MUST PRECEDE DISTRIBUTION; BUT IT MUST
CONFORM WITH THE KNOWN DESIRE AND WANTS OF THE CONSUMERS

IF IT IS TO RESULT IN PROFITABLE SALES.

THE SALES MANAGEMENT EMPHASIS, I930 - I950

NTRODUCTI ON

‘

SHAW DESCRIBED THE PERIOD OF PRODUCTION ORIENTATION As
IAN ERA DURING WHICH THE MANUFACTURER WAS IN NO SENSE A MERCHANT;
RATHER, HE DEPLORED THE DISTRIBUTION SYSTEM OF THE DAY WHICH
FAILED TO ACKNOWLEDGE AND APPRECIATE THE RELATIONSHIP OF THE
CONSUMER T0 CONTINUED SUCCESS OF THE FIRM. As EARLY AS I9I2 HE
PROCLAIMED SYSTEMATIC STUDY OF DISTRIBUTION To BE THE MOST PRESSING
PRC>BLEM OF THE BUSINESSMAN. A REVIEW OF THE LITERATURE OF THE

FOLLOWING DECADES INDICATES THAT THE POINT OF VIEW EXPRESSED BY

 

\

O
(2 2 J. B. McKITTERICK, "WHAT IS THE MARKETING MANAGEMENT
OSNCEPTT," THE FRONTIER: OF MARKETING THOUGHT AND SCIENCE, PROCEEDINGS
1W1E FORTIETH NATIONAL CONFERENCE (CHICAGO: AMERICAN MARKETING

ASSOC IATION, I957), 73.

2'WILLIAM B. CASTENHOLZ, THE CONTROL OF DISTRIBUTION COSTS

A
T‘£=£3_J§gggg (NEW YORK: HARPER & BROS., I930), 28.

\'-

HE

20

SHAW GAINED WIDESPREAD ACCEPTANCE. THE CHANGE IN DIRECTION AND
EMPHASIS OF MANAGERIAL THINKING WAS SUMMARIZED BY BORSODI, AS

FOLLOWS:

THE DAY Is GONE WHEN THE RECIPE FOR FABULOUS
PROFIT WAS SIMPLY 'PRODUCTION; MORE PRODUCTION; STILL
MORE PRODUCTION!‘

THE GOLDEN AGE OF PRODUCTION IS PASE.

THE AGE OF DISTRIBUTION IS UPON US. 2

SIMILARLY, REED WROTE OF THE SHIFTING OF EMPHASIS TO THE MARKETING

AREA:

ONLY A FEW YEARS AGO INDUSTRY WAS NECESSARILY PRODUCTION-
MINDED. TODAY IT HAS TO BECOME MARKET-MINDED. PRODUCTION
HAS SO FAR OUT-DISTANCED MARKETING THAT THERE IS NO

LONGER A PROBLEMOF INCREASING PRODUCTION BUT ONE OF
PROFITABLY DISPOSING OF THE CAPACITY AVAILABLE.2

CHASE, NOTING THAT THE ECONOMY HAD ENTERED INTO A DISTRIBUTION

AGE IN WHICH "THE MOST IMPORTANT THING IS THAT MASS CONSUMPTION

I

BALANCE MASS PRODUCTION,T WROTE:

. . . FOR ALL PRACTICAL PURPOSES, THE PROBLEM OF PRODUC’
TION IS SOLVED. THE PLANT HAS LOST ITS SCARCITY

STATUS, AS WITNESSED BY SURPLUSES AND EXCESS CAPACITY,

A CONDITION WHICH WAS BECOMING OMINOUS LONG BEFORE

THE DEPRESSION. FURTHER INCREASES IN THE MEANS OF
PRODUCTION ARE DISCOUREEED, OWING TO THE POOR PROSPECTS
OF REALIZABLE PROFITS.

FORMER SECRETARY OF COMMERCE CHARLES SAWYER MORE RECENTLY COMMENTED

UPON WIDESPREAD EMPHASIS ON MARKETING PROBLEMS, DUE IN LARGE PART

\

22RALPH BORSODI, THE DISTRIBUTION AGE (NEW YORK:

D. APPLETON 8. CO., I929): 3-

F2 23VERGIL D. REED, PLANNED MARKETING (NEW YORK: THE
0"WILD PRESS CO., I929), 3.

(:,< 21ISTUART CHASE, "THE AGE OF DISTRIBUTION," THE NATION
XXIX (JULY 2h, I93II), 93.

2|

TO THE MORE ADVANCED STATE OF MANUFACTURING TECHNOLOGY, AS

FOLLOWS:

DURING THE PAST CENTURY AND A HALF THIS NATION HAS
CONCERNED ITSELF WITH DEVELOPING THE TECHNIQUES OF
PRODUCTION . . . . TODAY OUR PRODUCTION Is VIRTUALLY

LIMITED ONLY BY OUR ABILITY TO SELL AND USE WHAT WE
PRODUCT.

IT WOULD APPEAR THAT MASS PRODUCTION IN AND OF ITSELF

WOULD LEAD TO INCREASED ATTENTION TO MARKETING PROBLEMS. FURTHER,

THE COMPARATIVE LACK OF CONCERN AMONG BUSINESSMEN REGARDING
DISTRIBUTION PROBLEMS, WIDELY REPORTED TO HAVE EXISTED PRIOR TO

I930, EMPHASIZES ACCEPTANCE OF THE SALES MANAGEMENT ORIENTATION.

NEVERTHELESS, THE SHIFT FROM A PRODUCTION TO A SALES EMPHASIS

APPEARS TO BE QUITE REAL WHEN MEASURED IN TERMS OF PUBLIC

PRONOUNCEMENTS BY BUSINESSMEN AND ACADEMICIANS, AND OF THE
cchPARATIVE NUMBERS OF BOOKS AND ARTICLES CONCERNED WITH
DIESTRIBUTION PROBLEMS PUBLISHED DURING THIS PERIOD. As IMPORTANT
AS THE BASIC CHANGE IN ORIENTATION, HOWEVER, ARE FEATURES,
INCLLIDING SOME SIGNIFICANT FAULTS, OF THE SALES MANAGEMENT EMPHASIS.
THESE FEATURES ARE DISCUSSED BELOW BRIEFLY IN TERMS OF THE TASK
“SSIGNED THE SALES MANAGER, HIS OPERATIONAL ORIENTATION, LACK

0" (TVERALL MARKETING PLANNING, LACK OF SUFFICIENT COORDINATION
AMONG THE SEVERAL MARKETING FORCES, INSUFFICIENT CONTROL OF

THE OVERALL MARKETING OPERATION, CONFLICT WITH OTHER OPERATIONAL

AREAS OF THE COMPANY, AND THE DEVELOPMENT OF MARKETING RESEARCH.

 

\

2
5CHARLES SAWYER, "MAIN PROBLEM IS DISTRIBUTION," THE

CO\MMERCIAL AND FINANCIAL CHRONICLE, CLXXVI (SEPTEMBER II, I952), 9|l.

22

ROLE OF THE SALES MANAGER
IT APPEARS THAT DURING RECENT YEARS THE TASK OF THE SALES
MANAGER HAS BEEN MADE EXCEEDINGLY MORE DIFFICULT, DUE NOT ONLY
TO THE CHANGE IN THE MARKET FORCES WITHIN WHICH HE MUST OPERATE,
BUT FURTHER BY TOP MANAGEMENT'S BROADENING OF THE SCOPE OF
HIS POSITION. FREQUENTLY HE MAY LACK TRAINING FOR PERFORMING
HIs RESTRUCTURED JOB, AND EVEN GIVEN SUCH TRAINING, HE MAY LACK
THE TIME NECESSARY FOR PROPERLY PERFORMING THESE VARIED DUTIES.
THE FOLLOWING COMMENTS ARE PRESENTED AS EVIDENCE OF CHANGES AND
DIFFERENCES OF OPINION WHICH HAVE DEVELOPED IN RECENT YEARS
REGARDING THE ROLE OF THE SALES MANAGER.
TWO DESCRIPTIONS OF THE TRADITIONAL SALES MANAGER AND

HIS TASKS ARE WORTHY OF ATTENTION. BUSINESS WEEK HAS REPORTED:

 

THE SALES MANAGER USED TO BE TOP DOG. HE WAS CHIEF
SALESMAN AND ALSO SUPERVISOR OF THE SALES FORCE.
USUALLY, HE WAS A MAN WHO HAD COME UP THROUGH THE FIELD
SELLING ORGANIZATION. HE WON HIS SPURS FOR THE JOB

BY HIS SELLING RECORD. WHEN HE BECAME SALES MANAGER,
HE ASSUMED OVER-ALL RESPONSIBILITY FOR DISTRIBUTION,
PROMOTION, AND SERVICE ACTIVITIES OF THE COMPANY. HE
PROBABLY BUMPED INTO PROBLEMS OF ADVERTISING AND

SALES PROMOTION FOR THE FIRST TIME Ig HIS LIFE. HE
KNEW NOTHING ABOUT MARKET RESEARCH.2

AI-LEEN DESCRIBES THE POSITION OF THE SALES MANAGER, AS FOLLOWS:

BEFORE WORLD WAR II, THE CHIEF CONCERN OF THE
SALES EXECUTIVE WAS TO DEVELOP A SALES ATTACK THAT WOULD
PERSUADE PEOPLE TO BUY THE COMPANY'S PRODUCT. HE WAS
IN DIRECT COMMAND OF THE FIELD SALES FORCE AND OPERATED
ON THE SAME LEVEL As ADVERTISING, SALES PROMOTION,

\

PIC) 26"MARKETING MEN TAKE OVER IN G.E. UNITS," BUSINESS WEEK,

- l086 (JUNE 2h, I950), 3|.

 

..i\ L

II"

In...

i1-

IIIA

. I
P‘b
n».
A!-

23

AND MARKET RESEARCH.27

OBVIOUSLY THE TWO POSITIONS DESCRIBED ABOVE INCLUDE
SIGNIFICANT DIFFERENCES. THAT DIFFERENT COMPANIES NEED DIFFERENT
ORGANIZATIONAL PATTERNS AND JOB DESCRIPTIONS Is NOT QUESTIONED
HERE; HOWEVER, THE FOLLOWING QUOTATIONS INDICATE THAT RECENTLY
EVEN LESS CONSENSUS IS TO BE FOUND REGARDING THE BASIC NATURE
OF THE SALES MANAGER'S POSITION. COWAN HAS WRITTEN:

. . . ONE OF THE MARKS OF A CAPABLE SALES MANAGER IS

HIS ABILITY TO RELEGATE THE HANDLING OF DAILY OPERATIONS

TO PROPERLY TRAINED ASSISTANTS, AND TO CONCENTRATE

HIS OWN ATTENTION ON LONG-RANGE POLICIES AND PLANS,

UPON WHICH THE GENERAL METHODS OF HANDLING THE

DAILY DETAILS DEPEND. 8

RECENTLY BUSINESS WEEK REPORTED DIFFERENCES AMONG COMPANIES REGARD-

 

IIUG: ‘THE PROPER SCOPE OF THE SALES MANAGER'S POSITION, AS FOLLOWS:

SOME ARE PUSHING THE SALES MANAGER OUT FROM BEHIND HIS
DESK INTO THE FIELD WITH HIS MEN. OTHERS DISAGREE
WITH THIS APPROACH, INSTEAD ARE SHARPENING HIS ROLE AS
A SHAPER OF THE BROAD MARKETING POLICIES AND SALES
STRATEGIES THAT MAKE THE SALESMEN MORE EFFECTIVE. 9

TF1
E: I.ATTER INTERPRETATION WAS SUFFICIENTLY WIDESPREAD BY I9h0 TO

CAR
‘k’Ss‘i NOLAN AND MAYNARD TO SUGGEST THAT THE TERM "MARKETING MANAGER"

"30

~" (EIE1 n
‘T BE MORE ACCURATE THAN SALES MANAGEMENT. McNAIR AND

\

BE 3 27LOUIS A. ALLEN, "INTEGRATED MARKETING: THE CUSTOMER KNOWS
‘r"" DUN'S REVIEW AND MODERN INDUSTRY, LXXIII (JANUARY, I959), MI.

I K. 28DONALD R. G. COWAN, "THE FUNCTION OF MANAGEMENT IN MARKET-
Sc: :§.a> " THE ANNALS OF THE AMERICAN ACADEMY OF POLITICAL AND SOCIAL

““‘3-SE;33§;’CCIX (MAY, ISHO), 72.

NC) 29"FINGERS POINT AT SALES MANAGER," BUSINESS WEEK,

" I506 (JULY I2, I958), AT.

 

 

 

(A! E: 3OHERMAN C. NOLAN AND HAROLD H. MAYNARD, SALES MANAGEMENT
“V YORK: THE RONALD PRESS CO., I9IIO), II.

 

‘

2h

HANSEN RECOGNIZED SIX BASIC CATEGORIES OF SALES EXECUTIVES IN
AMERICAN BUSINESS;

I. THE POLICY MAKING EXECUTIVE WHO DETERMINES BUT
DOES NOT EXECUTE THE SALES PROGRAM;

2. THE SUBORDINATE OPERATING EXECUTIVE WHO DIRECTS
EXECUTION OF THE SALES PROGRAM;

3. THE COMBINATION POLICY AND OPERATING EXECUTIVE;

A. THE TERRITORIAL SALES EXECUTIVE;

5. THE PRODUCT SALES MANAGER; AND

6. THE PRODUCT-STAFF EXECUTIVE OR MERCHANDISING MANAGER.3|

As SUGGESTED PREVIOUSLY, ALTHOUGH THE SALES MANAGER ASSUMED
GREATER SIGNIFICANCE DURING THIS PERIOD, HIS FUNCTION WAS SUBJECT
TO CONSIDERABLE REVISION. AS A RESULT, IT IS REPORTED THAT,
FREQUENTLY, MEN ILL-EQUIPPED TO HANDLE THE BROADER TASK WERE
ASSIGNED TO IT, AND THAT PERSONS PROPERLY PREPARED HAD TOO
LITTLE TIME TO ATTEND TO THE VARIOUS ASPECTS OF THE JOB.
EMPHASIS ON SALES VOLUME

THE OPERATIONAL ORIENTATION OF THE SALES MANAGER OF
THIS PERIOD APPEARS TO BE ONE OF SALES VOLUME EMPHASIS. IT WOULD
BE UNREALISTIC TO SUGGEST THAT THESE PERSONS WERE GENERALLY
UNAWARE OR UNCONCERNED WITH THE PROFIT IMPLICATIONS OF THEIR
ACTIONs; EXCEEDINGLY CLEAR STATEMENTS APPEARED REGARDING THE

RELATIONSHIP OF SALES MANAGEMENT TO COMPANY PROFIT. FOR

 

3|MALCOLM P. McNAIR AND HARRY L. HANSEN, READINGS IN
MARKETING (NEW YORK: McGRAw-HILL BOOK CO., I9M9), 5R2.

 

7:15:

M.

I I

25

EXAMPLE, TOSDAL WROTE:

SINCE THE BUSINESS ENTERPRISE IS FOUNDED FOR PROFIT AND

SINCE NO BUSINESS ENTERPRISE MAY PERSIST INDEFINITELY

WITHOUT IT, THE OBJECTIVE OF THE SALES DEPARTMENT SHOULD

CONTRIBUTE DIRECTLY TO THE ATTAINMENT OF NET PROFIT.
HOWEVER, SUBSTANTIAL EVIDENCE EXISTS TO SUPPORT THE PROPOSITION THAT
SALES MANAGEMENT DURING THIS PERIOD WAS BASICALLY SALES-VOLUME
ORIENTED. IN I929 DICK WROTE:

. . . WE ARE NOT DOING ENOUGH PROFITABLE SELLING.

THERE HAS BEEN TOO MUCH URGE FOR SALES VOLUME AND

NOT ENOUGH URGE FOR THE PROFITS THAT SHOULD GO

WITH IT.
DICK ATTRIBUTED THIS VOLUME ORIENTATION LARGELY TO THE BASIS OF
SALES MANAGERS' COMPENSATION, WHICH GENERALLY WAS GEARED TO THE
VOLUME OF SALES WHICH THEY GENERATED.

SUFFICIENT STATEMENTS BY BUSINESS EXECUTIVES ARE AVAILABLE
TO INDICATE WIDESPREAD ACCEPTANCE AMONG CORPORATE MANAGEMENTS OF
THE SALES VOLUME EMPHASIS. FOR EXAMPLE, PRESIDENT J. OGDEN ARMOUR,
OF ARMOUR AND COMPANY, WROTE:

THE BASIS OF PROFITABLE BUSINESS IS ACTIVE MONEY;

SLOTH IN MONEY Is THE PRELUDE TO FAILURE . . . .

THE TEST OF A BUSINESS IS THE NUMBER OF TIMES THAT

THE STOCK Is TURNED AT A PROFIT EACH YEAR .u. . .
THE ANSWER To RISING COSTS Is: MORE SALES.3

 

32HARRY R. TOSDAL, INTRODUCTION TO SALES MANAGEMENT
(NEW YORK: MCGRAW-HILL BOOK COMPANY, I933), 3.

33RALPH H. DICK, "THE MARKETING PROBLEMS OF A MANUFACTURER
OF EQUIPMENT," BULLETIN OF THE TAYLOR SOCIETY, XIV (FEBRUARY, I929),

29.

3hBUSINESS LEADERSHIP: A SERVICE IN BUSINESS MANAGEMENT
(GARDEN CITY: DOUBLEDAY, PAGE & CO., I9I9), I.

I‘
n

26

SOME ACADEMICIANS, TOO, APPEAR TO HAVE STRESSED SALES VOLUME RATHER
THAN PROFIT. DAVIS WROTE:
THE SALES DEPARTMENT IS CONCERNED WITH STIMULATING
THE SALES OF THE COMPANY'S PRODUCTS, TO THE END THAT A
SATISFACTORY VOLUME OF SALES MAY BE OBTAINED AT A
REASONABLE COST OF DISTRIBUTION. WHILE IT HAS NO
JURISDICTION OVER THE FUNCTION OF PRODUCTION, IT IS
‘INTERESTED IN THE ATTAINMENT OF MINIMUM PRODUCTION
COSTS CONSISTENT WITH THE REQUIRED STANDARDS OF
QUALITY, BECAUSE THE PRICE AT WHICH MOST PRODUCTS
CAN BE SOLD DIRECTL AFFECTS THE EASE WITH WHICH THEY
CAN BE DISTRIBUTED.
AGAIN IT MUST BE EMPHASIZED THAT THE PERSONS MENTIONED
AND QUOTED ABOVE PROBABLY DID NOT OVERLOOK THE NEED FOR PROFITs;
RATHER THEY WERE CONCERNED PRIMARILY WITH ATTAINING SALES
VOLUMES SUFFICIENT To MAINTAIN MASS PRODUCTION. IT APPEARS THAT A
PREVALENT ASSUMPTION OF THE TIME WAS THAT HIGHER VOLUME OPERATION
YIELDS HIGHER PROFITs; THE LITERATURE REVEALS FEW CRITICS WHO
QUALIFIED OR QUESTIONED THIS ASSUMPTION.
LACK OF COORDINATION OF MARKETING ACTIVITIES
IT APPEARS THAT DURING THIS PERIOD THE OVERALL MARKETING
OPERATION WAS HAMPERED BY A LACK OF COORDINATION OF THE SEVERAL
MARKETING ACTIVITIES, AS WELL AS BY LACK OF PLANNING AND CONTROL
OF THEM. BURGER NOTES:
UNFORTUNATELY, MARKETING HAS GROWN UP MEDIUM BY
MEDIUM RATHER THAN As A UNIFIED OPERATIONAL CONCEPT.
AMERICAN SILESMANSHIP BEGAN IN ITS PRESENT FORM SOMEWHERE
NEAR THE I820'S; ADVERTISING, PERHAPS ABOUT I900;

PUBLICITY, AROUND I930. TODAY'S BUSINESSMAN EARNESTLY
GROPES FOR A BLENDING FORCE . . . , BUT EACH MEDIUM

 

35RALPH CURRIER DAVIS, THE PRINCIPLES OF FACTORY ORGANIZATION
AND MANAGEMENT (NEW YORK: HARPER & BROS., I928), 6|.

 

A.

1..

II:

\

27

REMAINS STR NGER THAN ANY COURT GUARDIAN THAT MAY BE
APPOINTED.3

BECKMAN, TOO, HAS NOTED THAT "VERY OFTEN ALL OF THESE DEPARTMENTS
FUNCTIONED INDEPENDENTLY As IF THEY WERE SEPARATE ENTITIES."37
THE EXTENT OF UTILIZATION, As WELL As THE STATE OF
DEVELOPMENT, OF CONTROL OF MARKETING EFFORT DURING THIS PERIOD
IS SUMMARIZED BY FREELAND, As FOLLOWS;
As ONE TALKS WITH MARKETING MANAGERS, HE CANNOT BUT
BE IMPRESSED WITH THEIR SILENCE ABOUT MARKETING OR SALES
CONTROL, IN CONTRAST WITH THE PRODUCTION MANAGER AND
HIS CONVERSATIONS ABOUT PRODUCTION CONTROL . . .
IN MOST INSTANCES WE HAVE NOT HAD ENOUGH RESEARCH
To DISCOVER WHAT WE ARE, OR SHOULD BE, TRYING TO CONTROL
. . . . ONLY RARELY DO WE FIND ANY WRITTEN MARKETING
PLANS, WITH QUANTITY AND TIME SCHEDULES AND EXPENSE
BUDGETS . . . . I PREDICT . . . A HIGH TURNOVER OF
SALES MANAGERS UNTIL WE HAVE ESTABLISHED A BREED THAT
BELIEVES IN AN PRACTICES RESEARCH, PLANNING AND CONTROL
IN MARKETING.3
LACK OF INTERDEPARTMENTAL COORDINATION
ANOTHER CHARACTERISTIC OF THIS PERIOD FREQUENTLY REFERRED
To IN THE LITERATURE Is CONFLICT AND LACK OF COOPERATIONAMONG THE
FIRM'S SEVERAL OPERATING DIVISIONS. SALES DEPARTMENTS HAVE BEEN

DESCRIBED AS BEING CRITICAL OF THEIR FIRMS. PRODUCTION DEPARTMENTS

BECAUSE OF COSTS AND QUALITY OF GOODS PRODUCED, THE TIMING OF

 

36'HENRY G. BURGER, "THE NEED FOR MARKETING ENGINEERING,"
THE JOURNAL OF MARKETING, XXIII (JANUARY, I959), 2H6.

37THEODORE N. BECKMAN, "THE EVOLUTION OF MARKETING AND
MARKETING CONCEPTS," PROCEEDINGS, CONFERENCE OF MARKETING TEACHERS
FROM FAR WESTERN STATES (BERKELEY, CALIF.: UNIVERSITY OF CALIFORNIA,

I955ITS-

38WILLARD E. FREELAND, "THE MARKETING PROBLEMS OF A
MANUFACTURER OF RESALE GOODS," BULLETIN OF THE TAYLOR SOCIETY,
XIII (DECEMBER, I928), 226.

 

28

DEEIVERIES, ETC. CONVERSELY, THE FACTORIES ARE DESCRIBED As

BEING CRITICAL OF THE SALES DEPARTMENTS BECAUSE OF THE LATTER'S
REQUESTS FOR SPECIAL ORDERS, SPECIAL HANDLING, ETC. THIS SITUATION
CAUSED POROSKY To NOTE: "To THE CASUAL OBSERVER IT WOULD SEEM

AS THOUGH THE FACTORY AND SALES FORCES IN MANY MANUFACTURING
ESTABLISHMENTS HAD OPPOSING INTERESTS AND WERE LINED UP IN

HOSTILE CAMPS."39 LACK OF COORDINATION AMONG OPERATING DIVISIONS
HAS BEEN SUMMARIZED BY WEBER, AS FOLLOWS:

THE SALES MANAGER THOUGHT MOSTLY ABOUT VOLUME
(PROFITS WERE THE CONCERN OF SOMEOIE ELSE); THE PLANT
MANAGERS THOUGHT ABOUT KEEPING UNIT COSTS DOWN AND
THEREFORE RESISTED CHANGES THAT REQUIRED RETOOLING;
THE BOSS WORRIED ABOUT THE SHRINKING NET IN RELATION
To CAPITAL INVESTED AND WROTE BLISTERING MEMOS ABOUT
CUTTING OUT UNNECESSARY RILLs; ALMOST NOBODY THOUGHT
ABOUT THE CONSUMER . . . 0

THE RELATIVE INDEPENDENCE OF THE SALES MANAGER, AS EVIDENCED
BY HIS OFFICIAL CONTACTS WITH OTHER COMPANY OFFICERS, INCLUDING
THE EXECUTIVE OFFICER, HAS BEEN NOTED BY DICK, WHO WROTE:

. . . BUSINESS EXECUTIVES HAVE BEEN TOO PRONE TO LEAVE
MARKETING, AND PARTICULARLY THE POLICY MATTERS SURROUNDING
IT, IN THE HANDS OF PURE SALES EXECUTIVES. UNTIL

RECENTLY . . . THE CHIEF EXECUTIVES HAVE COME UP FROM

THE PRODUCTION END OF THE BUSINESS. THEY HAVE BEEN
RELUCTANT TO TAMPER WITH AFFAIRS IN THE SALES AREA OF

THE BUSINESS FIELD, AND THE RESULT HAS BEEN THAT

THE SALES MANAGEfi'HAS OFTEN BEEN LEFT TOO MUCH To

HIS OWN DEVICES.

 

39MATTHEW POROSKY, PRACTICAL FACTORY ADMINISTRATION
(NEW YORK: MCGRAW HILL BOOK CO., I923), 228.

hoNORTON WEBER, "ARE WE MARKETING MEN . . . OR
WITCHDOCTORST," INDUSTRIAL MARKETING, XLII (NOFEMBER, I957), 55.

I'IIDICK, 29.

29

GROWING USE OF MARKETING RESEARCH
ONE OF THE MOST SIGNIFICANT DEVELOPMENTS OF THIS PERIOD
WAS THE INITIATION OF WIDESPREAD INTEREST IN, AND ACCEPTANCE OF,
MARKETING RESEARCH BY BUSINESSMEN. IN I9I2 SHAW HAD INDICATED
THE NEED FOR SYSTEMATIC STUDY IN AND OF MARKETING.u2 AS LATE
AS I928 FREELAND REPORTED:
I AM SURPRISED AS I GO ABOUT THE COUNTRY, AT THE NUMBER
OF MARKETING MANAGERS WHO HAVE PROBLEMS BECAUSE THEY
WILL NOT INTEREST THEMSELVES IN THE SUBJECT OF
COMMERCIAL OR MARKETING RESEARCH. THEY ARE CONTENT
TO BASE POLICIES AND METHODS UPON OPINIONS . . . M3
RATHER THAN TO FIND THE FACTS OF THEIR OWN BUSINESSES.
A STUDY CONDUCTED RECENTLY BY THE AMERICAN MARKETING ASSOCIATION
REFLECTS THE COMPARATIVELY RAPID DEVELOPMENT OF FORMAL MARKETING
RESEARCH DEPARTMENTS IN COMPANIES WHICH ARE NOW MEMBERS OF
THE ASSOCIATION. FOR EXAMPLE, FROM I933 T0 I937 MORE MARKETING
RESEARCH DEPARTMENTS WERE ESTABLISHED IN THE MEMBER FIRMS THAN
HAD BEEN CREATED IN ALL THE PRECEDING YEARS. FURTHER, SUCH
GROWTH HAS CONTINUED To THE PRESENT TIME.uh
SUMMARY
INTERESTING SUMMARIES OF COMPANY OPERATION DURING THE
PERIOD OF SALES MANAGEMENT ORIENTATION ARE PROVIDED IN THE

LITERATURE IN STATEMENTS BY COMPANY OFFICIALS REGARDING THEIR

OWN FIRMS. TWO SUCH STATEMENTS ARE PRESENTED BELOW. THE OPERATING

 

h23am, 97-98.

M3FREELAND, 226.

MIA SURVEY OF MARKETINGARESEARCH_(CHICAGO; AMERICAN
MARKETING ASSOCIATION, I959), T8.

 

3O

PHILOSOPHY OF PILLSBURY COMPANY DURING THE SALES MANAGEMENT ERA
HAS BEEN DESCRIBED BY KEITH, AS FOLLOWS:

AS A FLOUR MILLING COMPANY, MANUFACTURING A NUMBER OF
PRODUCTS FOR THE CONSUMER MARKET, WE MUST HAVE A FIRST-
RATE SALES ORGANIzATION WHICH CAN DISPOSE OF ALL THE
PRODUCTS WE CAN MAKE AT A FAVORABLE PRICE. TO ACCOMPLISH
THIS OBJECTIVE, OUR SALES FORCE MUST BE BACKED UP

BY CONSUMER ADVERTISING AND MARKET INTELLIGENCE.

OUR SALESMEN SHOULD HAVE ALL THE TOOLS THEY NEED FOR
MOVING THE OUTPUT OF OUR PLANTS TO THE CONSUMER.45

CONFLICT AND LACK OF COORDINATED EFFORT EXISTING AMONG THE
OPERATING DIVISIONS OF CHAIN BELT COMPANY Is EMPHASIZED BY
PRESIDENT LYNN B. McKNIGHT, AS FOLLOWS:

TIME WAS . . . WHEN INVENTORY WAS THE WORRY OF THE
PRODUCTION DEPARTMENT. AND SINCE PRODUCTION SEEMED To
KNOW BETTER THAN SALES WHAT COULD BE SOLD, THERE

WAS USUALLY SOME MANEUVERING BEHIND THE SCENES.

WHY? BECAUSE THE PRODUCTION DEPARTMENT HAD TO TAKE

THE BLAME IF INVENTORIES WENT TOO HIGH, KNOWING, AT
THE SAME TIME, THAT THE FINGER WOULD UNDOUBTEDLY BE
POINTED AT THE SALES DEPARTMENT IF BUSINESS WERE ADVERSELY
AFFECTED BECAUSE OF LOW INVENTORY. IN OTHER WORDS,
WHY NOT PLAY IT A LITTLE SAFE? THERE ALWAYS SEEMED

TO BE A TENDENCY TO SHY AWAY FROM SIZABLE INVENTORIES
WHEN - IN THE OPINION OF THE PRODUCTION DEPARTMENT -
WE WERE ACCUMULATING MfigE ITEMS THAN OUR SALES
DEPARTMENT COULD SELL.

THE PERIOD OF SALES MANAGEMENT EMPHASIS MAY BE SUMMARIZED
AS AN ERA DURING WHICH PROBLEMS OF DISTRIBUTION ASSUMED SPECIAL
SIGNIFICANCE IN AMERICAN INDUSTRY. THE POSITION OF THE SALES
MANAGER WAS STRENGTHENED, ALTHOUGH DURING THIS PERIOD THE DEFINITION

OF HIS TASK WAS SUBJECT TO CONSIDERABLE REVISION, GENERALLY

 

u5KEITH, "AN INTERPRETATION . . . ," I06.
M6LYNN 3- MCKNIGHT, "KEEPING PRODUCTION LINES OPEN,"

BROADENING THE SALES DEPARTMENT'S ROLE, MARKETING SERIES NO. 9h
(NEW YORK: AMERICAN MANAGEMENT ASSOCIATION, I955), 5.

 

In!

3|

RESULTING IN THE ASSIGNMENT OF BROADER RESPONSIBILITIES. THE
MEASURE OF THE SALES MANAGER'S EFFECTIVENESS, AND THE BASIS OF
HIS OWN RUWUNERATION, MOST FREQUENTLY APPEARS TO HAVE BEEN

THE LEVEL OF SALES VOLUME WHICH HIS ACTIONS GENERATED. ALTHOUGH
PROFIT WAS NOT IGNORED, THE SALES MANAGER HAD LITTLE, IF ANY,
DIRECT PROFIT RESPONSIBILITY. THE ASSUMPTION THAT HIGHER SALES
VOLUMES LEAD TO HIGHER PROFITS APPEARS TO HAVE BEEN ACCEPTED
WIDELY. ALSO, THERE Is EVIDENCE THAT CONFLICT AND LACK OF
COORDINATION EXISTED AMONG THE SEVERAL OPERATING DIVISIONS,

AND ALSO AMONG THE MARKETING AREAS. THE FORMER MAY BE EXPLAINED
IN PART ON THE BASIS OF THE SUPPOSED THREAT PRESENTED BY THE
SALES DEPARTMENT TO THE TRADITIONALLY SUPERIOR POSITION OF

THE PRODUCTION DEPARTMENT. THE LATTER IS DUE IN PART TO THE
EMPHASIS PLACED UPON THE SALES FORCE'S ROLE IN THE ABSENCE OF

AN APPRECIATION OF THE OTHER AREAS' CONTRIBUTIONS TO OVERALL
MARKETING EFFORT. THE MOST SIGNIFICANT DEVELOPMENTS OF THE
PERIOD PROBABLY WERE RECOGNITION OF THE IMPORTANCE OF MARKETING
PROBLEMS AND THE INITIATION OF WIDESPREAD USE OF MARKETING

RESEARCH TO AID THE SALES DEPARTMENT IN ITS EFFORTS.

EMPHASIS ON THE MARKETING CONCEPT, I950 - PRESENT
CHANGING DEFINITION OF MARKETING
TO THE READER OF BUSINESS PUBLICATIONS AND SCHOLARLY
JOURNALS CONCERNED WITH PROBLEMS OF BUSINESS MANAGEMENT, IT MUST
BE APPARENT THAT DURING THE PAST TEN YEARS COMMON USAGE OF THE
TERM "MARKETING" HAS UNDERGONE EXTENSIVE AND SIGNIFICANT REVISION.

IT IS NOT THE PURPOSE OF THIS PAPER TO SUGGEST THAT THE CONTEMPORARY

32

II II 1

DEFINITION IS NEW THE DATE OF ORIGIN OF SUCH A DEFINITION
IS OF FAR LESS CONSEQUENCE THAN IS THE INCREASING EXTENT TO
WHICH IT HAS RECEIVED ACCEPTANCE AND APPLICATION BY BUSINESSMEN AND
ACADEMICIANS. THEREFORE, THE ASPECTS OF RECENCY AND SOURCE
OR ORIGIN ARE NOT QUESTIONED HERE; As THIS THESIS Is DEVELOPED,
THE STUDENT OF MARKETING HISTORY WILL SEE FREQUENT APPLICATION
OF DEFINITION AND ACTION PROPOSED BY SHAW, CHERINGTON, AND OTHERS
SEVERAL DECADES AGO. CONCERN HERE IS WITH THE COMPARATIVE
INTEREST SHOWN IN, AND INTERPRETATIONS OF, MARKETING BY
BUSINESSMEN AND ACADEMICIANS DURING THE PAST DECADE.
WHEREAS IN FORMER PERIODS THE TERMS SELLING AND MARKETING
FREQUENTLY WERE USED INTERCHANGABLY, DURING THIS PERIOD OF
EMPHASIS ON THE MARKETING CONCEPT THE LITERATURE OFFERS NUMEROUS
EXAMPLES REGARDING DIFFERENCES BETWEEN THEM. FOR EXAMPLE, BUND
REPORTS:
RIGHT OR WRONG, MARKETING HAS COME TO MEAN A
GREAT DEAL MORE THAN JUST SELLING. SELLING, TRADITIONALLY-
AND IN MANY COMPANIES TO THIS DAY - MEANS GETTING THE ORDER,
THEN DEALING WITH THE CUSTOMER.
MARKETING IS A RESPONSIBILITY THAT EXTENDS BEYOND
SALES. IT ENTAILS COOPERATION AND COORDINATION WITH
OTHER PARTS OF THE ORGANIZATION, SPECIFICALLY PRoouc-
TION AND FINANCE. IT MEANS TAKING THEIR VIEWPOINT INTO
CONSIDERATION so As TO PRODUCE THE KIND OF SALES
VOLUME AND DYNAMICS THAT WILL GIVE THE COMPANY THE
GREATESE NET PROFIT AS WELL AS THE GREATEST POTENTIAL
GROWTH.

ANOTHER CONTEMPORARY DEFINITION OF MARKETING IS OFFERED BYI

ST. THOMAS, As FOLLOWS:

 

I

II("MARKETING - NEW HARNESS FOR MANAGEMENT,' PRINTERS' INK,

CCLVII (NOVEMBER 23, I956), 2|.

 

33

MARKETING IS A WAY OF MANAGING A BUSINESS SO EACH
CRITICAL BUSINESS DECISION (THOSE CRITICAL DECISIONS MADE
BY ENGINEERING PEOPLE, BY MANUFACTURING PEOPLE, BY
FINANCIAL PEOPLE, AND SO FORTH) Is MADE WITH A FULL

AND PRIOR KNOXBEDGE OF THE IMPACT OF THAT DECISION ON

THE CUSTOMER.

McKAY OFFERS AN EXPANDED DEFINITION WHICH SUGGESTS THAT MARKETING
Is:
I. A PHILOSOPHY OF CONSUMER ORIENTATION,

2. A METHOD OF MANAGING BY OBJECTIVES,

o
)

SYSTEM OF COMMERCIAL INTELLIGENCE,

A ROAD TO DYNAMIC BUSINESS STRATEGY,

AN ORDERLYPROCESS OF BUSINESS PLANNING,

AN EMPHASIS ON INNOVATION,

A MODERN FORM OF ORGANIZATION,

AN APPROACHING PROFESSION,

AN ESSENTIAL FOR PERFORMANCE EVALUATION, AND

(D \0 CD ~J 0\ \J1 #F L»

A FOCUS ON FUTURE OPPORTUNITIES.h9

OTHER DEFINITIONS CURRENTLY POPULAR SUGGEST THAT MARKETING IS
THE CREATION AND DELIVERY OF A STANDARD OF LIVING, OR THE
ENGINEERING OF PROFITABLE SALABILITY INTO PRODUCTS.
RE-EVALUATION OF MANAGERIAL RULES OF THUMB

THIS QUESTIONING OF THE TRADITIONAL CHANNEL-ORIENTED

 

h8CHARLES E. ST. THOMAS, "MARKETING AND THE SMALL BUSINESS,’
PAPER READ BEFORE MEETING OF THE NATIONAL FLUID POWER ASSOCIATION,
CHICAGO, NOVEMBER M, I958.

u9EDWARD S. McKAY, "THE NEW RESPONSIBILITIES OF MARKETING,"
LECTURE AT GRADUATE SCHOOL OF BUSINESS ADMINISTRATION, NEW YORK
UNIVERSITY, JANUARY 9, I958.

31+

DEFINITION OF MARKETING, APPARENTLY GENERALLY ACCEPTED DURING
THE ERA OF SALES MANAGEMENT EMPHASIS, HAS BEEN ACCOMPANIED BY AN
EXAMINATION OF A NUMBER OF REPORTEDLY POPULAR SALES MANAGEMENT
RULES OF THUMB. FOR EXAMPLE, DOES AN INCREASING SALES VOLUME
INDICATE THAT BUSINESS Is "GOOD"? DOES THE ADDITION OF PRODUCT
LINES REDUCE UNIT SELLING COST? ARE DEALERS THE ULTIMATE
CUSTOMERS OF THE MANUFACTURER? SHOULD CREATION OF SALES VOLUME
BE THE ULTIMATE GOAL OF THE SALES MANAGER? DOES THE STATEMENT,
"THE SUPPLY OF GOODS Is GREATER THAN MARKET DEMAND," REPRESENT
OVERPRODUCTION OF GOODS OR UNDERDEVELOPMENT OF MARKETS?

SUCH QUESTIONING OF TRADITIONAL MARKETING THINKING AND
ACTION, CAUSED BY NUMEROUS FORCES IN THE CONTEMPORARY BUSINESS
ENVIRONMENT DISCUSSES LATER IN THIS CHAPTER, HAS LEAD TO
WIDESPREAD FOCUS ON THE MARKETING CONCEPT. GUSTAFSON HAS
REPORTED:

BASIC APPROACHES TO SELLING IN THE AMERICAN
MARKET ARE CHANGING. BUSINESS IS BROADLY APPLYING A
NEW POINT OF VIEW WHICH BEGINS AND ENDS WITH THE CUSTOMER.
MANUFACTURING, ENGINEERING AND FINANCIAL DEPARTMENTS
ARE BEGINNING TO OPERATE IN A DIFFERENT FRAMEWORK:

WHAT IS GOOD FOR THE CUSTOMER IS ALSO GOOD FOR THE

COMPANY.
THE TERM COMMONLY USED TO EXPRESS THE NEW
CONCEPT IS "MARKETING."

SUCH CHANGES WERE NOTED BY HAHN, TOO, WHO WROTE:
THE MIDDLE FIFTIES MAY WELL GO DOWN IN THE

ANNALS OF BUSINESS AS THE YEARS IN WHICH TWO THINGS
HAPPENED THAT WERE TO BE OF MORE THAN MINOR CONSEQUENCE

 

50PHILIP GUSTAFSON, "SELLING TOMORROW'S MARKET,"
NATION'S BUSINESS XV (FEBRUARY, I957), 76.

35

IN OUR ECONOMY:

I. SIGNIFICANT NUMBERS OF BUSINESS LEADERS
DECIDED THAT CUSTOMERS ARE WHAT MAKE OUR ECONOMIC
WHEELS GO AROUND.

2. HAVING REFLECTED UPON THIS PREMISE, WHICH
SEEMS AS FUNDAMENTAL AS GRAVITY, THEY DECIDED THE
WAY TO BUILD A SUCCESSFUL BUSINESS IS TO FIND SOME
CUSTOMERS WHO NEED OR WANT SOMETHING, AND THEN TRY
TO MAKE IT AND MAKE IT AVAILABLE - BOTH AT A REASONABLE
PROFIT TO THOSE WHO RISK THEIR MONEY IN THE ENTER-
PRISE.

THAT 5 . . IS WHAT THIS "MARKETING CONCEPT" Is

ALL ABOUT.
HAHN'S PREDICTION IS IN PART CONFIRMED BY A POLL OF EIGHTY
SPEAKERS BEFORE THE NATIONAL INDUSTRIAL CONFERENCE BOARD HELD
IN NEW YORK IN I959, WHICH INDICATED THAT "THE WIDESPREAD
IMPLEMENTATION OF THE MARKETING CONCEPT DESERVES TOP BILLING
As THE BIGGEST MARKETING NEWS OF RECENT YEARS."52
CORPORATE INTEREST IN THE MARKETING CONCEPT

THE SHIFT IN MANAGERIAL THINKING FROM A SALES MANAGEMENT
TO A MARKETING CONCEPT ORIENTATION, DESCRIBED BY PHELPS AS A
SHIFT FROM A CAVEAT EMPTOR TO A CAVEAT VENDOR SYSTEM, HAS BEEN
ACKNOWLEDGED BY NUMEROUS BUSINESSMEN. DISTINCTION BETWEEN THE
TWO APPROACHES To BUSINESS PROBLEMS HAS BEEN DESCRIBED BY
FRED J. BORCH, VICE-PRESIDENT OF MARKETING SERVICES, GENERAL
ELECTRIC COMPANY, AS FOLLOWS:

. . II THE SALES CONCEPT ALONE CONCERNS ITSELF PRIMARILY
WITH VOLUME. MARKETING MEANS CUSTOMER ORIENTATION '- A

 

5IA. R. HAHN, "THE 'MARKETING CONCEPT': A MAJOR CHANGE
IN MANAGEMENT THINKING," SALES MANAGEMENT, LXXIX (NOVEMBER I0, I957),

6h.

52"TOMORROW'S MAJOR TRENDS IN MARKETING," SALES MANAGEMENT,
LXXXIII (SEPTEMBER h, I959), 39.

36

TRUE ALLIANCE WITH THE FELLOW AT THE OTHER END OF THE
PIPELINE, BUT IT INSISTS UPON A COURSE OF ACTION OF
MUTUAL BENEFIT.53
IN COMPARING THE TWO EMPHASES, McKAY STRESSES THE ROLE OF MARKETING
IN OVERALL COMPANY PLANNING UNDER THE MARKETING CONCEPT:
UNDER THE TRADITIONAL "SALES" CONCEPT, ENGINEERING
DESIGNED A PRODUCT, MANUFACTURING PRODUCED IT - AND THEN
THE SALES PEOPLE WERE EXPECTED To SELL IT. UNDER THE
MODERN "MARKETING" CONCEPT, THE WHOLE BUSINESS PROCESS
STARTS WITH MARKETING RESEARCH AND SALES FORECASTING
TO PROVIDE A SOUND, FACTUAL, CUSTOMER-ORIENTED BASIS
FOR PLANNING ALL BUSINESS OPERATIONS, AND THE BUSINESS
FUNCTION WHICH HAS SALES RESPONSIBILITY NOW PARTIfiIPATES IN
ALL THE STAGES OF THE BUSINESS PLANNING PROCESS.5
OF THE SEVERAL COMPANIES REPORTING INTEREST IN THE
MARKETING CONCEPT IN THE EARLY I950's, MOST ATTENTION IN THE
LITERATURE HAS BEEN GIVEN TO THE IMPACT OF THE CONCEPT'S
ACCEPTANCE BY GENERAL ELECTRIC COMPANY MANAGEMENT. BY I950
ITS MANAGEMENT HAD RECOGNIZED THE NEED FOR STRENGTHENING
MARKETING PROCEDURES AND POOLING MARKETING EXPERIENCE, AND
MARKETING MANAGEMENT POSITIONS WERE ESTABLISHED THROUGHOUT
UNITS OF THE DECENTRALIZED ORGANIZATION. FURTHER, A MARKETING
SERVICES FACILITY WAS ESTABLISHED AND A VICE-PRESIDENT OF
MARKETING POLICY WAS APPOINTED. McKAY HAS NOTED:
THE MARKETING CONCEPT WAS DEVELOPED AS AN
INTEGRAL PART OF A BROAD COMPANY ORGANIZATION AND

MANAGEMENT PROGRAM. TOP MANAGEMENT RECOGNIZED, MORE
THAN TEN YEARS AGO, THAT THE TREMENDOUS GROWTH

 

53FRED J. BORCH, THE MARKETING PHILOSOPHY AS A WAY OF
BUSINESS LIFE (NEW YORK: GENERAL ELECTRIC CO., I957):

 

ShEDWARD S. McKAY, "THE MARKETING CONCEPT IN GENERAL
ELECTRIC," AN UNPUBLISHED PAPER DATED SEPTEMBER 30, I958.

37

OPPORTUNITIES - IN THE AMERICAN ECONOMY OVER-ALL

AND SPECIFICALLY IN THE ELECTRICAL INDUSTRY - CALLED
FOR AN ENTIRELY NEW APPROACH TO LONG-RANGE PLANNING,
ORGANIZATION STRUCTURE, MANAGERIAL COMPETENCE, AND
PERSONNEL DEVELOPMENT. THIS PROGRAM INCLUDED:
DECENTRALIZATION OF PRODUCT BUSINESSES INTO AUTONOMOUS
OPERATIONs; PROVISION OF TECHNICALLY COMPETENT
FUNCTIONAL SERVICES (INCLUDING ONE IN MARKETING)

TO DO ADVANCED RESEARCH, TEACHING, AND COUNSELING;
DEVELOPMENT OF A MORE PROFESSIONAL APPROACH TO
MANAGING; AND A MARKETING CONCEPT WHICH WOULD ORIENT
EACH OPERATION AND THE COMPANY TO THE CONSUMER.55

IN THE ANNUAL REPORT FOR I952, PRESIDENT CORDINER, REFERRING TO
THE COMPANY'S NEW EMPHASIS ON MARKETING, NOTED THAT THE
MARKETING CONCEPT:
. . . INTRODUCES THE MARKETING MAN AT THE BEGINNING
RATHER THAN THE END OF THE PRODUCTION CYCLE AND WOULD
INTEGRATE MARKETING INTO EACH PHASE OF THE BUSINESS.
THUS MARKETING, THROUGH ITS STUDIES AND RESEARCH,
WILL ESTABLISH FOR THE ENGINEER, THE DESIGNER AND THE
MANUFACTURING MAN WHAT THE CUSTOMER WANTS IN A
GIVEN PRODUCT, WHAT PRICE HE IS WILLING To PAY,
AND WHERE AND WHEN IT WILL BE WANTED. MARKETING
WOULD HAVE AUTHORITY IN PRODUCT PLANNING, PRODUCTION
SCHEDULING AND INVENTORY CONTROL, AS WELL AS IN

THE SALE§6 DISTRIBUTION AND SERVICING OF THE
PRODUCT.

TODAY, EACH OF THE MORE THAN ONE HUNDRED PRODUCT DEPARTMENTS
OF GENERAL ELECTRIC COMPANY HAS ITs MARKETING SECTION HEADED
BY A MARKETING MANAGER.

THE IMPACT OF THE DECISION BY GENERAL ELECTRIC COMPANY'S
MANAGEMENT TO ACCEPT AND IMPLEMENT THE MARKETING CONCEPT, AND
OF THE PUBLICITY GIVEN TO THAT DECISION, EXTENDED RAPIDLY

FAR BEYOND THE LIMITS OF THE COMPANY. ALMOST IMMEDIATELY EXECUTIVES

 

55IBID

 

56GENERAL ELECTRIC COMPANY ANNUAL REPORT, I952.

OF OTHER LEADING COMPANIES ACKNOWLEDGED ACCEPTANCE OF THIS
BUSINESS ORIENTATION. WIDE PUBLICITY HAS BEEN GIVEN TO THE
RESULTING PROGRAMS OF GENERAL FOODS CORPORATION, KRAFT FOODS
COMPANY, CAMPBELL SOUP COMPANY, MOTOROLA, INC., WESTINGHOUSE
ELECTRIC CORPORATION, BULLDOG ELECTRIC PRODUCTS COMPANY,
F. AND M. SCHAEFER BREWING COMPANY, PILLSBURY COMPANY,
AMERICAN TELEPHONE AND TELEGRAPH COMPANY, AND OTHERS. THE
NAMES OF SEVERAL HUNDRED FIRMS HAVE BEEN ASSOCIATED IN THE
LITERATURE WITH THE MARKETING CONCEPT, FOR THE MOST PART
SINCE I95h.
THE OPERATING PHILOSOPHIES OF THE PILLSBURY COMPANY
DURING THE ERAS OF PRODUCTION AND SALES ORIENTATIONS HAVE BEEN
DESCRIBED PREVIoosLY. KEITH HAS DESCRIBED THE COMPANY'S
PRESENT VIEW OF MARKETING'S ROLE, AS FOLLOWS:
MARKETING Is VIEWED IN OUR COMPANY TODAY AS
THE FUNCTION WHICH PLANS AND EXECUTES THE SALE - ALL
THE WAY FROM THE INCEPTION OF THE IDEA, THROUGH ITS
DEVELOPMENT AND EXECUTION, To THE SALE To THE
CUSTOMER. MARKETING BEGINS AND ENDS WITH THE CONSUMER.
THE IDEA FOR A NEW PRODUCT IS CONCEIVED AFTER CAREFUL
STUDY OF HER WANTS AND NEEDS, HER LIKES AND DISLIKES.
WITH THE IDEA IN HAND, THE MARKETING DEPARTMENT FUNCTIONS
AS A UNIVERSAL JOINT IN THE CORPORATION, MARSHALLING
ALL THE FORCES OF THE CORPORATION T0 TRANSLATE THE
IDEA INTO PRODUCT AND THE PRODUCT INTO SALES.57
IN SUMMARY KEITH NOTES THAT PILLSBURY COMPANY EMPHASIS HAS SHIFTED
FROM PRODUCTION TO MARKETING PROBLEMS, FROM THE PRODUCT THAT

COULD BE MADE TO THE PRODUCT THAT CONSUMERS WANTED MADE, AND

FROM THE COMPANY ITSELF TO THE MARKET PLACE.

 

57KEITH, "AN INTERPRETATION . . .," I07.

39

SUMMARY

TYPICALLY, ADVOCATES OF THE MARKETING CONCEPT DESCRIBE
NUMEROUS WAYS IN WHICH THE CONCEPT AIDS THEIR ORGANIZATIONS.
BENEFITS MOST FREQUENTLY NAMED INCLUDE: BETTER INTERGRATION OF
OVERALL MARKETING EFFORT, COORDINATION AMONG THE OPERATION
DIVISIONS OF THE FIRM, INCREASED PROFIT CONSCIOUSNESS AND
RESULTING HIGHER PROFITS AND RETURN ON INVESTMENT, INSURED
COMPANY GROWTH AND STABILITY, AND SMOOTH ORGANIZATIONAL FUNCTIONING
INVOLVING ASSIGNMENT OF RESPONSIBILITY AND THE FREEING OF
PERSONNEL FROM MINOR TASKS SO THAT THEY MAY ATTEND TO THEIR
PRIMARY FUNCTIONS. -ALSO CONSUMER ORIENTATION AND MANAGEMENT
BY OBJECTIVES ARE EXPECTED TO REDUCE NEW PRODUCT FAILURE RATES,
THEREBY ENHANCING OVERALL EFFECTIVENESS OF MARKETING EFFORT.
MANAGEMENT DEVELOPMENT, TOO, IS SUGGESTED AS A BY-PRODUCT OF
THE CONCEPT. ALTHOUGH DISCUSSIONS OF SUCH BENEFITS MAY BE
CONSIDERED As BEING PART-PROOF AND PART-PLATITUDE, APPARENTLY
FEW PERSONS QUESTION THEIR vALIDITY AND STILL FEWER REJECT THE
MARKETING CONCEPT AS BEING A "BETTER"ORIENTATION THAN THOSE
WIDELY HELD PREVIOUSLY BY COMPANY MANAGEMENTS.

ONLY A BRIEF OVERVIEW OF THE MARKETING CONCEPT HAS BEEN
PRESENTED IN THIS CHAPTER. A DETAILED REVIEW OF THE CONTENT OF
MARKETING CONCEPT LITERATURE AND A PROPOSED MODEL OF THE MARKETING
CONCEPT ARE PRESENTED IN THE FOLLOWING CHAPTERS. THE PURPOSE OF
THIS AND THE PRECEDING SECTIONS HAS BEEN TO INDICATE THE EXISTENCE
AND ACCEPTANCE OF OTHER ORIENTATIONS AND, IN SUMMARY, TO COMPARE

THEIR BASES WITH THOSE OF THE MARKETING CONCEPT.

IIO

SOME FACTORS AFFECTING EVOLUTION OF THE MARKETING CONCEPT

INTRODUCTION

 

IN THE PRECEDING PAGES OF THIS CHAPTER IT IS NOTED THAT
DURING THE PRESENT CENTURY MANAGERIAL ORIENTATION IN AMERICAN
BUSINESS HAS UNDERGONE SIGNIFICANT REVISION, RESULTING IN
EMPHASIS UPON DIFFERENT ASPECTS OF THE BUSINESS AT DIFFERENT
TIMES. IT IS PROPOSED BY THIS WRITER, FIRST, THAT SHIFTING
BUSINESS EMPHASES AND ORIENTATIONS IS A NATURAL PHENOMENON IN
A DYNAMIC ECONOMY; SECOND, THAT DEVELOPMENT OF THE MARKETING
CONCEPT AND THE TIMING OF THAT DEVELOPMENT ARE REASONABLE, GIVEN
THE DYNAMIC NATURE OF THE ECONOMY; AND THIRD, THAT FACTORS IN THE
CONTEMPORARY ECONOMY WHICH WERE INSTRUMENTAL IN DEVELOPMENT
OF THE MARKETING CONCEPT STILL DIRECT MANAGERIAL ATTENTION TO
THE AREA OF MARKETING ACTIVITY AND PROBABLY SHALL CONTINUE
TO DO 50 IN THE YEARS IMMEDIATELY AHEAD.

HALF A CENTURY AGO SHAW RECOGNIZED THAT ECONOMIC CONDITIONS
PREVALENT IN EIGHTEENTH CENTURY ENGLAND WERE DIRECTLY RESPONSIBLE
FOR THE EMPHASIS WHICH WAS PLACED UPON MASS PRODUCTION, AND
WHICH WAS RESPONSIBLE IN PART FOR THE DEVEOPMENT OF THE FACTORY
SYSTEM. NOTING THAT THE EXPLANATIONS FOR THE CHANGES WHICH DID
'OCCUR, AS WELL AS THE REASONS WHY DISTRIBUTION RECEIVED LITTLE
ATTENTION AS A PROBLEM AREA WORTHY OF STUDY, ARE TO BE FOUND
IN THE STUDY OF ECONOMIC HISTORY, SHAW WROTE:

CHIEF AMONG THE CAUSES FOR THE INDUSTRIAL CHANGES

LEADING TO THE ESTABLISHMENT OF THE FACTORY SYSTEM

IN ENGLAND IN THE EIGHTEENTH CENTURY WAS THE CONSTANT

WIDENING OF THE MARKET. IT WAS A RAPIDLY INCREASING'
PRESSURE ON THE PRODUCER FOR GREATER QUANTITIES OF STAPLE

MI

ARTICLES FOR MASS CONSUMPTION THAT GAVE INCENTIVE
TO REVOLUTION IN THE METHOD OF PRODUCTION. FOR A
CENTURY THEREAFTER THE NECESSITY OF SUPPLYING A
CONTINUALLY WIDENING MARKET, As MEANS OF TRANSPORTA-
TION STEADILY IMPROVED AND THE POPULATION INCREASED
WITH UNPRECIDENTED RAP DITY, MADE PRODUCTION
THE DOMINANT PROBLEM.5
SIMILARLY, MARSHALL RECOGNIZED THAT KNOWLEDGE OF MARKETING WAS
FAR LESS ADVANCED THAN KNOWLEDGE OF PRODUCTION IN I92I. AGAIN
THE DIFFERENCE IS EXPLAINED IN TERMS OF THE ECONOMIC SITUATION
OF TIME. REGARDING THIS DISPARITY HE WROTE:
THE REASON IS SIMPLE AND PLAIN. WE HAVE BEHIND US MORE
THAN ONE HUNDRED YEARS OF STUDY OF PRODUCTION PROBLEMS
DURING A TIME WHEN THE MARKET WAS EVER YAWNING FOR
MORE OUTPUT . . . . MARKETING PROBLEMS, IN THE CONTRARY,
HAVE BECOME PRESSING ONLY IN THE LAST GENERATION OR
TWO . . .5
IT APPEARS REASONABLE THAT AS FACTORIES WERE ESTABLISHED
AND THE MORE BASIC NEEDS OF THE POPULATION WERE FILLED, EMPHASIS
SHOULD SHIFT FROM THE ORIGINAL PROBLEMS OF ENGINEERING AND PRoouc-
TION TO THOSE OF SELLING, I.E. MOVING THE GOODS OUT OF THE
FACTORIES. SEVERAL ADVOCATES OF THE MARKETING CONCEPT HAVE
SUGGESTED THAT THE SALES MANAGER OF THE SELLING ERA WAS "A
PUSHER" OR "A GOOD DRUMMER" WHO WORKED FROM VOLUME SALES.
VIEWED WITHIN THE HISTORICAL FRAMEWORD, SUCH COMMENTS NEED
NOT BE INTERPRETED As DISPARAGEMENTS. INDEED, FOR A NUMBER
OF YEARS, IT MAY BE THE CASE THAT PROFITS OF FIRMS WERE.MAXIMIZED

THROUGH SUCH EFFORTS, RATHER THAN THROUGH CONCERN WITH THE VARIOUS

PHYSICAL MANIFESTATIONS ASSOCIATED WITH THE MARKETING CONCEPT. THAT

 

58SHAW, M2.

59LEON CARROLL MARSHALL, BUSINESS ADMINISTRATION (CHICAGO:

 

THE UNI\IERSITY OF CHICAGO PRESS: I92II: 308°

III.

~I\2

h2

IS, GIVEN THE NATURE OF PREVAILING COMPETITION AND CONSUMER DEMAND,
IT Is POSSIBLE THAT DURING AN INTERMEDIATE PERIOD PROFITS AND

RETURN ON INVESTMENT WOULD NOT HAVE BEEN ENHANCED BY MANAGERIAL
EMPHASIS ON CERTAIN SPECIALIZED MARKETING FUNCTIONS.

HOWEVER, THE ECONOMIC SYSTEM IS DYNAMIC. ACTIONS OF
COMPETITORS, SUCH As CHANGES IN PRODUCT LINES, PRICE STRUCTURES,
ETC., AND CHANGES IN CONSUMERS' SITUATIONS, INCLUDING STOCK OF
GOODS ALREADY ACCUMULATED AS WELL AS DESIRE AND ABILITY TO CONSUME
MORE, ETC., REQUIRE ADJUSTMENTS WITHIN THE FIRM. SUCH CHANGES
HAVE OCCURRED IN THE PAST FIFTEEN YEARS, AND THEY HAVE BEEN VAST
CHANGES OF CONSIDERABLE CONSEQUENCE TO THE FIRM. REPORTEDLY, IT
Is BECOMING INCREASINGLY EVIDENT To BUSINESS MANAGEMENT THAT THE
SALES ORIENTATION IS No LONGER ACCEPTABLE, FOR THE CONDITIONS WITHIN
WHICH IT YIELDED REASONABLY SATISFACTORY RESULTS ARE NO LONGER
PRESENT. IT IS FOR THIS REASON THAT DOSCHER WROTE:

TODAY'S EMPHASIS ON THE TOTAL MARKETING CONCEPT IS

SIMPLY ANOTHER STEP IN THE EVOLUTION OF AMERICAN INDUSTRY

UNDER OUR COMPETITIVE SYSTEM IN WHICH, TO SURVIVE, WE

MUST CONTINUALLY LOOK TO IMPROVED ORGANIZATION, THE ADOPTION

OF NEW TECHNIQUES AND PRINCIPLES, AND THE MORE EFFECTIVE

ORIENTATION OF BRAINPOWER TO THE6EVER-GROWING

COMPLEXITIES OF MODERN INDUSTRY. 0
IN RECOGNIZING THE INEVITABILITY OF CHANGE, ITS PRESENCE IN

SIGNIFICANT PROPORTIONS IN TODAY'S ECONOMY, AND THE NECESSITY OF

BUSINESSMEN'S ADJUSTING TO IT, COX STATES:

 

6OFEN K. DOSCHER, "THE VICE-PRESIDENT FOR MARKETING:
WHAT KIND OF MAN MUST HE BE?," THE MARKETING CONCEPT: ITS MEANING
To MANAGEMENT (NEW YORK: AMERICAN MANAGEMENT ASSOCIATION, I957);

23.

“3

. . . WE MUST HAVE THE VISION TO SEE THAT WE ARE LIVING

IN TURBULANT TIMES} THE HONESTY T0 ADMIT IT; AND THE COURAGE

TO Do SOMETHING ABOUT IT. WE MUST MEET CHANGE WITH C ANGE

IF WE.ARE TO SUCCEED IN TOMORROW'S TURBULANT MARKETS.

PREREQUISITE TO FULL APPRECIATION OF THE MARKETING CONCEPT Is
RECOGNITION OF VARIOUS FORCES WHICH CONSTITUTE THE ENVIRONMENT
WITHIN WHICH THE FIRM MUST OPERATE. THE IMPRACTICABILITY OF ENUMERAT-
ING AND DISCUSSING ALL COMPONENTS OF SUCH A SYSTEM OF FORCES IS
RECOGNIZED BY THIS WRITER. HOWEVER, A BRIEF DESCRIPTION OF SEVERAL
OF THE MOST SIGNIFICANT ENVIRONMENTAL BASES OF THE MARKETING
CONCEPT IS PRESENTED IN THE REMAINING PAGES OF THIS CHAPTER, SO
As TO PROVIDE A FRAMEWORD FOR INTERPRETATION OF THE CONCEPT. THE
AREAS WHICH ARE DISCUSSED BELOW ARE, RESPECTIVELY, GENERAL ECONOMIC,
COMPETITIVE, FIRM, AND MARKET FORCES.
GENERAL ECONOMIC FACTORS

ALTHOUGH DISCUSSIONS OF THE MARKETING CONCEPT ARE
GENERALLY CONCERNED WITH FIRM, COMPETITIVE, AND MARKET FORCES, IT
SHOULD BE RECOGNIZED THAT SEVERAL GENERAL TRENDS IN THE ECONOMY HAVE
HAD A DIRECT BEARING ON EVOLUTION OF THE CONCEPT. THE FOLLOWING
ARE AMONG THE MOST SIGNIFICANT OF THESE FORCES.

I. DEVELOPMENT OF A GAP BETWEEN THE ABILITY OF FIRMS T0
PRODUCE QUANTITIES OF GOODS AND THEIR ABILITY TO DISPOSE OF SUCH
QUANTITIES PROFITABLY Is WIDELY REPORTED IN CURRENT BUSINESS LITERATURE.
THIS SITUATION MAY BE EXPLAINED IN TERMS OF THE HISTORICAL

DEFERENCE SHOWN TO PRODUCTION PROBLEMS, OF EXPANSION OF PRODUCTION

 

6|REAVIS Cox, "THE CHANGING MARKET: WHAT LIES AHEAD?,"
PLANNING AHEAD FOR PROFITS (NEW YORK: AMERICAN MANAGEMENT ASSOCIATION,
'955)’ 220

I‘I'IIWI

uh

CAPACITY IN CERTAIN INDUSTRIES FOR WAR PRODUCTION, OR OF THE
SHIFTING OF CONSUMER DEMAND FROM ONE INDUSTRY TO ANOTHER, ETC.
SOME BUSINESSMEN INTERPRET THIS DEVELOPMENT TO BE INDICATIVE
OF BUSINEss' NEED FOR "EDUCATING" PEOPLE TO CONSUME MORE GOODS AND
SERVICES; OTHERS SUGGEST THAT BASIC CHANGES IN MANAGERIAL
THINKING ARE REQUIRED.

2. SINCE THE END OF WORLD WAR II THE SHIFT FROM A SELLERS'
MARKET To A BUYERS' MARKET HAS OCCURRED. THE TRADITIONAL PRODUCTION
ORIENTATIONAND EVEN THE AGGRESSIVENESS OF THE SALES ORIENTATION
HAVE PROVED TO BE INSIFFICIENTLY EFFECTIVE FOR OPERATION IN THE
CONTEMPORARY BUSINESS CLIMATE.

3. MANAGEMENT GENERALLY Is TENDING TOWARD PROFESSIONALISM.
THE TREND TOWARD A MORE PROFESSIONAL APPROACH TO THE STUDY AND
PRACTICE OF BUSINESS ADMINISTRATION Is EMPHASIZED BY GROWING
MEMBERSHIPS OF "PROFESSIONAL" BUSINESS ASSOCIATIONS, THE NATURE
OF THE CONTENT OF THESE ASSOCIATIONS' PUBLICATIONS, MANAGERIAL
CONCERN WITH CORPORATE PHILOSOPHIES, THE CURRICULA CONTENT
OF PROFESSIONAL SCHOOLS OF BUSINESS, ET CETERA.

h. THERE IS AN EVIDENT TREND TOWARD SYSTEMATIC MANAGEMENT,
BASED UPON ANALYSIS OF CORPORATE GOALS AND PROCEDURES, AND EVEN
OF THE BASES OF CORPORATE EXISTENCE. EMPHASIS IS PLACED UPON
RATIONAL ACTION BASED ON FACTS, THEREBY REDUCING RISKS WHICH ARISE
FROM LACK OF INFORMATION. CORPORATE RESEARCH EXPENDITURE LEVELS
AND CONCERN WITH PLANNING AND INTERNAL COMMUNICATION ARE PARTIAL
EVIDENCE OF THIS TREND.

5. WIDESPREAD ATTENTION CURRENTLY Is GIVEN TO THE ROLE

1+5

OF MARKETING IN SUPPORTING A HIGH LEVEL OF EMPLOYMENT, ECONOMIC
GROWTH AND STABILITY, AND OPTIMUM UTILIZATION OF NATIONAL RESOURCES
GENERALLY. IT IS TO BE EXPECTED THAT, AS MARKETING'S SHARE OF

THE TOTAL LABOR FORCE CONTINUES TO INCREASE, THIS SENTIMENT SHALL
GAIN EVEN WIDER ACCEPTANCE.

6. IT IS OCCASIONALLY SUGGESTED IN THIS AGE OF IDEOLOGICAL
CONFLICT, THAT TO A CONSIDERABLE DEGREE, PRESERVATION OF THE
CAPITALISTIC SYSTEM Is DEPENDENT UPON MARKETING'S EFFECTIVENESS
IN PROVIDING FOR FULFILLMENT OF WANTS AND NEEDS OF THE PEOPLE.

COMPETITIVE FACTORS

 

PROBABLY OF MORE IMMEDIATE CONCERN To MOST COMPANY MANAGE-
MENTS, HOWEVER, ARE PROBLEMS RELATED TO COMPETITION WITH OTHER
FIRMS IN THE MARKET PLACE. AGAIN IT SHOULD BE NOTED THAT
-MANUFACTURING THE HIGHEST QUALITY PRODUCT POSSIBLE AND HIRING
THE MOST DYNAMIC SALES MANAGER AVAILABLE DO NOT NECESSARILY CONSTITUTE
AN EFFECTIVE RESPONSE TO CONTEMPORARY COMPETITION. THE FOLLOWING
ARE AMONG THE MOST SIGNIFICANT COMPETITIVE FORCES.LEADING TO
DEVELOPMENT OF THE MARKETING CONCEPT.

I. THE MARKETER TODAY FACES CONSUMERS WHO HAVE ATTAINED
A RELATIVELY HIGH LEVEL OF LIVING. FOR THE MOST PART, THE NECESSITIES
OF LIFE HAVE BEEN MET; YET DISCRETIONARY SPENDING POWER CONTINUES
To RISE. AS A RESULT THE MARKETER IS FACED WITH COMPETITION NOT
ONLY FROM OTHER FIRMS IN HIS INDUSTRY, BUT FROM FIRMS IN OTHER
INDUSTRIES As WELL. FOR EXAMPLE, THE MARKETER OF BOATING EQUIPMENT
CONPETES WITH THE MARKETER OF TOURS THROUGH EUROPE, AS WELL As

WITH OTHER BOATING EQUIPMENT MANUFACTURERS.

MO

2. NARROWED PROFIT MARGINS HAVE STRESSED THE SIGNIFICANCE
OF MAXIMUM RETURN ON ALL COMPANY INVESTMENTS. As A RESULT MORE
EFFECTIVE METHODS AND BETTER CONTROLS ARE REQUIRED IN MARKETING
MANAGEMENT. ‘

3. DURING THIS PERIOD OF NARROW PROFIT MARGINS, THE
CONTRIBUTIONS TO COMPANIES' PROFITS MADE BY NEW PRODUCTS BECOME
MOST EVIDENT. FREQUENTLY MARKETING MANAGERS DESCRIBE NEW PRODUCTS
As THE BASIS OF COMPANY SURVIVAL, GROWTH, AND STABILITY.

A. THE PRACTICE OF PLANNED OBSOLESCENCE, COMMON IN
MANY INDUSTRIES, IS CONDUCIVE TO RAPIDITY OF NEW PRODUCT APPEARANCE,
AND CONSEQUENTLY, TO THE DESTRUCTION OF EXISTING MARKETS. THUS
ADDITIONAL EMPHASIS IS PLACED UPON NEW PRODUCT DEVELOPMENT.

5. PROBLEMS SUCH AS THE EXTENSIVE PERIOD OF TIME REQUIRED
IN DEVELOPMENT OF NEW PRODUCTS, AS WELL As THE CONSEQUENT FAILURE
IN THE MARKET OF MANY OF THESE PRODUCTS, INDICATE THE NEED FOR MORE

EFFECTIVE PRODUCT PLANNING AND RESEARCH.

FIRM FACTORS

 

OF THE SEVERAL AREAS OF FACTORS RESPONSIBLE FOR DEVELOPMENT
OF THE MARKETING CONCEPT, THE ONE MOST FREQUENTLY MENTIONED BY
BUSINESS MANAGEMENT IS "FIRM" FACTORS. SIMILARLY, MANAGEMENT'S
EVALUATIONS OF ALLEGED PROGRAMS OF IMPLEMENTATION OF THE CONCEPT
TYPICALLY INDICATE CONCERN WITH ORGANIZATIONAL STRUCTURES, TITLES
AND POSITIONS, AND JOB DESCRIPTIONS. THE FOLLOWING ARE AMONG THE
MOST SIGNIFICANT FIRM FACTORS RELATED TO DEVELOPMENT OF THE

CONCEPT.

I. DURING RECENT YEARS MANY FIRMS HAVE UNDERGONE PERIODS

II?

OF RAPID GROWTH, CAUSED IN PART BY NATURAL GROWTH IN AN EXPANDING

ECONOMY AND FURTHER BY EXTENSIVE PROGRAMS OF COMPANY MERGERS. IT

IS NOTED THAT THE CURRENT MERGER MOVEMENT APPEARS TO BE DIRECTED
PRIMARILY TOWARD ENHANCEMENT OF MARKET POSITION AND CREATION OF A

BROAD BUSINESS BASE, PROVIDING FOR GREATER PROFIT STABILITY.

EARLIER MERGER MOVEMENTS ARE TYPICALLY DESCRIBED IN TERMS OF MANAGEMENTS'
EFFORTS TOWARD CAPITAL ACCUMULATION AND FINANCIAL STRENGTH.

2. AS FIRMS HAVE GROWN LARGER, MANAGEMENTS HAVE DISCOVERED
THAT THEIR TRADITIONAL ORGANIZATION STRUCTURES FREQUENTLY IMPEDE,
RATHER THAN FACILITATE, EFFECTIVE OPERATION. MANY MANAGEMENTS
HAVE DEVELOPED HIGHLY DECENTRALIZED ORGANIZATIONS IN THEIR EFFORTS
TOWARD EQUATING ORGANIZATION STRUCTURE AND COMPNY NEED.

3. NEVERTHELESS, IT APPEARSTHAT THE PROBLEMS OF INEFFECTIVE
INTERNAL COMMUNICATIONS AND LACK OF COORDINATED EFFORT AND UNIFIED
DIRECTION HAVE NOT YET BEEN RESOLVED IN MANY COMPANY SITUATIONS.

THE TENDENCY TOWARD INDEPENDENT OPERATION REPORTED AMONG TRADITIONAL
SALES AND PRODUCTION MANAGEMENTS As WELL AS AMONG THE SEVERAL
MARKETING FORCES SUPPORT THIS STATEMENT.

N. THE MERGER TREND MENTIONED ABOVE, WITH ITS RESULTING
WIDENING OF FIRMS' PRODUCT LINES TENDS To COMPLICATE SUCH PROBLEMS
OF COORDINATION AND DIRECTION FURTHER. HOWEVER, GROWTH AND STABILITY
RESULTING FROM SUCH BROADER BASES OF OPERATION SUPPORT DESIRABILITY
OF THE MERGER TREND.

5. INCREASED AUTOMATION OF FIRMS' PRODUCTION AND MARKETING
OPERATIONS HAS GENERATED NEW PROBLEMS, ALSO. UBUALLY ACCOMPANYING

AUTOMATION IS THE ABILITY TO MANUFACTURE A LARGER QUANTITY OF GOODS;

. 35:3." 8‘25:

MB

YET THE FIRMS' SELLING EFFORTS MEET GREATER CONSUMER RESISTANCE
IN THE MARKET PLACE.

6. NARROWING OF PROFIT MARGINS AND INCREASED ABILITY TO
PRODUCE EMPHASIZE FIRMS' NEED FOR "GUARANTEED ANNUAL CUSTOMERS."
TYPICALLY THE CAPITAL INVESTMENT INVOLVED IN AUTOMATION REQUIRES A
HIGH RATE OF UTILIZATION IF PROFIT POTENTIALS ARE TO BE REALIZED.

7. INCREASED COMPANY INVESTMENT IN COSTLY FIXED EQUIPMENT
DETERMINES AT LEAST THE GENERAL NATURE OF FIRMS' OUTPUTS FOR A
CONSIDERABLE FUTURE PERIOD. SUCH INVESTMENTS TEND TO RESTRICT
THE FREEDOM OF MANAGEMENT TO REACT TO CHANGING COMPETITIVE AND
MARKET CONDITIONS.

8. FOR THESE REASONS AND OTHERS, BUSINESS MANAGEMENT Is
BECOMING INCREASINGLY AWARE OF THE NEED FOR PLANNING FOR FUTURE
PROFITABILITY. ALSO THEY ARE AWARE OF THEIR INCREASED ABILITY TO
DO SUCH PLANNING, GIVEN MORE ACCURATE AND MORE COMPLETE INFORMATION
FROM BROADER BASED, MORE HIGHLY DEVELOPED MARKETING RESEARCH
ACTIVITIES.

CONSUMER FACTORS

 

ATTENTION GIVEN BY BUSINESS MANAGEMENT TO THE ROLE OF THE
CONSUMER APPEARS TO HAVE EXPANDED IN ACCORDANCE WITH THE LATTER'S
ABILITY AND DESIRE TO EXPAND BEYOND, IF NOT BREAK FREE FROM, HIS
TRADITIONAL CONSUMPTION PATTERNS. CERTAINLY THE DEVELOPMENT OF
A BUYERS' MARKET AT A TIME WHEN FIRMS ACTIVELY SEEK STABILITY OF
OPERATION EMPHASIZES THE CONSUMER'S CRUCIAL ROLE. SOME CONSUMER
FACTORS WHICH HAVE BEEN INSTRUMENTAL IN DEVELOPMENT OF THE

MARKETING CONCEPT ARE PRESENTED BELOW.

LI9

I. GENERALLY, CONSUMERS HAVE SATISFIED THE BASIC NECESSITIES
OF LIFE AND ARE ABLE TO MAINTAIN A HIGH LEVEL OF CONSUMPTION. ONE
RESULT OF SUCH CONSUMPTION HAS BEEN THE ACCUMULATION OF VAST STOCKS
OF GOODS BY HOUSEHOLDS.

2. ALTHOUGH SUCH STOCKS HAVE BEEN ACCUMULATED, HOUSEHOLDS
TODAY ARE FINANCIALLY ABLE To EXPAND THEIR CONSUMPTION SIGNIFICANTLY,
DUE TO THEIR RISING DISCRETIONARY SPENDING POWER.

3. HOWEVER, AS MOST HOUSEHOLDS HAVE SATISFIED THEIR MORE
BASIC NEEDS, THEY ARE NOT ABLE TO POSTPONE OR CANCEL SPECIFIC
PURCHASE DECISIONS AND ACTIONS AT THEIR DISCRETION. THE SIGNIFICANCE
OF THE STOCK OF GOODS ALREADY OWNED AND THE PROBABLE DIMINISHING
UTILITY OF OTHER GOODS WHICH MIGHT BE ADDED To THIS STOCK Is BEING
RECOGNIZED BY BUSINESS MANAGEMENT.

h. CONSUMERS ARE ACQUAINTED WITH A GREATER NUMBER AND
VARIETY OF GOODS, DUE IN PART TO HIGHER LEVELS OF EDUCATION&
ATTAINMENT AND IMPROVED TRANSPORTATION AND COMMUNICATION
FACILITIES. As A RESULT INCREASED TRAVEL AND GREATER EXPOSURE
TO NATIONAL ADVERTISING MEDIA AND INTERNATIONAL MARKETS INCREASE
CONSUMER SOPHISTICATION AND FURTHER FRUSTRATE THE BUSINESSMAN'S
SEARCH FOR PROFITABLE GROWTH AND STABILITY.

5. FINALLY, BUSINESS MANAGEMENT INDICATES GROWING CONCERN
REGARDING ITS PROBLEM OF COMMUNICATION WITH THE MARKET PLACE.
HISTORICAL CONCERN APPEARS TO HAVE BEEN WITH THE FLOW OF INFORMATION
FROM MANUFACTURER To CONSUMER. TODAY THE SITUATION FREQUENTLY
DESCRIBED As IDEAL BY BUSINESSMEN IN A CONSUMER-MARKET-DESIGNER-

MANUFACTURER SYSTEM OF COMMUNICATION WHICH STRESSES THE MULTI'

50

DIRECTIONAL FLOW OF INFORMATION AT EACH OF THESE UNIT LEVELS.

SUMMARY

IN THIS CHAPTER IT HAS BEEN OBSERVED THAT DURING THE
PRESENT CENTURY THE BASIC OPERATIONAL ORIENTATIONS OF AMERICAN
BUSINESS MANAGEMENT HAVE UNDERGONE SIGNIFICANT RE-EVALUATION AND
CHANGE. FOR PURPOSES OF EMPHASIS, THREE BASIC ORIENTATIONS HAVE
BEEN CONSTRUCTED AND DESCRIBED AS TYPICAL OF CERTAIN PERIODS OF
TIME: THE PRODUCTION ORIENTATION, I900 - I930; THE SALES MANAGEMENT
ORIENTATION, I930 - I950; AND EMPHASIS ON THE MARKETING CONCEPT
DURING THE PAST DECADE.

DEVELOPMENT OF THESE MANAGERIAL ORIENTATIONS HAVE BEEN
DESCRIBED AS A NATURAL EVOLUTION, RESULTING FROM THE TRADITIONAL
TENDENCY OF MANAGEMENT TO DIRECT ITS ATTENTION TO THOSE AREAS
OF BUSINESS WHICH CURRENTLY DEMONSTRATE MOST NEED OR OFFER GREATEST
POTENTIAL BENEFITS. HOWEVER, ESTABLISHED FIRMS APPEAR TO BE MORE
RESISTANT To CHANGE THAN IS THE ENVIRONMENT WITHIN WHICH THESE
FIRMS OPERATE. AS A RESULT, CHANGES IN THE VARIOUS FORCES WITHIN
THE BUSINESS ENVIRONMENT HAVE OCCASIONALLY FUNCTIONED TOGETHER
TO REDIRECT THE FOCUS OF MANAGERIAL ATTENTION. IN RECENT YEARS
CHANGES IN GENERAL ECONOMIC, COMPETITIVE, FIRM, AND MARKET FORCES
HAVE RESULTED IN WIDESPREAD RECOGNITION OF THE MARKETING CONCEPT

AS THE MOST VALID CONTEMPORARY GUIDE TO MOBILIZATION OF CORPORATE

EFFORT.

CHAPTER III
LITERATURE OF THE MARKETING CONCEPT

INTRODUCTION

IT IS THE PURPOSE OF THIS CHAPTER, FIRST TO ESTABLISH
THE MEANING OF THE TERM, MARKETING CONCEPT, AS IT IS EMPLOYED
BY BUSINESSMEN AND ACADEMICIANS, AND SECOND, To DETERMINE THE
EXTENT OF CONCERN WITH THE MARKETING CONCEPT PREVALENT AMONG
THESE GROUPS. AS A BASIS FOR THIS STUDY, A THOROUGH ANALYSIS
OF CONTENT OF THE MARKETING CONCEPT LITERATURE HAS BEEN MADE.
THE MATERIALS STUDIED, IN THIS PAPER REFERRED TO AS THE LITERATURE
OF THE MARKETING CONCEPT, WERE ARTICLES APPEARING IN TRADE
PUBLICATIONS AND SCHOLARLY JOURNALS, PAPERS READ BEFORE CON-
VENTIONS OF BUSINESSMEN AND BUSINESS ADMINISTRATION ACADEMICIANS,
AND COMPANY BROCHURES WHICH INCLUDED PUBLIC STATEMENTS BY
MEMBERS OF MANAGEMENT. THE PERloD INCLUDED IN THIS STUDY IS
I950 THROUGH I959. ISSUES OF PUBLICATIONS WHICH DEMONSTRATED
GREATEST CONCERN WITH THE MARKETING CONCEPT HAVE BEEN REVIEWED
THROUGH JUNE, I960.

PUBLICATIONS WHICH HAVE GIVEN MOST EDITORIAL AND REPORTING
SPACE TO THE MARKETING CONCEPT ARE BUSINESS PUBLICATIONS,

ESPECIALLY PRINTERS' INK, SALES MANAGEMENT, INDUSTRIAL MARKETING,

 

AND TIDE. THE BUSINESS NEWS MAGAZINES HAVE REPORTED PRONOUNCE-

MENTS OF EXECUTIVES REGARDING ACCEPTANCE OF THE CONCEPT BY

SI

52

THEIR ORGANIZATIONS. A FEW UNIVERSITY PUBLICATIONS HAVE CARRIED
INFREQUENT REPORTS DEALING PRIMARILY WITH PHYSICAL MANIFESTATIONS
OF THE CONCEPT. THE AMERICAN MANAGEMENT ASSOCIATION HAS CONDUCTED
EXECUTIVE SEMINARS WHICH WERE CONCERNED WITH THE CONCEPT, AND

IN RECENT YEARS FREQUENT PAPERS DESCRIBING THE CONCEPT HAVE

BEEN READ BEFORE NATIONAL MEETINGS OF THE AMERICAN MARKETING

ASSOCIATION; THE JOURNAL OF MARKETING, HOWEVER, HAS BEEN

 

CONSPICUOUSLY SILENT IN THIS RESPECT. IN SOME INSTANCES,
SELECTION OF MATERIALS FOR INCLUSION HAS BEEN COMPLICATED BY THE
WIDESPREAD PRACTICE OF USING NUMEROUS OTHER TERMS As SYNONYMOUS
WITH MARKETING CONCEPT, ALTHOUGH DIFFERENCES IN EMPHASIS ARE
IMPLIED BY THE TERMS. FOR EXAMPLE, A NUMBER OF ARTICLES IN

FORTUNE AND THE HARVARD BUSINESS REVIEW HAVE BEEN INCLUDED IN

 

THE CONTENT ANALYSIS, ALTHOUGH GENERALLY THEIR AUTHORS HAVE
USED TERMS SUCH AS MARKETING MANAGEMENT PHILOSOPHY IN PREFERENCE
TO MARKETING CONCEPT; THIS INCLUSION APPEARS JUSTIFIED UPON

THE BASIS OF CONTENT AND EMPHASIS OF THESE ARTICLES.

DEFINITION OF THE MARKETING CONCEPT

PROBLEMS IN DEFINING THE MARKETING CONCEPT

REGARDING THE PROBLEM OF ADEQUATELY DEFINING THE MARKETING
CONCEPT, ONE MARKETING EXECUTIVE HAS APTLY STATED THE CASE AS
FOLLOWS:

. . . ONE WOULD INFER THAT THE MARKETING CONCEPT ITSELF

IS AN UNEQUIVOCAL THING . . . YET ONE OF THE MOST CHARMING

ATTRIBUTES OF THIS TIRELESS CONFERENCE SUBJECT IS ITS

STURDY RESISTANCE TO ONSLAUGHTS OF DEFINITION AND
PRESCRIPTION. INDEED, TO BE ASKED TO DEFINE THE MARKETING

53

CONCEPT CAN ALMOST BE ACCEPTED IN THE SPIRIT OF A

CHALLENGE.l
THE PROBLEM OF APPLYING MEANINGFUL DEFINITIONS TO THE MARKETING
CONCEPT IS DIFFICULT ENOUGH DUE TO ITS INHERENT NATURE AS A
CONCEPT. HOWEVER, ADDITIONAL CONFUSION HAS BEEN GENERATED BY
THE INTERCHANGEABLE USE OF VARIOUS TERMS WHICH SUPPOSEDLY
HAVE REFERENCE TO A COMMON BODY OF PRINCIPLES AND CONCEPTS.
FOR EXAMPLE, THE FOLLOWING TERMS ARE AMONG THOSE MOST FREQUENTLY
USED SYNONYMOUSLY WITH "MARKETING CONCEPT": DYNAMIC MARKETING,
INTEGRATED MARKETING, CONSUMER-ORIENTED MARKETING, THE NEW
MARKETING CONCEPT, MARKETIZING, MANAGERIAL MARKETING, MARKETING
MANAGEMENT CONCEPT, MODERN MARKETING, AND SIMPLY THE WORD,
MARKETING, TYPICALLY CAPITALIZED. WITH REFERENCE TO THIS
SEMANTICAL PROBLEM AN ADVERTISING PRACTITIONER HAS OBSERVED
THAT MANY BUSINESSMEN ARE TALKING LIKE "WITCH-DOCTORS":
"ONLY THE WITCHDOCTORS CAN FIND THEIR WAY THROUGH THE TANGLED
JUNGLE-WAY OF THEIR OWN MUMBo-JUMBO AND JARGON, THE PROTECTIVE
COVERING OF DOUBLE TALK WITH WHICH THEY HAVE SURROUNDED WHAT
THEY DELIGHT TO CALL THE 'NEW MARKETING CONCEPT.”2

ANOTHER CHARACTERISTIC OF MOST DEFINITIONS OF THE
MARKETING CONCEPT WHICH ADDS CONFUSION IS INCOMPLETENESS; IT

IS QUITE COMMON FOR A WRITER TO SET FORTH HIS INTERPRETATION

 

'J. B. MCKITTERICK, "WHAT IS THE MARKETING MANAGEMENT
CONCEPT?," THE FRONTIERS OF MARKETING THOUGHT AND SCIENCE,
PROCEEDINGS OF FORTIETH NATIONAL CONFERENCE (CHICAGO: AMERICAN
MARKETING ASSOCIATION, I957), 7|.

NORTON WEBER, "ARE WE MARKETING MEN...OR WITCHDOCTORS?,
INDUSTRIAL MARKETING, XLII (NOVEMBER, I957), 55.

 

 

5A

OF THE CONCEPT, ONLY TO PROCEED TO INCLUDE ADDITIONAL FACETS
AS HIS DISCOURSE CONTINUES. TO A DEGREE, THIS IS A PROBLEM OF
DIFFERENTIATING BETWEEN DEFINITIONS OF THE COMMON CORE OF THE
MARKETING CONCEPT AND PROGRAMS OF IMPLEMENTATION, DESIGNED BY
INDIVIDUAL COMPANIES IN ORDER TO CORRECT OR PREVENT SPECIFIC
PROBLEM SITUATIONS WITHIN THESE ORGANIZATIONS. EQUALLY
SIGNIFICANT, HOWEVER, IS THE OBSERVATION THAT DISCUSSION OF THE
MARKETING CONCEPT, ESPECIALLY DURING THE PAST FIVE YEARS, HAS
BECOME A VOGUE AMONG MANY BUSINESSMEN AND ACADEMICIANS. ONE
CONSEQUENCE HAS BEEN THE LABELING OF VARIOUS STRUCTURAL, POLICY,
AND PERSONNEL CHANGES AS INDICATIONS OF ADOPTION OF THE CONCEPT,
OFTEN WITHOUT REGARD To THE FACTORS PRIMARILY RESPONSIBLE FOR
SUCH CHANGES OR THE IMPACT OF SUCH CHANGES UPON THE BUSINESS
PHILOSOPHIES HELD BY MEMBERS OF THE ORGANIZATIONS' MANAGEMENTS.
EVEN USE OF THE TERMS "CONCEPT" AND "PHILOSOPHY", WHICH APPARENTLY
ARE SO VITAL To MEANINGFUL DISCUSSION OF THIS SUBJECT, INDICATES
SOME DISAGREEMENT. FOR EXAMPLE, BORCH NOTES: "A PHILOSOPHY

IS A BROAD UMBRELLA THAT GOVERNS THE TOTAL BUSINESS LIFE, WHILE
A CONCEPT IS A RECOGNIZED WAY OF OPERATING WITHIN THE CLIMATE
THAT THE PHILOSOPHY UMBRELLA HAS SET."3 PHELPS STATES THAT

"A CONCEPT IS A WAY OF LOOKING AT THINGS, OR A MENTAL IMAGE.

A PHILOSOPHY MAY BE DEFINED AS PRACTICAL WISDOM OR A SYSTEM OF

 

3FRED J. BORCH, THE MARKETING PHILOSOPHY AS A WAY
OF BUSINESS LIFE (NEW YORK: GENERAL ELECTRIC COMPANY, I957), 3.

 

55

A

PRINCIPLES FOR GUIDANCE IN PRACTICAL AFFAIRS." UNQUESTIONABLY,
A REVIEW OF THE MARKETING CONCEPT LITERATURE REVEALS SIGNIFICANT
VARIATIONS IN RECOGNITION OF USEFUL IMPLEMENTATION MEASUREs;
HOWEVER, DIFFERENCES IN COMPANY SITUATIONS, AS WELL As IN
INTERPRETATIONS OF THE CONCEPT, ACCOUNT FOR THIS VARIATION.
DEFINITIONS OFFERED IN THE LITERATURE

FOR THE PURPOSES OF THIS STUDY, DEFINITIONS OF THE CONCEPT
OFFERED IN THE LITERATURE CAN BE DIVIDED INTO TWO DISTINCT
GROUPS: THOSE CONCERNED PRIMARILY WITH THE CORE CONTENT OF THE
CONCEPT, AND THOSE CONCERNED PRIMARILY WITH PHYSICAL MANIFESTA-
TIONS USEFUL IN IMPLEMENTING THE CONCEPT. EXAMPLES OF BOTH
TYPES OF DEFINITIONS ARE PRESENTED BELOW. DIRECT QUOTATIONS
OF BUSINESSMEN AND ACADEMICIANS ARE USED IN ORDER TO PRESERVE
THE FLAVOR OF CURRENT DISCUSSION OF THE CONCEPT.

TWO CHARACTERISTICS GENERALLY ARE DEEMED TO REPRESENT
THE CORE OF THE MARKETING CONCEPT: (I) RECOGNITION THAT THE
PRIMARY REASON FOR THE EXISTENCE AND CONTINUANCE OF THE FIRM IS
ITS ABILITY AND SUCCESS IN FULFILLING CUSTOMER WANTS AND NEEDS,
AND ACCEPTANCE BY MANAGEMENT OF A CONSUMER ORIENTATION AS THE
BASIS PROVIDING DIRECTION OF COMPANY ACTIVITY, AND (2) RECOGNITION
THAT PROFIT Is THE COMPANY'S REWARD FOR SUCCESSFULLY SERVING
AREAS OF CONSUMER WANTS AND NEEDS, AND FURTHER THAT SUCH SUCCESS

MUST BE MEASURED IN TERMS OF RETURN ON INVESTMENT AND SALES

 

MD. MAYNARD PHELPS, "INTRODUCTION," EFFECTIVE MARKETING
ACTION, ED. DAVID W. EWING (NEW YORK: HARPER & BROS., I952), A.

 

56

VOLUME, RATHER THAN IN TERMS OF SALES VOLUMES ALONE.
THE FOLLOWING DEFINITIONS ARE TYPICAL OF MANY WHICH

REFLECT ACCEPTANCE OF A MANAGERIAL PHILOSOPHY, BASED UPON CONSUMER

ORIENTATION AND PROFIT REWARD, AS THE CORE OF THE MARKETING CONCEPT,

CORBIN STATES THAT THE CONCEPT "IS A PHILOSOPHY, AN ATTITUDE, A STATE

OF MIND, A GUIDING POINT OF VIEW WHICH UNDERLIES AND MOTIVATES

ALL THE POLICIES, DECISIONS, AND ACTIONS OF A FIRM AND ITS PEOPLE.

IT IS A WAY OF LOOKING AT EVERYTHING A BUSINESS DOES AS THE

MEDIUM FOR SATISFYING CONSUMER NEEDS AND WANTS."5 WAKEFIELD

RECOGNIZES THE DUAL COMPONENTS OF THE CONCEPT, STATING THAT IT

MEANS "TO GEAR THE CONDUCT OF THE ENTIRE BUSINESS TO THE

SATISFACTION OF CUSTOMER NEEDS AND, AT THE SAME TIME, TO ASSURE

A PREDETERMINED PROFIT."6 ELSEWHERE, HE STATES THAT "THE

MARKETING CONCEPT Is A PHILOSOPHY OF BUSINESS, WHICH IS BASED

ON THE BELIEF THAT INDENTIFICATION AND SATISFACTION OF CUSTOMER

NEEDS, WANTS, AND DESIRES ARE VITAL TO SUCCESS - SUCCESS BEING

MEASURED IN TERMS OF PROFITABLE SALES AND RETURN ON INVESTMENTS."7

LAZO, NOTING THAT THE CONCEPT REPRESENTS "A RETURN TO THE BASIC

AND SIMPLE ECONOMIC PHILOSOPHY OF PRODUCTION FOR THE MARKET,

RATHER THAN CREATION OF A MARKET FOR THE OUTPUT OF OUR PLANTS

 

5ARNOLD CORBIN, "TODAY'S MARKETING CONCEPT - WHAT IS IT?,"
ADVERTISINGS AND MARKETING TO MEET TODAY'S ECONOMIC CHALLENGE
AND OPPORTUNITY (MILWAUKEE: MARQUETTE UNIVERSITY, I955), 6.

6JOHN E. WAKEFIELD, "MARKETING CONCEPT: THREE STEPS ARE
NECESSARY To PUT IT To WORK," PRINTERS' INK, CCLXIV

(SEPTEMBER I9, I958), 35.

 

YJOHN 5° WAKEFIELD: "THE TEN COGS IN MARKETING FOR PROFIT,"
§ALES MANAGEMENT, LXXXIII (OCTOBER I6, I959), ho,

 

57

\
I
\

AND FACTORIES," STATES THAT THE CONCEPT MEANS "THAT THE MANAGEMENT
ACCEPTS THE PHILOSOPHY THAT EVERY DECISION MADE IN THE OPERATION
OF A BUSINESS IS MADE IN THE LIGHT OF CONSUMER NEEDS, AND NOT
COMPANY NEEDS. MARKETING MANAGEMENT STARTS WITH A CUSTOMER NEED
AND ENDS WITH THE SATISFACTION OF THAT CUSTOMER NEED."9 BORCH
ALSO ACKNOWLEGES THE DUAL NATURE OF THE CONCEPT, STATING THAT
UNDER THE CONCEPT "THE CUSTOMER BECOMES THE FULCRUM, THE PIVOT
POINT ABOUT WHICH THE BUSINESS MOVES . . . FOR THE BALANCED BEST
INTEREST OF ALL CONCERNED" AND THAT THE PHILOSOPHY "IS ROOTED

IN THE PROFIT CONCEPT, NOT THE VOLUME CONCEPT."IO McKITTERICK
SEES "A FOCUS ON GROWTH IN WHICH THERE IS A CONTINUING PLANNED
EFFORT TO ENLARGE THE SIZE OF THE MARKET" AS THE CRUX OF THE
MARKETING CONCEPT.ll FINALLY, HAHN REPORTS THAT "IMPLICIT IN
THE MARKETING CONCEPT IS ACCEPTANCE OF THE PREMISE THAT ALMOST

CONTINUOUS CHANGE IS INEVITABLE IF A COMPANY IS SUCCESSFULLY TO

KEEP PACE WITH THE CHANGING WANTS AND NEEDS OF CUSTOMERS."l2

 

O
OHECTOR LAZO, "BIG BUSINESS GIVES 0.K. TO MARKETING
MANAGEMENT," SALES MANAGEMENT, LXXXI (NOVEMBER 2|, I950), 33.

 

O .
/HECTOR LAZO, "THE MARKETING MANAGER - WHO THE NEW
EXECUTIVE IS AND WHAT HE WILL DO," PRINTERS' INK, CCLXII

(JANUARY 3. I958). 29.
IO

 

BORCH, 3-H.
llMCKITTERICK, 77.

IZA. R. HAHN, "THE 'MARKETING CONCEPT': A MAJOR CHANGE
IN MANAGEMENT THINKING?," SALES MANAGEMENT, LXXIX

(NOVEMBER IO, I957), 73.

 

 

58

MOST DEFINITIONS, HOWEVER, EXTEND BEYOND THE BASES OF
CONSUMER ORIENTATION AND PROFIT REWARD, AND ARE CONCERNED
PRIMARILY WITH MEANS BY WHICH THE CONCEPT MAY BE IMPLEMENTED.
APPARENTLY THERE IS WIDESPREAD AGREEMENT WITH THE STATEMENT
BY MARKETING VICE PRESIDENT THOMAS J. KEHANE OF WORTHINGTON
CORPORATION THAT "THE SO-CALLED MARKETING CONCEPT IS JUST A
BUNCH OF WORDS UNTIL IT COMES OUT IN PERFORMANCE."I3 TYPICALLY
THIS GROUP OF DEFINITIONS STRESSES THE INHERENT NATURE OF
PHYSICAL MANIFESTATIONS SUCH AS THE FOLLOWING: ORGANIZATIONAL
STRUCTURING, FORMAL MARKETING PLANNING, INCLUDING PRODUCT AND
PROFIT PLANNING, AND EMPHASIS ON THE ROLE OF MARKETING RESEARCH.
THE FOLLOWING COMMENTS REPRESENT THIS SECOND CATEGORY OF
DEFINITIONS.

ORGANIZATIONAL ASPECTS ARE MOST FREQUENTLY EMPHASIZED
IN DEFINITIONS CONCERNED WITH PROCEDURE FOR IMPLEMENTING THE
CONCEPT. BREEN STATES THAT THE CONCEPT "REFERS TO AN ORGANIZATION
OF ACTIVITIES. IT EMPHASIZES THE COORDINATION OF AND PLANNING
FOR ALL SELLING ACTIVITIES AND SUGGESTS THAT ALL SUCH ACTIVITIES

BE THE RESPONSIBILITY OF THE MAN."'M GREY MATTER REPORTS THAT

 

"THE MARKETING CONCEPT MEANS THAT ALL THE STEPS FROM THE

DEVELOPMENT OF A PRODUCT UNTIL IT GIVES SATISFACTION TO THE

 

'3"3HIFTING THE STRESS TO MARKETING," BUSINESS WEEK,

NO. I5I8 (OCTOBER H, I958), 57.

 

'hJOHN J. BREEN, "HISTORY OF THE MARKETING MANAGEMENT
CONCEPT," ADVANCING MARKETING EFFICIENCY, PROCEEDINGS OF THE
FORTY-FIRST NATIONAL CONFERENCE (CHICAG0: AMERICAN MARKETING

ASSOCIATION, I959), M58-h59.

 

59

FINAL USER ARE NOT INDEPENDENT OF ONE ANOTHER BUT ARE LINKS
OF ONE CONTINOUS CHAIN."'5 ACCORDING TO JAMES JEWELL, VICE
PRESIDENT OF MARKETING OF WESTINGHOUSE ELECTRIC CORPORATION,
THERE ARE "TWO FUNDAMENTAL PRINCIPLES OF THIS NEW CONCEPT:
FIRST - CUSTOMER ORIENTATION - AND SECOND - FUNCTIONAL
INTEGRATION OF ALL OPERATING ACTIVITIES."l6 OTHERS STRESS
PLANNING ASPECTS OF THE CONCEPT. FOR EXAMPLE, PRESIDENT
ROBERT F. DICK OF GEORGE FRY AND ASSOCIATES, NOTES THAT "ALL
ASPECTS OF MARKETING NEED TO BE COORDINATED AND UNIFIED IN A
COMPREHENSIVE 'MARKETING PLAN.’ THIS IS FREQUENTLY REFERRED
TO AS THE TOTAL MARKETING CONCEPT."'7 PETER G. PETERSEN,

"THE

VICE PRESIDENT OF McCANN ERICKSON, INC., STATES THAT

MARKETING CONCEPT ENVISIONS ORDERLY PLANNING, AND WITH PLANNING

COME OBJECTIVES, AND WITH OBJECTIVES THE NECESSITY FOR

OBJECTIVE MEASUREMENT AND EVALUATION. THE CONCEPT OF MARKETING
"'8 II

IS A PLANNED PROCESS. ACCORDING TO HOWARD: THE NEW

MARKETING CONCEPT, AS I SEE IT, IS THE TENDENCY TO THINK OF

 

I5EDITORS OF GREY MATTER, "THE SALESMAN'S ENLARGED

ROLE UNDER THE MARKETING CONCEPT," SALES MANAGEMENT, LXXXI
'3

(NOVEMBER 7, I95b), 62.

 

 

I6JAMES JEWELL, "THE MARKETING CONCEPT," WHAT MODERN
MARKETING MEANS To CORPORATE SUCCESS (NEW YORK: NATIONAL
ASSOCIATION OF MANUFACTURERS, I958), h.

 

 

I

7ROBERT F. DICK, "THE GOLDEN AGE FOR MANAGEMENT," PAPER
READ BEFORE THE THIRTY-SEVENTH ANNUAL CONFERENCE OF THE NATIONAL
INDUSTRIAL ADVERTISERS ASSOCIATION, SAN FRANCISCO, JUNE IA, I959.

(I

IOEIGHTH ANNUAL CHICAGO TRIBUNE DISTRIBUTION AND
ADVERTISING FORUM, "TODAY'S MARKETING CONCEPT AT WORK IN MANAGEMENT,'
AREA | (CHICAGO: THE CHICAGO TRIBUNE, I957), 37.

60

MARKETING IN TERMS OF STRATEGY - STRATEGY WHICH IS CHARACTERIZED
BY THREE THINGS: UNCERTAINTY, INTEGRATION, AND DELEGATION,"l9
OTHERS EMPHASIZE THE ROLE OF MARKETING RESEARCH AS AN ELEMENT

OF THE CONCEPT IN ACTION. PRINTERS' INK REPORTS: "TODAY,

 

UNDER MARKETING CONCEPT ORIENTATION, A COMPANY USES MORE
RESEARCH AND MORE DIFFERENT KINDS OF RESEARCH AS THE BASIS

OF PLANNING."20 FOX STATES THAT "THE MARKETING CONCEPT IS A
VEHICLE FOR KEEPING PACE WITH THE CHANGING CUSTOMER AND HIS
MARKET AND FOR HARMONIZING THE SALES FUNCTIONS TO MEET CONSTANT

CHANGE. EMPHASIS ON RESEARCH - INTO THE MARKET AND CONSUMER

BEHAVIOR - PROVIDES A FACTUAL, REALISTIC BASE FOR PLANNING."2|

SMITH HAS SUMMARIZED THE MOST FREQUENT USAGE OF THE TERM, AS
FOLLOWS:

AT PRESENT, THE so-CALLED MARKETING CONCEPT
APPEARS TO BE AN UMBRELLA TERM USED TO DESCRIBE ONE,
SEVERAL, OR EVEN ALL OF THE FOLLOWING DEVELOPMENTS
IN THE BASIC COMPONENTS OF EFFECTIVE MARKETING
OPERATIONS:

I. A MARKED INCREASE IN THE DEGREE OF MARKET
ORIENTATION OF TOP MANAGEMENT THINKING . . .

2. AN INCREASING RECOGNITION OF THE IMPORTANCE
OF PLANNING MARKETING ACTIVITIES IN A SYSTEMATIC WAY
AND USING MARKETING PLANS AS THE SPRINGBOARD FOR
OVERALL PLANS AND BUDGETS.

3. THE EMERGENCE OF THE NOTION THAT INNOVATIONS

 

l9lELE" l3.

20"THE CHALLENGE TO MANAGEMENT: HOW TO GROW IN THE
COMPETITIVE MARKET," PRINTERS' INK, CCLV (JUNE 6, I950), 2H.

 

2|SOL FOX, "A BUSINESS EDITOR'S VIEW OF MARKETING TODAY,'
ADVANCING MARKETING EFFICIENCY, PROCEEDINGS OF THE FORTY-FIRST
NATIONAL CONFERENCE (CHICAG0: AMERICAN MARKETING ASSOCIATION,

I959): III-

 

6|

IN MARKETING . . . ARE JUST AS REVITALIZING AS NEW
PRODUCTS.

A. A TREND TOWARD POSITIONING MARKETING EXECUTIVES

IN THE ORGANIZATION STRUCTURE IN WAYS COMPATIBLE WITH

EFFECTIVE MARKET ORIENTATION AND PLANNING.
PROBLEM OF MISINTERPRETATION OF THE MARKETING CONCEPT

WHILE NO UNIVERSALLY ACCEPTED DEFINITION OF THE MARKETING
CONCEPT EXISTS, A NUMBER OF CRITICS VIEW CERTAIN TRENDS WITH
MISGIVINGS. MISINTERPRETATIONS AND MISAPPLICATIONS OF THE
CONCEPT APPEAR CERTAIN FOR A NUMBER OF REASONS: FOR EXAMPLE,
BEFORE SATISFACTORY DEFINITIONS HAVE BEEN ESTABLISHED, BUSINESS
PRACTITIONERS HAVE CENTERED THEIR CONCERN ON PHYSICAL MANIFESTATIONS

WHICH ALLEGEDLY WILL AID IN IMPLEMENTING THE INTANGIBLE CONCEPT.

RECENTLY IT WAS PREDICTED IN PRINTERS! INK THAT "THE MARKETING

 

CONCEPT WILL GET SOME REAPPRAISING BY THE GROWING NUMBER OF
COMPANIES. THE REASON: THE MANAGEMENTS OF MANY COMPANIES

BELIEVED THEY WERE OPERATING UNDER THE CONCEPT BUT NOW HAVE

FOUND THEY DO NOT UNDERSTAND ITS APPLICATION COMPLETELY."23

RELATED TO THIS PROBLEM IS ANOTHER: APPARENTLY A NUMBER OF COMPANIES
HAVE ATTEMPTED TO DUPLICATE INTO THEIR OWN FIRMS THE PHYSICAL
MANIFESTATIONS OF OTHER COMPANIES WHICH REPORT SUCCESS IN
IMPLEMENTING THE CONCEPT. DAY REPORTS: "NO ONE QUESTIONS THE

BASIC VALUE OF THE MARKETING CONCEPT . .1. BUT IT'S BECOMING

APPARENT THAT EACH COMPANY MUST TAILOR IT TO ITS INDIVIDUAL NEEDS.

 

22WENDELL R. SMITH, "THE ROLE OF PLANNING IN MARKETING,"
BUSINESS HORIZONS, II (FALL, I959), 53-5h.

 

I

23"PRINTERS' INK PREDICTS,’ PRINTERS' INK, CCLXX

(JANUARY I, I960), I8.

 

62

21+
FOR IT CAN MEAN VASTLY DIFFERENT THINGS FROM COMPANY TO COMPANY."

ANSHEN REPORTS THAT RESISTANCE TO CHANGE MAY CAUSE TRADITIONAL
MANAGEMENTS TO FAIL TO UNDERSTAND THE CONCEPT, FOR THEY "THINK
OF IT AS WRAPPED UP IN ADVERTISING AND SELLING PROGRAMS. THEY
ARE NOT LIKELY TO GRASP THE FACT THAT ACCEPTANCE OF THE MARKETING
PHILOSOPHY REQUIRES NEW IDEAS AND NEW BEHAVIOR IN PRACTICALLY
EVERY DEPARTMENT OF THE ORGANIZATION."25
SUMMARY

THE FOLLOWING COMMENTS SUMMARIZE THE PRINCIPAL FINDINGS
OF THE CONTENT REVIEW OF THAT PORTION OF THE MARKETING CONCEPT
LITERATURE WHICH IS CONCERNED WITH DEFINITIONS OF THE CONCEPT:

I) A VARIETY OF TERMS IS USED INTERCHANGABLY WITH THE
TERM, MARKETING CONCEPT. SOME OF THESE STRESS ITS MANAGERIAL
ORIENTATION, OTHERS ITS NEWNESS AND DYNAMIC NATURE, AND OTHERS
ARE COINED WORDS GENERALLY USED IN BUSINESS GROUPS TO POPULARIZE
THE CONCEPT. HOWEVER, CONTENT ANALYSIS SUGGESTS THAT ALTHOUGH
THEIR EMPHASES VARY, GENERALLY THEY ARE CONCERNED WITH THE SAME
BODY OF ORIENTATIONS AND ACTIONS.

2) DEFINITIONS OF THE MARKETING CONCEPT MAY BE DIVIDED

INTO TWO GROUPS: THOSE CONCERNED WITH THE CENTRAL CORE FEATURES

 

ZMCAMERON DAY: "WHAT IS THE MARKETING MAN'S JOB?:"
PRINTERs' INK, CCLIV (MARCH 2, I956), 25.

 

25MELVIN ANSHEN, "INTRODUCING THE MARKETING CONCEPT
THROUGH MANAGEMENT DEVELOPMENT," ADVANCING MARKETING EFFICIENCY,
PROCEEDINGS OF THE FORTY-FIRST NATIONAL CONFERENCE (CHICAGO:
AMERICAN MARKETING ASSOCIATION, I959), 252-253.

 

63

OF THE CONCEPT, AND THOSE CONCERNED WITH PHYSICAL MANIFESTATIONS
ASSOCIATED WITH THE CONCEPT. THE FORMER ARE CONCERNED WITH
CONCEPTS OF CONSUMER ORIENTATION AND PROFIT REWARD WHILE THE
LATTER DISCUSS STRUCTURAL ARRANGEMENTS, JOB DESCRIPTIONS,
PLANNING PROCEDURES, ETC.

3) THE MOST SIGNIFICANT DEVELOPMENT OF THIS CONCERN
WITH DEFINITIONS OF THE CONCEPT APPEARS TO BE AN INFREQUENT
BUT GROWING RECOGNITION OF THE POTENTIAL EFFECTIVENESS OF THE
CONCEPT AS THE FOUNDATION OF A BASIC MANAGERIAL PHILOSOPHY.
DISCUSSIONS OF ITS MEANINGS AND OF MEANS FOR ITS IMPLEMENTATION
ARE ENCOURAGING COMPANY MANAGEMENTS TO RE-EVALUATE THEIR
PURPOSES AND ORIENTATIONS, AND EMPHASIZING THE NEED FOR THEIR
VIEWING THE TOTAL COMPANY OPERATION AS ONE SYSTEM, WITH THE
SEVERAL DEPARTMENTS COMPLEMENTING ONE ANOTHER IN WORKING TOWARD
ACHIEVEMENT OF COMMON GOALS.

A) WHILE RELATIVELY FEW CRITICS DESCRIBE ALL THE FOLLOWING
FEATURES AS COMPONENTS OF THE MARKETING CONCEPT, ALL ARE
FREQUENTLY SO MENTIONED IN THE LITERATURE. IN ORDER TO DEVELOP
MORE FULLY THE MEANINGS AND SIGNIFICANCE OF THE CONCEPT, AS
REFLECTED IN THE LITERATURE, THESE FEATURES ARE DISCUSSED IN.

THE FOLLOWING PAGES IN THE ORDER INDICATED: CONSUMER ORIENTATION,
ORGANIZATIONAL ASPECTS, MARKETING PLANNING, PRODUCT PLANNING
AND DEVELOPMENT, PROFIT PLANNING AND CONTROL, MARKETING RESEARCH,

AND OTHER AREAS.

6’4

CONSUMER ORIENTATION

INTRODUCTION

 

OF THE SEVERAL COMPONENTS OF THE MARKETING CONCEPT

MENTIONED BY A MAJORITY OF THE WRITERS, CONSUMER ORIENTATION

APPEARS TO BE MOST WIDELY RECOGNIZED AND ACCEPTED BY BUSINESSMEN

AND ACADEMICIANS. THERE IS SOMEWHAT LESS AGREEMENT REGARDING

THE MEANING OF SUCH AN ORIENTATION, HOWEVER, AND THE DEFINITIONS

OFFERED IN THE LITERATURE GENERALLY ARE VAGUE. EVEN LESS

COMMENT AND AGREEMENT EXISTS REGARDING A MEANINGFUL IMPLEMENTA-

TION OF CONSUMER ORIENTATION. SOME EXAMPLES OF TYPICAL PUBLIC

STATEMENTS BY BUSINESSMEN AND ACADEMICIANS ARE PRESENTED LATER

IN THIS SECTION.

HISTORICAL BASIS

 

As IS TRUE REGARDING OTHER COMPONENTS OF THE MARKETING
CONCEPT, A LIMITED NUMBER OF WRITERS DESCRIBE CONSUMER ORIENTATION
AS A DISCOVERY AND DEVELOPMENT OF BUSINESS CONDITIONS AND
PRACTICES IN THE UNITED STATES DURING THE I950'S. HOWEVER,

MOST EVALUATIONS RECOGNIZE THAT THE BASIS OF THIS ORIENTATION
RESTS IN THE MOST FUNDAMENTAL PRINCIPLES OF ECONOMICS.

RECOGNITION OF THIS FACT PERMITS A SIMPLE, YET FAR MORE MEANING-
FUL, EVALUATION OF THE ROLE OF THE CONSUMER: PRODUCTION IS CARRIED
ON IN so FAR AS THE GOODS PRODUCED FIND ACCEPTANCE AMONG CONSUMERS;
GOODS NOT PROPERLY ADJUSTED TO CONSUMER DEMAND IN TERMS OF

FORM, TIME, PLACE, PRICE, ETC,, WILL PROBABLY FIND A LIMITED

AND RELATIVELY UNPROFITABLE MARKET IN THE SHORT RUN, AND PROBABLY

NO MARKET AT ALL IN THE LONG RUN.

65

PHELPS HAS QUITE PROPERLY EVALUATED CURRENT ADVOCACY OF
CONSUMER ORIENTATION AS A RE-DISCOVERY OR RE-EMPHASIS OF THE ROLE
OF THE CONSUMER, As OPPOSED TO A DISCOVERY OR DEVELOPMENT OF
A RADICAL BUSINESS PHILOSOPHY:

. . . CONSUMER ORIENTATION IS NOT A NEW CONCEPT OF A PROPER

APPROACH FOR BUSINESS. IT IS AN IDEA OF LONG STANDING

AMONG ECONOMISTS. THEREFORE, IN RE-EMPHASIZING THIS

APPROACH, BUSINESS CONCERNS ARE GOING BACK TO SOUND

PRINCIPLES WHICH HAVE OFTEN BEEN DISREGARDED THROUGH

INADVERTENCE, A LACK OF COMPREHENSION, OR INABILITY

TO COPE WITH THE PROBLEMS WHICH SUCH AN APPROACH

BRING FORWARD. 0

IT WOULD BE MOST INACCURATE, AS WELL AS UNFAIR, TO SUGGEST
THAT BUSINESSMEN IN RECENT YEARS HAVE FAILED TO SEE THE VITAL
ROLE PLAYED BY THE CONSUMER. AT THE TURN OF THE PRESENT CENTURY,
CHARLES A. COFFIN, FIRST PRESIDENT OF GENERAL ELECTRIC COMPANY,
NOTED THAT "THE COMPANY SHOULD FIRST CONSIDER THE PUBLIC IT
SERVES, SECOND ITS OWN SUCCESS."27 IN I933 ALFRED P. SLOAN,

THEN PRESIDENT OF GENERAL MOTORS CORPORATION, NOTED IN THE
ANNUAL STATEMENT TO STOCKHOLDERS THAT ”THE MATTER OF KEEPING A
BUSINESS SENSITIVELY IN TUNE WITH THE REQUIREMENTS OF THE

r)
ULTIMATE CONSUMER BECOMES A MATTER OF INCREASING IMPORTANCE."2U

 

/
20PHELPS, 6-7.

27LAWRENCE M. HUGHES, "G-E SEEKS CONQUEST OF BIGNESS
THROUGH FANNED-OUT MANAGEMENT," SALES MANAGEMENT, LXIX
(OCTOBER I, I952), l2h.

28

 

PHELPS, 8.

MANAGERIAL RECOGNITION OF THE ROLE OF CONSUMER ORIENTATION,

THE PAST DECADE HAS BEEN A PERIOD IN WHICH BUSINESSMEN
AND CRITICS OF THE BUSINESS SYSTEM HAVE RE-EMPHASIZED THE CONCEPT
OF CONSUMER ORIENTATION. EVEN A CURSORY EXAMINATION OF THE
COMMENTS PRESENTED BELOW, WHICH ARE TYPICAL OF STATEMENTS
APPEARING IN TRADE PUBLICATIONS, BUSINESS JOURNALS, AND CONVENTION
SPEECHES, INDICATE THAT THE BUSINESSMAN Is KEENLY AWARE OF
THE VETO POWER OF THE CONSUMER AND OF THE EFFECT UPON THE FIRM
OF THE CONSUMER'S EXERCISING THAT POWER:

IT IS THE CUSTOMER WHO DETERMINES WHAT A BUSINESS
Is. FOR IT Is THE CUSTOMER, AND HE ALONE, WHO THROUGH
BEING WILLING To PAY FOR A GOOD OR FOR A SERVICE, CONVERTS
ECONOMIC RESOURCES INTO WEALTH, THINGS INTO GOODS . . . .
THE CUSTOMER IS THE FOUNDATION OF A BUSINESS AND KEEPS
IT IN EXISTANCE.

TdE MARKET HOLDS ULTIMATE VETO OVER WHAT WE DO IN
PRODUCT STYLING, PRODUCTION SCHEDULING, IN INVENTORY
CONTROL, AND IN PRICING, AND FOR THAT REASON THE
WHOLE SYSTEM OF ACTION OF A FIRM SHOULD BE MARKET-
ORIENTED: SHOULD BEGIN WITH MARKET OPPORTUNITIES AND
WORK BACKWARD.

A BUSINESS WILL EXIST ONLY SO LONG AS IT CONTINUES
TO SERVE ITS MARKET. WHEN IT NO LONGER FURNISHES THAT
MARKET WITH THE GOODS OR SERVICES WHICH THE MARKET WANTS,
IT WILL SOON CEASE TO EXIST. AN ORGANIZATION TAKES ITS
MARCHING ORDERS FROM THE MARKET WHETHER ITS MARKET CONSISTS
OF ULTIMATE CONSUMERS OR INDUSTRIAL USERS.

 

29PETER F. DRUCKER, THE PRACTICE OF MANAGEMENT (NEW YORK:
HARPER & BROS., I95h), 37.

 

3O"EXCERPTS FROM A MARKETING ROUNDTABLE," SECOND REGIONAL
CONFERENCE ON MARKETING, DETROIT, APRIL IO, I956, A.

3I"A MARKETING APPROACH To ORGANIZATIONAL PLANNING,"
MANAGERIAL MARKETING: PERSPECTIVES AND VIEWPOINTS, ED.
EUGENE J. KELLEY AND WILLIAM LAZER (HOMEWOOD, ILL.: RICHARD D. IRWIN, INC.,

I958). 237.

67

EVERYTHING STARTS WITH THE NEEDS AND WANTS OF THE
ULTIMATE USER OF A PRODUCT . . . . THOSE WHO ARE IN
TUNE WITH THIS FUNDAMENTAL ARE THOSE WHO WILL BE THE
GROWTH LEADERS IN THE COMING DECADE.
IN THE COMPANIES WE HAVE STUDIED, WE HAVE FOUND THAT
THE LACK OF CUSTOMER-ORIENTATION HAS CONTRIBUTED GREATLY
TO THEIR RELATIVE LACK OF PROGRESS. CONVERSELY, THE
MOST SUCCESSFUL COMPANIES WE HAVE WORKED WITH HAVE
REALLY ADOPTED THE MARKETING CONCEPT.
THE GRAVEYARD OF DEAD BUSINESSES IS FULL OF
COMPANIfiS THAT DID NOT REMAIN SENSITIVE TO CUSTOMER
NEEDS.3
IT IS INDEED SIGNIFICANT THAT, WHEN ASKED TO NAME THE
MOST IMPORTANT DEVELOPMENT IN MARKETING DURING THE PAST FIVE
YEARS, R. L. 8080, VICE-PRESIDENT OF MARKETING OF FEDERAL
PACIFIC ELECTRIC COMPANY, NAMED "INDUSTRY'S GENERAL RECOGNITION
OF THE FACT THAT THE CUSTOMER IS THE MAYPOLE AROUND WHICH ALL
’3
FUNCTIONS OF A SUCCESSFUL BUSINESS MUST DANCE."J5 CURRENT
BUSINESS LITERATURE LEADS ONE TO INFER THAT A VAST AND RAPIDLY
GROWING NUMBER OF BUSINESSMEN ARE ACUTELY AWARE OF THE

SIGNIFICANCE OF CONSUMER ORIENTATION TO CONTEMPORARY AND FUTURE

MARKETING PLANNING AND ACTION.

 

32J. W. KEENER, "MARKETING'S JOB IN THE I96O'S," MARKETING
KEYS To PROFITS IN THE I960'S, PROCEEDINGS OF THE FORTY-SECOND
NATIONAL CONFERENCE (CHICAGO: AMERICAN MARKETING ASSOCIATION, I960),
I0.

 

33EDGAR W. NELSON, ESTABLISHING THE PRODUCT PLANNING FUNCTION
IN YOUR COMPANY (NEW YORK: MARKET PLANNING CORPORATION, N.D.), II.

 

 

3"PHILIP GUSTAFSON, "SELLING TOMORROW'S MARKET," NATION'S
’3
BUSINESS, XV (FEBRUARY, I957), b7.

35"TOMORROW'S MAJOR TRENDS IN MARKETING," SALES MANAGEMENT,
LXXXIII (SEPTEMBER A, I959), 30.

 

68

HOWEVER, A SMALL NUMBER OF WRITERS NOTE THAT WHILE THE
BASIC ROLE OF THE CONSUMER OVERTIME IS QUITE CONSTANT, THE
BUSINESSMAN'S EVALUATION OF THAT ROLE APPEARS TO CHANGE RATHER
DRASTICALLY OVER TIME, AND ESPECIALLY DURING PERIODS OF WIDE
FLUCTUATIONS IN ECONOMIC ACTIVITY. AN EXAMPLE OF WIDELY DIVERGENT
VIEWS REGARDING CONSUMER ORIENTATION IS PROVIDED BY A STATEMENT
MADE BEFORE A NATIONAL ASSOCIATION OF MANUFACTURERS CLINIC IN
I9h5 BY EVERETT R. SMITH, DIRECTOR OF RESEARCH OF MCFADDEN
PUBLICATIONS, INC.:

BUT WITH THIS ROSY PICTURE OF ACCUMULATED SAVING AND

DEFERRED DEMAND THERE ARE TWO SCHOOLS OF THOUGHT.

THE FIRST IS THAT THE PUBLIC IS so STARVED FOR

PRODUCTS THAT THEY WILL BUY ANYTHING . . . .

THE OTHER, THE REALISTIC APPROACH, IS THAT YOU

WILL HAVE AHEAD OF YOU THE BIGGEST SELLING JOB IN

HISTORY.3
IT APPEARS THAT BUSINESSMEN VIEW EMPHASIS ON "REDISCOVERY OF
THE CONSUMER" AS A HEALTHY AND NECESSARY CHARACTERISTIC OF
CONTEMPORARY MARKETING.

BEFORE REVIEWING THE BUSINESSMAN'S DEFINITIONS OF CONSUMER
ORIENTATION, A SUMMARY EVALUATION OF THE DIFFERENCES BETWEEN THEIR
PRESENT AND PAST POINTS OF VIEW REGARDING THE CONSUMER IS MOST
USEFUL AND INTERESTING. THE EXECUTIVE TYPICALLY DENIES THAT

IN PAST YEARS BUSINESS WAS CONDUCTED IN THE ABSENCE OF CONSUMER

ORIENTATION; HOWEVER, THE EXECUTIVES ARE IN DISAGREEMENT REGARDING

 

36EVERETT R. SMITH, "THE CUSTOMER WILL BE BOSS," VITAL
SPEECHES OF THE DAY, XI (SEPTEMBER I, l9h5), 693.

69

THE DEGREE TO WHICH SUCH AN ORIENTATION DID EXIST, THE EXTENT TO
WHICH THIS ORIENTATION WAS ACCEPTED IN "NON-MARKETING" DEPARTMENTS
OF THE FIRM, AND THE AMOUNT OF IMPACT THAT THE ORIENTATION HAD
ON POLICY FORMULATION, PRODUCT OFFERINGS, PROMOTIONAL STRATEGY, ETC.
J. B. MCKITTERICK, OF THE MARKETING SERVICES DEPARTMENT OF GENERAL
ELECTRIC COMPANY, NOTES THAT OFTEN THE MANUFACTURER THOUGHT OF HIS
CUSTOMERS AS BEING THE WHOLESALERS OR RETAILERS WHO BOUGHT FROM
HIM, AND NOT OF THE ULTIMATE CONSUMER OF THE PRODUCT; UNDER THESE
CONDITIONS THE TRADE STRUCTURE "WAS REGARDED AS AN IMPENETRABLE
BARRIER - IT WAS THE MARKET, AND . . . THE END USER WAS THE EXCLUSIVE
PROBLEM OF THE DEALER, AND NO CONCERN OF THE MANUFACTURER."37
TYPICALLY, STATEMENTS DESCRIBING DIFFERENCES IN CONSUMER
ORIENTATION IN THE PAST AND PRESENT ARE CONCERNED WITH THE
POSITIONING OR RANKING OF THE CONSUMER BY THE MANUFACTURER AND/OR
MARKETER AS THE LATTER DEVELOPS HIS MARKETING POLICY STRATEGY,
AND TACTICS. THE FOLLOWING COMMENTS ILLUSTRATETHIS CHARACTERISTIC:
. . . I SEE MY COMPANY, AND AMERICAN BUSINESS IN
GENERAL, IN THE MIDST OF A . . . REVOLUTION - A COMPLETE
REORIENTATION OF THOUGHT AND POINT OF VIEW. NO LONGER
IS THE COMPANY AT THE CENTER OF THE BUSINESS UNIVERSE;
TODAY THE CUSTOMER IS AT THE CENTER . . . . . TODAY OUR
ATTENTION HAS MOVED FROM PROBLEMS OF PRODUCTION TO
PROBLEMS OF SALEss FROM THE PRODUCT WE CAN MAKE To

THE PRODUCT THE CUSTOMER WANTS US TO MAKE; FRgM THE
COMPANY ITSELF TO THE MARKET PLACE IT SERVES..)U

 

37MCKITTERICK, 72.

3 ROBERT J. KEITH, "AN INTERPRETATION OF THE MARKETING CONCEPT,"

ADVANCING MARKETING EFFICIENCY, PROCEEDINGS OF THE FORTY-FIRST NATIONAL
CONFERENCE (CHICAGO: AMERICAN MARKETING ASSOCIATION, I959), ION-I05.

 

70

THE TRADITIONAL CONCEPT THAT MARKETING STARTS WHEN
THE GOODS LEAVE THE FACTORY AND ENDS WHEN THE GOODS REACH
THE CONSUMER MUST CHANGE. WE MUST RECOGNIZE THAT MARKETING
STARTS WITH FINDING OUT WHAT THE CONSUMER WANTS AND THAT
IT ENDS WHEN THE USER CONTINUES TO BUY THE PRODUCT OR
SERVICE BECAUSE HE Is FULLY SATISFIED WITH IT.J

UNDER THE OLD METHOD, THE COMPANY, OF COURSE,

ALWAYS RECOGNIZED THE CUSTOMER AS A VERY IMPORTANT FACTOR;
80 IT EMPLOYED THE BEST ADVERTISING TALENT AND THE BEST
SALES FORCE POSSIBLE TO CONVINCE THE CUSTOMER THAT HE
SHOULD BE PLEASED WITH THE PRODUCT. THE CUSTOMER CAME

IN FOR A LOT OF ATTENTION, BUT TOO OFTEN HE CAME IN LAST

- AFTER THE PRODUCT HAD BEEN DESIGNED, MANUFACTURED
AND WAS READY FOR SALE. UNDER THE CONCEPT OFunMARKETING"
THE CUSTOMER COMES IN FIRST, LAST AND ALWAYS.

CURRENT INTERPRETATIONS OF CONSUMER ORIENTATION

 

THE COMMENTS ABOVE ILLUSTRATE THE DIFFERENCES BETWEEN PAST

AND PRESENT POINTS OF VIEW REGARDING CONSUMER ORIENTATION AND

PROVIDE A MORE MEANINGFUL AND INTERESTING BASIS FOR VIEWING AND

EVALUATING DEFINITIONS OF CONSUMER ORIENTATION OFFERED BY BUSINESSMEN

IN THE LITERATURE. IT MAY BE NOTED THAT A DEFINITION OF SUCH

A CONCEPT IS USEFUL ONLY WHEN ITS CLARITY AND PRECISION MAKE POSSIBLE

THE MEANINGFUL IMPLEMENTATION OF THE CONCEPT. UNFORTUNATELY

LITERATURE OF THE MARKETING CONCEPT IS CENTERED AROUND SEVERAL

FUNCTIONAL AREAS THROUGH WHICH A CONSUMER ORIENTATION MAY BE

IMPLEMENTED WITHOUT FIRST HAVING SHARPLY DEFINED WHAT IS MEANT

BY SUCH AN ORIENTATION. IT IS RECOGNIZED THAT BY ITS NATURE

AS A CONCEPT, EXACTING PRECISION IN DEFINITION IS DIFFICULT IF

 

39c. J. COURTNEY, "THE JOB OF MARKETING," SALES MANAGEMENT,
LXXVII (DECEMBER 2|, I956), 5h.

 

"OROBERT M. NELSON, "HOW TO CREATE AND SUPPORT NEW MARKETS,"
INDUSTRIAL MARKETING, XLII (AUGUST, I957), M9.

 

7|

NOT IMPOSSIBLE TO ATTAIN. HOWEVER, MUCH OF THE VAGUENESS PRESENT
IN THE LITERATURE COULD HAVE BEEN AVOIDED, HAD MORE ATTENTION
BEEN GIVEN TO DEFINING THE BASIC CONCEPT BEFORE WRITERS PROCEEDED
TO ITS IMPLEMENTATION. AS CORBIN HAS NOTED: "ACTUALLY MUCH OF
THE CONFUSION STEMS FROM PREOCCUPATION WITH THE 'TREES' OF

ORGANIZATIONAL AND FUNCTIONAL RELATIONS, RATHER THAN THE 'FOREST'

"III

OF CONSUMER ORIENTATION.

THE LIMITED RANGE OF DEFINITIONS OF CONSUMER ORIENTATION

OFFERED IN CURRENT BUSINESS LITERATURE IS EXPRESSED IN THE FOLLOWING

STATEMENTS:

. . . IT SEEMS TO ME THAT THIS MARKETING CONCEPT IS MORE
THAN AN ORGANIZATION CHART - THAT IT IS MORE THAN A
DEFINITION OF FUNCTIONS - THAT IT IS A BASIC FRAME OF

MIND, A PHILOSOPHY IN JUST TWO WORDS - CONSUMER ORIENTATION
. . . . UNDER THIS CONCEPT THEN, THE CONSUMER AND NOT THE
MANUFACTURER IS THE ONE WHO EFFECTIVELY SHAPES OUR
MARKETING PLANS."2

AMERICAN MARKETING BEGINS, RATHER THAN ENDS,
WITH THE USER - WITH A CONCERN FOR WHAT HE NEEDS OR WANTS.
THE OLD "MOUSETRAP" THEORY . . . HAS LONG SINCE BEEN
ABANDONED . . . . THE POINT IS: WE START WITH THE A
PEOPLE AND THEIR WANTS, RATHER THAN WITH THE PRODUCT. 3

. . . FUNDAMENTAL TO THIS PHILOSOPHY IS THE
RECOGNITION AND ACCEPTANCE OF A CONSUMER - ORIENTED WAY OF
DOING BUSINESS. UNDER MARKETING THE CUSTOMER BECOMES
THE FULCRUM, THE PIVAT POINT ABOUT WHICH THE BUSINESS

 

lII

CORBIN, 6.

"ZEIGHTH ANNUAL CHICAGO TRIBUNE DISTRIBUTION AND
ADVERTISING FORUM, 3I-32.

"3CHARLES G. MORTIMER, "CHALLENGING OPPORTUNITIES IN
A CHANGING WORLD," ADDRESS BEFORE SEVENTEENTH BIENNIAL CONGRESS,
INTERNATIONAL CHAMBER OF COMMERCE, WASHINGTON, APRIL 2|, I959.

72

MOVES IN ALL OPERfifiING FOR THE BALANCED BEST INTERESTS
OF ALL CONCERNED.

IT IS MY BELIEF THAT MARKETING PEOPLE HAVE A UNIQUE
LEADERSHIP ROLE IN ANY BUSINESS. IT IS THEIR RESPONSIBILITY
TO STIMULATE CUSTOMER ORIENTATION IN EVERY AREA OF THE
BUSINESS. THEY MUST SOMEHOW CONVINCE EVERY ENGINEER,
EVERY MANUFACTURING MAN, EVERY ACCOUNTANT - THAT NO
MATTER HOW COMPLEX, HOW INTERESTING, AND HOW CHALLENGING
THEIR WORK MAY BE, THERE IS NO PAYOFF UNTIL THE CUSTOMER
IS SOLD, SERVICED, AND SATISFIED. EXPRESSED AS A GOAL,
THE MARKETING MAN'S PURPOSE SHOULD BE: TO DIRECT ALL
VISION AND EFFORTS OF THE BUSINESS TOWARD MARKETING
OBJECTIVES, AND ALL VISION AND FFORTS OF MARKETING TOWARD
THE OBJECTIVES OF THE BUSINESS.

FUNDAMENTAL TO THE ACCEPTANCE OF THE MARKETING
MANAGEMENT PHILOSOPHY IS THE ADOPTION OF A CONSUMER
ORIENTATION TO BUSINESS DECISIONS. HERE THE CONSUMER
BECOMES THE FULCRUM ABOUT WHICH ALL BUSINESS ACTIVITIES
REVOLVE. BUSINESS FUNCTIONS, WHETHER FINANCE,
PERSONNEL, PRODUCTION, MARKETING, OR OTHERS, ARE NOT
REGARDED As ENDS AND GOALS PER SE - BUT ARE VIEWED
ESSENTIALLY AS A MEANS OF SATISFYING CONSUMER WANTS.
THUS, COMPANY PROBLEMS ARE APPRAISEO AS CONSUMER
PROBLEMS AND NOT MERELY AS PROBLEMS IN ANY OF THE
FUNCTIONAL BUSINESS AREAS."6

IT IS REGRETTABLE THAT MORE WRITERS HAVE NOT ACCEPTED
AS COMPREHENSIVE A DEFINITION OF CONSUMER ORIENTATION AS LAZER'S
INTERPRETATION, ABOVE. SUCH A DEFINITION PROVIDES BOTH DIRECTION
AND SCOPE TO MEANINGFUL IMPLEMENTATION OF THIS ORIENTATION; YET
FEW WRITERS HAVE DEVELOPED THEIR INTERPRETATIONS EXTENSIVELY

ENOUGH TO PROVIDE A POSITIVE COURSE OF ACTION EITHER TO ASSIST

 

MM

BORCH, 3.

"SEDWARD S. McKAY, "THE NEW RESPONSIBILITIES OF MARKETING,"
LECTURE AT GRADUATE SCHOOL OF BUSINESS ADMINISTRATION, NEW YORK
UNIVERSITY, JANUARY 9, I950.

"6WILLIAM LAZER, "CHANGING DIMENSIONS IN MARKETING,"
THE BUSINESS QUARTERLY, XXIV (SPRING, I959), 25.

 

73

OR TO ASSURE ITS ACCEPTANCE AND IMPLEMENTATION WITHIN A FIRM.
ONE NOTABLE EXCEPTION, HOWEVER, IS FOUND IN McKAY'S DESCRIPTION
OF THE COMPANY-WIDE NEED FOR, AND SIGNIFICANCE OF, THE CONSUMER
POINT OF VIEW."7

REGARDLESS OF THE EXTENT TO WHICH POPULAR DEFINITIONS
OF CONSUMER ORIENTATION PERMIT OR ENCOURAGE EFFECTIVE IMPLEMENTATION,
A REVIEW OF BUSINESS LITERATURE MAKES OBVIOUS THE FACT THAT A
CONSIDERABLE SEGMENT OF THE BUSINESS COMMUNITY RECOGNIZES THAT
SUCCESS OR FAILURE OF THEIR FIRMS RESTS IN LARGE PART UPON
THEIR KNOWLEDGE OF THEIR CUSTOMERS, AND THEIR ADOPTING THEIR
TOTAL MARKET OFFERING TO HIS NEEDS. IMPLICIT IN MANY OF THESE
COMMENTS IS A RECOGNITION THAT THE CONSUMER IN THE PAST HAS
NOT BEEN AWARDED HIS DUE COGNIZANCE WHEN COMPANY POLICY, PRODUCT
AND SERVICE OFFERINGS, INVENTORY SYSTEMS, ETC. WERE DETERMINED.
ARTICLES AND SPEECHES BY BUSINESSMEN INDICATE NO REJECTION OF
CONSUMER ORIENTATION; RATHER THEY DEMONSTRATE INTEREST AND CONCERN
RANGING FROM REAFFIRMATION OF FAITH IN SUCH AN ORIENTATION TO
COMPLETE REORGANIZATION OF FIRMS' STRUCTURES TO ASSIST IN ITS
IMPLEMENTATION. TO ILLUSTRATE THIS RANGE OF STATEMENT AND ACTIVITY,
SEVERAL COMMENTS REGARDING ACCEPTANCE CONCERN, AND CORRECTIVE
ACTION AT THE LEVEL OF THE INDIVIDUAL FIRM ARE OFFERED BELOW.

THE MCGREGOR-DONIGER COMPANY, MANUFACTURER OF MEN'S SPORTS
AND CASUAL CLOTHING, IS DESCRIBED AS A FIRM WITHIN WHICH

COORDINATED MARKETING EFFORT AND CONSUMER ORIENTATION ARE BASIC:

 

"7MCKAY.

7%

THE COMPANY'S POLICY FUNDAMENTALLY HAS NEVER BEEN
AN OPPORTUNIST ONE. IT HAS ALWAYS BEEN FUNDAMENTALLY
A POLICY OF HOW GOOD CAN WE MAKE THE PRODUCT AT A FAIR
PRICE? HOW WILL THE CONSUMER REACT? WE HAVE ALWAYS
FELT THAT THE CONSUMER IS BOSS. WE HAVE ALWAYS FELT THAT
IF WE GIVE THE CONSUMER A GOOD PRODUCT AT A FAIR PRICE,
HE WILL COME BACK AND BUY ANOTHER ONE. 0

JAMES H. JEWELL, VICE-PRESIDENT OF MARKETING OF WESTINGHOUSE
ELECTRIC CORPORATION, NOTES THAT THE CONSUMER PLAYS A DIFFERENT
ROLE UNDER WESTINGHOUSE'S IMPLEMENTATION OF THE MARKETING CONCEPT:

FOR TOO LONG WE HAVE REGARDED THE CUSTOMER PRIMARILY
IN TERMS OF OUR NEEDS TO INFLUENCE HIM FAVORABLY TOWARD
OUR PRODUCTS. OUR MARKETING CONCEPT REQUIRES THAT WE
RECOGNIZE HIM AS AN IMPORTANT SOURCE OF INFORMATION ON
NEEDS AND DESIRES - WITH THIS INFORMATION SERVING AS
THE BASIS OF PLANNI G AND CONTROLLING OUR ENTIRE
BUSINESS OPERATION.

ROBERT M. NELSON, SUPERVISOR OF GENERAL PROMOTION OF

ARMCO STEEL CORPORATION, SEES CONSUMER ORIENTATION AS THE BASIS

FOR ALL CORPORATE PLANNING:

. . . THE FIRST STEP IS FOR MARKETING RESEARCH TO
FIND OUT WHAT THE CUSTOMER WANTS IN THE PRODUCT, WHAT
PRICE HE IS WILLING TO PAY, AND WHEN AND WHERE HE WANTS
IT. FROM THIS POINT ON, IT BECOMES THE OVER-ALL
CORPORATE POLICY TO INTEGRATE EVERY ORGANIZATIONAL

AND PHYSICAL FACILITY T0 FULFILL THESE CUSTOMER

SPECIFICATIONS.5

M. E. ZIENGENHAGEN, MANAGER OF ADVERTISING AND MARKETING
PROMOTION DEPARTMENT OF WORTHINGTON CORPORATION NOTES THAT SUCH AN

ORIENTATION IS BOTH EFFECTIVE AND NECESSARY IN THE INDUSTRIAL GOODS

 

"BDICK BRUNER, "FOR McGREGOR CLAN, COORDINATED MARKETING
IS KEY," PRINTERS' INK, CCLIV (FEBRUARY l7, I956), A0.

II9NEW MARKETING CONCEPT AT WESTINGHOUSE: DECENTRALIZE AND
A
STUDY THE CONSUMER," PRINTERS' INK, CCLXII (JANUARY 2A, I950), 33-

SONELSON, H9.

75

MARKETS ALSO:

THE PRIME MOVES ALL THROUGH THE DIVISIONS SHOULD BE

THE NEEDS OF CUSTOMERS. BY BASING ALL OF OUR MARKETING

ACTIVITIES ON A MAXIMUM OF SOUND REASONING AND EQUALLY r

SOUND PLANNING, WE COULD MINIMIZE THE ELEMENT OF FAILURE.)l

IN EXPLAINING THE BASIS FOR CERTAIN CHANGES IN THE
ORGANIZATIONAL STRUCTURE OF TRUMBULL ELECTRIC MANUFACTURING COMPANY,
PRESIDENT ELMER T. CARLSON NOTED:

THE CUSTOMER IS THE REASON FOR OUR BUSINESS . . . AND

ANY ORGANIZATION PLAN DECIDED UPON MUST BE ABLE_TO PROVE

ITSELF IN TERMS OF IMPROVED CUSTOMER RELATIONS.

SEVERAL WRITERS AND SPEAKERS HAVE NOTED THAT A MEANINGFUL
IMPLEMENTATION OF A CONSUMER ORIENTATION MUST INVOLVE NOT ONLY THE
MARKETING LINE AND STAFF, BUT FURTHER THAT IT MUST BE ACCEPTED AND
PRACTICED BY ALL FUNCTIONAL AREAS OF THE BUSINESS. FOR EXAMPLE, DON
G. MITCHELL, PRESIDENT OF SYLVANIA ELECTRIC PRODUCTS, INC., HAS
NOTED:

SUCCESSFUL MARKETING IS BASED ON THE CONCEPT OF CUSTOMER

ACCEPTANCE. IF THE CUSTOMER DOESN'T LIKE A PRODUCT, IT

WON'T SELL. IF THE CUSTOMER DOESN'T LIKE A PRICE, HE

WON'T BUY. THEREFORE, THE DESIGN DEPARTMENT, THE PRODUCTION

DEPARTMENT, AND THE SALES DEPARTMENT MUST WORK TOGETHER,

NOT INDEPENDENTLY.

THE INTERDEPARTMENTAL OR COMPANY-WIDE NATURE OF CONSUMER

ORIENTATION IS EMPHASIZED ALSO BY A. A. TOGENSEN, VICE-PRESIDENT

5I"WORTHINGTON CORPORATION ADOPTS NEW MARKETING PHILOSOPHY,

EUILDS CAPACITY FOR GROWTH," PRINTERS' INK, CCLXV (OCTOBER 3, I95C),
2.

 

E2
J A. R. HAHN, "TRUMBULL REMODELS ITS MANAGEMENT TO MEET
'THE AGE OF CRISIS'," SALES MANAGEMENT, LXVI (FEBRUARY I5, I95I), 37.

 

53DON G. MITCHELL, "TO MARKET, TO MARKET IN SIX STEPS,"
DUN'S REVIEW AND MODERN INDUSTRY, LX (MARCH, I952), IA.

76

IN CHARGE OF MARKETING, BULLDOG ELECTRIC COMPANY, WHO NOTED THE

SPECIAL ROLE OF MARKETING PERSONNEL IN SPREADING CONSUMER ORIENTA-

TION

IN THE FIRM:

THE CUSTOMER AND HIS REQUIREMENTS PROVIDE THE DYNAMIC
FORCE THAT DICTATES HOW WE WILL MARKET OUR GOODS . . . .
THE MARKETER IS THE LOGICAL ONE TO PROVIDE ALL THE ESSENTIAL
DATA CONCERNING THE MARKET ABILITY OF A PRODUCT TO ALL
SIGMENTS OF A COMPANY AT THE BEGINNING - NOT THE END -

OF THE PRODUCTION CYCLE. THE MARKETER - THROUGH STUDIES
AND RESEARCH AND THROUGH HIS PARTICULAR SENSITIVITY TO
CUSTOMER AND MARKET CONDITIONS - SHOULD FAMILIARIZE

THE ENGINEER, THE DESIGNER, AND THE PRODUCTION DEPARTMENT
WITH THE CUSTOMERS' REQUIREMENTS T0 ASSURE OMPLIANCE

AS TO THE FORM AND END PRODUCT SHALL TAKE.5

IN SOME DETAIL, EDWARD S. MCKAY, MARKETING SERVICES,

GENERAL ELECTRIC COMPANY, HAS DEFINED VARIOUS INTERDEPARTMENTAL

ASPECTS OF CONSUMER ORIENTATION, INCLUDING SUCH "NON—MARKETING"

AREAS AS RESEARCH AND ENGINEERING, MANUFACTURING, AND FINANCE.

FOR EXAMPLE, REGARDING RESEARCH AND ENGINEERING HE HAS NOTED

THAT CUSTOMER ORIENTATION MEANS:

. . . THAT SPECIFICATIONS AS TO CUSTOMER REQUIREMENTS,
MARKET-PLACE TESTS, AND PRODUCT PERFORMANCE DATA GUIDE
THE STARTING POINTS, THE DIRECTIONS, AND THE EMPHASIS
IN BASIC RESEARCH, IN ADVANCE ENGINEERING DEVELOPMENT,
AND IN PRODUCT DESIGN.

REGARDING THE RELATIONSHIP OF CONSUMER ORIENTATION TO MANUFACTURING,

HE HAS NOTED:

. . . THAT FOR OUR PRODUCTION PEOPLE THE MARKET’PLACE
FACTS AND FORECASTS, PRESENTED AS PRODUCTION SCHEDULES
TO MEET CUSTOMER REQUIREMENTS, FURNISH THE FOUNDATION

 

5 A. A. TOGESEN, "THE SWITCH FROM SALES TO A MARKETING

CONCEPT," BROADENING HORIZONS IN MARKETING (NEW YORK: AMERICAN
MANAGEMENT ASSOCIATION, I956), 29.

 

55McKAY.

77

FOR PLANNING/PERSONNEL, FACILITIES AND ACTUAL FACTORY
PRODUCTION.5O

FINNALLY, REGARDING THE RELATIONSHIP OF CONSUMER ORIENTATION TO
FINANCE, McKAY HAS NOTED THAT CONSUMER ORIENTATION MEANS:

. . . THAT SOUND FINANCIAL PLANNING - INCLUDING BUDGETS,

APPROPRIATIONS, CASH FLOW, CREDIT PROGRAMS, AND PERFORMANCE

MEASUREMENTS - IS FIRMLY BASED ON FACTS AND FORECASTS

AS TO SALES VOLUME, MARKET THRENDS, AND INVENTORIES.57

ANOTHER INTERESTING ASPECT OF THE LITERATURE IS APPARENT
RECOGNITION THAT CONSUMER ORIENTATION IS APPLICABLE AND USEFUL
BEYOND THE AREA OF CONSUMER AND INDUSTRIAL GOODS. A NUMBER OF
ARTICLES DESCRIBE THE SIGNIFICANCE OF CONSUMER ORIENTATION TO
SERVICE FIRMS, SUCH AS AUTOMOBILE RENTAL COMPANIES, TO ADVERTISING
AGENCIES, TO THE MASS MEDIA ORGANIZATIONS, AND To THE PUBLIC
UTILITIES. FOR EXAMPLE, ANSHEN HAS NOTED THAT IN THE PRESENT
AMERICAN ECONOMY, IN WHICH THE PUBLIC UTILITY MONOPOLIES ARE
SERVING A LEVEL OF CONSUMER DEMAND SUBSTANTIALLY ABOVE THAT OF
MINIMUM ESSENTIAL NEEDS, AND IN WHICH CONSUMERS HAVE INCREASING
DISCRETIONARY SPENDING POWER FOR WHICH MANUFACTURERS AND MARKETERS
OF A VAST RANGE OF GOODS AND SERVICES ARE COMPETING, THE PUBLIC
UTILITIES ARE FORCED TO ADOPT AGGRESSIVE MARKETING PROGRAMS IN
ORDER TO COMPETE FOR THESE DOLLARS. GIVEN THIS SITUATION, ANSHEN
NOTES:

THIS VIEW OF THE PUBLIC UTILITY WORLD INVITES UTILITIES

TO ACCEPT AND IMPLEMENT A NEW MANAGEMENT PHILOSOPHY "
ONE THAT MAKES THE CONSUMER THE FOCUS OF MANAGEMENT

 

K”
C\

(D

U

o

 

\fl
-U
U)
U

 

78

ATTENTION. THIS IS A REVOLUTIONARY CONCEPT FOR AN INDUSTRY

THAT TRADITéONALLY HAS BEEN CONCERNED WITH ENGINEERING

TECHNOLOGY.JO

THE PRECEEDING COMMENTS BEAR EVIDENCE OF CONSIDERABLE
ATTENTION BEING GIVEN TO THE ROLE OF THE CONSUMER BY LEADERS OF
AMERICAN BUSINESS. HOWEVER, ACCEPTANCE AND IMPLEMENTATION OF
A CONSUMER ORIENTATION ARE NOT IDENTICAL. THE LITERATURE LEAVES
CONSIDERABLE DOUBT AS TO THE INCIDENCE OF SPECIFIC CORRECTIVE
ACTIONS AND RE-ORIENTATIONS ON A COMPANY-WIDE BASIS RESULTING
FROM MANAGEMENT OF A SIGNIFICANT NUMBER OF FIRMS. IT HAS BEEN
NOTED THAT:". . . IF THE PRODUCTION PEOPLE SEE THE CONSUMER AS
SOMEONE 'WHO SEEMS TO COMPLICATE OUR PRODUCTION PROBLEMS,‘
RATHER THAN SOMEONE TO BE SERVED AND ACCOMMODATED AT ALMOST ANY
COST OR INCONVENIENCE, THE MARKETING CONCEPT IS NOT IN OPERATION159
SUMMARY

IN SUMMARY, SOME MEANINGFUL AND INTERESTING OBSERVATIONS
BASED UPON CURRENT LITERATURE OF CONSUMER ORIENTATION MAY BE
MADE. ALTHOUGH THERE ARE SOME EXCEPTIONS, AND IN A FEW CASES
VERY SIGNIFICANT EXCEPTIONS, TO THE FOLLOWING GENERALIZATIONS,
THESE OBSERVATIONS DO REPRESENT THE CURRENT STATUS OF CONSUMER
ORIENTATION IN AMERICAN BUSINESS, IN SO FAR AS THAT STATUS IS
REFLECTED BY TRADE PUBLICATION AND JOURNAL ARTICLES AND ADDRESSES

BEFORE BUSINESS AND PROFESSIONAL CONVENTIONS BY BUSINESSMEN

AND ACADEMICIANS.

 

BBANSHEN 25I
, .

59THE MODERN MARKETING CONCEPT AND THE CHANGING ROLE OF THE
ADVERTISING AGENCY (NEW YORK: MCCANN-ERICKSON, INC., N.D.), 5.

 

79

I) AN ANALYSIS OF CONTENT OF PUBLICATIONS AND ADDRESSES
OF BUSINESSMEN AND ACADEMICIANS DURING THE PERIOD I950-I960, AND
ESPECIALLY DURING THE LATTER HALF OF THAT PERIOD, REVEALS RATHER
WIDESPREAD RECOGNITION OF THE ROLE OF THE CONSUMER IN THE
CONTEMPORARY MARKET, AS WELL As THE ROLE WHICH HE HAS PLAYED
HISTORICALLY. GENERALLY, BUSINESSMEN AGREE THAT DURING THE
GREATER PART OF THE PRESENT CENTURY, AND ESPECIALLY DURING WAR
YEARS, INSUFFICIENT ATTENTION HAS BEEN GIVEN T0 CONSUMERS'

WANTS AND NEEDS.

2) WITHOUT EXCEPTION THE CONTENT REVIEWED INDICATED
ACCEPTANCE OF CONSUMER ORIENTATION AS A NECESSARY REQUISITE FOR
MOST PROFITABLE OPERATION IN THE CONTEMPORARY ECONOMY, AND IN MOST
CASES AS NECESSARY FOR CONTINUED EXISTENCE OF THE FIRM. BUSINEss-
MEN APPEAR TO BE KEENLY AWARE AND CONCERNED REGARDING THE
COMMUNICATIONS FEEDBACK FROM CONSUMER TO FIRM; CONSUMER ORIENTATION
APPEARS TO BE A NATURAL CONSEQUENCE OF THIS AWARENESS AND CONCERN.

3) NOT ONLY DO BUSINESSMEN SEE VALUE IN, AND NECESSITY
FOR, CONSUMER ORIENTATION; ALSO A CONSIDERABLE NUMBER OF
SPOKESMEN INDICATE THAT ACCEPTANCE AND IMPLEMENTATION MUST BE
ON A COMPANY-WIDE BASIS, AND NOT CONFINED TO TRADITIONAL MARKETING
DEPARTMENTS ALONE. GENERALLY THE MARKETING PERSONNEL, WITH
THE ACTIVE SUPPORT OF TOP MANAGEMENT, ARE REPORTED TO BE NECESSARILY
INVOLVED IN SPREADING THE CONSUMER ORIENTATION To OTHER FUNCTIONAL
AREAS OF THE BUSINESS, E.G. MANUFACTURING, FINANCE, ETC.

A) THE AREA OF BENEFICIAL APPLICATION OF CONSUMER ORIENTATION

IS VIEWED AS EXTENDING WELL BEYOND THE LIMITS OF CONSUMER AND

INDUSTRIAL GOODS. THE LITERATURE REVEALS INSTANCES OF APPLICATION
BY FIRMS IN THE SERVICE TRADES, BY PUBLIC UTILITIES, BY ADVERTISING
AGENCIES AND BY MAGAZINE PUBLISHERS AND OTHERS IN THE MASS
COMMUNICATIONS AREA. IT APPEARS THAT THESE SPOKESMEN REALIZE THAT
WHEREVER MARKETING IS INVOLVED, THE CONSUMER ORIENTATION IS
APPLICABLE AND ULTIMATELY NECESSARY.

5) REGRETTABLY, HOWEVER, THE MAJORITY OF DEFINITIONS OF
CONSUMER ORIENTATION ARE TOO VAGUE TO LEND THEMSELVES TO MEANINGFUL
IMPLEMENTATION. THE POPULAR DEFINITION, "RECOGNIZING THAT A FIRM
EXISTS TO SERVE ITS CUSTOMERS, AND THAT TO SERVE THEM, IT MUST
KNOW THEM," DOES EMBODY THE ESSENCE OF THE ORIENTATION. YET
IT WOULD SEEM THAT DEFINITIONS MORE DIRECTLY CONCERNED WITH
EFFECTS ON COMPANY POLICY, STRATEGY AND TACTICS WOULD BE MORE
MEANINGFUL TO THE BUSINESSMAN OR RESEARCHER CONCERNED WITH
INTRODUCING SUCH AN ORIENTATION INTO A FIRM ON A COMPANY-WIDE
BASIS, OR IN EVALUATING THE EFFECTIVENESS OF SUCH AN ORIENTATION
ALREADY IN EXISTENCE.

6) A FEW WRITERS HAVE REPORTED THAT VAGUENESS OF DEFINITIONS
HAS LED TO CONSIDERABLE CONFUSION REGARDING THE CONDITIONS
CONSTITUTING IMPLEMENTATION OF CONSUMER ORIENTATION BY A PARTICLJLAR
FIRM. FURTHER, IT IS OCCASIONALLY REPORTED THAT RECENT INTEREST-
AMONG BUSINESSMEN REGARDING THE MARKETING CONCEPT HAS LED TO
NUMEROUS, SOMETIMES ILL-CONCEIVED ACTIONS, ALL AIMED AT IMPLEMENT‘NG
CONSUMER ORIENTATION WITHOUT FIRST DEFINING THE RELATIVELY

SPECIFIC TERMS WHAT SUCH AN ORIENTATION MEANS. SUCH WRITERS

SUGGEST THAT THESE FACTORS EMPHASIZE THE DIFFERENCE BETWEEN

8|

ACCEPTANCE AND IMPLEMENTATION OF CONSUMER ORIENTATION, AND,
NECESSARILY, CAUSE THE RESEARCHER TO QUESTION THE DEGREE TO WHICH
FIRMS HAVE IMPLEMENTED THIS ORIENTATION.

7) FINALLY, INTEREST IN THIS AREA, EVIDENCED BY THE
QUANTITY OF LITERATURE, EXPERIMENTATION BY FIRMS, AND THE MORE
SUBSTANTIAL NATURE OF RESEARCH CONCERNED WITH CONSUMER ORIENTATION
SUGGEST BETTER DEFINITION, WIDER ACCEPTANCE, AND MORE EFFECTIVE
PRACTICE OF THIS ORIENTATION IN THE YEARS AHEAD. AS ONE WRITER
HAS PREDICTED,"SENSING THIS COMPANY-WIDE NEED FOR INTIMATE
IDENTIFICATION WITH THE CONSUMER, THE MARKETING-MINDED COMPANY
OF TOMORROW WILL UNDOUBTEDLY DEVELOP INGENIOUS WAYS OF STIMULATING
EVERY AREA OF THE BUSINESS TO BE CONSUMER-MINDED" JUST AS MANY
COMPANIES HAVE DEVELOPED UNIQUE METHODS OF TRAINING THEIR PEOPLE
TO BE AWARE OF OTHER COMPANY EMPHASES, SUCH AS SAFETY AND COST

REDUCTION.

ORGANIZATIONAL ASPECTS

INTRODUCTION

 

IN THE LITERATURE, ADVOCATES OF THE MARKETING CONCEPT HAVE
PLACED CONSIDERABLE EMPHASIS ON THE ROLE OF ORGANIZATION IN COMPANY-
WIDE IMPLEMENTATION OF THE CONCEPT. IN SOME INSTANCES, MERE
CHANGES IN ORGANIZATION STRUCTURE, WHICH HAVE EMPHASIZED THE
SIGNIFICANCE OF THE SEVERAL MARKETING FUNCTIONS, HAVE BEEN DEEMED
SUFFICIENT EVIDENCE OF A COMPANY'S HAVING IMPLEMENTED THE CONCEPT.
MORE GENERALLY ACCEPTED, HOWEVER, IS THE OBSERVATION REPORTED

BY KNIFFIN: "IN LARGER COMPANIES ORGANIZATION CHANGES APPARENTLY

 

/
OOIBID., 5-6.

 

82

HAVE BEEN TAKING PLACE CONCURRENTLY WITH THE INTRODUCTION OF THE
MODERN MARKETING CONCEPT. ALTHOUGH THIS CONCEPT IS PRIMARILY A
WAY OF THINKING ABOUT MARKETING PROBLEMS, THESE ORGANIZATION
CHANGES REFLECT AN EFFORT TO MAKE THE CONCEPT A WORKING PHENOMENON."6|
SIGNIFICANCE OF ORGANIZATIONAL ASPECTS OF THE MARKETING
CONCEPT IS ALSO INDICATED BY EDWARD S. MCKAY, WHO NOTES: "THE
MODERN MARKETING CONCEPT CALLS FOR AN INTEGRATED COMPANY AND
DISTRIBUTION ORGANIZATION, DESIGNED TO CARRY OUT THIS MARKETING
PLAN, AND ALL THE REQUIRED MARKETING FUNCTIONS, EFFECTIVELY,
ECONOMICALLY, AND ON TIME."62 BAY E. ESTES, VICE PRESIDENT OF
MARKETING OF UNITED STATES STEEL CORPORATION, IN NOTING THAT
MARKETING PRODUCTS SUCCESSFULLY TODAY UNDER ANY OTHER THAN THE

II

MARKETING CONCEPT WOULD BE MOST DIFFICULT, STATES THAT THE
CONCEPT WORKS NOT JUST BECAUSE WE 'ADOPTED' IT . . . BUT BECAUSE
WE RECOGNIZED AND TOOK INTO ACCOUNT ALL THE FUNCTIONS OF
MARKETING, AND PUT THEM To WORK ON A COORDINATED BASIS."63
OF THE SEVERAL MARKETING CONCEPT COMPONENTS DESCRIBED IN

THIS CHAPTER AND REPORTED IN THE LITERATURE, A FAR LARGER SHARE OF

THE CONTENT OF ARTICLES AND SPEECHES ARE CONCERNED WITH ORGANIZA-

 

6'FRED W. KNIFFIN, THE MODERN CONCEPT OF MARKETING MANAGEMENT:
ITS IMPLICATIONS AND PROBLEMS (BLOOMINGTON, IND.: INDIANA UNIVERSITY
BUREAU OF BUSINESS RESEARCH, I958), I6.

 

62EDWARD S. McKAY, "HOW TO PLAN AND SET UP YOUR MARKETING
PROGRAM," BLUEPRINT FOR AN EFFECTIVE MARKETING PROGRAM (NEW YORK:
AMERICAN MANAGEMENT ASSOCIATION, I95h), 4.

63BAY E. ESTES, "DOES THE MARKETING CONCEPT WORK IN THE
INDUSTRIAL FIELD?," SALES MANAGEMENT, LXXXII (MARCH 20, I959), 33.

 

83

TIONAL ASPECTS THAN WITH ANY OTHER AREA. IN FACT, OF THE TOTAL BODY
OF LITERATURE, THE MOST SUBSTANTIAL ARTICLES ARE THOSE WHICH
DESCRIBE THE VARIOUS FORMS OF ORGANIZATION WHICH HAVE EMERGED
AS A CONSEQUENCE OF COMPANIES' ATTEMPTS AT IMPLEMENTING THE
MARKETING CONCEPT. TO A LESSER EXTENT, THE CONTENT HAS BEEN
CONCERNED WITH THE DUTIES AND CHARACTERISTICS OF THE NEWLY FORMED
POSITION OF MARKETING MANAGER OR VICE PRESIDENT OF MARKETING AS
COMPARED WITH THE HISTORICAL POSITION OF SALES MANAGER. THIS
ALLOCATION OF EMPHASIS HAS LED MANY CRITICS TO AGREE WITH THE
POSITION SET FORTH BY CORBIN: THAT MUCH OF THE CONFUSION REGARDING
IMPLEMENTATION OF THE MARKETING CONCEPT "STEMS FROM PREOCCUPATION
WITH THE 'TREES' OF ORGANIZATIONAL AND FUNCTIONAL RELATIONS,
RATHER THAN THE 'FOREST' OF CONSUMER ORIENTATION."6" FOX REGARDS
THE SITUATION AS AN EXAGGERATION OF THE ADVANTAGES OF ORGANIZATION,
NOTING THAT "OVER-EAGER CONVERTS" TO THE MARKETING CONCEPT "SEIZE
UPON THE CONCEPT AND THE INTEGRATED ORGANIZATION FLOWING OUT
OF IT AS A SURE CURE, A PANACEA . . . THEY SAY THE MARKETING
CONCEPT MEANS YOU PULL TOGETHER SALES AND ADVERTISING, ADD RESEARCH,
/
GIVE SOMEBODY THE TITLE OF MARKETING MANAGER AND YOU'RE IN BUSINESS."05
CASCINO TOO, NOTES THAT "ALL TOO OFTEN . . . WE ARE INCLINED TO

DESCRIBE THE IMPLEMENTATION PROCESS OF THE MARKETING CONCEPT IN

 

6h

CORBIN, 6.

65FOX, III.

8A

/,/
TERMS OF A SERIES OF PHYSICAL MANIFESTATIONS."CO CURRENT EMPHASIS

ON ORGANIZATIONAL ASPECTS OF THE CONCEPT MAY BE EXPLAINED IN
PART IN TERMS OF THE NEWNESS OF THIS BUSINESS PHILOSOPHY TO
MANAGEMENT. McKAY REPORTS THAT, DURING THE PERIOD I9h3-I953,
HEAVY EMPHASIS WAS PLACED ON ORGANIZATIONAL ASPECTS AT GENERAL
ELECTRIC COMPANY "IN ORDER To FACILITATE RAPID COMPANY-WIDE
IMPLEMENTATION OF THE CONCEPT." AT THE SAME TIME IT WAS RECOGNIZED
THAT "MARKETING IS FAR MORE THAN A FORM OR ELEMENT OF ORGANIZATION.
IT IS A PHILOSOPHY, AN ATTITUDE . . ."67

NUMEROUS WRITERS HAVE ACKNOWLEDGED THAT ONE MAJOR PROBLEM
PRESENT CURRENTLY IN MANY BUSINESS ORGANIZATIONS IS LACK OF
COORDINATION OF THE VARIOUS AREAS OF COMPANY EFFORT. LARGELY
BECAUSE OF THIS PROBLEM A SIGNIFICANT NUMBER OF MARKETING CONCEPT
ADVOCATES HAVE DEVOTED CONSIDERABLE ATTENTION TO ORGANIZATION
AS ONE MEANS EFFECTIVE IN IMPLEMENTING THE CONCEPT. THAT IS,
COORDINATION OF EFFORT IS A NECESSARY PART OF THE MARKETING
CONCEPT, AND ORGANIZATIONAL RELATIONSHIPS MAY LEAD TO COORDINATION
OF EFFORT. KNIFFIN REPORTS THAT "COORDINATION AMONG THE

VARIOUS DIVISIONS OF THE FIRM . . . IS A PRIME PREREQUISITE FOR

CD
ADOPTION OF CUSTOMER-ORIENTED THINKING BY MANAGEMENT."UU A

 

66ANTHONY E. CASCINO, "IMPLEMENTING THE MARKETING CONCEPT FROM
A COMPANY POINT OF VIEW," MARKETING KEYS TO PROFITS IN THE I960'S
PROCEEDINGS OF THE FORTY-SECOND NATIONAL CONFERENCE (CHICAG0:
AMERICAN MARKETING ASSOCIATION, I960), A3.

 

67EDWARD S. MCKAY, "THE MARKETING CONCEPT IN GENERAL ELECTRIC,"

AN UNPUBLISHED PAPER DATED SEPTEMBER 30, I956.

6QKNIFFIN, 7.

85

RELEASE BY MCCANN-ERICKSON, INC., STATES THAT "AT THE CORE OF THE
MARKETING CONCEPT IS A SENSE OF UNITY OF PURPOSE, OF PARALLEL

/
MOVEMENT OF GOODS AND COMMUNICATION."09 WEST NOTES THAT THE
BASIS OF THE MARKETING CONCEPT "Is THE INTEGRATION OF ALL MARKETING
FUNCTIONS OF A COMPANY TOWARD ONE SET OF COMPANY GOALS."7O THE
CONSENSUS IS THAT COORDINATION OF THE VARIOUS MARKETING AREAS AS
WELL AS COORDINATION OF MARKETING AND NON-MARKETING AREAS IS
ESSENTIAL FOR COMPANY GROWTH, STABILITY, AND CONTROL. AN
EVALUATION OF LITERATURE CONTENT RELATED TO INTRA- AND INTER-

DEPARTMENTAL COORDINATION APPEARS LATER IN THIS SECTION.

THE FORMAL MARKETING DEPARTMENT

 

ONE DEVELOPMENT STEMMING FROM THIS CONCERN WITH ORGANIZATION
FOR THE PURPOSE OF COORDINATION HAS BEEN THE WIDE-SPREAD ESTABLISH-
MENT OF FORMAL MARKETING DEPARTMENTS WITHIN BUSINESS ORGANIZATIONS.
FIRMS ENGAGED IN THE MANUFACTURING AND MARKETING OF GOODS AND
SERVICES, CONSUMER AND INDUSTRIAL, HAVE INCORPORATED THIS ORGANIZA-
TIONAL UNIT WITH EQUAL ENTHUSIASM. IN I955 COLLEY, REPORTING
PRELIMINARY FINDINGS OF THE ASSOCIATION OF NATIONAL ADVERTISERS'

"ADVERTISEMENT MANAGEMENT PROJECT,"

NOTED THE EMERGENCE OF SUCH AN
ORGANIZATIONAL UNIT, DUE PRIMARILY TO COMPANY GROWTH, DIVERSIFICATION,

AND DECENTRALIZATION.7| IN I957 SMITH NOTED THAT "AS A PHENOMENON

 

69THE MODERN MARKETING CONCEPT AND THE CHANGING ROLE OF
THE ADVERTISING AGENCY, I9.

 

TOEIGHTH ANNUAL CHICAGO TRIBUNE DISTRIBUTION AND ADVERTISING
FORUM, Al.

7ICAMERON DAY, "NEW MARKETING CONCEPT DOMINATION A.N.A.
MEETING," PRINTERS' INK, CCLIII (NOVEMBER II, I955), 27.

 

CO
0\

OF INDUSTRIAL ORGANIZATION, THE MARKETING DEPARTMENT IS A
RELATIVELY RECENT DEVELOPMENT.72 LAZER, TOO, NOTED THAT CHANGES
IN MARKETING ORGANIZATION STRUCTURE ARE "RELATED TO THE INCREASING
ACCEPTANCE OF THE MARKETING MANAGEMENT PHILOSOPHY. ORGANIZATIONAL
ARRANGEMENTS ARE BEING ADJUSTED TO COORDINATE AND DIRECT THE
TOTAL MARKETING EFFORT MORE EFFECTIVELY."73

IT IS EMPHASIZED THAT SIGNIFICANT DIFFERENCES EXIST
BETWEEN THIS RECENT INNOVATION IN ORGANIZATIONAL STRUCTURE, THE
MARKETING DEPARTMENT, AND ITS PREDECESSOR, THE SALES DEPARTMENT.
THE LATTER WAS CONCERNED PRIMARILY WITH MARSHALLING THE OVERALL
MARKETING FORCES TOWARD SUCCESS, MEASURED IN TERMS OF SALES VOLUME
IN THE CURRENT PERIOD. THE FORMER IS INDICATIVE OF PROFIT-ORIENTED
OPERATION BASED UPON PLANS, FOUNDED IN FACTS, AND AIDED BY A STRONG
MARKETING STAFF, WHICH NOT ONLY FREES THE SALES MANAGER OF SUCH
DUTIES WHICH WERE HIS FORMERLY, BUT FURTHER RENDERS SERVICE USEFUL
T0 HIM IN MANAGING THE SALES FORCE. A. A. TOGESEN, THEN VICE
PRESIDENT IN CHARGE OF MARKETING, BULLDOG ELECTRIC COMPANY, HAS
DESCRIBED THE FUNCTION AND ORGANIZATION OF THE MARKETING DEPARTMENT

AS FOLLOWS:

IT IS THE MARKETING DEPARTMENT'S JOB TO DO THE OVERALL
MARKETING PLANNING: TO ESTABLISH MARKETING POLICIES AND
PROGRAMS, TO GUIDE THE DEVELOPMENT OF PRODUCTS WHICH

WILL BE ACCEPTABLE AFTER THEY ARE PRODUCED AND SELLING

 

72CHARLES W. SMITH, "PLANNED MARKETING: KEY TO INCREASED
PROFITS," PLANNED MARKETING - MANAGEMENT'S RESPONSIBILITY (CHICAGO:
AMERICAN MARKETING ASSOCIATION, I957), 3.

73LAZER, 25.

57

BEGINS. CONSEQUENTLY MARKETING SHOULD INCLUDE IN ITS

SCOPE MARKET RESEARCH AND ANALYSIS, MARKET FORECASTING,

MARKET POLICY FORMULATION, MARKET PLANNING - INCLUDING THE

DETERMINATION OF PRODUCT DESIGN, PRICING, DELIVERY, AND

DISTRIBUTION SOURCES - AND THE DIRECTION AND CONTROL OF

ADVERTISING AND SALES PROMOTION AND SALES SOLICITATION.

THE MARKETING EXECUTIVE MUST INCLUDE ON HIS STAFF

SPECIALISTS WHO ARE ADEPT IN ADVERTISING,

SALES PROMOTION, MARKET RESEARCH SALES FORECASTING,

SALES TRAINI G, AND CUSTOMER SERVICE, AS WELL AS SALES

MANAGEMENT.
WHILE DIFFERENCES DO EXIST AMONG COMPANIES REGARDING THE SPECIFIC
FUNCTIONS WHICH SHOULD BE ASSIGNED TO THE MARKETING DEPARTMENT,
MOST COMPANIES WITH FORMAL MARKETING DEPARTMENTS INCLUDE IN THEM
MOST OF THE FUNCTIONAL AREAS NAMED ABOVE. IT IS OBVIOUS THAT THE
SCOPE OF THE MARKETING DEPARTMENT'S DUTIES ARE VASTLY WIDER THAN
THAT COMMONLY ASCRIBED TO THE SALES DEPARTMENT.

ACCOMPANYING THE CREATION OF FORMAL MARKETING DEPARTMENTS
HAS BEEN A TENDENCY TO ESTABLISH THE VARIOUS MARKETING ACTIVITIES
AS SEPARATE SPECIALTIES, COORDINATED WITHIN THE FRAMEWORK OF THE
DEPARTMENT. THE FUNCTIONAL AREAS MOST OFTEN SO INCLUDED ARE
PRODUCT DEVELOPMENT, PACKAGING, PRICING, SERVICE, RESEARCH,
ADVERTISING AND SALES PROMOTION, PERSONAL SELLING, DISTRIBUTION,
AND TRADE AND PUBLIC RELATIONS. ALMOST WITHOUT EXCEPTION, AMONG
THOSE COMPANIES WHOSE MANAGEMENTS HAVE PUBLICLY INDICATED THEIR
ACCEPTANCE OF THE MARKETING CONCEPT, THESE SPECIALIZED MARKETING

FUNCTIONS ARE CONSIDERED AS A STRONG, CENTRAL MARKETING STAFF,

SERVING THEIR MARKETING DEPARTMENTS WITH REGARD TO LONG RANGE

 

7"TOGESEN, 3I-32.

88

MARKETING PLANNING PROBLEMS AS WELL AS CURRENT OPERATING PROBLEMS.
IN SOME FIRMS THE SEVERAL MARKETING SERVICES HAVE BEEN BROUGHT
TOGETHER UNDER A MANAGER WHO IS OF EQUAL RANK, AND COORDINATE TO,
THE SALES MANAGER. IN OTHER FIRMS THE MARKETING SERVICES ARE
ORGANIZED UNDER THE DIRECTION OF A MARKETING VICE PRESIDENT WHO
FUNCTIONS AS A STAFF OFFICER WITHOUT ANY RESPONSIBILITY FOR DIRECTING
THE SALES FORCE. IT MAY BE CONCLUDED THAT GENERALLY COMPANIES ARE
CREATING NEW OR EXPANDED MARKETING STAFF UNITS, THAT THESE UNITS
ARE BEING COORDINATED SO AS TO CONSTITUTE STRONG, CENTRAL STAFFS
UNDER A MANAGER OF MARKETING SERVICES OR A VICE PRESIDENT OF
MARKETING, AND THAT INCREASING RELIANCE IS PLACED UPON THESE
STAFFS IN LONG-RANGE PLANNING AS WELL As IN CURRENT OPERATION

OF THE MARKETING FORCE.

AS STATED PREVIOUSLY, CONSIDERABLE ATTENTION IN THE
LITERATURE HAS BEEN GIVEN TO THE ORGANIZATIONAL ARRANGEMENTS OF
MARKETING ACTIVITIES IN THOSE FIRMS WHOSE OFFICERS HAVE EXPRESSED
ACCEPTANCE OF THE MARKETING CONCEPT. IT IS READILY APPARENT
THAT THE ORGANIZATION STRUCTURES ADOPTED HAVE BEEN TAILORED TO
MEET THE NEEDS OF THE ADOPTING FIRM. DUE TO THE VAST RANGE OF
PRODUCTS, SERVICES, COMPANY SIZES, AND INTERPRETATIONS APPLIED TO
THE MARKETING CONCEPT, IT IS NOT SURPRISING THAT NO UNIVERSALLY
ACCEPTED ORGANIZATION STRUCTURE HAS EMERGED. HOWEVER, SEVERAL
FEATURES ARE COMMON TO MOST OF THE STRUCTURES. DESCRIPTIONS OF
THE ORGANIZATIONAL FORMS ADOPTED BY SEVERAL OF THESE FIRMS AND OF
THE MANAGERIAL REASONING UPON WHICH THESE CHANGES WERE BASED ARE
PRESENTED BELOW As INDICATIVE OF SUCH SIMILAR CHARACTERISTICS.

ALSO, REFERENCE IS MADE TO A NUMBER OF ORGANIZATION DESCRIPTIONS

59

OF ADDITIONAL FIRMS REPORTED IN THE LITERATURE.
RALPH WINSLOW, VICE PRESIDENT AND MARKETING MANAGER OF

KOPPERS COMPANY, RECOGNIZES THAT IN SOME ORGANIZATIONS THE SALES

MANAGER HAS BEEN GIVEN THE TITLE OF MARKETING MANAGER ALTHOUGH

HIS TRADITIONAL DUTIES AND HIS BUSINESS PHILOSOPHY REMAIN UNALTERED.

HOWEVER, HE NOTES THAT IN MANY COMPANIES ATTEMPTS HAVE BEEN

MADE "To INTEGRATE SALES WITH ALL THE OTHER FACETS OF THEIR BUSINESSES

AND TO DO THE KIND OF PLANNING AND PRODUCE THE KIND OF SALES

VOLUME THAT WILL PROVIDE MAXIMUM REASONABLE PROFIT AND THE GREATEST

POTENTIAL GROWTH - ALL THIS WITH AN EYE TO WHAT THE CUSTOMER WANTS

AND NEEDS."75 THESE COMPANIES, HE NOTES, ARE THE ONES WHICH HAVE

ADOPTED THE MARKETING CONCEPT. COORDINATION, AN INTEGRAL PART

OF WINSLOW'S DEFINITION, IS BUILT INTO THE STRUCTURE OF KOPPERS

COMPANY. THERE ARE EIGHT STAFF DEPARTMENTS, ONE OF WHICH IS

MARKETING, WHICH HAVE RESPONSIBILITY FOR ADVISING AND ASSISTING

"OPERATING UNITS, COMMITTEES, AND OTHER COMPONENTS OF THE COMPANY

IN THE PERFORMANCE OF THEIR ASSIGNED FUNCTIONS. STAFF UNITS ARE

EXPECTED TO EXERCISE GENERAL SUPERVISION OVER ALL FUNCTIONS

ENTRUSTED TO THEM," TO INSURE THAT SPECIFIED POLICIES, PLANS,

AND PROCEDURES ARE CARRIED OUT AS PRESCRIBED.76 BOTH INTRA- AND

INTER-DEPARTMENTAL ASPECTS OF COORDINATION ARE RECOGNIZED. THE

 

75RALPH WINSLOW, "ORGANIZING A COORDINATED MARKETING STAFF
GROUP," THE MARKETING CONCEPT: ITS MEANING TO MANAGEMENT (NEW YORK:
AMERICAN MANAGEMENT ASSOCIATION, I957), 32.

76I8l0., AI.

9O

RESULT HAS BEEN "THE KOPPERS MARKETING PROCESS,‘ WHICH INVOLVES
INTEGRATION OF: MARKETING RESEARCH, GENERAL MANAGEMENT OBJECTIVES,
PRODUCT PLANNING, MARKETING PLANNING, PROGRAMMING, AND EXECUTION
OF THE PROGRAM. IT IS BOTH INTERESTING AND INDICATIVE THAT
MARKETING RESEARCH WAS NAMED BEFORE GENERAL MANAGEMENT OBJECTIVES
BY WINSLOW, PERMITTING DETERMINATION OF OBJECTIVES ON THE BASIS
OF CONSUMER WANTS AND THE RESULTING COMPANY DIRECTION.

IN I957, OFFICIALS OF THE NESTLE COMPANY, DISSATISFIED WITH
ITS ORGANIZATIONAL STRUCTURE, ANNOUNCED A REORGANIZATION WHICH
RESULTED IN "A DIVISIONALIZED, LINE-AND-STAFF ORGANIZATION THAT
IS A CLEAR-CUT DELINEATION OF THE TOTAL MARKETING CONCEPT. THE
NEW MARKETING ORGANIZATION IS DESIGNED TO ACCOMPLISH THREE MAJOR
OBJECTIVES: TO PROVIDE GREATER MARKETING EFFICIENCY, BETTER
CUSTOMER SERVICE, AND ROOM FOR EXPANSION."77 A VICE PRESIDENT
OF MARKETING WAS APPOINTED TOCPERATE THE DEPARTMENT, WHICH INCLUDED
A LINE ORGANIZATION HEADED BY THREE PRODUCT GROUP GENERAL MANAGERS
AND A MARKETING STAFF COMPOSED OF THE MANAGERS OF ADVERTISING, NEW
PRODUCTS, MARKETING RESEARCH, CORPORATE TRADE RELATIONS, SALES
PERSONNEL DEVELOPMENT, AND FIELD OFFICE OPERATIONS.

THE TRUMBULL ELECTRIC MANUFACTURING COMPANY INITIATED A
REORGANIZATION PROGRAM IN l9u8 WHICH LED TO ESTABLISHMENT OF A

MARKETING DEPARTMENT. PRESIDENT ELMER T. CARLSON DEFINED THE PURPOSE

 

77JAMES G. PLUNKETT, "IS YOUR MARKETING SET-UP GEARED TO
TOMORROW'S SALES NEEDS?," SALES MANAGEMENT, LXXXIII (OCTOBER 2, I959),

hO-MI.

 

9|

OF THIS REORGANIZATION, AS FOLLOWS: "THE CUSTOMER IS THE REASON FOR
OUR BUSINESS . . . AND ANY ORGANIZATIONAL PLAN DECIDED UPON MUST BE
ABLE TO PROVE ITSELF IN TERMS OF IMPROVED CUSTOMER RELATIONS,"78
THE NEW ORGANIZATION ASSIGNED TO THE MARKETING DEPARTMENT'S PR0-
DUCTION PLANNING DIVISION THE RESPONSIBILITY OF TELLING THE
MANUFACTURING DEPARTMENT "WHAT TO MAKE, WHEN TO MAKE IT, AND AT
WHAT COST . . . MARKETING ALSO TELLS ENGINEERING WHAT TO DEVELOP,
WHEN TO DEVELOP IT, AND AT WHAT COST."79 IT IS REPORTED WITH
SATISFACTION THAT "NEVER, AT TRUMBULL, CAN A SITUATION ARISE IN
WHICH MARKETING GLOWERS AT MANUFACTURING AND SAYS, "WHY DID YOU
MAKE ALL THIS STUFF WHEN WE CAN'T SELL IT?’ . . . BECAUSE IARKETING
TELLS MANUFACTURING WHAT . . . AND HOW MUCH TO MAKE - AND MANUFACTUR-
ING IS ONLY T00 HAPPY TO GET OUT FROM UNDER RESPONSIBILITY FOR
SETTING PRODUCTION QUOTAS."E

A MAJOR REASON FOR THE REORGANIZATION OF THE F. AND M. SCHAEFER
BREWING COMPANY IN I952 WAS THE INCREASING BURDEN PLACED UPON ITS
PRESIDENT. IT IS REPORTED THAT "BY I950 SCHAEFER FOUND ON THE
MARKETING SIDE ALONE HE HAD FIVE DIVISION HEADS REPORTING TO HIS
PANELED OFFICE. 'I HAD,‘ HE RECALLS, 'OTHER THINGS TO DO BESIDES

(‘.
OI
COORDINATE THEIR EFFORTS." ALSO THE SCHAEFER MANAGEMENT MANAGE-

 

7dHAHN, 37.

79IBID., I26.
80IBID., I3A.
8|"

SCHAEFER BREWING TRIES A NEW MARKETING STRUCTURE AND
LIKES IT,” TIDE, XXIX (JUNE A, I955), 2M.

92

MENT RECOGNIZED ITS NEED TO INTENSIFY ITS MARKET PENETRATION; AS
A RESULT THE SALES DEPARTMENT WAS BROKEN INTO TWO DIVISIONS: WHOLE-
SALE AND RETAIL. SCHAEFER'S ADVERTISING AGENCY ACCOUNT EXECUTIVE
EMPHASIZED THE COORDINATION AND COOPERATION BETWEEN THE SALES AND
ADVERTISING DEPARTMENTS WHICH DEVELOPED IN THE REORGANIZED COMPANY,

AS FOLLOWS:

WE KNOW A LOT MORE ABOUT THE OPERATION NOW. WE GET

SALES FIGURES OF THE PREVIOUS YEAR AND WE CAN BUDGET

ADVERTISING ON THE SALES POTENTIAL. IT WASN'T LIKE THIS

BEFORE. THERE USED TO BE AN IRON CURTAIN BETWEEN US

AND SALES. NOW, TOO, WE GET THE CHANCE TO TIE IN A

LOT MORE EFFECTIVELY WITH PUBLIC RELATIONS ACTIVITIES

. . . ALL IN ALL, WE NEVER GOT SUCH COOPERATION

BEFORE.02

IN I956 TOGESEN STATED THAT "BULLDOG HAS BEEN APPROACHING
A MARKETING-DIVISION ORGANIZATION FOR OVER SEVEN YEARS PRIOR TO
OUR ADOPTING THE NEW CONCEPT. THE COMPANY'S PHILOSOPHY AND
ALERT MANAGEMENT CONVINCED US THAT OUR EXISTING PLAN REQUIRED
MODERNIZATION. HENCE IT WAS INEVITABLE THAT WE EMBRACE THE

"B

MARKETING TYPE OF ORGANIZATION. 3 BULLDOG ELECTRIC COMPANY
MANAGEMENT NOTED THAT WHILE HISTORICALLY THE SEVERAL FUNCTIONS
OF BUSINESS MANAGEMENT TENDED TO OPERATE INDEPENDENTLY, THE
COMPLEXITY OF MARKETING TODAY "REQUIRES THE DEVELOPMENT OF TEAM-

WORK BETWEEN THE PRODUCER AND THE CONSUMER AND BETWEEN THE PEOPLE

WHO SPECIALIZE IN KNOWING AND SERVICING THE FEATURES OF THE

 

('I
O
CAMERON DAY, "INTEGRATED MARKETING ACTION," PRINTERS'
NK, CCLVIII (MARCH 29, I957), 5h.

83TOGENSEN, 32-33

93

I‘
\‘,

PRODUCT."U" THE CURRENT ORGANIZATIONAL STRUCTURE ACKNOWLEGES

THIS NEED FOR TEAMWORK BY ASSIGNING TO THE MARKETING DEPARTMENT THE

TASK OF OVERALL MARKETING PLANNING, AND BY RESTRICTING THE

INTEREST OF THE SALES MANAGER PRIMARILY TO CURRENT SALES OPERATIONS.
AN INTERESTING EXCEPTION TO THE TREND TOWARD FORMAL

MARKETING DEPARTMENTS WITH CENTRALIZED STAFFS IN PROVIDED BY

CHANGES WITHIN THE STRUCTURE OF JOSEPH E. SEAGRAM AND SONS, INC.,

A SUBSIDIARY OF SEAGRAM-DISTILLERS CORPORATION, LTD. IN I957

THE POSITION OF VICE PRESIDENT OF MARKETING WAS ESTABLISHED

"To CENTRALIZE AND ASSUME CONTROL OF ADVERTISING AND ALL OTHER

MARKETING ACTIVITIES EXCEPT FIELD SALES."95 HOWEVER, WITHIN TWO

YEARS "HIS FUNCTION - IF NOT HIS TITLE - WAS ALREADY ABOLISHED.

HIS CENTRALIZED MARKETING ORGANIZATION WAS BEING DECENTRALIZED.

AUTHORITY FOR ADVERTISING, SALES PROMOTION, MARKETING RESEARCH,

WAS BEING RETURNED TO THE SALES DIVISION, NONE OF WHICH HAD

BEEN VISIBLY EAGER TO SURRENDER SUCH AUTHORITY IN THE FIRST

PLACE."86 THE FOLLOWING COMMENTS MADE BY COMPANY OFFICIALS

REGARDING ABANDONMENT OF THE CENTRAL MARKETING STAFF APPEARED

IN A TRADE JOURNAL: "WE OPERATED UNDER A MARKETING SETUP BEFORE,

AND WE CONTINUE. THE ONLY DIFFERENCE IS THAT WE TRIED TO CENTRALIZE

I

AND NOW WE'RE DECENTRALIZED AGAIN;' REGARDING THE VICE PRESIDENT

 

8"IBID., 32.

E’5"SEAGRAM ABANDONS CENTRALIZED MARKETING AS BRAGARNICK
LEAVES," PRINTERS' INK, CCLXVIII (AUGUST IA, I959), I9.

 

IBID.

 

9h

OF MARKETING IT WAS STATED THAT HE "SIMPLY TRIED TO GO TOO FAR
TOO FAST WITHOUT SUFFICIENT REGARD FOR POLITICS AND PERSONALITIE53"
ANOTHER EXECUTIVE REPORTED THAT "WHEN HE CAME IN, WE NEEDED A
DYNAMIC GUY TO STIR THINGS UP. HE DID THAT. THE TROUBLE IS,
HE KEPT STIRRING WHEN IT WOULD HAVE BEEN BETTER TO LET THINGS
SET A WHILE."87

NUMEROUS STUDIES OF MARKETING REORGANIZATIONS AMONG A
VARIETY OF FIRMS MAY BE FOUND IN THE LITERATURE. AMONG THE MORE
COMPLETE DESCRIPTIONS OF MARKETING ORGANIZATION STRUCTURES AND
OF THE MANAGEMENT RATIONLE WHICH BROUGHT ABOUT SUCH ARRANGEMENTS

DO

ARE STUDIES OF THE FOLLOWING COMPANIES: GENERAL FOODS CORPORATION3UU

Q
CAMPBELL SOUP COMPANY;U9 AMERICAN TELEPHONE AND TELEGRAPH COMPANY;9O

O
PARKER PEN COMPANY;9' SCOTT PAPER COMPANY;92 REYNOLDS METALS COMPANY/3

 

C;-
”YIBID.

 

8dLAWRENCE M. HUGHES, "GENERAL FOODS ORGANIZES MANAGEMENT
AND MARKETING 'FOR THE NEXT TEN YEARS'," SALES MANAGEMENT,

LXXV (JULY I5, I955), 36.

 

89nTHE STORY or CAMPBELL SOUP," PRINTERS' INK, CCL
(FEBRUARY ID, I955), 23.

 

9ORENA M. HAMELFARB, "WHY A.T.&T. Is STEPPING UP SALES -
AD DRIVE," PRINTERS' INK, CCL (MARCH 25, I955), 25-26.

 

9|"PARKER PEN - A CLOSE LOOK AT A MARKETING STORM CENTER,"
PRINTERS' INK, CCLII (SEPTEMBER 9, I955), 3|; AND JAMES N. BLACK,I
INTEGRATED MARKETING PAYS OFF WHEN INDUSTRY SALES SLUMP," PRINTERS'
‘Lfifi, CCXXXII (SEPTEMBER 29, I950, 25.

 

92CARROLL J. SWAN, "HOW SCOTT PAPER DIRECTS ITS SALES
POWER," PRINTERS' INK, CCXXXVI (AUGUST 3, I95I), 38-h0.

 

93"THE REYNOLDS STORY: THE MARKETING AND MERCHANDISING
PROGRAM OF REYNOLDS METALS COMPANY," INDUSTRIAL MARKETING, XL
(OCTOBER, I955), 8I-92.

 

95

UNITED STATES STEEL CORPORATION;9" MEAD JOHNSON AND COMPANY;95
AND SESSIONS CLOCK COMPANY.96

IN ADDITION TO SUCH PROBLEMS AS PERSONALITY CONFLICTS
AND THE OCCURENCE OF POWER-CENTERED DEPARTMENTS WITH AN ACCOMPANY-
ING HOSTILITY TOWARD CHANGE IN ORGANIZATIONAL ARRANGEMENTS, OTHER
PROBLEMS ENCOUNTERED IN ESTABLISHING INTEGRATED MARKETING
DEPARTMENTS ARE REPORTED IN THE LITERATURE. PERHAPS THE GREATEST
AREA OF CONCERN IS THE APPARENTLY WIDE-SPREAD TENDENCY TO CHANGE
TITLES OF MARKETING FUNCTIONARIES AND POSSIBLY EVEN ALTERING THE
COMPANY'S ORGANIZATION CHART, WHILE NO CHANGE IN OVERT BEHAVIOR
OR OPERATIONAL ORIENTATION HAS COME ABOUT. THE VAST NUMBER OF
TITLE CHANGES WHICH INVOLVE NO PERSONNEL CHANGE AS REPORTED
WEEKLY IN TRADE PUBLICATIONS, E.G. FROM SALES MANAGER To
VICE PRESIDENT OF MARKETING OR MARKETING MANAGER, PROVIDE A
BASIS FOR QUESTIONING BOTH QUANTITY AND QUALITY OF CHANGE IN
MARKETING OPERATIONS AFFECTED BY SUCH REORGANIZATION. STILL
ANOTHER PROBLEM, ONE REPORTEDLY OFTEN OVERLOOKED BY SOME MANAGE-
MENTS WHICH EAGERLY ADOPT THIS ORGANIZATIONAL UNIT, IS THE PERIOD

OF TIME REQUIRED FOR EFFECTIVE IMPLEMENTATION OF SUCH AN OPERATION.

 

9""U.S. STEEL'S NEW MARKETING PLAN)" TIDE: XXIX

(NOVEMBER 5, I955), 25f32.

95BERNARD TOLK, "NEW TEAM PACES MARKET EXPANSION AT MEAD
JOHNSON AND COMPANY," PRINTERS' INK, CCLI (JUNE I7, I955), 2I-2A.

 

96"A NEW STYLE MARKETING DIRECTOR HELPS OLD-TIME COMPANY'S
SALES," TIDE, XXIX (JULY 2, I955), 26-27.

 

96

BUND NOTES THAT "THREE YEARS REPRESENTS THE ABSOLUTE MINIMUM TO
ACHIEVE THE FIRST STAGE OF AN INTEGRATED MARKETING OPERATION. FAR
MORE COMMON IS THE EXPERIENCE OF THOSE COMPANIES WHICH TOOK AN
AVERAGE OF FIVE TO SEVEN YEARS TO REACH A WORKING MARKETING ORGANIZA-
TION."97 ONE EXECUTIVE HAS DESCRIBED THE DIFFICULTY RESULTING
IN HIS COMPANY'S ATTEMPTS AT REORGANIZATION AS FOLLOWS:

'MY COMPANY RUSHED INTO THIS MARKETING THING WITHOUT

ANY PLANNING. SOMEBODY THOUGHT IT WAS A GREAT IDEA,

GRABBED THE BALL AND RAN WITH IT BEFORE ANYONE KNEW

EXACTLY WHAT IT MEANT FOR OUR COMPANY. NOW WE'VE HAD

TO REVISE OUR ORIGINAL SETUP.' IN THIS CASE, SOMEONE

WAS SHOT INTO THE NEWLY CREATED POST OF MARKETING DIRECTION

AND SOON FOUND HE HAD MORE ON HIS HANDS THAN HE COULD

COPE WITH.9U

REGARDING THE RELATIONSHIP OF FORMAL MARKETING ORGANIZATION
TO EFFECTIVE IMPLEMENTATION OF THE MARKETING CONCEPT, IT SHOULD
BE NOTED THAT WHILE MOST WRITERS AND SPEAKERS HAVE DEVOTED
CONSIDERABLE ATTENTION TO SPECIFIC DESIRABLE STRUCTURAL CHANGES,
IT Is RECOGNIZED THAT SUCH AN ORGANIZATION IS NOT A NECESSARY
COMPONENT. RATHER, A COMPANY WITH NO FORMAL MARKETING DEPARTMENT,
MUCH LESS ONE HEADED BY A COMPANY VICE PRESIDENT WHO IS SUPPORTED
BY A STRONG CENTRAL STAFF, MAY HAVE EFFECTIVELY AND EFFICIENTLY
COORDINATED THE SEVERAL MARKETING FUNCTIONS, AND THESE FUNCTIONS

WITH OTHER AREAS OF COMPANY OPERATION. THE LINDE COMPANY, DIVISION

OF UNION CARBON AND CARBIDE COMPANY, Is SUGGESTED AS ONE EXAMPLE

 

97HENRY BUND, "THE MOVE TOWARD MARKETING-HOW TO DO IT,"
PAPER READ BEFORE THE THIRTY-FIFTH ANNUAL CONFERENCE, NATIONAL
INDUSTRIAL ADVERTISERS ASSOCIATION, NEW YORK, JUNE 9, I957.

O
UDAY, "WHAT Is THE MARKETING . . .," 26.

97

OF A MARKETING-ORIENTED ORGANIZATION OPERATING WITH NO FORMAL
MARKETING DEPARTMENT.99 ALTHOUGH THE LITERATURE REFLECTS CONCERN
PRIMARILY WITH ORGANIZATIONAL ARRANGEMENT, SOME CRITICS SEE THE
ESSENCE OF ORGANIZATION'S ROLE IN IMPLEMENTING THE MARKETING
CONCEPT AS BEING AN AID TO COORDINATED AND CONTROLLED EFFORT, NOT
AS AN END IN ITSELF.

THE MARKETING EXECUTIVE

 

As MARKETING DEPARTMENTS HAVE BEEN ESTABLISHED BY NUMEROUS
FIRMS, INTEREST AND CONCERN REGARDING THE POSITION AND THE MAN
MANAGING SUCH A DEPARTMENT HAS ALSO DEVELOPED. GENERALLY, CREATION
OF THE PART OF MARKETING MANAGER OR VICE PRESIDENT IN CHARGE OF
IHARKETING IS VIEWED As AN EVOLUTIONARY PROCESS. ONE MANAGEMENT
<:ONSULTANT INDICATES SEVERAL FACTORS WHICH HAVE BEEN INSTRUMENTAL

IN THE DEVELOPMENT OF THESE POSITIONS:

. . . EMPHASIS ON OVERALL STRATEGY . . . IS LEADING
TOWARD THE DEVELOPMENT OF A TOP MARKETING VICE PRESIDENT;
SECONDLY, THERE IS THIS REQUIREMENT WHICH IS INCREASING
CONTINUOUSLY TO ACHIEVE SHORT AND LONG-RANGE BALANCE

OF EFFORT, AND BALANCE BETWEEN THE STAFF AND THE LINE;
THIRDLY, THERE IS A MULTIPLICITY OF INFORMATION AND

IDEAS FLYING AROUND IN THE WORLD OF MANAGEMENT . . .

THE FOURTH POINT IS THAT WE HAVE TO COUNTERACT THE BUILT-
IN TENDENCY IN AMERICAN MANAGEMENT TO DEVELOP SPECIALISTS,
AND THEN TO FIND THAT WE HAVE NOT DEVELOPED TOP

MANAGERS . . 00

‘X33 EARLY AS I929 LEE H. BRISTOL, PRESIDENT OF BRISTOL-MYERS COMPANY,

\

C: 99"THE CHALLENGE TO MANAGEMENT: HOW TO GROW IN THE
OMI=ETITIVE MARKET," 39.

C2 'OO"EXCERPTS FROM A MARKETING ROUNDTABLE," FIRST REGIONAL
(N,
0b\IFFERENCE ON MARKETING, CHICAGO, FEBRUARY A, I950, II.

98

INDICATED THE SIGNIFICANCE OF THE TOP COORDINATING POST IN MARKETING.
REGARDING THIS POST, WHICH HE REFERRED TO AS DISTRIBUTION DIRECTOR,

BRISTOL STATED BEFORE THE ASSOCIATION OF NATIONAL ADVERTISERS

CONVENTION THAT:

0 o 0 IT SEEMS INEVITABLE THAT ALL IMPORTANT BUSINESSES
IN THE COUNTRY WILL FOLLOW THE LEAD OF SOME OF OUR MORE
PROGRESSIVE ONES, WHICH HAVE ALREADY DONE SO, AND PROVIDE
A TITLE OF DIGNITY, RESPONSIBILITY, AND EXECUTIVE
AUTHORITY TO ONE PERSON WHOSE SOLE CONCERN IS THE BROAD

SUBJECT OF DISTRIBUTION IN ITS MANY PHASES.

IF WE HEAD IN WITH THE TITLE, THEN WE BEGIN TO
DESCRIBE HOW HIS JURISDICTION MAY BE EFFECTIVELY
APPLIED. IN ANY CONCEPTION OF THE JOB, THE SCOPE OF
THE WORK ACTUALLY TRANSCENDS THAT OF THE PRESENT SALES
MANAGER AND PRESENT ADVERTISING MANAGER. HE IS THE
NEW FOCAL POINT WHERE ADVERTISING AND SALES POLICIES
MEET AND ARE ADEQUATELY BLENDED.IO

TYPICALLY THE DISTINCTIONS MADE BETWEEN THE TRADITIONAL
SALES MANAGER AND THE CONTEMPORARY MARKETING MANAGER OR VICE
PRESIDENT ARE BASED UPON THE SCOPE OF ACTIVITIES WITH WHICH THEY
ARE CONCERNED AND THEIR MANAGERIAL ORIENTATIONS AND ABILITIES.
PRESIDENT ROBERT DICK OF GEORGE FRY AND ASSOCIATES, INC., NOTES
THAT "THE SALES MANAGER WAS THE GUY WHO WAS TOLD HERES PRODUCT -

NOW GO OUT AND SELL IT - THE MARKETING MANAGER MUST CONSULT,

deST CONCERN HIMSELF WITH EVERY STEP AFFECTING ULTIMATE

ESALABILITY OF A PRODUCT."|02 DIETRICH LEONHARD, A FRY CONSULTANT,

ESTATES THAT "THE SALES MANAGER IS A GOOD DRUMMER WHO KNOWS HOW

IO|CAMERON DAY, "MARKETING-MINDED EXECUTIVES MOVING INTO
h4c>RE TOP MANAGEMENT POSTS," PRINTERS' INK, CCXLIV (AUGUST 7, I953), 32.

'02 "MARKETING SOLD TO THE COMPANY," BUSINESS WEEK,

hJC)- |556 (JUNE 27, I959): 83°

99

TO MAXIMIZE SHORT-TERM PROFITS . . . IF THE MARKETING MANAGER IS
TO WORK FOR THE COMPANY'S GREATEST ULTIMATE BENEFIT, HE MUST

"I03 C
BE REMOVED FROM THIS PRESSURE FOR IMMEDIATE SALES. REGARDING
THE GENERAL ELECTRIC COMPANY POSITION OF MARKETING MANAGER,

BUSINESS WEEK REPORTED "HE IS A DIFFERENT BREED FROM THE SALES

 

MANAGER. HE IS MORE ANALYTICAL, HIS BACKGROUND IS BROADER. HE
IS INCLINED TO PUT MORE EMPHASIS ON DETAILED SALES PLANNING,
CONTROL OF MARKETING METHODS, AND STUDY OF THE MARKET . .nIOH
PERHAPS THE STRONGEST EVIDENCE THAT THE POSITION OF THE
MARKETING MANAGER IS SIGNIFICANTLY DIFFERENT FROM THAT OF THE
SALES MANAGER MAY BE FOUND IN A STUDY OF JOB DESCRIPTIONS OF
THE TWO POSITIONS. FOR EXAMPLE, THE JOB DESCRIPTION OF THE
VICE-PRESIDENT OF MARKETING, HOUSEHOLD PRODUCTS DIVISION,
COLGATE-PALMOLIVE COMPANY STATES THAT "THE VICE-PRESIDENT OF
MARKETING IS RESPONSIBLE FOR PLANNING AND DIRECTING ALL
ADVERTISING, PROMOTION, MERCHANDISING, SALES, AND DISTRIBUTION
ACTIVITIES. HE IS ACCOUNTABLE FOR DEVELOPING MARKETING PLANS

AND PROGRAMS TO INCREASE PROFITABLY THE SHARE OF MARKET HELD BY

EACH OF THE DIVISION'S PRODUCTS."I05 RESPONSIBILITIES OF THE

I03IBID.

‘ lounMARKETING MEN TAKE OVER IN G.E. UNITS," BUSINESS WEEK,
No. I086 (JUNE 2h, I950), 32.

 

 

IO5JOB DESCRIPTION OF POSITION OF VICE-PRESIDENT OF
“4AXRKETING, HOUSEHOLD PRODUCTS DIVISION, COLGATE-PALMOLIVE COMPANY,
(W

h\IEW YORK, DATED JANUARY 27, I950.

IOO

VICE-PRESIDENT OF MERCHANDISING OF AMERICAN TELEPHONE AND TELEGRAPH
COMPANY ARE "TO DETERMINE WHAT CUSTOMERS WANT AND NEED, TO ENCOURAGE
THE DEVELOPMENT OF NEW PRODUCTS AND To GET THE PRODUCTS DESIGNED
ATTRACTIVELY. THE LAST STEP IS . . . To MARKET THESE AT PRICES

/
"'00 THE TASK OF THE

THAT WILL SELL AND MAKE A REASONABLE PROFIT.
SALES MANAGER, HOWEVER, MORE TYPICALLY IS DESCRIBED AS DIRECTION
OF THE SALES FORCE TOWARD ATTAINMENT OF MORE IMMEDIATE GOALS.
WAKEFIELD DEFINES THE TASK OF THE MARKETING MANAGER AS INCLUDING
CREATING A MARKETING CLIMATE, DEFINING AND ALLOCATING MARKETING
RESPONSIBILITIES, AND DEVELOPING A MASTER OPERATING PROGRAM, BASED
ON CUSTOMER NEEDS AND PROFIT OBJECTIVES.'O7 MAPEL DESCRIBES THE
TASK OF THE MARKETING DIRECTOR MORE BRIEFLY: "HE IS THE INDIVIDUAL
WHO SAYS: 'THE CUSTOMER'S WANTS AND NEEDS WILL BE REFLECTED IN OUR

0
PRODUCT AND PROFIT PLANNING!"IOO THE RELATIONSHIP OF THE MARKETING
DIRECTOR TO THE PRODUCTION FUNCTION HAS BEEN DISCUSSED IN SOME DETAIL

BY HOUSERl09 AND BY BUND.IIO CHARACTERISTICS OF THE EXECUTIVE

MARKETING POSITION AND THE MAN TO HOLD THAT POSITION ARE DISCUSSED

 

IO6HAMELFARB, 25.

IOZWAKEFIELD, ”MARKETING CONCEPT: THREE . . .," 36.

I 08 n
GUSTAFSON, DO.

'O9T.V. HOUSER, "THE TRUE ROLE OF THE MARKETING EXECUTIVE,"
111E JOURNAL OF MARKETING, XXIII (APRIL, I959), 363-369.

0
ll "MARKETING - NEW HARNESS FOR MANAGEMENT," PRINTERS'
INK, CCLVII (NOVEMBER 23, I956), 2|.

 

 

IOI

IN SOME DEPTH BY BUND AND CARROLL.'|I

COORDINATION OF MARKETING FUNCTIONS

 

ALTHOUGH WRITERS AND SPEAKERS HAVE DIRECTED THEIR ATTENTION
PRIMARILY TOWARD THE ESTABLISHMENT OF ORGANIZATIONAL UNITS WHICH
ARE DESIGNED TO ENHANCE SPECIALIzATION IN CERTAIN MARKETING
ACTIVITIES, AND TOWARD THE STRUCTURAL ARRANGEMENT OF THESE UNITS
WITHIN THE FIRM, IT IS GENERALLY ACCEPTED THAT THE UNDERLYING
PURPOSE OF SUCH REORGANIZATION HAS BEEN INTEGRATION OF THE SEVERAL
MARKETING FORCES AND COORDINATION OF THE TOTAL MARKETING EFFORT
WITH THE EFFORTS OF OTHER OPERATIONAL UNITS OF THE COMPANY.

WHILE MOST ATTENTION HAS BEEN GIVEN TO INTRA-DEPARTMENTAL RELATION-
SHIPS, THE NEED FOR COMPANY-WIDE COORDINATION IS RECOGNIZED AS

A NECESSARY ELEMENT OF THE MARKETING CONCEPT BY A SIGNIFICANT
NUMBER OF CRITICS. THE NEED FOR INTER-DEPARTMENTAL COORDINATION

IN ALL FIRMS, REGARDLESS OF SIZE, HAS BEEN EXPRESSED BY BUND

AND CARROLL: "THE SHEER SIzE AND COMPLEXITY OF MODERN MARKETING
CREATE NEW PROBLEMS OF INTEGRATION AND COORDINATION BOTH WITHIN
MARKETING AND WITH OTHER DEPARTMENTS, PARTICULARLY FOR LARGE
COMPANIES BUT TO A LESSER DEGREE FOR MOST MEDIUM - AND SMALLER
SIZED FIRMS As WELL. THE NEED IN SMALLER BUSINESSES IS LESS

I
APPARENT AND, THEREFORE, FREQUENTLY IGNORED."‘2

 

IIIHENRY BUND AND JAMES W. CARROLL, "THE CHANGING ROLE OF
THE MARKETING FUNCTION," THE JOURNAL OF MARKETING, XXI

(JANUARY, I957), 268-325.

ll2IBID., 3l3.

I02

BECKMAN HAS NOTED THAT AFTER WORLD WAR I THE SUPPLY OF
MANY PRODUCTS CAUGHT UP WITH THE MARKET DEMAND FOR THEM, AND AS
A RESULT STRONG SALES DEPARTMENTS WERE CREATED; THAT DEPARTMENTS
OF ADVERTISING, SALES PROMOTION, AND MARKETING RESEARCH FOLLOWED;
BUT THAT "VERY OFTEN ALL OF THESE DEPARTMENTS FUNCTIONED

II3

INDEPENDENTLY AS IF THEY WERE SEPARATE ENTITIES." NUMEROUS
COMMENTS IN THE BUSINESS PUBLICATIONS INDICATE THAT LACK OF.
COORDINATION OF MARKETING EFFORT HAS REMAINED A PROBLEM; HOWEVER,
ADVOCATES OF THE MARKETING CONCEPT VIEW THE CREATION OF A

FORMAL MARKETING DEPARTMENT AS APPROPRIATE CORRECTIVE ACTION

REGARDING THIS PROBLEM. A PRINTERS' INK JURY OF MARKETING

 

OPINION STUDY, CONDUCTED IN I957, INDICATED THAT SIXTY-FIVE PER-
CENT OF THE EXECUTIVES WHO RESPONDED WERE AWARE OF A TREND
TOWARD INkaDEPARTMENTAL COORDINATION OF SALES AND ADVERTISING
EFFORT; TWENTY-TWO PERCENT OF THE RESPONDENTS INDICATED THAT
THEIR OWN FIRMS COORDINATED THESE FORCES THROUGH A MARKETING
DEPARTMENT.|Iu FURTHER, AMONG THOSE COMPANIES WHERE THE
ADVERTISING AND SALES FORCES WERE NOT SO COORDINATED, THERE WAS
A STRONG INCLINATION TO COMPENSATE FOR THE LACK BY HAVING MORE

FREQUENT SCHEDULED JOINT MEETINGS OF MEMBERS OF THE TWO DEPARTMENTS,

 

II3THEODORE N. BECKMAN, "THE EVOLUTION OF MARKETING AND
MARKETING CONCEPTS," PROCEEDINGS OF THE CONFERENCE OF MARKETING
TEACHERS FROM FAR WESTERN STATES, UNIVERSITY OF CALIFORNIA AT
BERKELEY, I958.

IllITHOMAS E. WEAKLEY, "ADVERTISING AND SALES UNDER ONE
PROGRAM," PRINTERS' INK, CCLIX (APRIL 5, I957), I9-2I.

I03

PERMITTING DISCUSSION OF PROBLEMS OF MUTUAL CONCERN. IN COMPANIES
WITH COORDINATED DEPARTMENTS, MEETINGS WERE HELD LESS OFTEN,
ON A "WHEN NEEDED" BASIS.”5 A TIDE LEADERSHIP PANEL STUDY
CONDUCTED IN I955 ALSO INDICATED "FIRST, THAT SUCH COORDINATION
IS HIGHLY DESIRABLE FOR MOST COMPANIES AND MOST PRODUCTS AND,
SECOND, THAT COORDINATION WILL BECOME INCREASINGLY MORE COMMON
AS TOP MANAGEMENT IS EDUCATED TO IT AND SEES THE EXAMPLE
/
OF OTHER SUCCESSFUL OPERATIONS WHICH ARE SO RUN.”|IQ
HOWEVER, STRONG EVIDENCE IN THE FORM OF FREQUENT STATE-
MENTS BY COMPANY EXECUTIVES INDICATES THAT LACK OF COORDINATION
OF MARKETING EFFORT PERSISTS TODAY. A BULLDOG ELECTRIC PRODUCTS
COMPANY MARKETING EXECUTIVE, WHO IS A STRONG SUPPORTER OF THE
MARKETING CONCEPT, HAS NOTED:
IN MANY CASES ADVERTISING DOES NOT COMPLEMENT AN
INDUSTRIAL PRODUCT ADEQUATELY. THIS IS A GENERAL
OBSERVATION, NOT ONE THAT APPLIES ONLY TO OUR COMPANY.
THE CAUSE OF THIS PROBABLY Is THAT THE ADVERTISING
DEPARTMENT WAS NOT INTIMATELY ACQUAINTED WITH EVERY
DETAIL. IT PROBABLY OBTAINED ITS PRODUCT KNOWLEDGE
SECOND HAND. WHEN AN ADVERTISING MANAGER HAS AS MUCH
KNOWLEDGE AS ANYONE ELSE IN THE ORGANIZATION CONCERNING

A PRODUCT, HIS APPROACH TO HIS ASSIGNMENT CAN BE MADE
WITH MORE CONFIDENCE.l|7

 

[ISTHOMAS E. WEAKLEY, "HOW AD-SALES COORDINATION WORKS IN
DEPARTMENTALIZED COMPANIES," PRINTERS' INK, CCLIX (JUNE l4, I957),
ZH-ZO.

/
IIO"HOW MANY COMPANIES USE 'TOTAL MARKETING'?," TIDE,
XXIX (DECEMBER 3, I955), MO. .

H7ROBERT W. SILBAR, ”FUSION OF AD AND SALES EFFORTS
MEANS COMPLETE CUSTOMER SERVICE," PRINTERS' INK, CCLIX

(APRIL 26, I957), Ah.

 

IOII

PRESIDENT L. E. PHENNER OF INTERNATIONAL CELLUCOTTON PRODUCTS
COMPANY RECOGNIZES THE HISTORICAL INDIVIDUALITY OF THE FUNCTIONAL
MARKETING DEPARTMENTS AND THE NEED FOR THEIR COORDINATED EFFORT,

AS FOLLOWS:

WE FEEL THAT SINCE SALES, ADVERTISING, AND MARKET RESEARCH
ARE ALL WORKING TOWARD THE SAME END, THEY SHOULD NOT
BE SEPARATED. I KNOW THAT IN SOME COMPANIES THE
ADVERTISING DEPARTMENT IS CONSIDERED BY THE SALES
DEPARTMENT TO BE A NECESSARY EVIL . . . AND VICE
VERSA. YET IT'S ALL ONE OPERATION. ADVERTISING IS
REALLY A TOOL OF SALES, AND MARKET RESEARCH -

WELL, THAT USED TO BE SOMETHING THAT WENT ON IN AN
IVORY TOWER. NOBODY QUITE KNEW WHAT THE DEPARTMENT
DID. THAT IS NO LONGER THE CASE. NOW ALL OF OUR n
DEPARTMENT HEADS SHARE IN OUR MARKETING PLANNING.IIO

ACCEPTANCE OF INTRA-DEPARTMENTAL COORDINATION OF MARKETING EFFORT
IN THE GENERAL ELECTRIC COMPANY IS INDICATED BY MCKAY, AS FOLLOWS:

IT Is OUR CONVICTION THAT SUCCESSFUL BUSINESS OPERATION
TODAY REQUIRES THAT THOSE WHO PROVIDE THE FACTS AND
FIGURES FOR THE BUSINESS THROUGH RESEARCH, THOSE WHO
PLAN OUR PRODUCTS AND SERVICE THEM, THOSE WHO SCHEDULE
PRODUCTION TO MEET SALES REQUIREMENTS, AND SO ON -

ALL THESE NUMBERS OF THE TEAM FORM AN ESSENTIAL
ORGANIC, UNIFIED SEGMENT OF THE TOTAL BUSINESS
ORGANIZATION. IN OTHER WORDS, THE MARKETING FUNCTION
IS MORE THAN A CONVENIENT ORGANIZATION MARRIAGE OF
DIVERSE ACTIVITIES.'I9

COORDINATION OF INTER-DEPARTMENTAL OPERATIONS
LESS FREQUENTLY IT IS INDICATED IN THE LITERATURE THAT THE
PRIMARY DIVISIONS OF COMPANIES, I.E. MARKETING, MANUFACTURING,

FINANCE, ENGINEERING, ETC. HISTORICALLY HAVE OPERATED RELATIVELY

 

IIBA. R. HAHN, "I.C.P.'S 'MARKETING CONCEPT': THREE
TOP MANAGEMENT MEN DEFINE IT," SALES MANAGEMENT, LXXIV (MARCH '5: I955):

80.

 

l|9MCKAY, "THE NEW RESPONSIBILITIES . . ."

I05

INDEPENDENTLY ALSO. MARKETING CONCEPT ADVOCATES WHO ACKNOWLEDGE
THIS SITUATION TYPICALLY STRESS THAT INTERDEPARTMENTAL COORDINATION
ALSO IS A NECESSARY CONDITION FOR FULL IMPLEMENTATION OF THE
CONCEPT. CHARLES E. ST. THOMAS OF GENERAL ELECTRIC COMPANY PRESENTS
THE FOLLOWING RATIONALE:

BECAUSE MARKETING, WHEN IT IS ACCEPTED AS A CONCEPT,
BRINGS A COMMON FOCUS TO ALL THE FUNCTIONAL WORK
(ENGINEERING, FINANCE, MANUFACTURING, ETC.) OF THE
BUSINESS, WE FIND THAT THIS WORK USUALLY IS ACCOMPLISHED
FAR MORE EFFECTIVELY BECAUSE IT IS GEARED TO A COMMON,
SINGLE OBJECTIVE - THE PREDETERMINED NEEDS OF THE
CUSTOMER. HENCE, THE WORK OF EACH BUSINESS FUNCTION
TENDS TO BE MUTUALLY SELF-SUPPORTING. IT TENDS TO BE
INTEGRATED. AND IT TENDS . . . TOWARD THE ACHIEVEMENT
OF CONSUMER-ORIENTED OBJECTIVES.

A RELATIVELY SMALL NUMBER OF ACADEMICIANS AND BUSINESSMEN
HAVE INDICATED THAT THE MARKETING CONCEPT IN FACT CALLS FOR A
"COMPANY POINT-OF-VIEW." FELTON SUGGESTS THAT "MARKETING CANNOT
BE EFFECTIVE IF CONSIDERED FROM A MARKETING POINT OF VIEW ALONE.

FOR THE MARKETING OFFICER, THIS MEANS CONTINUAL COMPROMISE AND

2
NEGOTIATION WITH OTHER DEPARTMENTS OF THE COMPANY."l | TOGESEN

COMMENTS ON COMPANY-WIDE COORDINATION AS FOLLOWS:

WHEN WE SEE THE VICE-PRESIDENT IN CHARGE OF MARKETING
CONFERRING WITH THE VICE-PRESIDENTS OF PRODUCTION,
ENGINEERING AND FINANCE IN PLANNING MARKETING PROGRAMs;
WHEN WE SEE THE VICE-PRESIDENT IN CHARGE OF MARKETING
REVIEWING HIS PLANS WITH HIS ASSISTANTS . . . THEN WE
SEE THE MARKETING CONCEPT IN ACTION. THIS IS THE
OPERATION OF AN ORGANIZATION THAT HAS DECIDED THAT

 

I20
CHARLES E. ST. THOMAS, "MARKETING AND THE SMALL

BUSINESS,”’PAPER READ BEFORE MEETING OF THE NATIONAL FLUID POWER
’1
ASSOCIATION, CHICAGO, NOVEMBER A, I950.

IEIARTHUR P. FELTON, "CONDITIONS OF MARKETING LEADERSHIP,"
HARVARD BUSINESS REVIEW, XXXIV (MARCH-APRIL, I956), IEA.

I06

PRESENT-DAY MARKETING REQUIRES A CHANGE IN ITS TECHNIQUES.'22
WAKEFIELD ALSO EMPHASIZES THE EQUAL PARTNERSHIP ROLE OF THE
MARKETING AND MANUFACTURING DEPARTMENTS: ". . . IN A MANUFACTURING
BUSINESS, THE PRODUCTION FUNCTION DOES NOT BECOME SUBSIDIARY
TO THE MARKETING FUNCTION, EVEN UNDER THE MARKETING CONCEPT. THE
PRODUCTION PROGRAM SHOULD, HOWEVER, BE MOTIVATED BY THE MARKETING
CONCEPT AND BY THE MASTER OPERATING PROGRAM, WHICH IS AN OUT-

GROWTH OF THE MARKETING CONCEPT."I23 PRESIDENT WALTHER H. FELDMANN
OF WORTHINGTON CORPORATION NOTES THAT "ONE OF THE BIG JOBS OF THE
MARKETING DIRECTOR OR THE VICE PRESIDENT IN CHARGE OF MARKETING IS
TO PERSUADE THE ENGINEERING PEOPLE, THE PRODUCTION PEOPLE, THE
ACCOUNTING PEOPLE, THE FINANCIAL PEOPLE AND OTHERS OF THE IMPORTANT
CONTRIBUTION THEY MUST MAKE TO DO A PROPER MARKETING JOB."‘2u
SUMMARY

THE FOLLOWING COMMENTS ARE PRESENTED AS A SUMMARY OF
THE CONTENT REVIEW OF THAT PORTION OF THE MARKETING CONCEPT
LITERATURE WHICH IS CONCERNED WITH ORGANIZATIONAL ASPECTS:

I) OF THE SEVERAL AREAS INDICATED IN THE LITERATURE AS
BEING COMPONENTS OF THE MARKETING CONCEPT, E.G. CONSUMER ORIENTATION,

PROFIT PLANNING, PRODUCT PLANNING, ETC. A RELATIVELY LARGE PORTION

OF THE CONTENT VOLUME IS CONCERNED WITH ORGANIZATIONAL ASPECTS.

 

'223lLBAR, HA.

'23WAKEFIELD, ”THE TEN COGS . . .,” A2.

l2u”WORTHINGTON CORPORATION ADOPTS NEW MARKETING PHILOSOPHY,
BUILDS CAPACITY FOR GROWTH," U4.

I07

A FEW CRITICS HAVE NOTED THAT ESTABLISHMENT OF A FORMAL MARKETING
ORGANIZATION IS MERELY ONE POTENTIALLY EFFECTIVE ACTION TOWARD
IMPLEMENTATION OF THE CONCEPT. HOWEVER, IT IS REPORTED FREQUENTLY
THAT VARIOUS FORCES, E.G. COMPANY GROWTH, EXPANSION OF PRODUCT
LINES, MERGERS AND CONSOLIDATIONS, GENERAL ECONOMIC CONDITIONS,
ETC., ARE CAUSING MANAGEMENT TO REVIEW THEIR ORGANIZATIONAL
STRUCTURING. ALSO SEVERAL CRITICS RECOGNIZE THAT TO MANY MANAGE-
MENTS IT PROBABLY APPEARS FAR LESS DIFFICULT TO CHANGE ORGANIZA-
TIONAL PHILOSOPHIES. THEREFORE, WHILE ONE MAY VIEW WITH SOME
ALARM THE ALLEGED OVER-CONCERN OF NUMBEROUS MANAGEMENTS WITH
ORGANIZATIONAL ASPECTS OF THE CONCEPT, THEIR RELATIVE CONCERN WITH
THIS AREA IS QUITE UNDERSTANDABLE.

2) COMPANY REORGANIZATIONS, ESPECIALLY WITH REGARD TO
THE SEVERAL MARKETING FUNCTIONAL AREAS, AND STATEMENTS OF COMPANY
OFFICIALS, AS REPORTED IN THE VARIOUS TRADE PUBLICATIONS, INDICATE
A SIGNIFICANT TREND TOWARD ESTABLISHMENT OF CENTRALIZED MARKETING
DEPARTMENTS WHICH COORDINATE THE EFFORTS OF SUCH FUNCTIONS AS_
ADVERTISING, SALES PROMOTION, MARKETING RESEARCH, CONSUMER SERVICE,
PUBLIC AND TRADE RELATIONS, NEW PRODUCT DEVELOPMENT, ETC., THEREBY
FORMING STRONG CENTRAL MARKETING STAFFS. ONE IMPORTANT RESULT OF
THIS DEVELOPMENT MOST FREQUENTLY REPORTED IS THAT THE SALES MANAGER
HAS BEEN RELIEVED OF THESE STAFF RESPONSIBILITIES WHICH FORMERLY
LIMITED THE AMOUNT OF TIME AVAILABLE TO HIM FOR MANAGING THE
SALES FORCE. FURTHER, HE IS PROVIDED WITH MORE AND BETTER INFORMA-

TION AND ASSISTANCE TO AID HIM IN PERFORMING HIS PRIMARY TASK.

3) TO COORDINATE THE EFFORTS OF THE MARKETING STAFF AND
TO HEAD THE FORMAL MARKETING DEPARTMENT, DESCRIBED ABOVE, MANY
COMPANIES HAVE ESTABLISHED THE POSITION OF VICE PRESIDENT IN CHARGE
OF MARKETING. LESS FREQUENTLY THE TERM "SALES" IS USED IN PLACE
OF ”MARKETING." IN HIGHLY DECENTRALIZED MULTI-DIVISIONAL ORGANIZA-
TIONS, THE CHIEF MARKETING OFFICER USUALLY CARRIES THE TITLE,
MARKETING MANAGER. GENERALLY THESE POSITIONS ARE STAFF POSITIONS,
ALTHOUGH SOME COMPANIES GIVE THIS OFFICER LINE AUTHORITY.
DISTINCTION IS MADE IN THE LITERATURE BETWEEN THE MARKETING
MANAGER OR VICE PRESIDENT AND THE SALES MANAGER, IN TERMS OF
JOB DESCRIPTIONS, WIDTH OF THE AREA OF CONCERN OF EACH, THEIR
BUSINESS BACKGROUNDS, THEIR ABILITIES, AND THEIR ORIENTATIONS.
HOWEVER, A FEW CRITICS SUGGEST THAT SINCE MOST MARKETING OFFICERS
ARE FORMER SALES MANAGERS NOW BEARING NEW TITLES IN THE SAME
COMPANIES, CERTAIN OF THESE DISTINCTIONS ARE OPEN TO QUESTION.

M) ALTHOUGH GREAT CONCERN IS INDICATED REGARDING
ORGANIZATIONAL STRUCTURING, THE BASIS OF THIS CONCERN, AT LEAST
AMONG THE MARKETING CONCEPT ADVOCATES, IS PRIMARILY THE HISTORICAL
LACK OF COORDINATION OF EFFORT AMONG THE SEVERAL MARKETING FORCES
AND BETWEEN THE OVERALL MARKETING ACTIVITY AND THE OTHER
OPERATIONAL AREAS OF THE COMPANY. A STRONG PLEA IS MADE FOR
PERSUADING OFFICERS OF ALL AREAS OF COMPANY OPERATION TO ACCEPT
THE MARKETING CONCEPT, WITH A RESULTING "COMPANY~WIDE VIEW" OF
EFFORT, AIMED AT CUSTOMER SATISFACTION. IT IS STRESSED THAT THE

MARKETING DEPARTMENT WOULD NOT BE PLACED IN A POSITION SUPER-

I09

ORDINATE TO OTHER DEPARTMENTS, RATHER THE DEPARTMENTS ARE
COMPLEMENTARY AND MUTUALLY DEPENDENT, AND THEY SHOULD FUNCTION
ACCORDINGLY.

5) WHILE GREAT CONCERN WITH ORGANIZATIONAL ASPECTS HAS
BEEN EVIDENCED BY COMPANY MANAGEMENTS, AS INDICATED BY THE
LITERATURE CONTENT, IT APPEARS THAT ANY INTERPRETATION OF THIS
TREND'S SIGNIFICANCE MUST BE BASED UPON A MOST INTENSIVE
STUDY OF A NUMBER OF INDIVIDUAL COMPANY SITUATIONS. A FEW
WRITERS SUGGEST THAT THE CREATION OF MARKETING DEPARTMENTS AND
EXECUTIVE POSITIONS IN MARKETING IS CURRENTLY A VOGUE AMONG
MANAGEMENTS,AND FURTHER, THAT IF THIS IS TRUE, IT IS PROBABLE
THAT MANY SUCH DEPARTMENTS AND POSITIONS REPRESENT REORGANIZATION
IN NAME ONLY. FEW CRITICS QUESTION THAT IMPLEMENTATION OF THE
MARKETING CONCEPT MAY BE FACILITATED BY RESTRUCTURING OF ORGANIZATIONs;
THEY NOTE, HOWEVER, CREATION OF MARKETING DEPARTMENTS "ON PAPER"
BRINGS ABOUT NO SUCH RESULT. RATHER THEY EMPHASIZE THAT CERTAIN
FIRMS WHICH HAVE NO FORMAL MARKETING DEPARTMENTS NEVER THE LESS
ARE "MARKETING-ORIENTED" AND CONSIDER THEMSELVES TO HAVE ADOPTED

THE MARKETING CONCEPT.

CHAPTER IV

LITERATURE OF THE MARKETING CONCEPT (CONTINUED)

MARKETING PLANNING

MANAGEMENT BY OBJECTIVES

 

CURRENT BUSINESS LITERATURE GIVES CONSIDERABLE ATTENTION
TO THE PROPOSITION OF MANAGEMENT BY OBJECTIVES, AND MARKETING
CONCEPT LITERATURE PLACES SPECIAL EMPHASIS ON THIS APPROACH.
AS IS TRUE OF ALL THE COMPONENTS OF THE MARKETING CONCEPT
DESCRIBED IN THIS CHAPTER, HOWEVER, THE DIFFERENCE BETWEEN
TRADITIONAL AND MARKETING CONCEPT-ORIENTED ACTIVITY IS DESCRIBED
AS MORE A DIFFERENCE OF DEGREE AND SOURCE OF DIRECTION, THAN OF
RECOGNITION AND UTILIZATION OF THE PARTICULAR ACTIVITY. GENERALLY
THIS FACT IS RECOGNIZED IN THE LITERATURE. IN DISCUSSING THE
MORE FORMAL NATURE OF MARKETING PLANNING, WENDELL SMITH HAS
WRITTEN:

THIS IS NOT TO SAY THAT, PRIOR TO THE EMERGENCE AND

RECOGNITION OF THE MARKETING CONCEPT, MARKETING

OPERATIONS WERE NECESSARILY FORTUITOUS AND UNPLANNED.

PERHAPS THE CRUCIAL POINT IS THAT DEVELOPMENTS IN THE

ECONOMY, AND IN SOCIETY GENERALLY, HAVE OPERATED

SO As TO STIMULATE THE EMERGENCE OF PLANNING As A

CONSCIOUS OR EXPLICIT FUNCTION.I

SMITH NOTES THAT THIS SITUATION HAS BEEN CAUSED BY INCREASING

 

'WENOELL R. SMITH, "THE ROLE OF PLANNING IN MARKETING,"
BUSINESS HORIZONS, II (FALL, I959), 5A.

 

IIO

COMPLEXITY OF PRODUCTS, SERVICES, AND MARKETING OPERATIONS,
RECOGNITION AND ACCEPTANCE OF THE INEVITABILITY OF CHANGE,
AND RECOGNITION OF THE ABILITY TO IDENTIFY AND CONTROL CERTAIN
FACTORS IN A MARKETING SITUATION. BUSINESS WEEK HAS DESCRIBED
CHANGES IN APPROACHES TO BUSINESS PLANNING AS FOLLOWS:
OF COURSE, THERE HAS ALWAYS BEEN PLANNING IN BUSINESS.
WHAT'S HAPPENING NOW IS THAT THE THINKING IS GROPING
FURTHER AND FURTHER INTO THE FUTURE. AND ITS BECOMING
A SEPARATE FUNCTION; SOMETIMES INDIVIDUALS OR GROUPS
HAVE PLANNING AS A FULL-TIME ASSIGNMENT, IN OTHER
CASES A TOP EXECUTIVE DEVOTES PART OF HIS TIME TO
IT, AS A FENCED-OFF, DISTINCT JOB.
THE RELATIONSHIP OF MARKETING PLANNING TO OVERALL COMPANY PLANNING
WAS EMPHASIZED BY THE BUND AND CARROLL STUDY, WHICH SUPPORTED
THE POSITION THAT "THE MARKETING PLAN Is INCREASINGLY ACCEPTED
AS THE CORNERSTONE FOR A COMPANY'S TOTAL PLANNING EFFORT. THIS
DOES NOT MEAN THAT THE MARKETING MAN NEED BE SUPREME. IT
SIGNIFIES ONLY THAT MARKETING MUST BE AWARDED A KEY ROLE IN
COMPANY MANAGEMENT."3 THIS POSITION HAS BEEN DISCUSSED AT THE
FIRM LEVEL BY MCKAY, WHO NOTES THAT IN GENERAL ELECTRIC COMPANY:
. . . MARKETING HAS A KEY ROLE As A PARTICIPANT IN
OVERALL PLANNING FOR THE BUSINESS IN ADDITION TO ITS
MORE OBVIOUS MARKETING PLANNING RESPONSIBILITY. WE
BELIEVE THAT AN ORDERLY BUSINESS PLANNING PROCESS
IS ESSENTIAL FOR SURVIVAL AND GROWTH; THAT SUCH PLANNING
Is A CONTINUING PROCESS, WITH MANY INTER-RELATED STEPs;

AND THAT THERE IS A LOGICAL SEQUENCE . . . OF SUCH WORK
WHICH IS GREATLY FACILITATED WHERE THE BUSINESS IS

 

2"CALLING THE SHOTS ON I9--," BUSINESS WEEK, NO. I203
(SEPTEMBER 20, I952), 8A.

3HENRY BUND AND JAMES W. CARROLL, "THE CHANGING ROLE
OF THE MARKETING FUNCTION," THE JOURNAL OF MARKETING, XXI

(JANUARY, I957), 325.

II2

ORGANIZED ITH A STRONG, FULL-FUNCTIONING MARKETING
COMPONENT.

PROBABLY THE MOST SUCCINCT DESCRIPTION OF THE NATURE
OF MANAGEMENT BY OBJECTIVES HAS BEEN PRESENTED BY DRUCKER, WHO
NOTES THAT "OBJECTIVES ARE NEEDED IN EVERY AREA WHERE PERFORMANCE
AND RESULTS DIRECTLY AND VITALLY AFFECT THE SURVIVAL AND
PROSPERITY OF THE BUSINESS."5 DRUCKER COMPARES OBJECTIVES,
OR GOALS OR TARGETS, TO A COMPASS RATHER THAN A TIMETABLE, AND
HE EMPHASIZES MANAGEMENT'S NEED FOR OBJECTIVES IN BALANCING THE
FIRM'S PRESENT MEANS AND FUTURE RESULTS. HIS POSITION REGARDING
"MANAGEMENT BY OBJECTIVES" Is SUMMARIZED, AS FOLLOWS:
. . . A BUSINESS MUST BE MANAGED BY SETTING OBJECTIVES
FOR IT. THESE OBJECTIVES MUST BE SET ACCORDING TO WHAT
IS RIGHT AND DESIRABLE FOR THE ENTERPRISE. THEY MUST
NOT BE BASED ON THE EXPENDIENT OR ON ADAPTATION TO
THE ECONOMIC TIDE. MANAGING A BUSINESS CANNOT, IN
OTHER WORDS, DEPEND UPON "INTUITION." IN FACT, IN
THE MODERN INDUSTRIAL ECONOMY WITH ITS LONG TIME SPAN
BETWEEN A DECISION AND THE RIPENING OF ITS FRUITS,
THE INTUITIVE MANAGER IS A LUXURY FEW COMPANIES, LARGE
OR SMALL, CAN AFFORD. AND PROFIT IN A WELL-MANAGED
BUSINESS IS NOT WHAT ONE HAPPENS To MAKE. IT I$6WHAT
ONE SETS OUT TO MAKE BECAUSE ONE HAS TO MAKE IT.
MEANINGS AND IMPLICATIONS OF MARKETING PLANNING

IN ADDITION TO AN EMERGING RECOGNITION OF THE NECESSITY

FOR MANAGING BY OBJECTIVES, THERE APPEARS TO BE GROWING INTEREST

 

"EDWARD S. MCKAY, "THE NEW RESPONSIBILITIES OF MARKETING,"
LECTURE AT GRADUATE SCHOOL OF BUSINESS ADMINISTRATION, NEW YORK
UNIVERSITY, JANUARY 9, I958.

5PETER F. DRUCKER, THE PRACTICE OF MANAGEMENT (NEW YORK:
HARPER & BROS., I95h), 63.

 

6IBID., 60.

 

II3

IN THE PREPARATION OF A FORMAL, WRITTEN MARKETING PLAN, DEVELOPED
UPON A BASIS OF OBJECTIVES, OR GOALS OR TARGETS, AND INCLUDING
STRATEGY AND TACTICS WHICH EXPEDITE SUCCESSFUL ATVNNMENT OF
THESE OBJECTIVES. IN EMPHASIZING THE DESIRABILITY OF A WRITTEN
MARKETING PLAN, CURTIS H. GAGER, VICE PRESIDENT OF SALES, THE
COCA COLA COMPANfi NOTES THAT "IN DEVELOPING MARKETING STRATEGIES,
WE MIGHT WELL TAKE A LEAF FROM THE GERMAN GENERAL STAFF, WHICH
HAD COVERED ALL THE POSSIBILITIES SO COMPLETELY THAT WHEN
VON MILTKE WAS AWAKEN ONE NIGHT IN I9lh To BE TOLD THAT WAR
HAD BROKEN OUT, HE REFERRED HIS INFORMANT To THE PROPER FILE
DRAWER AND WENT BACK TO SLEEP."7
THE MARKETING CONCEPT LITERATURE CONTAINS NUMEROUS
STATEMENTS REFLECTING THE OPINION THAT FORMAL MARKETING PLANNING
IS DEEMED To BE A VITAL AND NECESSARY COMPONENT OF THE CONCEPT.
SEVERAL COMMENTS REGARDING THIS ISSUE ARE OFFERED HERE As
TYPICAL OF THE SENTIMENT REFLECTED IN THE LITERATURE. ALDERSON
NOTES THAT "SYSTEMATIC PROBLEM-SOLVING AND FORMAL PLANNING HAVE
ARISEN To IMPLEMENT WHAT Is KNOWN AS THE MARKETING CONCEPT."8

WENDELL SMITH SUGGESTS THAT "THE HARD CORE OF THE so-CALLED MARKETING

CONCEPT . . . IS EFFECTIVE AND SCIENTIFIC USE OF MARKET PLANNING."9

 

7CURTIS H. GAGER, "CREATIVE MARKETING - A KEY To SALES
SUCCESS," BROADENING HORIZONS IN MARKETING (NEW YORK: AMERICAN
MANAGEMENT ASSOCIATION, I956), 57.

aWROE ALDERSON, "MARKETING AND MANAGEMENT DECISION,"
COST AND PROFIT OUTLOOK, XIII (JANUARY, I960), I.

9SMITH, 57.

IIlI

PARKER STOUGH, SALES PROMOTION AND ADVERTISING MANAGER OF BULLDOG
[Lecqalc COMPANY, SAYS THAT "THE FIRST REQUISITE OF THIS MARKETING
CONCEPT IS TO OBTAIN AND CORRELATE ALL PERTINENT DATA ON A

GIVEN PROJECT AND THEN PLAN ITS EXECUTION."IO JOHN WAKEFIELD,

OF BARRINGTON ASSOCIATES, WRITES THAT "THE DEVELOPMENT OF A

MASTER OPERATING PLAN Is THE KEY ELEMENT IN THE APPLICATION OF

THE MARKETING CONCEPT. IT HAS ITS ORIGIN IN THE COMPANY'S DUAL
OBJECTIVE: TO FULFILL CUSTOMER NEEDS AT A PROFIT."|I HERBERT’WEST,
VICE PRESIDENT OF BATTEN, BARTON, DURSTINE AND OSBORN, SAYS "THIS
NEW MARKETING CONCEPT . . . REACHES ITS FLESH AND BLOOD REALITY

IN THE WRITTEN MARKETING PLAN . . ."'2

MCCANN-ERICKSON, INC.

HAS ISSUED A REPORT STATING THAT "AT ITS VERY CORE, THE MARKETING
CONCEPT ENVISIONS ORDERLY PLANNING. WITH PLANS COME GOALS, AND
THE NEED FOR OBJECTIVE EVALUATION."l3 LAZER NOTES THAT "THIS
PHILOSOPHY OF BUSINESS OPERATION PLACES GREATER EMPHASIS ON

MARKETING PLANNING AND FORCES BUSINESS EXECUTIVES TO DESIGN

MARKETING STRATEGIES AND PROGRAM MARKETING EFFORT TO ACHIEVE

 

IO
ROBERT W. SILBAR, "FUSION OF AD AND SALES EFFORTS MEANS

EOMPLETE CUSTOMER SERVICE," PRINTERS' INK, CCLIX (APRIL 26, I957),
2.

HJOHN E. WAKEFIELD, "THE TEN COGS IN MARKETING FOR
PROFIT," SALES MANAGEMENT, LXXXIII (OCTOBER I6, I959), AZ.

 

I2EIGHTH ANNUAL CHICAGO TRIBUNE DISTRIBUTION AND
ADVERTISING FORUM, "TODAY'S MARKETING CONCEPT AT WORK IN MANAGEMENT,'
AREA I (CHICAG0: THE CHICAGO TRIBUNE, I957), 39.

l3THE MODERN MARKETING CONCEPT AND THE CHANGING ROLE OF
THE ADVERTISING AGENCY (NEW YORK: MCCANN-ERICKSON, INC., N.D.T:
I6.

 

IIS
"III

REALISTIC AND PREDETERMINED OBJECTIVES. KNIFFIN INDICATES THAT
"FOR MOST COMPANIES THIS SHIFT IN THINKING REQUIRES THAT MORE
RESOURCES AND GREATER EMPHASIS BE GIVEN TO BOTH SHORT - AND LONG-
RANGE PLANNING OF MARKETING ACTIVITIES. MARKETING PLANS THEN
PROVIDE THE BASIS FOR OVER-ALL CORPORATE PLANNING."'5

WHILE A REVIEW OF THE LITERATURE REVEALS A SIGNIFICANT NUMBER
OF STATEMENTS EXPRESSING AGREEMENT THAT FORMAL, WRITTEN MARKETING
PLANNING Is AN ESSENTIAL COMPONENT OF THE MARKETING CONCEPT,
AND ALTHOUGH NO DEBATE OF THIS SENTIMENT IS OFFERED FROM ANY
QUARTER, IT Is INTERESTING To NOTE THAT VERY FEW OF THESE STATE-
MENTS COME FROM THE BUSINESSMEN THEMSELVES. RATHER, THE ATTENTION
WHICH HAS BEEN FOCUSED UPON FORMAL MARKETING PLANNING HAS BEEN
DIRECTED THERE PRIMARILY BY ACADEMICIANS, AND TO A LESSER EXTENT
BY REPRESENTATIVES OF THE LARGER ADVERTISING AGENCIES. As DATA
PRESENTED LATER IN THIS SECTION WILL INDICATE, THIS CONDITION CANNOT
BE EXPLAINED ON THE BASIS OF BUSINESSMEN'S ASSUMING AWAY DISCUSSION
OF THIS COMPONENT DUE To ITS UNIVERSAL USE IN BUSINESS. RATHER, THE

EXPLANATION PROBABLY IS EMBODIED IN THE RATHER SUPERFICIAL TREAT-

MENT AND CONCERN WITH ORGANIZATIONAL ASPECTS BY BUSINESSMEN

 

Ih

WILLIAM LAZER, "SALES FORECASTING: KEY To INTEGRATED
MANAGEMENT," BUSINESS HORIZONS, II (FALL, I959), 6|.

 

'5FRED‘W. KNIFFIN, THE MODERN CONCEPT OF MARKETING MANAGE-
MENT: ITS IMPLICATIONS AND PROBLEMS (BLOOMINGTON, IND.: INDIANA
UNIVERSITY BUREAU OF BUSINESS RESEARCH, I958), 7.

II6

REGARDING THE CONCEPT. IT MUST BE EMPHASIZED, HOWEVER, THAT THERE
ARE SEVERAL SIGNIFICANT EXCEPTIONS To THIS GENERALIZATION. REPRESENTA-
TIVES OF GENERAL ELECTRIC COMPANY, BULLDOG ELECTRIC COMPANY, GENERAL
FOODS CORPORATION, AND OTHER ORGANIZATIONS HAVE STATED QUITE CLEARLY
THE SIGNIFICANCE THEY ASSIGN TO FORMAL MARKETING PLANNING. SEVERAL
SUCH COMMENTS ARE OFFERED LATER IN THIS SECTION.

WRITERS WHO HAVE CONCERNED THEMSELVES WITH FORMAL MARKETING
PLANNING As A COMPONENT OF THE MARKETING CONCEPT GENERALLY HAVE
DEFINED IN SPECIFIC TERMS THEIR CONCEPTIONS OF THE MEANING AND
CONTENT OF SUCH PLANNING. FOR EXAMPLE, WENDELL SMITH NOTES THAT
"THE END PRODUCT OF MARKET PLANNING . . . IS A DETAILED BLUEPRINT
OF THE MARKETING ACTIONS TO BE TAKEN DURING THE PERIOD COVERED BY

THE PLAN,’ INCLUDING "SPECIFICATIONS OF PRODUCT LINE, PLANS FOR

ADVERTISING AND SALES PROMOTION, AS WELL AS FOR THE DEPLOYMENT OF

III6

THE COMPANY'S PERSONAL SELLING FORCE. SMITH NOTES ELSEWHERE
THAT "PLANNING Is NECESSARILY CONCERNED WITH THE GOALS OR
OBJECTIVES THAT THE FIRM SEEKS To ATTAIN, THE PROGRAM BY MEANS
OF WHICH THE FIRM WILL ATTEMPT TO ACHIEVE THOSE GOALS, THE

QUANTITY AND QUALITY OF EFFORT NEEDED, AND THE FIRM'S CAPACITY

I
TO GENERATE THE EFFORT THAT IS NEEDED." 7 ONE OF THE MOST

 

I6WENDELL R. SMITH, "A RATIONAL APPROACH To MARKETING
MANAGEMENT," MANAGERIAL MARKETING: PERSPECTIVES AND VIEWPOINTS, ED.
EUGENE J. KELLEY AND WILLIAM LAZER (HOMEWOOD, ILL.: RICHARD D.

IRWIN, INC., I958), I54.

IZWENDELL R. SMITH, "MARKETING STRATEGY: WHAT PREPARATION
SHOULD PRECEDE THE MARKETING CONCEPT," PRINTERS' INK, CCLXIV

(SEPTEMBER 26, I958), 37.

II?

EXTENSIVE DESCRIPTIONS OF THE DESIRABLE MARKETING PLAN Is OFFERED
BY DONALD THAIN OF THE UNIVERSITY OF WESTERN ONTARIO, AS FOLLOWS:

A SATISFACTORY MARKETING PLAN SHOULD CONTAIN:

I. A COMPREHENSIVE REVIEW AND PENETRATING ANALYSIS
OF THE PERTINENT DATA ON EACH ASPECT OF THE
DEVELOPMENT AND MARKETING OF THE COMPANY, PRODUCT,
OR BRAND INVOLVED,

2. A COMPLETE AND REALISTIC DESCRIPTION AND APPRAISAL
OF THE PRESENT SITUATION,

3. A SPECIFIC STATEMENT OF THE OBJECTIVES IN TERMS OF
PRODUCT DEVELOPMENT, PROFIT, SALES, SHARE OF MARKET,
ETC., FROM BOTH A SHORT - AND A LONG-TERM POINT OF
VIEW,

A. A DESCRIPTION AND ANALYSIS OF ALL THE MARKETING
PROBLEMS INVOLVED IN REACHING THE OBJECTIVES
OUTLINED IN STEP 3 ABOVE,

5. A COMPLETE BLUEPRINT OF THE STRATEGY AND TACTICS
TO BE FOLLOWED IN OVERCOMING THE PROBLEMS INVOLVED
AND REACHING THE OBJECTIVES. SUCH A PLAN SHOULD
INCLUDE ALL NECESSARY RE OMMENDATIONS REGARDING
BUDGETS AND OPERATIONS.I

OTHER SIMILARLY DETAILED DESCRIPTIONS OF THE CONTENTS OF WRITTEN

PLANS HAVE BEEN PROPOSED BY WEST,'9 SMITH20 2'

, AND WAKEFIELD.
IN THE LITERATURE SEVERAL PURPOSES OF FORMAL MARKETING
PLANNING ARE OFFERED: To BRING ABOUT CHANGES IN FUNCTIONS, TO
PREPARE FOR SPECIFIC EVENTS, To CHANGE THE BASIC DIRECTIONS
TAKEN BY THE FIRM, To ENSURE THE LONG-RANGE COMPITITIVE POSITION

OF THE FIRM, TO IMPROVE COMPANY PROFITS, ETC. BASICALLY, THE

REASONS OFFERED AS SUPPORT FOR MARKETING PLANNING IMPLY AN ATTEMPT

 

I8

DONALD H. THAIN, "HOW TO APPROACH MARKETING PLANNING,"
THE BUSINESS QUARTERLY, XXIII (FALL, I958), I70.

l9HERBERT WEST, "YOUR MARKETING PLAN," ADVERTISING
AGENCY (JANUARY I8, I957), 59.

 

20SMITH, "THE ROLE OF PLANNING . . .," 5A.

2'WAKEFIELD, A2, Ah.

II8

AT "MORE SUCCESSFUL AND RATIONAL ADJUSTMENT To CHANGED CONDITIONS
THAN Is TRUE OF THE BUSINESS THAT IS NOT PLANNED AHEAD AND HENCE
IS CONSTANTLY ’MEETING DEVELOPMENTS' AND 'FLYING BY THE SEAT OF
ITS PANTS.

MORE SPECIFICALLY, THE WRITTEN MARKETING PLAN Is VIEWED
As ESSENTIAL To DIRECTION, COORDINATION AND CONTROL OF THE FIRM'S
OVERALL MARKETING EFFORT. REGARDING DIRECTIONAL ASPECTS, HOWARD
HAS NOTED:

THE NEW MARKETING CONCEPT HAS IMPLICATIONS FOR OVERALL

SHORT-TERM PLANNING . . . IT Is IN LONG-TERM PLANNING,

HOWEVER, THAT THE NEW MARKETING CONCEPT COMES TO FULL
FRUITION.

O O O O O O O O O O O O O C O O O O O O O O O O O O O O

. . . A LONG-TERM PLAN BEGINS IN THE MARKETING OPERATION.
THE MARKETING EXECUTIVE TAKES A MAJOR ROLE IN FORMULATING
THE PALN. WHY? THE REASON IS THAT THE FUTURE MARKET
LARGELY DET§§MINES WHAT THE COMPANY CAN Do IN THE NEXT
FIVE YEARS.
THE INCREASINGLY FIXED NATURE OF THE FIRM'S INVESTMENTS AND THE
RESULTING LESSENING OF ABILITY OF THE FIRM TO ADJUST QUICKLY To
FREQUENT AND VARIED PROBLEMS WHICH CONFRONT IT ARE RECOGNIZED
AS INCREASING THE SIGNIFICANCE OF PROVIDING DIRECTION THROUGH
MARKETING PLANNING.
REGARDING THE RELATIONSHIP OF COORDINATION TO MARKETING
PLANNING, ROBERT F. DICK, PRESIDENT OF GEORGE FRY AND ASSOCIATES,

HAS NOTED THAT "ALL ASPECTS OF MARKETING NEED TO BE COORDINATED

AND UNIFIED IN A COMPREHENSIVE 'MARKETING PLAN'. THIS IS FREQUENTLY

 

223MITH, "A RATIONAL APPROACH . . .," I55.

23EIGHTH ANNUAL CHICAGO TRIBUNE DISTRIBUTION AND ADVERTISING
FORUM, I5-I6.

II9
2h

REFERRED To AS THE TOTAL MARKETING CONCEPT." GEORGE FROST,
VICE PRESIDENT OF CANNON MILLS, INC” WRITES THAT "INCREASED
EMPHASIS ON COORDINATING THE BASIC MARKETING FUNCTIONS HAS LED
To THE NEED FOR BETTER PLANNING AND THE GROWTH OF WHAT IS KNOWN
As THE 'MARKETING PLAN.'"25 DAVIDSON HAS SUMMARIZED THE
SIGNIFICANCE OF COORDINATION AS IT IS RELATED TO THE MARKETING
PLAN, AS FOLLOWS:

AS MODERN MARKETING OPERATION INCREASE IN SCOPE
AND COMPLEXITY THERE IS A GROWING NEED FOR DEFINITION
AND COORDINATION OF EFFECTIVE MARKETING CONCEPTIONS,
POLICIES, PROCEDURES, ETC.

WITH MANY PEOPLE AND SOMETIMES CONFLICTING INTERESTS
INVOLVED IN THE EXPENDITURE OF LARGE SUMS OF MONEY, IT IS
IMPORTANT To DEFINE AND FOLLOW PRINCIPLES AND PROCEDURES
THAT YIELD THE BEST APPROACH TO STATED OBJECTIVES.

BECAUSE A LARGE NUMBER OF SPECIALIzED GROUPS AND
INDIVIDUALS ARE INVOLVED IN MODERN MARKETING, IT ALSO
IS IMPORTANT TO DEFINE AND FOLLOW POLICIES AND PROCEDURES
NECESSARY TO THE COORDINATION OF A COMPANY'S OVERALL
MARKETING EFFORT.

THE DEFINITION AND COORDINATION OF EFFECTIVE
MARKETING, THEREFORE, IS THE PRIMARY PURPOSE OF A
MARKETING PLAN.26

FINALLY, THE FORMAL MARKETING PLAN IS VIEWED AS A CONTROL
DEVICE, NECESSARY FOR MEANINGFUL EVALUATION OF MARKETING PERFORMANCE.
SMITH STATES THAT "THE MARKETING PLAN . . . WILL BE INCOMPLETE

IF IT FAILS TO SPECIFY BENCHMARKS OF EXPECTED PERFORMANCE WHICH CAN

 

2h
ROBERT F. DICK, "THE GOLDEN AGE FOR MANAGEMENT,"
PAPER READ BEFORE THE THIRTY-SEVENTH ANNUAL CONFERENCE OF THE
NATIONAL INDUSTRIAL ADVERTISERS' ASSOCIATION, SAN FRANCISCO,

JUNE In, I959.

25GEORGE FROST, "MARKETING IS MANAGEMENT'S JOB," DUN'S
REVIEW AND MODERN INDUSTRY, LXXII (OCTOBER, I958), 50.

 

 

26GEORGE W. DAVIDSON, "WHY YOU SHOULD BLUEPRINT YOUR
MARKETING PLAN," PRINTERS' INK, CCLIX (APRIL I9, I957), 3|.

I20

BE CHECKED AGAINST, AS SPECIFIED POINTS IN TIME, DURING THE PERIOD

27

COVERED BY THE PLAN." HOWEVER, AS NOTED BY DRUCKER AND CITED
PREVIOUSLY IN THIS SECTION, THE PLAN IS NOT CONSIDERED TO BE AN
UNALTERABLE DOCUMENT, A TIMETABLE; RATHER IT IS A COMPASS, A
GUIDE TO ACTION GIVEN IN THE PRESENCE OF VARIOUS COMBINATIONS
OF CONTROLABLE AND UNCONTROLABLE FACTORS AND CONDITIONS.

WRITERS WHO HAVE COMMENTED ON THE MERITS OF FORMAL MARKETING
PLANNING TYPICALLY EMPHASIZE ITS VALUE IN TERMS OF ITS INFLUENCE
ON ULTIMATE FINANCIAL SUCCESS OR FAILURE OF THE FIRM. FOR
EXAMPLE, SEARES NOTES THAT "SOUND PLANNING IS THE KEY To SUCCESSFUL
MARKETING OPERATIONS IN TODAY'S COMPLEX AND HIGHLY COMPETITIVE

"2
ECONOMY. COST AND PROFIT OUTLOOK, NOTING THAT GROWTH AND
STABILITY ARE FUNDAMENTAL MANAGERIAL OBJECTIVES, STATES THAT "FDR
PROFITABLE GROWTH IN MODERN MARKETS FACT-FINDING, ANALYSIS,
AND LONG-RANGE PLANNING ARE ESSENTIAL. UNPLANNED GROWTH CARRIES
ALMOST AS MANY PENALTIES AS BENEFITS."29 FELTON EMPHASIZES THE
DANGERS WHICH ACCRUE WHEN SUCH A PLAN IS LACKING IN STATING THAT
"IF MANAGEMENT DOES NOT HAVE A CAREFULLY THOUGH-OUT MARKETING PLAN,

OR HAS A PROGRAM BASED ON INSUFFICIENT FACTS, OR - HORSE YET ' HAS

NO REAL PLAN AT ALL, THIS COMPANY'S SELLING EFFORT MAY FALL

 

2
7SMITH, "A RATIONAL APPROACH . . .," I5h.

28

AL N. SEARES, SCIENTIFIC MANAGEMENT OF MARKETING OPERATIONS
(NEW YORK: SOCIETY FOR ADVANCEMENT OF MANAGEMENT, I959), IO.

2

9"A MARKETING VIEW OF BUSINESS POLICY," MANAGERIAL
MARKETING: PERSPECTIVES AND VIEWPOINTS, ED. EUGENE J. KELLEY AND
WILLIAM LAzER (HOMEWOOD, ILL: RICHARD D. IRWIN, INC., I958), I36.

I2I

DANGEROUSLY OUT OF PHASE WITH THE TIMES AND MAY PRECIPITATE

A COMPANY CRISIS."3O ADDITIONAL AUTHORITY Is GIVEN TO THIS POINT
OF VIEW BY LOVEWELL, WHO, IN REPORTING THE FINDINGS OF A STUDY

OF FACTORS RELATED TO COMPANY GROWTH CONDUCTED BY THE STANFORD
RESEARCH INSTITUTE, NOTED THAT "IT IS TYPICAL OF PROGRESSIVE
COMPANIES THAT THE ENTIRE CORPORATION IS AWARE OF THE SIGNIFICANCE
OF THE PLANNING FUNCTION, AND THAT THERE IS BROAD PARTICIPATION

IN THE BUSINESS OF PLANNING."3l

COMPANY ACKNOWLEDGMENT OF VALUE AND USE

 

WHILE MOST DEFINITIONS AND EVALUATIONS OF MARKETING PLANNING
HAVE COME FROM ACADEMICIANS, NOT BUSINESSMEN, A NUMBER OF THE
LATTER HAVE MADE PUBLIC STATEMENTS REGARDING THEIR ACCEPTANCE AND
USE OF FORMAL PLANNING. SOME EXAMPLES OF THESE STATEMENTS ARE
PRESENTED BELOW AS TYPICAL OF THOSE APPEARING IN THE TRADE
PUBLICATIONS AND BEFORE TRADE ASSOCIATION CONVENTIONS. CLARENCE
ELDRIDGE,AT THAT TIME VICE PRESIDENT OF MARKETING OF CAMPBELL
SOUP COMPANY, STATED:

I AM SOLD ON THE WRITING OF SOUND MARKETING PLANS.

WHEN I SAY THAT, I MEAN A PLAN THAT ASSEMBLES INTO ONE

SPOT ALL THE VITAL UP-To-DATE INFORMATION ON THE PRODUCT,

so THAT WHEN THE WHOLE PICTURE IS SPREAD BEFORE ME, THE

INDICATED COURSE OF ACTION BECOMES CLEARLY A SOUND
PROCEDURE.

 

3OARTHUR P. FELTON, "CONDITIONS OF MARKETING LEADERSHIP,"
HARVARD BUSINESS REVIEW, XXXIV (MARCH-APRIL, I956), II9.

I
3 P. J. LOVEWELL, "THE KEY FACTORS IN SUCCESSFUL GROWTH,"
PLANNING AHEAD FOR PROFITS (NEW YORK: AMERICAN MANAGEMENT ASSOCIATION,

I958), I2I.
32WEST, I8.

 

I22

DAVID H. TAYLOR, DIRECTOR OF MARKETING OF THE CRYOVAC DIVISION
OF W. R. GRACE AND COMPANY STATED:

WE FOUND THAT IN THE EVER'CHANGING PATTERN OF DISTRIBUTION
IT BECAME INCREASINGLY IMPORTANT TO EMPHASIZE LONG-RANGE
PLANNING IF WE WERE TO ORGANIZE OURSELVES . . . TO MEET
THE DEMANDS THAT WOULD BE PLACED ON OUR ORGANIZATION

WITH THE EXPENDING ECONOMY. SINCE WE WERE EMBARKING

ON A PROGRAM OF DIVERSIFICATION AND EXPANSION OF OUR

BASIC PRODU T LINES, LONG-RANGE PLANNING WAS OUR ONLY
SALVATION;

C. E. SOUNDERS, GENERAL SALES MANAGER OF INTERNATIONAL CELLUCOTTON
PRODUCTS COMPANY,NOTED:

FOR YEARS EACH OF US WENT ALONG DOING OUR OWN JOBS IN OUR
OWN WAY. THINGS OFTEN CAME OUT ALL RIGHT BECAUSE, IN

A COMPANY OF OUR COMPACTNESS, COMMUNICATIONS ARE USUALLY
FAIRLY GOOD, BUT THIS KIND OF OPERATION CERTAINLY ISN'T
THE ANSWER TO AN EXPANDING BUSINESS.

NOW WE'RE ON MUCH MORE SOLID GROUND. LAST YEAR, AFTER
LABOR DAY, A FULLY DEVELOPED MARKETING PROGRAM WAS
BLUEPRINTED To RUN UNTIL MARCH 3|. THAT'S THE BEST WE'D
EVER DONE ON FORWARD PLANNING. WHILE THIS PROGRAM WAS
RUNNING, WE PREPARED PLANS FOR THE SPRING AND FALL OF
THIS YEAR. WE HOPE SOON TO BE ON A TIME-TABLE THAT WILL
PUT US NEVER LESS fiHAN SIX MONTHS AND POSSIBLY AS LONG
AS A YEAR, AHEAD.3

NOTING THAT INTERNATIONAL NICKEL COMPANY HAS PASSED THROUGH
PRODUCTION AND SELLING ORIENTATION STAGES, KELNE REPORTs:

TODAY . . . INTERNATIONAL NICKEL IS PLUNGING INTO ITS
THIRD PHASE. THIS IS THE PERIOD OF LONG RANGE MARKET,
SALES, DEVELOPMENT AND RESEARCH PLANNING . . . .

IT'S A PERIOD IN WHICH SELLING AND MARKETING TOOLS ARE
BEING HONED TO RAZOR-EDGE SHARPNESS AGAINST THE DAYS

 

33A. R. HAHN, "THE MARKETING CONCEPT': A MAJOR CHANGE
IN MANAGEMENT THINKING7," SALES MANAGEMENT, LXXIX (NOVEMBER IO, I957),

73-

 

3"A. R. HAHN, "I.C.P.'S 'MARKETING CONCEPT': THREE TOP
MANAGEMENT MEN DEFINE IT," SALES MANAGEMENT, LXXIV (MARCH I5, I955),

78.

 

I23

OF AMPLE SUPPLY AND STRONG COMPETITION.35
FINALLY, PRESIDENT WAYNE C. MARKS OF GENERAL FOODS CORPORATION
DESCRIBES THE SCOPE AND PURPOSE OF LONG-RANGE PLANNING WITHIN HIS
ORGANIZATION:

LONG-RANGE, I.E. FIVE YEAR, PLANS ARE PREPARED BY EACH
OPERATING DIVISION . . . AND EACH CORPORATE DEPARTMENT
AND UPDATED EACH YEAR. THESE PLANS DO NOT SEEK MERELY
TO FORECAST THE NATURAL COURSE OF EVENTS FOR THE
BUSINESS; THEY SEEK, RATHER TO DEVELOP CHALLENGING
OBJECTIVES FOR EXISTING AND NEW PRODUCT§6 NEW
PROCESSES, NEW METHODS, NEW EVERYTHING.

SCOPE OF COMPANY USE

 

IT WOULD APPEAR INACCURATE To INTERPRET THE ABOVE COMMENTS
As INDICATING WIDESPREAD USE IN BUSINESS OF FORMAL MARKETING
PLANNING. THIS IS NOT TO SUGGEST THAT COMPANIES ARE OPERATING
IN THE ABSENCE OF MARKETING PLANS, HOWEVER. DAVIDSON DESCRIBES
THE MORE TYPICAL SITUATION, AS FOLLOWS:

SOME SORT OF PLAN GENERALLY Is ASSUMED TO EXIST TO
GUIDE THE MARKETING OPERATIONS OF MOST COMPANIES

LARGE ENOUGH TO BE DEPARTMENTALIZED. TOO OFTEN,
UNFORTUNATELY, SUCH "PLANS" ARE LOCKED IN THE MIND OF A
SINGLE MAN WHO HEADS THE MARKETING OPERATION. IN

OTHER CASES WHERE WRITTEN MARKETING PLANS ARE BELIEVED
TO EXIST THESE ACTUALLY REPRESENT BUT FRAGMENTS OF

THE OVERALL MARKETING FUNCTION. SUCH FRAGMENTS SOME-
TIMES ARE EVEN UNCOORDINATED WITH THE TOTAL MARKETING
CONCEPT.

 

35NATHAN KELNE, "WHAT MAKES INTERNATIONAL NICKEL RUN?,"
PRINTERS' INK, CCLIII (DECEMBER I6, I955), h2.

 

36WAYNE C. MARKS, "HOW To SECURE MANAGEMENT EFFECTIVENESS
IN THE I960's," PAPER READ BEFORE MID-YEAR EXECUTIVE CONFERENCE,
NATIONAL ASSOCIATION OF WHOLESALE GROCERS OF AMERICA, BERMUDA,
OCTOBER 28, I959.

37DAVIDSON, 3|.

I2h

BUELL HAS NOTED THAT A REMARKABLE PARADOX OF CONTEMPORARY
AMERICAN BUSINESS "IS THE CONTRAST BETWEEN THE PUBLICLY ADMITTED
NEED FOR BETTER PLANNING AND THE ACTUAL STATUS OF MARKETING
PLANNING. THE FACT IS THAT PLANNING, WITH A FEW NOTABLE
EXCEPTIONS, IS RATED A SECOND-CLASS ACTIVITY IN THE TYPICAL
CORPORATE SALES SETUP."3 COST AND PROFIT OUTLOOK HAS OBSERVED
THAT MARKETING PLANNING IS "CURRENTLY A BACKWARD ART COMPARED TO
THE PROGRESS WHICH HAS BEEN ACHIEVED IN MARKETING RESEARCH AND
ANALYSIS."39 WRAPP HAS SUMMARIZED THE CURRENT STATUS OF FORMAL
LONG-RANGE PLANNING, AS FOLLOWS:

UP To NOW, NOT MANY COMPANIES OTHER THAN THE GIANTS

HAVE DONE MUCH ABOUT SUCH LONG-RANGE PLANNING ON A

FORMAL BASIS. TYPICALLY, MANAGEMENTS IN SMALL AND

MEDIUM-SIZE COMPANIES ARE TOO BUSY TRYING TO MAKE

A PROFIT FOR THE CURRENT MONTHS To FIND TIME TO THINK

ABOUT WHAT THE COMPANY WILL BE DOING FIVE YEARS

FROM NOW. YET THESE SAME MANAGEMENTS ARE MAKING

FREQUENT DECISIONS WITH LONG-TERM IMPLICATIONS -

DECISIONS WHICH, IN MANY CASES, ARE EVEN MORE CRITICAL

FOR THEM THAN FOR THEIR BIGGER COMPETITORS, SIMPLY

BECAUSE THEY CANNOT AS EASILY AF ORD A COSTLY ERROR

ON A NEW PRODUCT OR A NEW PLANT.

SOME QUESTION REMAINS REGARDING THE CURRENT LEVEL OF
ACCEPTANCE OF FORMAL MARKETING PLANNING. THAIN NOTES THAT "IT
WOULD BE SATISFYING INDEED TO BE ABLE TO CONCLUDE . . . ON

AN OPTIMISTIC NOTE BY REPORTING THAT MORE COMPANIES EVERY YEAR

ARE MAKING MORE EFFECTIVE USE OF MARKETING PLANNING. HOWEVER,

 

38VICTOR P. BUELL, "ORGANIzING FOR MARKETING PLANNING,"
THE JOURNAL OF MARKETING, XXI (JULY, I956), 68. _

39"TOP MANAGEMENT AND MARKET ORIENTATION," COST AND
PROFIT OUTLOOK, XII (APRIL, I959), 6.

"0H. EDWARD WRAPP, "ORGANIZATION FOR LONG-RANGE PLANNING,"
HARVARD BUSINESS REVIEW, XXXV (JANUARY-FEBRUARY, I957), 38.

I25

THE WRITER'S OBSERVATIONS INDICATE THAT THIS Is NOT 50.")H ON

THE OTHER HAND BUSINESS WEEK CITES FINDINGS OF A NATIONAL

 

INDUSTRIAL CONFERENCE BOARD STUDY WHICH INDICATE THAT WHILE ONLY
TEN PERCENT OF THE COMPANIES STUDIED HAD AN INDIVIDUAL OR GROUP
SPECIFICALLY ASSIGNED TO FULL-TIME PLANNING, "INDICATIONS ARE
THAT THE TEN PERCENT Is GROWING, THAT FAR AHEAD PLANNING WILL
BE A JOB IN ITSELF.""2 MOST OF THE OPINIOMSEXPRESSED IN THE
LITERATURE ARE IN AGREEMENT WITH THE LATTER POSITION. YET,
WHETHER BECAUSE OF THE SEEMING REMOTENESS OF THIS AREA OF STUDY,
CONCERN WITH IMMEDIATE PROBLEMS, OPERATION WITHIN AN INDUSTRY
WITH A GROWTH RATE SUFFICIENTLY HIGH TO MAKE SUCH PLANNING SEEM
UNNECESSARY OR IMPOSSIBLE, OR SOME OTHER REASON, IT IS OBVIOUS
THAT FORMAL, LONG-RANGE MARKETING PLANNING Is EMPLOYED BY A SMALL
MINORITY OF FIRMS. HOWEVER, THERE APPEARS TO BE NEAR UNIVERSAL
AGREEMENT REGARDING THE BASIC VALUE OF THE ACTIVITY.
SUMMARY

THE FOLLOWING COMMENTS SUMMARIZE BRIEFLY THAT AREA OF
MARKETING CONCEPT LITERATURE CONCERNED WITH FORMAL MARKETING
PLANNING. LATER SECTIONS OF THIS CHAPTER DEAL MORE SPECIFICALLY
WITH TWO ASPECTS OF THE MARKETING PLAN WHICH HAVE RECEIVED
SPECIAL ATTENTION IN THE LITERATURE: PRODUCT PLANNING AND DEVELOPMENT,

AND PROFIT PLANNING AND CONTROL.

 

h'THAIN, I73.

"2"CALLING THE SHOTS ON l9--," 8M.

I26

I) RECOGNITION OF THE NEED FOR "MANAGEMENT BY OBJECTIVES"
IN CONTEMPORARY BUSINESS HAS LED TO INTEREST IN FORMAL MARKETING
PLANNING, WHICH IMPLIES CONSTRUCTION OF A WRITTEN PLAN WHICH
ATTEMPS TO INTEGRATE THE VARIOUS ACTIVITIES CARRIED ON WITHIN
THE FIRM AND To DIRECT THEIR EFFORTS TOWARD SUCCESSFUL ATTAINMENT
OF STATED COMPANY OBJECTIVES.

2) THE MARKETING PLAN PLACES HEAVY EMPHASIS ON FUTURE
ACTIONS AND CONDITIONS. TYPICALLY A PLAN COVERS A PERIOD OF
TEN YEARS, AND INDICATES THE OBJECTIVES THAT THE FIRM DESIRES
TO ATTAIN, PROBLEMS WHICH ARE ANTICIPATED, PLANS OF ACTION, ETC.

3) ORGANIZATIONS USING FORMAL, LONG-RANGE MARKETING
PLANS TEND To MAKE THEM THE BASIS OF OVERALL LONG-RANGE COMPANY
PLANNING. THIS SITUATION IS EXPLAINED ON THE BASIS THAT ULTIMATELY
IT IS THE MARKET PLACE WHICH DETERMINES THE DIRECTION, AND
SUCCESS OR FAILURE, OF THE FIRM.

h) ALTHOUGH FEW FIRMS ARE REPORTED TO HAVE IMPLEMENTED
THE MARKETING PLANNING PROCEDURE DESCRIBED IN THIS SECTION, IT
APPEARS THAT THE NUMBER OF FIRMS DOING so IS INCREASING SIGNIFICANTLY.
FURTHER, AMONG THOSE FIRMS WHICH HAVE IMPLEMENTED THE PROCEDURE,
THERE IS A TENDENCY TO SEPARATE THE PLANNING FUNCTION, THEREBY
ASSIGNING PLANNING TO A PERSON OR COMMITTEE AS A FULL- OR PART-
TIME RESPONSIBILITY.

5) MOST ARTICLES AND SPEECHES CONCERNING MARKETING PLANNING
HAVE COME FROM ACADEMICIANS, ALTHOUGH SOME SIGNIFICANT EXCEPTIONS
TO THIS GENERALIZATION HAVE BEEN CITED. RELATIVE ABSENCE OF COMMENT

BY BUSINESSMEN REGARDING MARKETING PLANNING PROBABLY IS MORE AN

 

I27

INDICATION OF LACK OF FAMILIARITY AND INFORMATION THAN OF

LACK OF INTEREST IN THE SUBJECT.

PRODUCT PLANNING AND DEVELOPMENT

INTRODUCTION

 

CONSIDERABLE ATTENTION IS GIVEN TO THE AREA OF PRODUCT
PLANNING AND DEVELOPMENT IN THE MARKETING CONCEPT LITERATURE.
BEFORE ANALYZING THE CONTENT OF THIS MATERIAL, HOWEVER, IT WILL
BE USEFUL TO RECOGNIZE DEFINITIONS OF CERTAIN TERMS AS THEY ARE
USED IN THE LITERATURE. PERHAPS MOST VAGUE IS THE TERM "NEW
PRODUCT", WHICH HAS BEEN APPLIED TO THE FOLLOWING CONDITIONS:

A PRODUCT WHICH IS BASICALLY DIFFERENT AND WHICH HAS NOT BEEN
PRODUCED PREVIOUSLY BY ANY FIRM, A PRODUCT WHICH Is NEW TO THE
LINE OF A PARTICULAR COMPANY, SIGNIFICANT CHANGES IN THE SIZE
OR FORM OF PACKAGING THE PRODUCT, STYLING CHANGES OR IMPROVEMENTS
IN PRESENT PRODUCTS, AND THE DEVELOPMENT OF NEW BRANDS IN THE
PRESENT PRODUCT LINE, ETC. WHILE THE MAJORITY OF WRITERS RESTRICT
USE OF THE TERI "NEW PRODUCT" TO THE FIRST TWO OF THESE DEFINITIONS,
I.E. To PRODUCTS WHICH ARE BASICALLY NEW OR DIFFERENT FROM
PRODUCTS PREVIOUSLY PRODUCED BY A COMPANY, IN SOME CASES A BROADER
INTERPRETATION OF THE TERM IS NECESSARY FOR UNDERSTANDING OF
CONTENT. ANOTHER TERM, "PRODUCT PLANNING", HAS BEEN DEFINED CLEARLY
AND IN TERMS OF ITS COMMON USAGE IN LITERATURE, BY WILCOCK AS
FOLLOWS:
PRODUCT PLANNING IS A MANAGEMENT RESPONSIBILITY THAT
EVALUATES, INTEGRATES, AND COORDINATES: IDEAS, PLANS,

AND OBJECTIVES OF ALL FUNCTIONS, WITH RESPECT TO THE
DEVELOPMENT OF NEW OR REVISED PRODUCTS AND THE ELIMINATION

I28

OF PRODUCTS. IT PERFORMS THIS FUNCTION IN ALL STAGES
OF PRODUCT LIFE, FROM THE ENCOURAGEMENT OF IDEAS,
THROUGH THE SUCCESSFUL MARKETING AND FINALLY THE
DECISION To DROP THfi PRODUCT, WHEN THE LIFE CYCLE
APPROACHES THE END. 3

DRUCKER HAS FURTHER DEFINED PRODUCT PLANNING IN TERMS OF ITS
CONTENT, AS FOLLOWS:

PRODUCT PLANNING DOES NOT TRY TO DESIGN A NEW PRODUCT.

.THIS IS THE JOB OF THE ENGINEER, THE CHEMIST OR THE

DESIGNER . . . . BUT PRODUCT PLANNING TRIES TO BRING

TO THE DESIGNERS THE KNOWLEDGE OF MARKETING NEEDS AND
MARKETING OPPORTUNITIES . . . . PRODUCT PLANNING, IN

OTHER WORDS, Is THE INTELLIGENCE SERVICE OF MARKETING

AND OF DESIGNING . . . PRODUCT TESTING IS THE RECONNAISSANCE
FORCE OF THE BUSINESS.""

IT IS GENERALLY RECOGNIZED IN THE LITERATURE THAT NEW
PRODUCT ACTIVITY SPECIFICALLY AND PRODUCT PLANNING AND DEVELOPMENT
ACTIVITY GENERALLY ARE NOT NEW AREAS OF BUSINESS CONCERN. HOWEVER,
THERE APPEARS CURRENTLY TO BE A WIDESPREAD RE-EVALUATION OF THE
ROLE OF PRODUCT PLANNING AND DEVELOPMENT AND ITS RELATIONSHIP
TO SUCCESSFUL ACCOMPLISHMENT OF COMPANY GOALS. As RANDLE NOTES:

NEW PRODUCT ACTIVITY Is AS OLD AS BUSINESS ITSELF,

BUT RECENTLY MANAGEMENT HAS FOUND IT MUST THINK WITH

NEW EMPHASIS ON THIS ASPECT OF BUSINESS. TODAY'S SHIFTING

MARKETS AND RAPIDLY EXPANDING TECHNOLOGY BREED AN

EVER-ACCELERATING NEW PRODUCT RACE. NEW PRODUCTS
TODAY ARE THE KEY FACTOR NOT ONLY IN COMPANY GROWTH

 

3J. W. WILCOCK, "PRODUCT PLANNING AND SALES ORGANIZATION,"
WHAT MODERN MARKETING MEANS TO COORPORATE SUCCESS (NEW YORK:
NATIONAL ASSOCIATION OF MANUFACTURERS, I958), 6.

""PETER F. DRUCKER, "SELLING WILL BECOME MARKETING,"
NATION'S BUSINESS, XLIII (NOVEMBER, I955), 79.

I29

BUT IN COMPANY SURVIVAL."5
IN A SIMILAR VIEW DRUCKER NOTES THAT PRODUCT PLANNING AND TESTING
"ARE THE NEWEST AREAS OF MARKETING AND THE ONES WHERE WE SO
FAR MOSTLY KNOW WHAT SHOULD BE DONE RATHER THAN HOW IT COULD BE
DONE. A GREAT MANY MARKETING PEOPLE . . . FEEL STRONGLY THAT
THESE MAY BE, IN THE LONG RUN, THE MOST IMPORTANT AREAS OF
MARKETING.""6 IN STRONGER TERMS MARVIN NOTES THAT "THERE IS
ONLY ONE JUSTIFICATION FOR A COMMERCIAL ENTERPRISE, THE PRODUCT
THAT THE BUSINESS SELLS.""7
SIGNIFICANCE OF NEW PRODUCTS
THE LITERATURE REFLECTS RECOGNITION OF THE IMPORTANCE OF
PRODUCT PLANNING AND DEVELOPMENT IN TERMS OF ITS CONTRIBUTION ,
TO SALES VOLUME AND TO PROFIT. IT IS FURTHER RECOGNIZED THAT
THE DYNAMIC NATURE OF CONTEMPORARY MARKETING TENDS TO EMPHASIZE
THIS CONTRIBUTION. FOR EXAMPLE, JOHNSON AND JONES WRITE:
IT IS A RARE COMPANY THAT CAN ESCAPE THE IMPACT OF
TODAY'S RAPIDLY SHIFTING MARKETS AND EXPANDING
TECHNOLOGY. EXISTING PRODUCTS CAN BE EXPECTED, IN THE
COURSE OF TIME, EITHER To BE PRE-EMPTED BY NEW AND
IMPROVED PRODUCTS OR TO DEGENERATE INTO PROFITLESS PRICE
COMPETITION. ONLY THROUGH CONTINUALLY BRINGING FORTH

NEW PRODUCTS CAN MOST MANUFACTURING COMPfigIES SUSTAIN
THEIR LONG-RUN GROWTH AND PROFITABILITY.

 

5C. WILSON RANDLE, "WEIGHING THE SUCCESS OF NEW PRODUCT
IDEAS," INDUSTRIAL MARKETING, XLII (JULY, I957), 37.

MO

DRUCKER, "SELLING WILL BECOME . . .," 79.

"7PHILIP MARVIN, "MANAGEMENT STRATEGY FOR PRODUCT
PIONEERING," BUSINESS HORIZONS, I (SPRING, I958), IOM.

#8

SAMUEL C. JOHNSON AND CONRAD JONES, "HOW TO ORGANIZE
FOR NEW PRODUCTS," HARVARD BUSINESS REVIEW, XXXV (MAY-JUNE, I957),

II9.

I30

THERE IS SUBSTANTIAL EVIDENCE TO SUPPORT THE VIEW THAT
THE CONTRIBUTION OF NEW PRODUCTS T0 EXPANDING SALES VOLUMES IS

SIGNIFICANT. KELNE HAS REPORTED THAT A PRINTERS' INK SURVEY

 

OF SIXTY-FOUR LEADING AMERICAN CAPITAL GOODS PRODUCERS INDICATED
THAT PRACTICALLY ALL OF THESE FIRMS INTRODUCED AT LEAST ONE

NEW PRODUCT DURING THE FIVE YEARS PRECEDING THE STUDY, AND
FURTHER, THAT ONE-THIRD OF THESE NEW PRoDUCTS WERE CONSUMER
GOODS."9 RANDLE OBSERVES THAT IN I958 ALMOST ONE-HALF OF ALL
MANUFACTURING COMPANIES WERE WORKING ON NEW PRODUCTS. AT
GENERAL FOODS CORPORATION, HUGHES REPORTS THAT "FOR FISCAL

I955 PRODUCTS INTRODUCED IN THE LAST DECADE REPRESENTED 237.5
MILLION DOLLARS OF GENERAL FOODS' 82h.8 MILLION DOLLAR VOLUME.
AND WHILE TOTAL SALES ROSE 5.H PERCENT FROM THE YEAR BEFORE,

"50 PRESIDENT RALPH CORDINER

THE 'NEw-COMERS' GAINED 27.7 PERCENT.
OF GENERAL ELECTRIC COMPANY REPORTED THAT "SINCE WORLD WAR II
WE'VE INTRODUCED MORE BASICALLY NEW PRODUCTS THAN IN ALL THE
PREVIOUS THIRTY YEARS."5|

SEVERAL WRITERS HAVE ALSO EMPHASIZED THE SIGNIFICANCE

OF THE PROFIT CONTRIBUTION TO TOTAL COMPANY PROFITS. ROBERT M.

OLIVER, VICE PRESIDENT OF MARKETING OF THOMAS A. EDISON INDUSTRIES,

 

"9NATHAN KELNE, "INDUSTRIAL ADVERTISERS ADDING MORE
CONSUMER LINES," PRINTERS' INK, CCXLIX (DECEMBER IO, I95H), 23.

 

50LAWRENCE M. HUGHES, "GENERAL FOODS ORGANIZES MANAGEMENT
AND MARKETING 'FOR THE NEXT TWENTY YEARS'," SALES MANAGEMENT, LXXV

(JULY '5: I955): '07:

I

5 LAWRENCE M. HUGHES, "G-E SEEKS CONQUEST OF BIGNESS
THROUGH FANNED-OUT MANAGEMENT," SALES MANAGEMENT, LXIX
(OCTOBER I, I952), II9.

 

 

I3I

MCGRAW EDISON COMPANY, REFERS TO "PLANNED PARENTHOOD" FOR NEW
PRODUCTS, A CONCEPT UNDER WHICH "THE TIME TO BEGIN TO DEVELOP
PRODUCTS FOR PROFIT IS BEFORE CONCEPTION AND THE PLACE IS THE
MARKET IN WHICH IT WILL BE BORN . . ."52 RANDLE NOTES THAT

"THOSE COMPANIES WHICH TODAY ARE PROVING MOST SUCCESSFUL ARE THE
ONES THAT HAVE DEVELOPED A SUCCESSION OF NEW PRODUCTS AND ARE
INTRODUCING THEM ON A TIMING SCHEDULE, SO THAT WHEN THE PROFIT
MARGIN STARTS To SLIDE DOWNHILL ON ONE PRODUCT, THEY CAN PICK

IT UP WITH ANOTHER NEW PRODUCT."53 CLIFFORD F. RASSWEILER,

VICE CHAIRMAN OF THE BOARD OF JOHNs-MANVILLE CORPORATION, STRESSES
THE PROFIT CONTRIBUTION OF NEW PRODUCTS AND THE NECESSITY OF
PLANNING FOR THIS PROFIT CONTRIBUTION BY STATING THAT "THE INTERVAL
REQUIRED FOR PRODUCT DEVELOPMENT IS GREATER THAN THE INTERVAL
BETWEEN THE START OF DECAY AND SERIOUS LOSS OF PROFITS PRODUCTIVITY
IN THE VAST MAJORITY OF CASES . . ."5"

THE EVOLVING PRODUCT PLANNING FUNCTION

 

THE EVOLVING EMPHASIS PLACED UPON PRODUCT PLANNING AND
DEVELOPMENT IS TREATED IN THE LITERATURE AS REPRESENTING TWO RATHER

DISTINCT OPERATING ORIENTATIONS: THE TRADITIONAL ENGINEERING AND

 

2

5 ROBERT M. OLIVER, "THE MARKETING CONCEPT IN DEVELOPING
PRODUCTS FOR PROFITS," CONTROL OF NON-MARKETING COSTS (NEW YORK:
AMERICAN MANAGEMENT ASSOCIATION, I957), BO-BI.

 

53C. WILSON RANDLE, "THE MANAGEMENT OF NEW PRODUCTS,"
PAPER READ BEFORE THE THIRTY~FIFTH ANNUAL CONFERENCE, NATIONAL
INDUSTRIAL ADVERTISERS ASSOCIATION, NEW YORK, JUNE 9, I957.

5"CLIFFORD F. RASSWEILER, "ESTABLISHING CORPORATE OBJECTIVES
FOR PRODUCT PROGRAMS," PLANNING AHEAD FOR PROFITS (NEW YORK:
AMERICAN MANAGEMENT ASSOCIATION, I958), 6|.

 

I32

PRODUCTION ORIENTATION, AND THE MARKETING ORIENTATION WHICH
EMPHASIZES THE ROLE OF THE CONSUMER. THE FORMER CONDITION IS
SUMMARIZED BY OLMER, WHO STATES THAT "UNLESS YOURS IS AN EXCEPTIONAL
COMPANY, THE PRODUCT CAME FIRST. THE COMPANY WAS FORMED TO
MAKE THE PRODUCT AND THEN TO SELL IT."55 ROBERT J. KEITH,
EXECUTIVE VICE PRESIDENT OF PILLSBURY COMPANY STATES THAT HIS
COMPANY WAS OPERATING UNDER THIS ORIENTATION IN DEVELOPING ITS
FIRST NEW PRODUCT, MIDDLINGS, THE BRAN LEFT OVER AFTER MILLING:
MILLFEED, AS THE PRODUCT CAME TO BE KNOWN, PROVED A
VALUABLE PRODUCT BECAUSE IT WAS AN EXCELLENT NUTRIENT
FOR CATTLE. BUT THE IMPETUS TO LAUNCH THE NEW PRODUCT
CAME NOT FROM A CONSIDERATION OF THE NUTRITIONAL NEEDS
OF CATTLE OR A MARKETING ANALYSIS. IT CAME PRIMARILY
FROM THE DESIRE TO DISPOSE OF A BY-PRODUCT. THE NEW
PRODUCT DEgISION WAS PRODUCTION ORIENTED, NOT MARKETING
ORIENTED.5
GUSTAFSON NOTES THAT UNDER THE TRADITIONAL ORIENTATION PRODUCT
DECISIONS WERE MADE BY "SOME TOPSIDE OFFICIAL WITH ENOUGH BRASS
OR TABLE-POUNDING ABILITY To SAY: 'THIS IS WHAT WE WILL MAKE,'"
OR BY PRODUCTION PERSONNEL WHO FELT THAT "WE HAVE THE BEST
ENGINEERS AND DESIGNER33 OUR PRODUCTION PEOPLE ARE TOPs; THEY
TURN OUT THE BEST. THEN WE TURN IT OVER TO OUR SALESMEN AND

SAY: 'SELL IT.'"57 POSSIBLE CONSEQUENCES OF SUCH AN ORIENTATION

IN THE CONTEMPORARY MARKET ARE SUGGESTED BY OLIVER, WHO ANALYZED

 

55OLIVER, 8|.

56ROBERT J. KEITH, "THE MARKETING REVOLUTION," IflE
JOURNAL OF MARKETING, XXIV (JANUARY, I960), 36.

57PHILIP GUSTAFSON, "SELLING TOMORROW'S MARKET,"
NATION'S3BUSINESS, XV (FEBRUARY, I957), 78-79.

'33

THE FAILURE OF AN ELECTRIC IRON MARKETED BY MCGRAw-EDISON COMPANY,
AS FOLLows:

I AM CONVINCED THAT THE LOSSES WERE A DIRECT RESULT

OF THE ABSENCE OF A PROPER MARKETING CONCEPT AND WOULD
NOT HAVE OCCURRED IF THE MARKETING APPROACH HAD BEEN
SOUND.

WHAT ACTUALLY HAPPENED WAS THAT THE ENGINEER
DEVELOPED THE PRODUCT AND THEN TURNED IT OVER To THE
SALES DEPARTMENT. FROM EVERY POINT OF VIEW COMMON
TO ENGINEERING PRACTICE, THE PRODUCT WAS SUPERIOR.

As THE ENGINEER SAW IT ALL THAT WAS NEEDED WAS FOR
SOMEONE TO "SELL IT."

THE SECOND PRODUCT PLANNING AND DEVELOPMENT ORIENTATION
DISCUSSED IN THE LITERATURE, THE MARKETING CONCEPT WHICH EMPHASIZES
CONSUMER ORIENTATION, HAS BEEN DIFFERENTIATED FROM THE PRODUCTION-
ENGINEERING ORIENTATION BY CHARLES E. ST. THOMAS, OF MARKETING
SERVICES OF THE GENERAL ELECTRIC COMPANY, AS FOLLOWS:

FIRST, ONE OF THE MOST CLEARLY DEFINED DIFFERENCES
LIES IN THE AREA OF NEW PRODUCT DEVELOPMENT . . . .
IN OVERSIMPLIFICATION, THE PROCESS STARTS WITH
DESIGN, AND MOVES SUCCESSIVELY THROUGH ENGINEERING,
MANUFACTURING AND SALES TOWARD THE CUSTOMER. NOW,
IF WE STUDY THIS PROCESS FROM THE STANDPOINT OF

HOW IT OCCURS UNDER THE MARKETING CONCEPT, WE FIND
A CHANGE RIGHT AT THE BEGINNING -- THE PROCESS NOW
STARTS WITH THE CUSTOMER . . . .

W. C. FLAHERTY, MANAGER OF BUSINESS RESEARCH OF CHRYSLER CORPORATION,
EXPRESSES THIS SENTIMENT MORE SUCCINCTLY: "YOU CANNOT SEPARATE THE

60
CONSUMER FROM THE PRODUCT . . ." McKITTERICK NOTES THAT THE

 

58OLIVER, 80.

59CHARLES E. ST. THOMAS, "MARKETING AND THE SMALL BUSINESS,"
PAPER READ BEFORE MEETING OF THE NATIONAL FLUID POWER ASSOCIATION,
CHICAGO, NOVEMBER H, I958.

6O"CHRYSLER IN TRANSITION," PRINTERS' INK, CCLIII

(OCTOBER 28, I955), M8.

 

I31I

COMPANY WHICH HAS ACCEPTED THE MARKETING CONCEPT ADJUSTS TO THE

CONSUMER ORIENTATION BY FOCUSING ITS INNOVATIVE EFFORT "

ON
ENLARGING THE SIZE OF THE MARKET IN WHICH IT PARTICIPATES BY
INTRODUCING NEW GENERIC PRODUCTS AND SERVICES, BY PROMOTING NEW
APPLICATIONS FOR EXISTING PRODUCTS AND SERVICES, AND BY SEEKING
OUT NEW CLASSES OF CUSTOMERS WHO HERETOFORE HAVE NOT USED THE
EXISTING PRODUCTS,"6| AS OPPOSED TO SIMPLY COMPETING FOR A LARGER
SHARE OF AN EXISTING MARKET. CHARLES E. ERB, MARKETING MANAGER,
LAMP DIVISION OF WESTINGHOUSE ELECTRIC CORPORATION, REPORTS
THAT HIS COMPANY'S DEVELOPMENT OF A CYLINDRICAL ELECTRIC LIGHT
BULB, CONTAINING SUCH CONSUMER BENEFITS AS ELIMINATION OF HARSH
GLARE AND SHADOWS, WAS IN ACCORDANCE WITH THIS CONSUMER ORIENTATION.62
ORGANIZING THE PRODUCT PLANNING FUNCTION

PREVIOUSLY, ATTENTION WAS GIVEN TO THE SIGNIFICANCE ASSIGNED
IN THE LITERATURE TO THE SALES AND PROFIT CONTRIBUTIONS FROM NEW
PRODUCTS ON WHICH A LARGE NUMBER OF FIRMS DEPEND FOR GROWTH AND
STABILITY. IN THE TRADE PUBLICATIONS CONSIDERABLE EMPHASIS HAS
BEEN PLACED UPON THE NEED FOR, AND DESIRABILITY OF, ORGANIZING
FOR PLANNED, CONTINUING PRODUCT PLANNING AND DEVELOPMENT. WITHOUT

SUCH ORGANIZED EFFORT, IT IS FELT THAT THE NECESSARY PROFIT AND

VOLUME CONTRIBUTIONS FROM NEW PRODUCTS WILL NOT BE FORTHCOMING,

 

6'J. B. McKITTERICK, "WHAT IS THE MARKETING MANAGEMENT
CONCEPT7," THE FRONTIERS OF MARKETING THOUGHT AND SCIENCE, PROCEEDINGS
OF THE FORTIETH NATIONAL CONFERENCE (CHICAGO: AMERICAN MARKETING
ASSOCIATION, I957), 78.

62

CHARLES E. ERB, ADDRESS BEFORE NEW PRODUCTS WORKSHOP,
ASSOCIATION OF NATIONAL ADVERTISERS, CHICAGO, MARCH 29, I960.

'35

AT LEAST NOT AT THE TIME AT WHICH SUCH CONTRIBUTIONS ARE MOST
NEEDED BY THE FIRM. THIS POINT OF VIEW IS SUBSTANTIATED BY THE
STANFORD RESEARCH INSTITUTE STUDY OF COMPANY GROWTH, WHICH
REVEALED THAT "PROGRESSIVE COMPANIES CHARACTERISTICALLY HAVE
ORGANIZED PROGRAMS TO SEEK AND PROMOTE NEW BUSINESS OPPORTUNITIES.
THEY USUALLY INVEST SIGNIFICANTPORTIONS OF THEIR EARNINGS TO
DEVELOP THEIR FUTURES THROUGH MARKET DEVELOPMENT, NEW PRODUCT
DEVELOPMENT, AND ACQUISITION PLANNING." 3 RECOGNIZING A TREND
TOWARDASSIGNED RESPONSIBILITY FOR PRODUCT PLANNING AND DEVELOPMENT,
KLINE REPORTS:
PRODUCT PLANNING, AS A SPECIALIZED FUNCTION OF MANAGEMENT,
IS A RELATIVELY NEW CONCEPT IN INDUSTRY. WHILE SOME
PLANNING OF PRODUCTS HAS ALWAYS BEEN CARRIED ON IN
INDUSTRY, THE FUNCTION HAS GENERALLY BEEN SCATTERED
THROUGHOUT SALES AND RESEARCH MANAGEMENT. IN ORDER
To ENSURE THAT PRODUCT DECISIONS ARE REACHED ONLY AFTER
CAREFUL CONSIDERATION OF ALL BUSINESS FACTORS, PROGRESSIVE
COMPANIES TODAY ARE BEGINNING To CENTER RESPONSIBILITY
FOR THE OVERghL ANALYSIS OF PRODUCT PROBLEMS IN SPECIFIC
INDIVIDUALS.
JOHNSON AND JONES HAVE REPORTED A SIMILAR TREND, STATING THAT
"MORE AND MORE COMPANIES ARE REACHING THE CONCLUSION THAT
SOMEBODY MUST BE PUT SPECIFICALLY IN CHARGE OF THE NEW PRODUCT
EFFORT AND HELD ACCOUNTABLE FOR IT."65 H. J. BARNUM, NEW PRODUCTS

MANAGER OF GOOD LUCK DIVISION, LEVER BROTHERS COMPANY, HAS

SUMMARIZED INDUSTRY'S RATIONALIZATION OF THE NEED FOR ORGANIZING THE

 

63LOVEWELL, I2I.

6"CHARLES H. KLINE, "PRODUCT PLANNING," ADVANCED MANAGEMENT,
XVIII (MARCH, I953), IO.

 

65JOHNSON AND JONES, 50.

I36

pRooUCT PLANNING FUNCTION, AS FOLLOWS:

NOTHING DIES FASTER THAN A RED-HOT IDEA FOR A NEW PRODUCT.

AS A MATTER OF FACT, NOTHING DIES FASTER THAN MANY NEW

PRODUCTS ONCE BORN. EVERYBODY IS NATURALLY INTERESTED,

IF NOT FASCINATED, BY THE CONCEPT OF FATHERING A

NEW PRODUCT, BUT IN MANY COMPANIES NOBODY DOES ANYTHING

ABOUT IT. THERE Is No ONE INDIVIDUAL ON THE MANAGEMENT

LEVEL WHO HAS THE SPECIFIC RESPONSIBILITY FOR EXAMINA-

TION, DECISION, AND IMPLEMENTATION IN THE NEW PRODUCT

AREA.

1

A FEW CRITICS HAVE SUGGESTED THAT MANAGEMENTS ATTEMPTS
AT RATIONALIZING THE PRODUCT PLANNING FUNCTION, RESULTING IN A
FORMAL ORGANIZATION OF THE FUNCTION, Is LITTLE MORE THAN ANOTHER
EVIDENCE OF MANAGEMENT'S CONTINUING SEARCH FOR PANACEAS, WHICH
ULTIMATELY LEADS ONLY TO SUPPORTING THE ALREADY HIGH RATE OF
FAILURE OF NEW PRODUCTS. MORE SPECIFICALLY, MCCARTHY ARGUES
THAT NEW PRODUCT DEVELOPMENT CANNOT BE SYSTEMATIZED, AND
FURTHER THAT "(I) ORGANIZATION IS NOT A VERY IMPORTANT FACTOR
IN NEW PRODUCT DEVELOPMENT AND THAT (2) ALTHOUGH ORGANIZATIONAL
PLANS MAY FACILITATE SUCCESSFUL PRODUCT DEVELOPMENT, SUCH
PLANS WILL BE FRUITLESS UNLESS ACCOMPANIED BY A DYNAMIC
INNOVATING ATTITUDE ON THE PART OF BOTH TOP MANAGEMENT AND THE
WHOLE COMPANY ORGANIZATION."67 ON THE OTHER HAND, RANDLE NOTES
THAT WHILE THE PRODUCT PLANNING FUNCTION IS MADE MORE COMPLEX

DUE TO ITS RELIANCE UPON PRACTICALLY EVERY FUNCTIONAL AREA OF

THE BUSINESS, THE AREA "CAN BE IDENTIFIED, DESCRIBED, AND

 

66H. J. BARNUM, JR., "HOW TO SCREEN A NEW PRODUCT IDEA,"
DUN'S REVIEW AND MODERN INDUSTRY, LXIII (JUNE, I95H), 36.

 

67E. JEROME MCCARTHY, "ORGANIZATION FOR NEW-PRODUCT
DEVELOPMENT?," THE JOURNAL OF BUSINESS, XXXII (APRIL, I959), I28.

I37

H 68

CONTROLLED, HENCE CAN BE MANAGED. THE LARGER BODY OF PUBLICATION
AND CONVENTION CONTENT SUPPORTS THE LATTER POSITION, I.E. THAT
RATIONALIZATION OF THE PRODUCT PLANNING FUNCTION LEADS TO ITS
EFFECTIVE MANAGEMENT THROUGH ORGANIZATION.

OF THE SEVERAL PROBLEMS INVOLVED IN PRODUCT PLANNING AND
DEVELOPMENT, THE AREA OF COORDINATION OF EFFORT AMONG THE VARIOUS
DEPARTMENTS CONCERNED APPEARS TO HAVE RECEIVED THE GREATEST
AMOUNT OF ATTENTION IN THE LITERATURE. MCCARTHY NOTES THAT "ONE
OF THE COMPLICATING FACTORS IN COORDINATING A NEW-PRODUCT
DEVELOPMENT PROGRAM IS THAT THERE IS A GRADUAL SHIFT IN RESPONSIBILITY

AS THE PROJECT DEVELOPS FROM THE LABORATORY THROUGH ENGINEERING

69

JOHNSON AND JONES STATE THAT "IT

AND PRODUCTION TO SALES."
IS ESPECIALLY IMPORTANT THAT THE PRODUCT TEAMS, CUTTING ACROSS
DEPARTMENT LINES, BE ADMINISTERED TO AVOID THE INHERENT PROBLEM

OF BREAKING DOWN NORMAL AND HEALTHY SUPERVISORY RELATIONSHIPS."70
FORMAL ORGANIZATION OF THE PRODUCT PLANNING FUNCTION APPEARS TO
DEVELOP FROM THESE SENTIMENTS AS A NATURAL CONSEQUENCE. AS HOWARD
OBSERVES, "BY FAR THE MOST COMMON WAY OF ATTEMPTING TO COPE WITH

THE COORDINATION PROBLEM HAS BEEN TO ESTABLISH A NEW PRODUCTS

DEPARTMENT."7| TRADITIONAL FORMAL ORGANIZATION ASPECTS MAY BE

 

68RANDLE, "THE MANAGEMENT OF NEW . . .," I.
69MCCARTHY, I30.
70 6
JOHNSON AND JONES, 2.
I
7 JOHN A. HOWARD, "INTERDEPARTMENTAL COORDINATION IN
PRODUCT DEVELOPMENT," THE FRONTEIRS OF MARKETING THOUGHT AND SCIENCE,

PROCEEDINGS OF THE FORTIETH NATIONAL CONFERENCE (CHICAG0:
AMERICAN MARKETING ASSOCIATION, I957), 9|.

I38

OVEREMPHASIZED TO THE DETRIMENT OF EFFECTIVE OPERATION OF THE
FUNCTION, HOWEVER, AS MARVIN HAS RECOGNIZED: "THE ADMINISTRATION
OF PRODUCT DEVELOPMENT IS UNNECESSARILY CLOUDED BY THE TENDENCY
TO VIEW IT THROUGH THE FRAMEWORK OF ORGANIZATION CHARTS. IN
REALITY PRODUCTS DO NOT PASS FROM RESEARCH TO ENGINEERING TD

72

SALES AND BACK TO RESEARCH." DICK HAS ALSO DESCRIBED THE NEED
FOR COORDINATION BETWEEN MARKETING AND THE "NON-MARKETING"
DEPARTMENTS OF THE COMPANY.73

ATTEMPTS AT FORMAL ORGANIZATION OF THE PRODUCT PLANNING
FUNCTION HAVE RESULTED IN THE ESTABLISHMENT OF VARIOUS NEW TITLES,
DEPARTMENTS, AND COMMITTEES WITHIN FIRMS. HOWEVER, THE MOST
FREQUENT RESULT APPEARS To BE FORMATION OF A NEW PRODUCTS
DEPARTMENT, QUITE SEPARATE FROM CONTROL BY PRODUCT OR SALES
MANAGERS. OTHER ORGANIZATIONS HAVE ESTABLISHED NEW PRODUCT
COMMITTEES, WITH MEMBERSHIP COMPOSED OF PERSONS REPRESENTING
VARIOUS FUNCTIONAL AREAS OF MARKETING, PRODUCTION, AND FINANCE;
OTHERS CREATE SPECIAL TEAMS FOR EACH PROPOSED PRODUCT VENTURE
AT ITS INCEPTION; FEWER FIRMS ASSIGN SPECIFIC NEW PRODUCT
RESPONSIBILITIES AS EXTRA DUTIES To PERSONS IN THE VARIOUS
DEPARTMENTS CONCERNED. RANDLE NOTES THAT NEW PRODUCT DEPARTMENTS

GENERALLY REPORT IN ONLY THREE PLACES, "ALWAYS DIRECTLY AND AT

A HIGH LEVEL, TO THE COMPANY'S CHIEF EXECUTIVE, TO THE TOP RESEARCH

 

72MARVIN, IIO.

73ROBERT F. DICK, "PRODUCT PLANNING," MARKETING'S ROLE IN
SCIENTIFIC MANAGEMENT, PROCEEDINGS OF THE THIRTY-NINTH NATIONAL
CONFERENCE (CHICAG0: AMERICAN MARKETING ASSOCIATION, I957), 25-39.

 

'39

AND DEVELOPMENT OFFICER, OR To THE TOP MARKETING OFFICER.~ HOWEVER,
THE GRAVITATION IN THIS FIELD IS DISTINCLY TOWARD TOP MANAGEMENT."7"
IN A STUDY OF PRODUCT PLANNING DEPARTMENTS AMONG 252 MEMBER FIRMS,
THE AMERICAN MANAGEMENT ASSOCIATION REPORTS THAT "BY AN OVERWHELMING
MARGIN - ALMOST TWO TO ONE - THE RESPONDENTS SAID THEY THINK THAT
GENERAL MANAGEMENT RATHER THAN MARKETING OR SALES MANAGEMENT SHOULD
BE RESPONSIBLE FOR COORDINATING THE PRODUCT PLANNING FUNCTION."75
REGARDLESS OF THE SPECIFIC FORM OF ORGANIZATION EMPLOYED,
HOWEVER, ONE FACT APPEARS TO BE UNIVERSALLY ACCEPTED: PERSONS
REPRESENTING THE VARIOUS FUNCTIONAL AREAS OF MARKETING, AS THE
COMPANY PERSONNEL MOST FAMILIAR WITH THE MARKET OF THE ORGANIZATION,
ARE IN AN IDEAL SITUATION TO FEED BACK INFORMATION NECESSARY FOR
SUCCESSFUL PRODUCT PLANNING AND DEVELOPMENT, AND THUS THEY MUST
PLAY AN ACTIVE ROLE IN A PRODUCT PLANNING DEPARTMENT. NELSON
DESCRIBES THE ROLE OF THE PRODUCT PLANNING DEPARTMENT AS "FUNCTION-
ING AS THE VOICE OF THE CUSTOMER" AND INTERPRETING "CUSTOMER
AND PRODUCT REQUIREMENTS IN ENGINEERING TERMS" TO THE COMPANY.7
THIS COMMONLY ACCEPTED DEFINITION OF THE PURPOSE OF THE PRODUCT
PLANNING FUNCTION LEADS TO EMPHASIS UPON THE ROLE OF MARKETING
PERSONNEL IN IMPLEMENTING THIS FUNCTION. AS BUELL HAS NOTED:

"BECAUSE OF ITS CLOSENESS TO THE CUSTOMER AND COMPETITION, THE

7n

RANDLE, "THE MANAGEMENT OF NEW . . .," 6-7.

75"HOW NEW PRODUCTS ARE PLANNED-AND WHY," PRINTERS' INK,
CCLXIX (OCTOBER I6, I959), 72.

76EDGAR W. NELSON, ESTABLISHING THE PRODUCT PLANNING FUNCTION
IN YOUR COMPANY (NEW YORK: MARKETING PLANNING CORPORATION, N.D.), 7-8.

 

I J

IIIO

SALES DEPARTMENT IS IN AN EXCELLENT POSITION TO SENSE SITUATIONS
THAT REQUIRE ADJUSTMENTS IN THE PRODUCT LINE."77
THE FORMAL PRODUCT PLANNING AND FORMAL ORGANIZATION FOR
PRODUCT PLANNING ARE ACCEPTED CONCEPTS IS EVIDENCED BY A SIGNIFICANT
NUMBER OF PUBLIC STATEMENTS DERIVING FROM A WIDE RANGE OF
INDUSTRY AREAS. SEVERALSUCH COMMENTS REFLECTING COMPANY ACCEPTANCE
OF MORE FORMAL PRODUCT PLANNING PROCEDURES ARE OFFERED BELOW
AS TYPICAL OF THE MAJORITY OF BUSINESS PUBLICATION CONTENT.
REGARDING THE ATTEMPTS OF AMERICAN TELEPHONE AND TELEGRAPH
COMPANY AT BECOMING A "MARKETING-MINDED ORGANIZATION, VICE PRESIDENT
OF MARKETING J. W. COOK HAS NOTED:
WE HAD TO RECAPTURE THE AGGRESSIVE SPIRIT AND ACCELERATE
THE DEVELOPMENT PROCESS. NEW PRODUCTS BECAME THE VEHICLE
FOR "SHOWING". IN THE PAST, NEW-PRODU T INTRODUCTION
HAD BEEN A RATHER INFORMAL PROCEDURE.7
PRESIDENT MELVILLE R. BISSELL OF BISSELL, INC., IN DESCRIBING
THE FEATURES OF HIS COMPANY'S "NEW MARKETING CONCEPT", NOTED:
WE NOT ONLY RESTYLED THE LINE, BUT WE SET UP A PROGRAM
OF CONTINUING PRODUCT DEVELOPMENT AND RESTYLING TO MAKE
SURE THAT OUR LINE IS ALWAYS UP To DATE AND THAT WE ARE
REGULARLY INTRODUCING PRODUCT INNOVATIONS TO STIMULATE
OUR MARKET.

THE REYNOLDS METALS COMPANY HAS FORMED A "PRODUCT AND MARKET SALES

DEVELOPMENT UNIT", WHICH IS:

 

77BUELL, 69.

78mmw PRODUCTS HELP A.T.&T- SELL PHONE CALLS,"
PRINTERS' INK, CCLX (JULY 3': I959): 53°

79"UPSWEEP IN BISSELL ADVERTISING - BUDGET TRIPPLES
IN ONE YEAR," PRINTERS' INK, CCLIII (DECEMBER 2, I955), 2H.

IIII

. . . AN UNUSUAL GROUP WHICH MIGHT BE DESCRIBED AS AN
APPLIED RESEARCH GROUP, WHOSE JOB IT Is TO DEVELOP NEW
USES AND NEW MARKETS FOR EXISTING PRODUCTS AS WELL AS
TO DISCOVER POSSIBLE NEW PRODUCTS FOR WHICH A MARKET
SEEMS TO EXIST. THIS HOWEVER, Is A SALES RATHER THAN
A RESEARCH OPERATION.80

IT IS GENERALLY RECOGNIZED IN THE LITERATURE THAT FORMAL
PRODUCT PLANNING PROCEDURES AND ORGANIZATIONS ARE NOT YET WIDELY
ADOPTED IN INDUSTRY. AS NELSON HAS NOTED REGARDING PROCEDURES,
"THE COMPANY THAT HAS A FORMAL, CLEAR-CUT, WRITTEN PROCEDURE

"8|

FOR AUDITING THE PRODUCT LINE IS MOST EXCEPTIONAL. REGARDING

ORGANIZATION, PRINTERS' INK, REPORTS AMONG ITS FINDINGS IN A

 

STUDY OF PRODUCT PLANNING IN FIFTY INDUSTRIAL ORGANIZATIONS THAT
"AN APPRECIABLE NUMBER OF COMPANIES HAVE YET To FIX NEW-PRODUCT
DEVELOPMENT AND MARKETING INTO THEIR STRUCTURES AND OPERATIONS
IN A COMPLETELY COMPATIBLE MANNER. COMPANIES ACCEPT NEW-PRODUCT
PROCEDURES THAT WOULD NOT BE TOLERATED IN ANY OTHER PHASE OF
THE BUSINESS."82 LEVITT SUGGESTS THAT THIS LACK OF FORMAL PRODUCT
PLANNING AND DEVELOPMENT IS INDICATIVE OF THE STATUS OF THE
MARKETING AREA GENERALLY IN BUSINESS CURRENTLY:
MARKETING IS THE STEPCHILD OF MOST MODERN CORPORATIONS.
THAT IS A STRONG STATEMENT, ESPECIALLY IN VIEW OF ALL THE

ENTHUSIASTIC TALK ABOUT THE "MARKETING CONCEPT", THE
TREMENDOUS AMOUNT OF MARKETING RESEARCH, AND THE VAST

 

&"

PROGRAM OF REYNOLDS METALS COMPANY,

(OCTOBER, I955), 85.

8'NELSON, II.

82"NEW PRODUCT REVOLUTION: IS MANAGEMENT ORGANIZED FOR
IT?," PRINTERS' INK, CCLVII (OCTOBER 3|, I958), 2|.

THE REYNOLDS STORY: THE MARKETING AND MERCHANDISING
" INDUSTRIAL MARKETING, XL

 

 

I1I2

QUANTITIES OF LITERATURE AND NUMEROUS SEMINARS AND
SPEECHES FOCUSING ON MARKETING PROBLEMS.
BUT TO SUPPORT THE STATEMENT IT IS ONLY NECESSARY

TO POINT OUT THAT IT IS A RARE COMPANY THAT FOLLOWS

UP WITH A SOLIDLY SY TAMATIC PROGRAM OF MARKETING EXPERIMENTA-

TION AND INNOVATION.

WHILE IT Is AGREED THAT FORMAL PROCEDURES AND ORGANIZATION
ARE NOT NOW WIDESPREAD IN INDUSTRY, SENTIMENT IS THAT THE SCOPE
OF SUCH ACTIVITY IS INCREASING RAPIDLY; FOR EXAMPLE, IN I957
JOHNSON AND JONES REPORT THAT "ANALYSIS OF FIFTY-EIGHT SUCH
DEPARTMENTS IN LARGER COMPANIES SHOWS THAT ONLY TWENTY PERCENT
OF THEM ARE MORE THAN FOUR YEARS OLD, AND FIFTY PERCENT HAVE
BEEN ORGANIZED WITHIN THE LAST TWO YEARS."8" THE CONCENSUS IS
THAT GROWTH OF SUCH DEPARTMENTS AS WELL AS OF FORMAL PROCEDURES
FOR AUDITING PRODUCT LINES WILL CONTINUE INTO THE YEARS IMMEDIATELY
AHEAD AT AN ACCELERATED RATE.
SUMMARY

THE FOLLOWING COMMENTS ARE OFFERED As A SUMMARIZATION OF
THIS REVIEW OF CONTENT OF THAT PORTION OF THE MARKETING CONCEPT
LITERATURE WHICH IS CONCERNED WITH PRODUCT PLANNING AND DEVELOPMENT:

I) DURING RECENT YEARS A GREAT AMOUNT OF ATTENTION HAS
BEEN CENTERED ON THE ROLE OF NEW PRODUCTS AS AN INFLUENCE ON

COMPANY PROFIT, GROWTH, AND STABILITY. THIS IS DUE IN PART TO

THE RAPID RATE OF INTRODUCTION OF NEW PRODUCTS INTO THE MARKET

 

3THEODORE LEVITT, "GROWTH AND PROFITS THROUGH PLANNED
MARKETING INNOVATION," THE JOURNAL OF MARKETING, XXIV (APRIL, I960),
I.

 

8"JOHNSON AND JONES, 50.

M3

SINCE THE END OF WORLD WAR II. EQUALLY SIGNIFICANT Is BUSINEss-
MEN'S RECOGNITION OF THE RELATIONSHIP OF THE PROFIT-LIFE OF A
PRODUCT TO ITS TOTAL LIFE CYCLE. COMPANY EXECUTIVES HAVE OBSERVED
THAT INCREASINGLY LARGER SHARES OF THEIR FIRMS' TOTAL SALES

AND PROFITS ARE BEING DERIVED FROM NEW-PRODUCT SOURCES. MANY
INDICATE, THEREFORE, THAT THIS AREA REQUIRES MORE CONCERN THAN

IT HAS RECEIVED HISTORICALLY, SO THAT THE FIRM WILL NOT ONLY
MAINTAIN ITS COMPETITIVE AND PROFITABILITY STANDINGS, BUT FURTHER,
SO THAT THE PROBABILITY OF EVEN MORE PROFITABLE PRODUCT OFFERINGS
IN THE FUTURE WILL BE ENHANCED.

2) THE PRODUCT PLANNING AND DEVELOPMENT FUNCTION HAS BEEN
SYSTEMATIZED IN VARYING DEGREES BY VARIOUS ORGANIZATIONS. THIS
STUDY HAS LED SOME CRITICS TO BELIEVE THAT THE FUNCTION INHERENTLY
PRECLUDES ORGANIZATION AND REGIMENTATION. HOWEVER, THE MAJORITY
OPINION IS THAT PRODUCT PLANNING AND DEVELOPMENT CAN AND SHOULD
BE MADE A FORMAL ACTIVITY, WITH DEFINED RESPONSIBILITY, PROCEDURE,
ET CETERA.

3) A NUMBER OF FIRMS HAVE ESTABLISHED FORMAL ORGANIZATIONS
TO CONDUCT, AND TO BE RESPONSIBLE FOR, PRODUCT PLANNING AND
DEVELOPMENT. THE FORM OF ORGANIZATION DIFFERS WIDELY, WITH SOME
COMPANIES ESTABLISHING NEW PRODUCT DEPARTMENTS AND OTHERS FORMING
INTERDEPARTMENTAL (AND LESS FREQUENTLY INTRADEPARTMENTAL)
COMMITTEES AND PRODUCT TEAMS. LESS FREQUENTLY THIS RESPONSIBILITY
IS ASSIGNED TO VARIOUS INDIVIDUALS THROUGHOUT THE ORGANIZATION AS
AN ADDITIONAL DUTY. ALMOST WITHOUT EXCEPTION, HOWEVER, THE

RESPONSIBLE PERSON OR GROUP REPORTS TO TOP-'LEVEL MANAGEMENT, AND

IlIlI

MARKETING AREA PERSONNEL ARE SIGNIFICANT AND ACTIVE MEMBERS IN
THE PROGRAM.

A) FIRMS WHICH HAVE ORGANIZED THE PRODUCT PLANNING
FUNCTION, AS DESCRIBED ABOVE, TEND TO BE LARGER FIRMS, ALTHOUGH
THIS GROUP INCLUDES FIRMS FROM A WIDE RANGE OF INDUSTRIES, INCLUDING
BOTH INDUSTRIAL AND CONSUMER GOODS AND SERVICES. FURTHER,

STUDIES REPORTED IN THE LITERATURE INDICATE THAT THESE FIRMS
GENERALLY HAVE RATES OF GROWTH SIGNIFICANTLY HIGHER THAN THE
AVERAGE FOR THEIR RESPECTIVE INDUSTRIES.

5) ALTHOUGH THE NUMBER OF FIRMS WHICH HAS ACCEPTED AND
IMPLEMENTED FORMAL PRODUCT PLANNING AND DEVELOPMENT IS RELATIVELY
SMALL, VARIOUS STUDIES INDICATE THAT THE RATE OF GROWTH IS HIGH
AND PROBABLY WILL REMAIN $0 FOR SEVERAL YEARS. THIS PREDICTION
Is SUPPORTED BY THE FACT THAT MOST NEW-PRODUCT DEPARTMENTS NOW
IN EXISTENCE WERE ORGANIZED ONLY RECENTLY; YET THE LITERATURE
REFLECTS GREAT INTEREST IN THESE DEPARTMENTS, AND ANNOUNCEMENTS
OF FORMATIONS OF ADDITIONAL DEPARTMENTS AND COMMITTEES BY OTHER

FIRMS ARE FREQUENT.

PROFIT PLANNING AND CONTROL
THE PROFIT-VOLUME EMPHASIS
WHILE DEFINITIONS OF THE MARKETING CONCEPT OFFERED IN
THE LITERATURE INDICATE THE SIGNIFICANCE OF NUMEROUS AND VARIED
ORIENTATIONS AND FUNCTIONS, ALMOST WITHOUT EXCEPTION TWO COMPONENTS
ARE GENERALLY AGREED UPON: CONSUMER ORIENTATION AND PROFIT MOTIVATION.
THE FORMER ALREADY HAS BEEN DISCUSSED; THE PURPOSE OF THIS SECTION

IS TO SUMMARIZE THE ROLE AND SIGNIFICANCE OF PROFIT AS IT IS

I145

RELATED TO THE MARKETING CONCEPT, AS REFLECTED IN THE CONTENT OF
BUSINESS PUBLICATIONS AND BUSINESS CONVENTION ADDRESSES.

TYPICALLY, IT IS NOTED THAT A SIGNIFICANT CHANGE REGARDING
THE INTERPRETATION OF VOLUME OPERATION HAS OCCURRED AMONG BUSINESS
EXECUTIVES GENERALLY AND MARKETING EXECUTIVES SPECIFICALLY.
PRIMARY ATTENTION HAS BEEN GIVEN To THE LATTER. THIS CHANGE, AS
TREATED IN THE LITERATURE,GENERALLY IS OBSERVED AS A TWO PART
PHENOMENON, ALTHOUGH A MINORITY GROUP, REPRESENTING AN AVANT
GARDE, PROPOSES AN EXTENSION OF THE SECOND PART. THE FIRST PHASE
IS DESCRIBED AS A PERIOD OF CONCERN WITH SALES VOLUME, WHICH
CONTINUED IN MOST FIRMS UNTIL APPROXIMATELY I950, AND WHICH
CONTINUES IN MANY TODAY. THE SECOND PHASE IS CHARACTERIZED
BY CONCERN WITH PROFIT LEVELS AND PERCENTAGES, WITH SALES VOLUME
VIEWED As ONE POSSIBLE METHOD BY WHICH PROFITS MAY BE ATTAINED.
THE EXTENTION TO THE PROFIT ORIENTATION IS APPLICATIONS OF THE
MEASURE OF RETURN ON INVESTMENT IN PROFIT EVALUATION.

WHILE NUMEROUS SPECIFIC ILLUSTRATIONS ARE OFFERED
CONCERNING THE LACK OF CONSUMER ORIENTATION AMONG COMPANIES DURING
THE I9HO'S AND EARLY I950'S, FAR FEWER EXAMPLES ARE INDICATED
REGARDING CONCERN WITH VOLUME RATHER THAN PROFIT. MORE TYPICAL
ARE THE FOLLOWING COMMENTS:

FOR THE PAST TEN YEARS, UNITED STATES' BUSINESS HAS

CONCENTRATED ON ONE THING MORE THAN ANY OTHER: MASS

CONSUMPTION. INDUSTRY HAS BEEN GREATED TO THE IDEA OF

VOLUME, AND VOLUME IS WHAT IT HAS ACHIEVED. THIS YEAR,

THOUGH, A NEW CRY IS BEING RAISED . . .

THE NEW CRY IN THE MARKET PLACE IS A QUESTION:

"WHAT PRICE VOLUME WITHOUT PROFITS?"

UNQUESTIONABLY, VOLUME IS STILL IMPORTANT IN THE
EYES OF MARKETING MEN. BUT IT SEEMS TO BE HEADED FOR

I1I6

REAPPRAISAL BY BOTH DISTRIBUTORS AND MANUFACTURERS.85

VOLUME TRADITIONALLY HAS BEEN THE YARDSTICK AGAINST WHICH

SALES EFFORT HAS BEEN MEASURED. BUT VOLUME ALONE DOES

NOT ALWAYS PRODUCE PROFITS. THE NEW APPROACH HAS BEEN To

PLAN SALES SO THAT VOLUME IS EMPHASIZED ONLY WHEN THERE

IS A REASONABLE ggANCE FOR A CORRESPONDING INCREASE IN

PROFIT RETURNED.
SIMILARLY, BUND AND CARROLL REPORT THAT "EXCLUSIVE PREOCCUPATION WITH
SALES FIGURES Is OBSOLETE,"87 AND AN EXECUTIVE OF KOPPERS COMPANY
STATES THAT THE OBJECTIVE OF HIS COMPANY "IS VOLUME AT A PROFIT, AND
NOT JUST VOLUME AT ANY PRICE."

ONE EXAMPLE OF THE INFREQUENT REFERENCE TO FIRMS OPERATING
UNDER THE MORE TRADITIONAL ORIENTATION IS PRESENTED BY CARPENTER,
WHO NOTES THAT THE CONCEPT OF RONSON'S PRESIDENT ARONSON IS:
"SALES AND PROFITS GO HAND IN HAND.‘ AND SINCE HIS FIRST OBJECTIVE
WAS TO GET THE COMPANY TO OPERATE PROFITABLY, HE TURNED HIS
ATTENTION TO INCREASING SALES AND LOWERING PRODUCTING COSTS." 9
ADVOCATES OF THE PROFIT ORIENTATION WOULD DISAGREE WITH THE

GENERALITY OF THE BASIC PREMISE STATED ABOVE; WHILE A LARGER

SALES VOLUME MAY LEAD TO HIGHER PROFITS, SUCH A CONSEQUENCE DOES

 

85"PUTTING VOLUME BEFORE PROFITS?," BUSINESS WEEK, NO. IH32

(FEBRUARY 9, I957), I29.

86LOUIS A. ALLEN, "INTEGRATED MARKETING: THE CUSTOMER
KNOWS BEST," DUN'S REVIEW AND MODERN INDUSTRY, LXXIII (JANUARY, I959), HI.

t

8(BUND AND CARROLL, 279.

88RALPH WINSLOW, "ORGANIZING A COORDINATED MARKETING STAFF
GROUP," THE MARKETING CONCEPT: ITS MEANING TO MANAGEMENT (NEW YORK:
AMERICAN MANAGEMENT ASSOCIATION, I957), HI.

 

 

89RUSS CARPENTER, "I00% SALES GAIN IN FOUR YEARS IS A GOAL
OF RONSON'S YOUNG MARKETING TEAM," PRINTERS' INK, CCLVII

(DECEMBER 28, I958), HI.

IlI7

NOT AUTOMATICALLY FOLLOW. FURTHER, THERE MAY BE ALTERNATIVES WHICH
LEAD TO EVEN GREATER PROFITABILITY; SUCH ALTERNATIVES ARE NOT
GIVEN DUE CONSIDERATION IN THE ARONSON ORIENTATION. HISTORICALLY,
CONSIDERING THE PERTINENT LEVELS OF SALES, THE MARKET CONDITIONS WITHIN
WHICH FIRMS OPERATED, ETC., THE GREATER SALES - HIGHER PROFITS
RELATIONSHIP GENERALLY MAY HAVE HELD TRUE; HOWEVER, ADVOCATES OF
THE PROFIT ORIENTATION DEEM THIS RULE OF THUMB TO BE AT LEAST
OPEN TO QUESTION, IF NOT TOTALLY UNSATISFACTORY.

SEVERAL WRITERS INDICATE THAT THE PROFIT-VERsus-VOLUME
CONTROVERSY HAS SPECIAL MEANING FOR A FIRM'S MARKETING OPERATmNS,
SINCE TRADITIONALLY THE SALES MANAGER HAS BEEN ACCUSED OF BEING THE
CHIEF ADVOCATE OF VOLUME SALES, AND SINCE RELATIVELY LITTLE
EVALUATION OF THE EFFICIENCY OF MARKETING OPERATINS HAS BEEN CONDUCTED.
ADVOCATES OF THE MARKETING CONCEPT SEE THE NEED FOR CHANGING
BOTH OF THESE CONDITIONS, AND FURTHER, THEY SEE WITHIN THE
MARKETING CONCEPT RECOGNITION OF THIS NEED AS WELL AS ESTABLISH-
MENT OF A FRAMEWORK OF THINKING,FACTS, AND PERSONAL RELATIONSHIPS
WHICH WILL IMPLEMENT THE CHANGE. PRESIDENT CORDINER OF GENERAL
ELECTRIC COMPANY HAS STATED THAT "THE MARKETING PHILOSOPHY IS

"90 CHARLES

ROOTED IN THE PROFIT CONCEPT, NOT THE VOLUME CONCEPT.
E. ST. THOMAS, OF MARKETING SERVICES, GENERAL ELECTRIC COMPANY,
NOTES THAT ONE BASIC DIFFERENCE BETWEEN THE "CLASSICAL OR SALES

APPROACH" AND THE MARKETING CONCEPT APPROACH TO BUSINESS DECISION

 

90LAWRENCE M. HUGHES, "G-E UNDER DECENTRALIZATION, REAPS
R CORD SALES AND PROFITS," SALES MANAGEMENT, LXXX (MARCH 7, I958), 35.

 

III8

MAKING IS THAT:

. . . UNDER THE MARKETING CONCEPT PROFIT BECOMES THE

PRIMARY BUSINESS OBJECTIVE. THIS IS NOT TO SAY, BY

ANY MEANS, IN SELECTED CIRCUMSTANCES THAT VOLUME MIGHT

NOT BE THE CORRECT ROAD TO TAKE TO ACHIEVE PROFITS.

HOWEVER, WHERE SUCH A CIRCUMSTANCE DOES OCCUR, PROFIT

DOES NOT BECOME OBSCURED BY VOLUME, AND VOLUME Is

SOUGHT AFTER INTELLIGENTLY AS ONLY THE MEANS OF

OBTAINING THE PROFIT OBJECTIVE.9
SIMILARLY, KNIFFIN HAS REPORTED THAT ONE FEATURE OF THE MARKETING
CONCEPT IS THAT:

. . . PROFITS BECOME THE MAJOR OBJECTIVE OF THE MARKETING

DEPARTMENT, SUPERSEDING THE SALES VOLUME OBJECTIVE . . . .

PROFITS, OF COURSE, ARE THE ULTIMATE OBJECTIVE OF ALL

DIVISIONS OF THE FIRM. HOWEVER, WHEN THE . . . CONCEPT

PREVAILS, MARKETING POLICIES ARE FORMULATED ON THE

BASIS OF CONTRIBUTIONS TO PROFITS RATHER THAN ON THE

BASIS OF SALES VOLUME ALONE.92

THUS IT BECOMES READILY APPARENT THAT PROFIT AND
PROFITABLE VOLUME, AS OPPOSED TO VOLUME ALONE, HAVE BECOME CENTERS
OF MANAGERIAL ATTENTION. HOWEVER, WHILE NOT QUESTIONING THE
SIGNIFICANCE OF THE PROFIT FACTOR, SOME DIFFERENCE OF OPINION
HAS BEEN EXPRESSED REGARDING CLASSIFICATION OF PROFIT AS A
PRIMARY OBJECTIVE OF THE FIRM. JAMES JEWELL, VICE PRESIDENT OF
MARKETING OF WESTINGHOUSE ELECTRIC CORPORATION, HAS STATED THAT
"THE REAL GOAL OF ANY BUSINESS Is PROFIT AND RETURN ON CAPITAL."93

SIMILARLY, KNIFFIN HAS REPORTED THAT UNDER THE MARKETING CONCEPT

"PROFITS BECOME THE MAJOR OBJECTIVE OF THE MARKETING DEPARTMENT,

9|ST. THOMAS, 3.
2
9 KNIFFIN, I2.
93JAMES JEWELL, "THE MARKETING CONCEPT," WHAT MODERN MARKETING

MEANS TO CORPORATE SUCCESS (NEW YORK: NATIONAL ASSOCIATION OF
MANUFACTURERS, I958), D.

I1I9

SUPERSEDING THE SALES VOLUME OBJECTIVE . . . . PROFITS, OF COURSE,
ARE THE ULTIMATE OBJECTIVE OF ALL DIVISIONS OF THE FIRM."9" ON
THE OTHER HAND, DRUCKER NOTES THAT THE VALID DEFINITION OF
BUSINESS PURPOSE IS THE CREATION OF CUSTOMERS. REGARDING THE

ROLE OF PROFIT HE SAYS THAT "PROFITABILITY IS NOT THE PURPOSE

OF BUSINESS ENTERPRISE AND BUSINESS ACTIVITY, BUT A LIMITING
FACTOR ON IT. PROFIT IS NOT THE EXPLANATION, CAUSE OR RATIONALE
OF BUSINESS BEHAVIOR AND BUSINESS DECISIONS, BUT THE TEST OF

THEIR VALIDITY."95

PROFIT PLANNING

 

IN PREVIOUS SECTIONS OF THIS CHAPTER,CURRENT THINKING
AMONG BUSINESSMEN AND ACADEMICIANS REGARDING THE DESIRABILITY OF
MARKETING PLANNING GENERALLY, AND PRODUCT PLANNING SPECIFICALLY,
HAS BEEN DESCRIBED. ALTHOUGH THE CONCEPT OF PROFIT PLANNING IS
SIMILAR IN NATURE AND INHERENTLY ASSOCIATED WITH SUCH PLANNING,
THE LATTER HAS RECEIVED SPECIAL ATTENTION IN THE LITERATURE;
THEREFORE, IT IS TREATED SEPARATELY HERE. DRUCKER HAS SUMMARIZED
THE SIGNIFICANCE OF PROFIT PLANNING, NOTING THAT "A BUSINESS
MUST BE MANAGED BY SETTING OBJECTIVES FOR IT," AND FURTHER THAT
"PROFIT IN A WELL—MANAGED BUSINESS IS NOT WHAT ONE HAPPENS TO

MAKE. IT IS WHAT ONE SETS OUT TO MAKE BECAUSE ONE HAS TO MAKE

IT."96 FURTHER, RECOGNITION OF THE RELATIVELY SHORT PROFIT-LIFE

 

9h

KNIFFIN, I2.

950RUCKER, THE PRACTICE OF . . ., 35.

 

96IBID., 60.

I50

SPAN OF PRODUCTS, AS COMPARED WITH THE LONGER PERIODS OF THE
PRODUCT'S LIFE CYCLE AND OF THE PERIOD REQUIRED TO DEVELOP NEW
PRODUCTS WHICH ARE INTENDED TO MAKE SCHEDULED PROFIT CONTRIBUTIONS,
HAS CAUSED MANAGEMENT To FOCUS ATTENTION ON PROFIT PLANNING.
OBVIOUSLY, OTHER FACTORS, SUCH AS INCREASED RATE OF PRODUCT
OBSOLESCENCE, RAPID RATE OF INTRODUCTION OF NEW PRODUCTS BY
COMPETITION As WELL AS ONE'S OWN FIRM, GROWING AND MORE DEMANDING
MARKETS, THE INCREASINGLY FIXED NATURE OF COMPANIES' INVESTMENTS,
ETC., HAVE INCREASED THE SIGNIFICANCE OF PROFIT PLANNING.

ONE OF THE MOST SIGNIFICANT RESULTS OF THE PROFIT
ORIENTATION AND RESULTING PROFIT PLANNING HAS BEEN THE ASSIGNMENT
OF PROFIT RESPONSIBILITY AT THE OPERATING DIVISION LEVEL. AS
PRESIDENT CORDINER OF THE GENERAL ELECTRIC COMPANY NOTED IN I952,
IN HIS COMPANY DECENTRALIZATION "MEANS NOT ONLY THE PHYSICAL
REGROUPINGS NECESSARY TO PROVIDE SMALLER ORGANIZATION UNITS BUT
ALSO THE DELEGATION OF AUTHORITY TO THE MANAGEMENT PERSONNEL
INVOLVED so THAT THEY MAY BE FULLY ACCOUNTABLE FOR PERFORMANCE."97

98

PROFIT RESPONSIBILITY HAS BEEN ASSIGNED SIMILARLY AT MOTOROLA, INC.,

99 I00 AND

PHILCO CORPORATION; WESTINGHOUSE ELECTRIC CORPORATION;

 

97HUGHES, "G-E SEEKS CONQUEST . . .," II9.

98

S. R. HERKES, "FOR MOTOROLA . . . DIVIDENDS FROM A COST-
CUTTING CRUSADE," SALES MANAGEMENT, LXXX (MARCH 2|, I958), 36.

99EDWARD T. THOMPSON, "THE UPHEAVAL AT PHILCO," FORTUNE,
LIX (FEBRUARY, I959), II3. " ”

00
' CARL RIESER, "THE CHANGES AT WESTINGHOUSE," FORTUNE,

LVIII (AUGUST, I958), 87.

I5I

OTHER ORGANIZATIONS. ASSIGNMENT OF PROFIT RESPONSIBILITY AND
DECENTRALIZATION OF BUSINESS ORGANIZATIONS APPEAR TO BE NOT
ONLY CAMPATIBLE, BUT MUTUALLY DEPENDENT.

EQUALLY SIGNIFICANT HAS BEEN THE RECOGNITION THAT THE
TRADITIONAL MARKETING ACTIVITIES SHOULD BE CONSIDERED AS PROFIT
PRODUCING ACTIVITIES, AND THAT THE CHIEF MARKETING EXECUTIVE
SHOULD BE HELD RESPONSIBLE FOR IMPLEMENTING THE MARKETING
PORTIONS OF THE PROFIT PLAN. FURTHER, THE MARKETING EXECUTIVE
SHOULD BE INVOLVED IN THE PREPARATION OF SUCH A PLAN. BUELL
NOTES, HOWEVER, THAT:

TOO FREQUENTLY, PROFIT PLANNING IS DONE ONLY BY THE

FINANCIAL OFFICER OF THE CHIEF EXECUTIVE OFFICER. BUT

THE MARKETING AREA OFFERS REAL OPPORTUNITIES TO INFLUENCE

COMPANY PROFITS. MARKETING STAFF PLANNING PERSONNEL

SHOULD BE TRAINED TO APPLY-THE PROFIT TEST AGAINST ALL

PROGRAMS THEY DEVELOP AND ASSESS THE EFFECTS OF MARKETING

PLANS ON CAPITAL REQUIREMENTS AND ON OPERATIONS OF

OTHER DEPARTMENTS.

AS ONE MARKETING EXECUTIVE HAS OBSERVED: "IF MARKETING IS, INDEED,
A 'PROFIT PHILOSOPHY,' THEN A MARKETING DEPARTMENT HEAD CANNOT
ESCAPE RESPONSIBILITY FOR BUDGETS AND CONTROLS."|02

THUS, ADVOCATES OF THE MARKETING CONCEPT SEE THE PROFIT
ORIENTATION AS ONE MAJOR DISTINCTION BETWEEN THE TRADITIONAL
SALES MANAGER AND THE CONTEMPORARY MARKETING MANAGER. FOR

EXAMPLE, BUND REPORTS THAT "FINANCIAL AND PROFIT RESPONSIBILITY

MAY BE ONE OF THE MOST IMPORTANT DISTINGUISHING FEATURES OF THE

 

OI
BUELL, 70.

'OZHAHN, "THE 'MARKETING CONCEPT'...," 72.

I52

NEW MARKETING MANAGER . . . . HE HAS A BROADER VIEWPOINT
AND ADDITIONAL TESTS BY WHICH HE MEASURES WHETHER WHAT HE AND
HIS PEOPLE ARE DOING Is RIGHT OR WRONG."'O3 A PUBLISHER NOTES
THAT "MORE AND MORE OUR MARKETING EXECUTIVE Is BEING HELD
RESPONSIBLE FOR THE ECONOMIC PROSPERITY OF HIS COMPANY; THE
FULL RESPONSIBILITY FOR PROFITS IS COMING TO REST ON HIS
"Ioh
SHOULDERS.
PROFIT PLANNING ACTIVITY IS DESCRIBED As LEADING To THE
CREATION OF A FORMAL DOCUMENT, THE PROFIT PLAN, WHICH WILL SERVE
AS A GUIDE TO CURRENT OPERATIONS AS WELL As A BASIS FOR LATER
EVALUATION OF PERFORMANCE. PRESIDENT WAYNE C. MARKS OF THE
GENERAL FOODS CORPORATION HAS DESCRIBED HIS COMPANY'S ANNUAL PROFIT
PLANS AS FOLLOWS:
ANNUAL PROFIT PLANS, WHICH ARE REVIEWED AND REVISED
QUARTERLY, ESTABLISH THE SPECIFIC VOLUME AND PROFIT
TARGETS BY PRODUCTS AND DIVISIONS AND ARE THE PRINCIPAL
BASIS FOR THE DAY-To-DAY OPERATION OF THE BUSINESS.
SIGNIFICANT VARIATIONS FROM THE PROFIT PLAN ARE
REPORTED TO AND DISCUSSED WITH CORPORATE MANAGEMENT
PROMPTLY.
THE ANNUAL PROFIT PLAN FORMS THE BASIS FOR
INDIVIDUAL OBJECTIVES ESTABLISHED THROUGH AGREEMENT BETWEEN
A MANAGER AND HIS SUPERIOR ON WHAT NEEDS To BE DONE
AND WHAT WILL CONSTITUTE SATISFACTORY PERFORMANCE.I05

THE PROFIT CENTER

SEVERAL WRITERS HAVE EMPHASIZED THE DESIRABILITY OF

 

'03"MARKETING - NEW HARNESS FOR MANAGEMENT," PRINTERS' INK,
CCLVII (NOVEMBER 23, I956), 2|.

IO"LAWRENCE DAMPIER, "THE NEW ROLE OF MODERN MARKETING,"
THE BUSINESS QUARTERLY, XXIV (SUMMER, I959), I03.

'05MARKS.

'53

ESTABLISHING PROFIT CENTERS THROUGHOUT THE FIRM, As ONE RATIONAL
MEANS TOWARD EFFECTIVE PROFIT CONTROL. THE DEFINITION OF A PROFIT
CENTER AND THE RATIONALE FOR CREATING SUCH A POINT OF PROFIT
MEASUREMENT ARE INCLUDED IN THE FOLLOWING STATEMENT BY DEAN:
. . . THE MODERN INTEGRATED, MULTIPLE-PRODUCT FIRM
FUNCTIONS BEST IF IT IS MADE INTO A SORT OF MINATURE
OF THE COMPETITIVE, FREE-ENTERPRISE ECONOMIC SYSTEM.
THE FIRM SHOULD BE COMPRISED OF INDEPENDENT OPERATING
UNITS THAT ACT LIKE ECONOMIC ENTITIES, FREE TD TRADE
OUTSIDE THE COMPANY AS WELL AS INSIDE. EACH SUCH
ENTITY OR PROFIT CENTER WILL, IN SEEKING TO MAXIMIZE ITS
OWN PROFITS, DO WHAT WILL ALSO MAXIMIZE THE PROFITS OF THE
ENTIRE COMPANY, JUST AS INDIVIDUAL FIRMS IN A PRIVATE-
anERPRISE SOCIETY, BY SEEKING THEIR SELFISH ADVANCEMENT,
GENERATE THE HIGH PROD CTIVITY AND WELL-BEING OF A
COMPETITIVE ECONOMY.IO
ALTHOUGH MOST ARTICLES WHICH DESCRIBE THE BENEFITS OF THE PROFIT
CENTER CONCEPT ARE DIRECTED TOWARD CREATION OF SUCH CENTERS IN
LARGE, INTEGRATED, MULTI-PRODUCT ORGANIZATION, A SMALLER
NUMBER OF ADVOCATES INDICATE THE APPLICABILITY OF THE BASIC
METHOD To THE SMALLER, SINGLE PRODUCT FIRM. SAUNDERS HAS
NOTED THAT REGARDLESS<F WHETHER THE MANAGEMENT OF A MANUFACTURING
CONCERN IS "PRODUCTION-ORIENTED" OR "MARKETING ORIENTED,"
"IT IS BETTER TO KEEP SELLING AND MANUFACTURING ACTIVITIES APART.
CERTAINLY SEPARATE ACCOUNTING SHOULD BE KEPT AND PREFERABLY
TWO ENTIRELY SEPARATE ORGANIZATIONS SHOULD BE FORMED."'07 SUCH

A DIVISION OF COSTS IS DEEMED TO PROVIDE TOP MANAGEMENT WITH AN

EFFECTIVE MEASUREMENT OF THE PROFIT PERFORMANCE OF LOWER

 

IO6JOEL DEAN, "DECENTRALIZATION AND INTRACOMPANY PRICING,"
HARVARD BUSINESS REVIEW, XXXIII (JULY-AUGUST, I955), 67-68.

 

IO7N.F.T. SAUNDERS, FACTORY ORGANIZATION AND MANAGEMENT
(LONDON: SIR ISAAC PITMAN AND SONS, I952), I.

 

I5II

LEVEL EXECUTIVES. SHILLINGLAW INDICATES, HOWEVER, THAT THE NEED
AND USEFULNESS OF THE PROFIT CENTER AS SUCH A MEASURE OF PROFIT
PERFORMANCE IS REMOVED IN AUTOCRATIC BUSINESS ORGANIZATIONS:
THE NEED FOR MEASURING THE PROFIT PERFORMANCE OF
SUBORDINATE EXECUTIVES ARISES WHEREVER MANAGEMENT
RESPONSIBILITY IS DECENTRALIZED - THAT Is, DELEGATED
TO SEMI-AUTONOMOUS PROFIT CENTERS. IT DOES NOT EXIST
IN A MONOLITHIC ORGANIZATION WHERE MAJOR ECONOMIC
DECISIONS ARE MADE ONLY AT THE TOP. AUTOCRACY REMOVES
THE UNIT MANAGER FROM DIRECT CONTROLBOVER MOST OF THE
FACTORS AND DETERMINE PROFIT . . .'0
NOTING THAT TRANSFER PRICES ARE NECESSARY FOR PRACTICALLY
ALL LARGE COMPANIES, DEAN SUGGESTS THAT THE NEED EXISTS FOR AN
IMPROVED SYSTEM OF TRANSFER PRICES. A SYSTEM AGREEABLE TO DEAN
WOULD FEATURE: "(A) PROFIT CENTERS WITH OPERATIONAL INDEPENDENCE,
ACCESS TO SOURCES AND MARKETS, SEPARABLE COSTS AND REVENUES,
AND PROFIT INTENT; AND (B) COMPETITIVE PRICING AMONG THESE
CENTERS."I09 A TRANSFER Is DEFINED AS THE "MOVEMENT OF PRODUCTS
BETWEEN OPERATING UNITS WITHIN THE LARGEST POLICY-MAKING UNIT

REGARDLESS OF CORPORATE ENTITITESS' TRANSFER PRICES ARE DEFINED

AS "THE NET VALUE PER UNIT THAT RECORDS THE TRANSACTION FOR THE

"I'O SHILLINGLAW OBSERVES THAT

PURPOSES OF OPERATING STATEMENTS.
THE INTERNAL PROFIT REPORTS NORMALLY ASSOCIATED WITH PROFIT

CENTER OPERATIONS WITHIN A COMPANY SERVE MANY USEFUL PURPOSES,

 

I08
GORDON SHILLINGLAW, "GUIDES TO INTERNAL PROFIT
MEASUREMENT," HARVARD BUSINESS REVIEW, XXXV (MARCH-APRIL, I957), 83.

IO9DEAN, 65.

"°Ie.o., 66.

'55

THE MOST IMPORTANT OF WHICH ARE:

I. As A GUIDE TO CURRENT OPERATING OR "TACTICAL"
DECISIONS.

2. AS A BASIS FOR EVALUATING MANAGERIAL PERFORMANCE.

3. AS A BASIS FOR PROFIT TREND AND PROFIT VARIATION
ANALYSIS.

H. AS A STARTING POINT FOR LONG-RANGE INVESTMENT
DECISIONS."'

ACCORDING TO DEAN, A PROFIT CENTER PLAN AS DESCRIBED ABOVE, WHICH
WOULD PERMIT THE SALES ORGANIZATION TO CONTROL FACTORS THAT
DETERMINE ITS PROFITS, ASSIGN PROFIT RESPONSIBILITY To THE MARKETING
AREA, AND FACILITATE MEASUREMENT OF ITS PROFIT PERFORMANCE,

WOULD HAVE THE GREAT ADVANTAGE OF ELIMINATING THE RATHER GENERAL
TOP-MANAGEMENT MISTRUST OF THE MARKETING ORGANIZATION. THIS
MISTRUST STEMS FROM "THE PRACTICES OF KIDDING THE SALES ORGANIZA-
TION ABOUT COSTS, PUSHING PRODUCTS DOWN ITS THROAT AND RIGGING
TRANSFER PRICES TO MAKE MARKETING OPERATIONS LOOK LIKE LOSERS."H2
THUS THE ESTABLISHMENT OF PROFIT CENTERS WITHIN A FIRM Is DEEMED
NOT ONLY TO INCREASE THE OVERALL EFFICIENCY OF THE FIRM, BUT
FURTHER TO ENHANCE THE PRESTIGE OF THE MARKETING OPERATION BY
ESTABLISHING MEASURES WITH WHICH ITS PROFIT CONTRIBUTION CAN

BE EVALUATED.

ALTHOUGH THE PROFIT CENTER SYSTEMS OF SEVERAL COMPANIES

HAVE BEEN DESCRIBED IN THE LITERATURE, LITTLE DIFFERENCE APPEARS

 

l|ISHILLINGLAW, 82-9h.

"2DEAN, 7h.

I56

TO EXIST AMONG THEM. A FEW COMMENTS TAKEN FROM THE LITERATURE
ARE PRESENTED BELOW AS TYPICAL OF THESE DESCRIPTIONS. UNDER THE
GENERAL ELECTRIC COMPANY PROGRAM, "ALL G.E. DEPARTMENTS TREAT
EACH OTHER AS INDEPENDENT COMPANIES WHEN IT COMES TO BUYING AND
SELLING FROM ONE ANOTHER. THE PRICES THEY CHARGE ARE THE FULL
MARKET PRICES - INCLUDING THE REGULAR PROFIT - AND THE SALE IS
CHALKED UP LIKE ANY TO AN OUTSIDE BUYER.""3 IT Is NOTED THAT
WHILE THE COMPANY LIKES TO SEE ITS OWN PRODUCTS USED IN DEPARTMENTAL
OPERATIONS, THE SEVERAL DEPARTMENTS ARE "MORE OR LESS INDEPENDENT."
FURTHER, SINCE EACH DEPARTMENT HAS A PROFIT RESPONSIBILITY, IT
MAY BUY FROM A SOURCE OUTSIDE THE COMPANY: "IT'S ONLY LOGICAL THAT
THE INDIVIDUAL DEPARTMENTS SHOULD HAVE THE RIGHT TO MAKE THE BEST
DEALS POSSIBLE FOR THEMSELVES WHEN IT COMES TO BUYING THE MATERIALS
AND COMPONENTS THEY NEED FOR MAKING THEIR PRODUCTS - EVEN THOUGH
THIS MIGHT LEAD THEM OUTSIDE THE COMPANY FOLD."")4

AT PHILCO CORPORATION WELL DEFINED PROFIT RESPONSIBILITIES
ARE ASSIGNED To THE MARKETING AND OPERATING, I.E. DESIGN, ENGINEERING
AND MANUFACTURING, AREAS. THE PHILCO PROGRAM IS DESCRIBED, AS
FOLLOW3:

OPERATIONS MUST SET PRICES ON THE GOODS IT "SELLS"

TO MARKETING THAT WILL ALLOW IT TO MAKE A "REASONABLE"

RETURN ON INVESTMENT; MARKETING, WHICH IN EFFECT OPERATES

As A SUPER DISTRIBUTOR, IS EXPECTED TO ORDER THE RIGHT

NUMBER OF THE RIGHT MODELS SO THAT IT CAN EARN A MAXIMUM
PROFIT. MARKETING ESTIMATES ITS VOLUME A YEAR IN ADVANCE,

 

|'3"COMPETITION WITHIN THE FAMILY," BUSINESS WEEK, NO. I386

(MARCH 24, I956), 43. I

 

IBID.

 

'57

AND OPERATIONS MAKES ITS PLANS ACCORDINGLY. ONCE THESE
PRICES ARE ESTABLISHED, THEY ARE SELDOM CHANGED. THIS
MAKES IT EASY TO TELL WHICH DIVISION IS TURNING A GOOD
PROFIT SHOWING, WHICH IS NOT. IF MARKETING DECIDES A
MODEL CHANGE IS NECESSARY DURING THE YEAR, OR HAS TO
CANCEL PART OF ITS ORDER, THE EXTRA COSTS INVOLVED ARE
CHARGED TO MARKETING ONLY. IF MARKETING ACHIEVES HIGHER-THAN-
EXPECTED SALES, IT GETS CREDIT FOR ANY LOWERED UNIT
PRODUCTION COSTS. CONVERSELY, IF OPERATIONS CAN PRODUCE
AT LOWER COST THAN ORIGINALLY ANTICIPATED, IT GETS
CREDIT FOR THE EXTRA PROFIT."

THE PROFIT CENTER SYSTEM HAS BEEN ADVOCATED BY PRESIDENT
MARK A. CRESAP OF WESTINGHOUSE ELECTRIC CORPORATION, WHO DEFINES
BASIC PROFIT CENTERS AS "THE LOWEST ELEMENT OF ORGANIZATION WHICH
HAS A FULLPTIME MANAGER, RESPONSIBLE FOR PROFIT, IN SUBSTANTIAL

CONTROL OF HIS SALES, ENGINEERING, AND MANUFACTURING . . . .

.IIII6

THE IDEAL IS THE PRODUCT MANAGER AS THE INDEPENDENT BUSINESSMAN. .
THE FOLLOWING EXAMPLE DESCRIBES THE WESTINGHOUSE PROFIT CENTER
SYSTEM OPERATION:

THE LAMP DIVISION MARKETING DEPARTMENT AIDS EACH
OF THE FIVE PROFIT CENTERS IN EVOLVING ITS INDIVIDUAL
PRODUCTION, SALES, AND PROFIT PROCEDURES, AND QUOTAS.
CONSUMER PRODUCTS GROUP HEADQUARTERS IN PITTSBURGH
OVERSEES THE DIVISION'S WORK. BUT THE BASIC RESPONSI-
BILITY AND PLANNING RESTS IN THE PROFIT CENTER.
‘ IN EFFECT, THE SIXTY-SIX PROFIT CENTERS ARE SEPARATE
BUSINESSES, GUIDED AND SUPPORTED BY THE CORPORATE HIGH
COMMAND, WHICH FUNCTIONS AS A SORT OF HOLDING COMPANY.
IN THAT CORPORATE SET-UP, THE MARKETING DEPARTMENT HAS
SERVED MORE AND MORE AS THE MEDIUM FOR COORDINATING
EFFICIENTLY THE OPERATIONS THAT PRODUCE PROFITS.‘

 

IISTHOMPSON, II6.

H6RIESER, 90.

'l7"NEW MARKETING CONCEPT AT WESTINGHOUSE: DECENTRALIZE
AND STUDY THE CONSUMER," PRINTERS' INK, CCLXII (JANUARY 2H, I958),

3'I.

 

I58

AT CHRYSLER CORPORATION, HOWEVER, THE PROFIT CENTER SYSTEM

HAS BEEN LESS FAVORABLY RECEIVED. IN I955 PRINTERS' INK REPORTED:

 

"DIVISION PRESIDENTS WERE NOTIFIED THAT AS OF JANUARY I, I95H,
EVERY TRANSFER OF MATERIAL FROM OTHER DIVISIONS WOULD BE ON A
MARKED-UP PRICE BASIS. NOW EVERY DIVISION HAS A RIGHT TO MAKE
"II8

A PROFIT ON WHAT IT SELLS. AT THAT TIME A CHRYSLER VICE
PRESIDENT NOTED THAT "THERE HAVE BEEN SOME DOG FIGHTS, AND WE
EXPECT MORE . . . SOMETIMES BUSINESS HAS BEEN TAKEN AWAY FROM
DIVISIONS AND GIVEN TO OUTSIDE CONCERNS."|I9 IN I956 BUSINESS
WEEK REPORTED THAT PRIOR To THE THEN REcENT DECENTRALIZATION OF
CHRYSLER CORPORATION, "THE DIVISION PRESIDENTS LITERALLY DID
NOT KNOW WHAT IT COST THEM TO MAKE A CAR BECAUSE, AMONG OTHER
THINGS, THEY NEVER KNEW WHAT THEIR DIVISION WAS BEING CHARGED
FOR COMPANY-PRODUCED PARTS. ALL SUCH FIGURES WERE A SECRET

"'2
AMONG A TIGHT LITTLE GROUP AT THE TOP OF THE CORPORATION.
INAUGURATION OF THE PROFIT CENTER SYSTEM WAS AGREED UPON AS AN
APPROPRIATE CORRECTIVE ACTION. HOWEVER, IN I958, NOTING THAT
"CHRYSLER CAN NO LONGER SUPPORT A GENERAL MOTORs-STYLE ORGANIZA-

TION ON A STUDEBAKER-PACKARD-STYLE LOSS," BUSINESS WEEK REPORTED

 

THAT THE COMPANY WAS DISMANTLING THE DIVISIONAL PROFIT CENTER

STRUCTURE AS PART OF A MOVE TO REDUCE ADMINISTRATIVE COSTS.|2I

 

I I8"

CHRYSLER IN TRANSITION," 26.

I'9IBID.

 

'20"CHRYSLER RESTYLES ITS EXECUTIVE STRUCTURE," BUSINESS
WEEK, NO. IHI8 (NOVEMBER 3, I956), 9h.

'2'"CHRYSLER FACES UP TO ITS TROUBLES," BUSINESS WEEK,

NO. Ih96 (MAY 3, I958), 29.

'59

SEVERAL WRITERS ACKNOWLEDGE INSTANCES IN WHICH PROFIT
CENTER SYSTEMS HAVE NOT MADE FOR MORE EFFICIENT, PROFITABLE
OPERATIONS. GENERALLY, HOWEVER, IT IS NOTED THAT THE FAULT WAS
IN THE IMPLEMENTATION OF THE SYSTEM, NOT INHERENT IN THE SYSTEM
ITSELF. RIESER REPORTS ONE SUCH CASE INVOLVING WESTINGHOUSE
ELECTRIC CORPORATION:

ON ONE OCCASION TIIE CORPORATE TOP BRASS BOUGHT A

TELEVISION SHOW. APPLIANCE DEPARTMENTS WERE ASSIGNED A

SHARE OF THE COST WHETHER THE MANAGERS FELT IT WAS THE

RIGHT ADVERTISING MEDIUM FOR THEIR PRODUCTS OR NOT.

ONE MANAGER WHO DIDN'T THINK SO WAS ASSIGNED ONE MILLION

DOLLARS OF THE SHOW'S COST AND HAD To CUT HIS PLANNED

ADVERTISING BUDGET To PAY FOR IT. WHEN HE DEMURRED HE 22

WAS ADMONISHED BECAUSE HE DID NOT "THINK CORPORATELY."l
RECOGNIZING THAT THE PROFIT CENTER SYSTEM MAY FAIL DUE TO
UNREALISTIC CONDITIONS IMPOSED UPON MANAGEMENT AT THE PROFIT
CENTER LEVEL BY HIGHER AUTHORITY, SOME PREREQUISITES FOR EFFECTIVE
FUNCTIONING HAVE BEEN SET FORTH IN THE LITERATURE. SHILLINGLAW
STATES THAT THE PROFIT CONCEPT MUST MEET TWO TESTS: "(I) THE
DIVISION MANAGER MUST BE ABLE To INCREASE HIS REPORTED PROFIT
ONLY BY TAKING ACTIONS THAT WILL INCREASE TOTAL COMPANY PROFITS,
AND (2) THE COSTS AND REVENUES OF ONE SEGMENT OF THE COMPANY MUST
BE INDEPENDENT OF POLICY DECISIONS AND PERFORMANCE ACHIEVEMENT
ELSEWHERE IN THE COMPANY."'23 DEAN REPORTS THAT THE FOLLOWING
FOUR CHARACTERISTICS DISTINGUISH AUTONOMOUS UNITS FROM THE MORE

TRADITIONAL SERVICE FUNCTIONS:

I. OPERATIONAL INDEPENDENCE, I.E. THE MANAGER OF THE PROFIT

 

'22RIESER, Ih2.

'23SHILLINGLAW, 93.

I60

CENTER OPERATION MUST BE FREE TO DETERMINE PRODUCTION VOLUME,
PRODUCT MIX, METHODS OF OPERATION, ETC., SUBJECT ONLY TO BROAD
POLICY DISCRETION OF TOP MANAGEMENT.

2. ACCESS TO SOURCES AND MARKETS, I.E. THE MANAGER
MUST BE FREE TO BUY AND SELL INSIDE OR OUTSIDE THE COMPANY; SUCH
MARKETS OR SOURCES MUST BE IN EXISTENCE OR CAPABLE OF CREATION.

II

3. SEPARABLE COSTS AND REVENUEs; AS NOTED BY DEAN, A

PROFIT CENTER MUST BE ABLE TO SPLIT OFF ITS COSTS AND FIND AN

ECONOMICALLY REALISTIC PRICE OF THE END PRODUCTs; OTHERWISE

MEASUREMENT OF ITS PROFIT PERFORMANCE IS IMPOSSIBLE."'2"
A. MANAGEMENT INTENT, I.E. DETERMINATION OF THE GOAL

OF AN OPERATION MUST BE MADE, E.G. THE IMMEDIATE GOAL OF THE PUBLIC

RELATIONS DEPARTMENT OPERATION IS NOT TO GENERATE PROFITS

DIRECTLY.

THUS BEFORE A PROFIT CENTER SYSTEM CAN FUNCTION PROPERLY, A

MANAGEMENT AT THE PROFIT CENTER OPERATING LEVEL MUST BE

PRIMARILY RESPONSIBLE FOR ITS OVERALL ECONOMIC PERFORMANCE.

PROFIT CONTROL

 

PROFIT CONTROL GENERALLY IS DISCUSSED IN TERMS OF THE
PROFIT PLAN, THE RIGHTS OF MANAGEMENT AT THE PROFIT CENTER LEVEL
OF OPERATION TO ACT, AND APPLICATION OF THE STANDARD OF RETURN
ON INVESTMENT IN THE EVALUATION OF PROFIT PERFORMANCE. AS THE
FIRST TWO ELEMENTS HAVE BEEN DISCUSSED PREVIOUSLY IN THIS SECTION,

ATTENTION HERE IS FOCUSED ON THE MEASURE, RETURN ON INVESTMENT.

 

l2"DEAN, 67.

I6I

HEYEL REPORTS THAT "DURING THE PAST DECADE, MANY COMPANIES WATCHED
THEIR PERCENTAGE OF PROFIT GO DOWN AS SALES INCREASED . . . . THIS
HAS CAUSED MANY A SALES MANAGER TO BE NUDGED MORE AND MORE ABOUT
INVENTORIES AS FINANCIAL AND TOP MANAGEMENT BECAME MORE AND MORE
WEDDED To THE 'RETURN ON ASSET' MEASURE OF THE SUCCESS OF THE
FIRM."'25 SEARES NOTES THAT "RETURN ON INVESTMENT IS THE CRITERION
USED TO GAUGE THE DESIRABILITY OF ALTERNATIVE PROGRAMS . . .

THIS EMPHASIS . . . IS A SWITCH FROM THE ATTITUDE OF THE OLD LINE
SALES MANAGER WHO USUALLY WAS SATISIFIED TO CONCENTRATE HIS
ATTENTION ON TOTAL SALES VOLUME."'26 THE LITERATURE INDICATES THAT
THE SHIFT FROM THE TRADITIONAL SALES VOLUME ORIENTATION To A

MORE PLANNED PROFIT ORIENTATION IS WELL ADVANCED IN AMERICAN BUSINESS.
HOWEVER, SOME ADVOCATES OF THE MARKETING CONCEPT CALL FOR FURTHER
TRANSITION: "PROFITS MUST BE RELATED To CAPITAL INVESTMENTS

IN THE MARKETING AREA . . . . FINALLY THE SENIOR MEMBERS OF THE
MARKETING-MANAGEMENT TEAM MUST BE PREPARED TO APPRAISE AND EVALUATE
RETURNS ON INVESTED CAPITAL IN THE MARKETING DEPARTMENT IN THE
LIGHT OF THOSE EARNED IN OTHER PARTS OF THE BUSINESS."'27 LITTLE
REFERENCE IS MADE TO MANAGEMENT'S PREOCCUPATION WITH MARKET SHARE

AS A MEASURE OF SUCCESS OF THE MARKETING OPERATION, ALTHOUGH

MCKITTERICK SUGGESTS THAT "WITH MANY SMALL COMPANIES TODAY OPERATING

 

'25CARL HEYEL, "SALES CHIEF'S PART IN WAREHOUSING," SALES
MANAGEMENT, LXXXI (OCTOBER I7, I958), 73. "'"

 

'26SEARES, 6.

'ZYJOHN G. MCLEAN, "THE NEW RESPONSIBILITIES OF MARKETING
MANAGEMENT," THE JOURNAL OF MARKETING, XXIII (JULY, I958), 3.

TA;

I62

IN CONDITIONS OF OLIGOPOLY, IT IS SMALL WONDER THAT ENLARGEMENT OF
THE MARKET AND COMPETITIVE SHARE HELD IN THAT MARKET HAVE BECOME
MATTERS OF MANAGEMENT CONCERN AT LEAST EQUAL IF NOT PRE-REQUISITE
TO PROFIT."I

SUMMARY

THE FOLLOWING COMMENTS SUMMARIZE THE PRINCIPAL FINDINGS
OF THIS REVIEW OF THAT PORTION OF THE MARKETING CONCEPT LITERATURE
CONCERNED WITH PROFIT PLANNING AND CONTROL:

I) MOST WRITERS INDICATE THAT A SIGNIFICANT CHANGE IN
MARKETING OPERATION ORIENTATION HAS COME ABOUT SINCE WORLD WAR II.
TYPICALLY THE TRADITIONAL SALES MANAGER IS DESCRIBED AS HAVING
BEEN CONCERNED PRIMARILY WITH IMMEDIATE OPERATIONS AND SALES
VOLUME, WHEREAS THE CONTEMPORARY MARKETING MANAGER IS DESCRIBED
AS BEING CONCERNED WITH FUTURE PLANNING AND THE PROFIT CONTRIBUTIONS
OF VARIOUS SALES LEVELS.

2) IN A GROWING NUMBER OF FIRMS THE PRIMARY MEASURE USED
IN EVALUATION OF PROFIT PERFORMANCE, IN THE MARKETING OPERATION AS
WELL As IN MANUFACTURING AND OTHER NON-MARKETING OPERATIONS, Is
RETURN ON INVESTMENT. IT IS PREDICTED THAT POLICY AND PROGRAM
DECISIONS INCREASINGLY WILL BE DETERMINED ACCORDING TO HOW WELL
THEY STAND THE TEST OF RETURN ON INVESTMENT.

3) THE PROFIT SQUEEZE OCCURRING SINCE I9h5 HAS LED

MANAGEMENTS OF MANY FIRMS TO A RECOGNITION OF THE NEED FOR PROFIT

 

I28

McKITTERICK, 77.

I63

PLANNING AND FURTHER, TO KNOWLEDGE OF PROCEDURES WHEREBY SUCH
PLANNING MAY BE IMPLEMENTED INTO THE COMPANY OPERATION. A MAJOR
OPERATING AND EVALUATION DOCUMENT TO ORIGINATE FROM THIS EFFORT
IS THE FORMAL PROFIT PLAN, WHICH IS USUALLY A COMPONENT OF THE
OVERALL WRITTEN MARKETING PLAN, DESCRIBED IN A PREVIOUS SECTION.

A) THE DESIRE FOR GREATER CONTROL OF PROFITS IN THE MARKETING
OPERATION HAS LED TO THE ASSIGNMENT OF PROFIT RESPONSIBILITY AT
VARIOUS LEVELS AND WITHIN VARIOUS FUNCTIONAL AREAS OF THE BUSINESS
ORGANIZATION. THE FORMAL PROFIT PLAN AND DEFINED MEASURES OF
PROFIT PERFORMANCE EVALUATION ALSO ARE CONTRIBUTING TO PROFIT
CONTROL.

5) TO FACILITATE THE EFFORTS OF A NUMBER OF COMPANIES
TOWARD BOTH INDIVIDUAL DEPARTMENT (OR DIVISION) AND OVERALL COMPANY
EFFICIENCY AND PROFITABILITY, THE PROFIT CENTER SYSTEM HAS COME
INTO WIDE USE. THE PROFIT CENTER, USUALLY A DEPARTMENT OR
DIVISION OF A COMPANY OPERATES PRIMARILY AS AN AUTONOMOUS UNIT,
IDEALLY LIMITED ONLY BY OVERALL CORPORATE GOALS AND WELFARE.

THE NEED FOR THE PROFIT CENTER SYSTEM IS ESPECIALLY GREAT IN
DECENTRALIZED ORGANIZATIONS.

6) WHILE THIS REVIEW INDICATES CONCERN ON THE PART OF
BUSINESSMEN REGARDING PROFIT PLANNING AND CONTROL, IT MUST BE
NOTED THAT MOST ATTENTION IN THE BUSINESS PUBLICATIONS HAS BEEN
DEVOTED TO THE VOLUME-PROFIT ORIENTATION DISTINCTION AND TO THE
NEED FOR PROFIT PLANNING, AS ILLUSTRATED BY THE SIGNIFICANCE
OF THE PROFIT CONTRIBUTION OF NEW PRODUCTS, ETC. FAR LESS ATTENTION

HAS BEEN GIVEN TO DESCRIPTIONS AND EVALUATIONS OF PROFIT CENTER

I61I

SYSTEMS, AND EVEN THIS SMALL EMPHASIS IS RATHER FAR REMOVED FROM
THE BULK, OR CORE, OF THE MARKETING CONCEPT LITERATURE. IN ANY
EVENT ONE MAY ASSUME THAT MUCH OF THE CONTENT IS CONCERNED WITH_
GOALS WHICH MAY BE SOUGHT AFTER RATHER THAN WITH THAT WHICH ALREADY

HAS BEEN ATTAINED.

MARKETING RESEARCH

INTRODUCTION

 

AN ANALYSIS AND EVALUATION OF MARKETING CONCEPT LITERATURE
CONTENT CONCERNED WITH MARKETING RESEARCH Is COMPLICATED BY THE
RELATIONSHIP OF THE MARKETING RESEARCH FUNCTION TO SOME OF THE
AREAS PREVIOUSLY DISCUSSED: CONSUMER ORIENTATION, MARKETING
PLANNING, PRODUCT PLANNING AND DEVELOPMENT, AND PROFIT PLANNING AND
CONTROL. WHILE A NUMBER OF WRITERS AND SPEAKERS ACKNOWLEDGE THE
RELATIONSHIP OF MARKETING RESEARCH T0 EFFECTIVE IMPLEMENTATION
OF EACH OF THE AREAS NAMED ABOVE, IT IS SIGNIFICANT THAT MARKETING
RESEARCH, AS COMPARED WITH ORGANIZATIONAL STRUCTURE, PRODUCT PLANNING,
ETC.,HAS BEEN RELATED DIRECTLY AND EXPLICITLY TO THE MARKETING
CONCEPT BY A VERY SMALL NUMBER OF WRITERS AND SPEAKERS.
RATHER, REFERENCES TO THE MARKETING RESEARCH FUNCTION ARE IMPLICIT
IN MANY OF THEIR STATEMENTS. THE FOLLOWING OBSERVATIONS ARE
BASED UPON THAT PORTION OF THE LITERATURE INVOLVING COMMENT
REGARDING BUSINESSMEN'S EVALUATION OF THE NEED FOR, AND GROWTH OF,
MARKETING RESEARCH ACTIVITY AND THE RELATIONSHIP OF THIS ACTIVITY
TO IMPLEMENTATION OF THE MARKETING CONCEPT.

STATUS OF MARKETING RESEARCH

 

IT IS APPARENT THAT THE RAPID RATE OF INTRODUCTION OF NEW

I65

PRODUCTS, DEVELOPMENT OF NEW MATERIALS FROM WHICH PRODUCTS MAY
BE MANUFACTURED, THE INCREASINGLY FIXED NATURE OF FIRMS' INVEST‘

MENTS IN MANUFACTURING AND MARKETING "TOOLS,"

ETC., HAVE LEAD TO
A RECOGNITION OF THE IMPORTANCE TO INDUSTRY OF RESEARCH GENERALLY.
EVIDENCE OF THIS RECOGNITION MAY BE STATED IN TERMS OF PERCENT
OF SALES "REINVESTED" IN RESEARCH, THE NUMBER OF PERSONS INVOLVED
IN SUCH ACTIVITY, DEPENDENCE OF MANAGEMENT UPON THIS AREA WHEN
SIGNIFICANT DECISIONS ARE TO BE MADE, ETC.
FOR EXAMPLE, IN DESCRIBING THE SIGNIFICANCE OF RESEARCH AT
MEAD JOHNSON AND COMPANY, TOLK NOTES:
RESEARCH, WHICH IS THE BREAD AND BUTTER OF ALL
SUCCESSFUL COMPANIES IN THE FAST CHANGING PHARMACENTICAL
FIELD, IS BEING EXPANDED AT A FAST CLIP. FLOOR SPACE
OF THE RESEARCH LABORATORIES WAS INCREASED I50 PER CENT
IN THE LAST THREE YEARS. RESEARCH PERSONNEL WAS INCREASED
200 PER CENT IN THE SAME PERIOD. NOW FIFTY-FOUR COLLEGES
AND UNIVERSITIES ARE REPRESENTED IN A PROFESSIONAL STAFF
WHICH INCLUDES SCIENTIFIC SPECIALISTS IN ALL PHASES OF
PHARMACEUTICAL AND NUTRITIONAL RESEARCH.'2
IN I958 PRESIDENT RALPH J. CORDINER OF GENERAL ELECTRIC
COMPANY NOTED THAT HIS COMPANY WAS COMMITTED TO CARRYING ON A
GROWING AND DIVERSIFIED, PROFITABLE BUSINEss; THAT GENERAL ELECTRIC
COMPANY SPENDS MORE THAN THREE TIMES As MUCH OF ITS SALES REVENUE
ON RESEARCH AND DEVELOPMENT AS INDUSTRY IN GENERAL; AND THAT IN
THA PAST TWELVE YEARS THE FIRM HAD INVESTED ONE AND A HALF BILLION

DOLLARS IN NEW PLANT AND EQUIPMENT, FAR MORE THAN IN ALL THE

0
PREVIOUS YEARS COMBINED.l3

 

29BERNARD TOLK, "NEW TEAM PACES MARKET EXPANSION AT
MEAD JOHNSON AND COMPANY;'PRINTERS' INK, CCLI (JUNE I7, I955), 23.

 

'3OHUGHES, "e-E, UNDER DECENTRALIZATION . . .," 3h.

I66

THE LITERATURE INDICATES THAT INTEREST AND ACTIVITY IN
THE AREA OF MARKETING RESEARCH HAS DEVELOPED AT AS FAST OR EVEN
A FASTER PACE THAN IN RESEARCH AND DEVELOPMENT IN RECENT YEARS.
DRUCKER NOTES THAT MARKETING RESEARCH "IS THE AREA OF MARKETING
THAT HAS GROWN THE FASTEST IN AMERICAN BUSINESS DURING THE PAST
TWENTY-FIVE YEARS."I3' MCKITTERICK CREDITS GOVERNMENTAL
SPONSORSHIP OF RESEARCH DURING THE WAR THREAT OF I9HO WITH TEACHING
INDUSTRY THE VALUE OF RESEARCH.'32

MANAGEMENT'S RECOGNITION OF THE NEED FOR, AND VALUE OF,
MARKETING RESEARCH IS INDICATED BY THE FOLLOWING COMMENTS.
J. H. LETSCHE, VICE-PRESIDENT OF SALES AND ADVERTISING OF H. J.
HEINZ COMPANY, REFERRING TO THE HEINZ OPERATION, NOTES THAT A
NEW SALES REGIME AT PITTSBURGH IS "ORGANIZING TO WIN MORE MASS
MARKETS . . . . AT THE SAME TIME, WE'RE OPERATING LESS ON GUESS
AND HUNCH AND TRADITION AND MORE ON FACTS."I33 BRUCE M. JEFFRIS,
PRESIDENT OF PARKER PEN COMPANY, EXPLAINS HIS COMPANY'S INCREASED
NEED FOR THE FORMAL ORGANIZATION AND OPERATION OF THE MARKETING
RESEARCH FUNCTION IN TERMS OF INCREASING COMPLEXITY AND LONG-RANGE
PLANNING REQUIREMENTS OF BUSINESS, AS FOLLows:

NO ONE OF US HAS A CRYSTAL BALL. THERE WAS A
TIME WHEN WE COULD REASON OUT WHAT TO DO - AND HAVE A GOOD
CHANCE OF SUCCEEDING. NOW WE HAVE TO BE SURE WHAT WE

ARE DOING EVERY STEP OF THE WAY.
FOR MARKETING ANALYSIS AND SALES FORECASTING NOWADAYS,

 

|3IDRUCKER, "SELLING WILL BECOME . . .," 79-
I32MCKITTERICK, 7h.

'33LAWRENCE M. HUGHES, "HEINZ MOBILIZES FOR MASS MARKETS,"
SALES MANAGEMENT, LXV (DECEMBER I, I950), 38.

 

WE DRAW ON SCORES OF SERVICES AND STUDIES. AND WE USE
THE MOST RELfiABLE MARKET TESTING AND OPINION PROCEDURES
AVAILABLE.'3

PRINTERS' INK REPORTS THAT MARKETING RESEARCH FIRST ASSUMED

 

SIGNIFICANCE AT CAMPBELL SOUP COMPANY DURING I939-I9HI, BUT THAT
ITS ACTIVITY CAME TO A STANDSTILL DURING THE WAR YEARS. BY
I9H8 MARKETING RESEARCH WAS AGAIN AN ACTIVE AREA, AND IN I955

PRINTERS' INK REPORTED: "THIS DEPARTMENT NOW NUMBERS NINE PEOPLE,

 

IS GROWING, REACHES OUT THROUGH THE RESEARCH DEPARTMENTS OF ITS
ADVERTISING AGENCIES AND THROUGH OUTSIDE RESEARCH SERVICES TO
TAP VAST AND VARIED SOURCES OF FACT."'35

A FEW WRITERS AND SPEAKERS HAVE EMPHASIZED THE BASIC
ROLE OF THE MARKETING RESEARCH FUNCTION AS A VITAL COMPONENT OF
IMPLEMENTATION OF THE MARKETING CONCEPT. WENDELL R. SMITH,
FORMER PRESIDENT OF THE AMERICAN MARKETING ASSOCIATION NOTES
THAT A NEW "MARKETING" IS EMERGING "AS THE LOGICAL OUTGROWTH
OF THE ACCEPTANCE OF MARKETING RESEARCH AND DEVELOPMENT AS
THE PARTNER OF THE TECHNICAL RESEARCH AND DEVELOPMENT THAT IS

"I36

THE PRIDE, AND NOT THE DESPAIR, OF OUR TIMES. KNIFFIN REPORTS
THAT "THE TREND TO CONSUMER-ORIENTED THINKING PLACES A PRIMARY
EMPHASIS ON A GROWING MARKETING RESEARCH FUNCTION. FACTS ARE

REQUIRED FOR MARKETING PLANNING AND DECISION MAKING, TO ESTABLISH

 

'3""PARKER PEN - A CLOSE LOOK AT A MARKETING STORM CENTER,"
PRINTERS' INK, CCLII (SEPTEMBER 9, I955), 33.

 

'35"THE STORY OF CAMPBELL SOUP, PRINTERS' INK, CCL

(FEBRUARY I8, I955), uh.

 

|36SMITH, "THE ROLE OF PLANNING . . .," 57.

I68

LONG RANGE GOALS AND REDUCE THE RANGE OF UNCERTAINTY ON DECISIONS

INVOLVING CUSTOMERS."'37 SALES MANAGEMENT REPORTS THAT "CUSTOMER

 

ORIENTATION WILL DEMAND A GREAT INCREASE IN MARKET RESEARCH TO
PROVIDE CONTINUING READINGS OF WHAT THE CUSTOMER NEEDS AND WANTS."'38
BUND AND CARROLL REPORT THAT "RESEARCH IS THE FUNCTION MOVING
FASTEST TOWARD THE NEW AND EXPANDED CONCEPT OF MARKETING . . . .
MOST INDIVIDUALS HEADING THE RESEARCH FUNCTION SEEM SLATED FOR
GREATER RESPONSIBILITY."'39 PRESIDENT M. R. BISSELL OF BISSELL, INC.,
NOTES: "THE WHOLE NEW CONCEPT OF OUR MARKETING Is BASED ON
RESEARCH."I"O

AMONG THE FEW WRITERS WHO RECOGNIZE THAT MARKETING RESEARCH
Is ESSENTIAL TO IMPLEMENTATION OF THE MARKETING CONCEPT, TWO
FACTORS APPEAR COMMON: THERE IS A TENDENCY TO VIEW THE MARKETING
RESEARCH FUNCTION AS ENCOMPASSING A WIDER SCOPE OF INTEREST AND
ACTIVITY THAN HAS BEEN THE CASE H STORICALLY, AND A TENDENCY TO
TREAT THIS WIDER RESEARCH FUNCTION AS THE BASIS OF AN EFFECTIVE
INTELLIGENCE OR COMMUNICATION FEEDBACK SYSTEM. THE WIDER SCOPE
OF THE RESEARCH FUNCTION IS EMPHASIZED BY SMITH, WHO NOTES THAT

"FROM THE POINT OF VIEW OF THE ALL-IMPORTANT TIME DIMENSION IN BUSINESS,

IT CAN BE SAID THAT MARKETING RESEARCH IS ORIENTED TOWARD PLANNING

 

I37KNIFFIN, 8.

I38"TOMORROW'S MAJOR TRENDS IN MARKETING," SALES MANAGEMENT,
LXXXIII (SEPTEMBER A, '959): 39-

'39

'IO
l "UPSWEEP IN BISSELL ADVERTISING - BUDGET TRIPPLES IN
ONE YEAR," 25.

BUND AND CARROLL, 275.

I69

FOR THE FUTURE, CONTROLLING OPERATIONS IN THE PRESENT, AND MEANINGFUL
EVALUATION OF WHAT HAS TRANSPIRED IN THE PAST."'"' THE EMPHASIS
ON PLANNING FOR THE FUTURE, AND To A CONSIDERABLE DEGREE THE
EMPHASIS 0N CONTROL OF CURRENT OPERATIONS, REPRESENT A MOVE-
MENT AWAY FROM THE "PAST AND PRESENT" ORIENTATION TRADITIONALLY
FOUND AMONG USERS OF MARKETING RESEARCH.

THIS EXPANDED DEFINITION OF THE SCOPE AND NATURE OF
MARKETING RESEARCH HAS LED SOME BUSINESSMEN TO VIEW THE RESEARCH
FUNCTION IN TERMS OF AN INTELLIGENCE OPERATION WITHIN THE FIRM.
CURTIS H. GAGER, VICE-PRESIDENT OF SALES OF THE COCA COLA COMPANY,
NOTES: "WE NEED MORE INTELLIGENCE AND COUNTER-INTELLIGENCE.
EFFECTIVE PLANNING AND DECISION ARE BASED ON RESEARCH OF ALL
KIND5--FUNDAMENTAL, APPLIED, SCIENTIFIC, PRACTICAL. IN OTHER WORDS,
BETTER MARKETING MANAGEMENT REQUIRES A DETERMINATION OF FACTS,
ALL THE FACTS WE CAN GET."'"2 USING SIMILAR TERMINOLOGfl E. S. McKAY
OF GENERAL ELECTRIC COMPANY STATES THAT "AN EFFECTIVE COMMERCIAL
INTELLIGENCE PROGRAM REQUIRES AN ORDERLY SYSTEM FOR ACQUIRING,
ETHICALLY AND CONTINUOUSLY, PRE-SELECTED TYPES OF INFORMATION WE
NEED ABOUT OUR OWN CUSTOMERS AND OUR COMPETITORS IN ORDER To
PREDICE THEIR MARKETING ACTIONS AND THE SUCCESS OF OURS."'"3

SUMMARY

THE FOLLOWING COMMENTS PRESENT IN SUMMARY THE MAJOR

 

I'II

SMITH, "A RATIONAL APPROACH . . .," I53.

'"2GAGER, 56.

'"3McKAY.

I70

CONCLUSIONS DRAWN FROM STUDY OF MARKETING RESEARCH LITERATURE
CONCERNED WITH THE MARKETING RESEARCH FUNCTION:

I) ALTHOUGH FORMAL DEPARTMENTS OF RESEARCH AND DEVELOPMENT
AND MARKETING RESEARCH HAVE BEEN IN OPERATION IN A NUMBER OF
FIRMS FOR MANY YEARS, IT APPEARS THAT DURING THE PAST TWENTY YEARS
THERE HAS BEEN A SIGNIFICANT INCREASE IN INTEREST AND ACTIVITY
IN INDUSTRY REGARDING RESEARCH GENERALLY, AND MARKETING RESEARCH
SPECIFICALLY. STATEMENTS MADE BY BUSINESS USERS OFQMARKETING
RESEARCH AND STUDIES OF ESTABLISHMENT AND ExPANSION OF FORMAL
RESEARCH DEPARTMENTS BY FIRMS, AS REPORTED IN THE LITERATURE,
INDICATE THAT THIS TREND WILL CONTINUE FOR SOME TIME.

2) AS THE UTILIZATION OF FORMAL MARKETING RESEARCH HAS
SPREAD TO MORE FIRMS, AND AS A DIFFERENT ORIENTATION, IE. A
MARKETING ORIENTATION, IS ACCEPTED BY A LARGER BODY OF BUSINESS-
MEN, A DIFFERENT CONCEPTION OF THE DEFINITION AND SCOPE OF THE
MARKETING RESEARCH FUNCTION IS EMERGING. EMPHASIS IS PLACED
UPON PLANNING FOR FUTURE OPERATIONS AND CONTROLLING PRESENT
OPERATIONS, WHEREAS TRADITIONALLY THE RESEARCH FUNCTION IS
VIEWED AS ORIENTED MORE TOWARD EVALUATION OF PAST OPERATIONS.
THE EXPANDED ROLE ASSIGNED TO THE MARKETING RESEARCH FUNCTION
HAS RESULTED IN ITS BEING CONSIDERED BY SOME BUSINESSMEN AS A
MARKETING INTELLIGENCE DEPARTMENT, A KEY LINK IN THE OVERALL
COMMUNICATIONS SYSTEM OF THE FIRM.

3) THE QUANTITY AND CONTENT OF THE LITERATURE CAUSES ONE

TO QUESTION HOW EXTENSIVELY THE FORMAL MARKETING RESEARCH FUNCTION

HAS BEEN ADOPTED IN AMERICAN BUSINESS, AND FURTHER, HOW EXTENSIVELY

I7I

THE EXPANDED DEFINITION AND SCOPE OF RESEARCH ACTIVITY HAS BEEN
ACCEPTED WITHIN FIRMS HAVING FORMAL MARKETING RESEARCH DEPARTMENTS.
THE FIRST QUESTION MAY BE ANSWERED IN PART BY NUMEROUS SURVEYS
CONDUCTED BY BUSINESS PUBLICATIONS AND ASSOCIATIONS CONCERNED WITH
THE MARKETING AREA. THE SECOND QUESTION APPEARS TO BE ACADEMIC,
BASED UPON THE LACK OF RECOGNITION AND ATTENTION GIVEN IT IN

THE LITERATURE. IN SUMMARY, AS NOTED IN COST AND PROFIT OUTLOOK,

 

THE INFORMATION FEEDBACK WITHIN THE CENTRAL ORGANIZATION OFTEN
IS WEAK; HOWEVER, "THEIR CHARACTERISTIC WEAKNESS APPEARS IN
COMMUNICATIONS WITH CONSUMERS, DISTRIBUTION CHANNELS, OR THE
GENERAL PUBLIC. THERE ARE STILL COMPANIES WHICH SPEND MILLIONS
OF DOLLARS FOR ADVERTISING TO TALK TO CONSUMERS BUT NOTHING FOR
THE ADVERTISING RESEARCH THROUGH WHICH CONSUMERS CAN TALK BACK."I""
H) WHEN COMPARED WITH OTHER AREAS POTENTIALLY INSTRUMENTAL
IN IMPLEMENTING THE MARKETING CONCEPT, E.G. ORGANIZATIONAL
STRUCTURE, FORMAL MARKETING PLANNING, ETC., LITTLE HAS BEEN
WRITTEN REGARDING THE BASIC ROLE WHICH MUST BE ASSIGNED TO THE
MARKETING RESEARCH FUNCTION. ONLY A VERY SMALL PROPORTION OF THE
WRITERS EXPLICITLY ACKNOWLEDGE THIS ROLE. WHILE SUCH RECOGNITION
IS IMPLICIT IN THE STATEMENTS OF A LARGER NUMBER OF WRITERS, ONE
MAY SERIOUSLY QUESTION WHETHER THE BUSINESSMAN, ATTEMPTING TO
IMPLEMENT THE MARKETING CONCEPT WITHIN HIS OWN FIRM, IS FULLY
COGNIZANT OF THE FUNDAMENTAL AND INHERENT RELATIONSHIP BETWEEN
UTILIZATION OF FORMAL MARKETING RESEARCH ACTIVITY OF THE SCOPE

DEFINED IN 2) ABOVE, AND SUCCESSFUL IMPLEMENTATION OF THE MARKETING

CONCEPT.

 

I'I'I

"A MARKETING VIEW OF BUSINESS POLICY," I35-I36.

I72

OTHER AREAS

NEARLY TOTAL CONCERN WITH THE MARKETING CONCEPT HAS BEEN
CENTERED AROUND THE MANAGERIAL ORIENTATIONS AND OVERT ACTIONS
DESCRIBED IN THE PRECEDING PAGES. HOWEVER, OCCASIONAL REFERENCE
HAS BEEN MADE IN THE LITERATURE To THE BEARING OF CERTAIN ADDITIONAL
AREAS ON SUCCESSFUL IMPLEMENTATION OF THE CONCEPT. THESE AREAS
ARE NAMED BELOW IN ORDER To ASSURE COMPLETENESS OF THIS REPORT,
ALTHOUGH IT SHOULD BE RECOGNIZED THAT THEY ARE ONLY MARGINALLY
RELATED TO GENERAL USAGE OF THE TERM, MARKETING CONCEPT.

IN CONNECTION WITH CONSUMER ORIENTATION, A FEW WRITERS
HAVE STRESSED THE SIGNIFICANCE OF CUSTOMER SERVICE, BOTHIS AN AREA
OF MANAGERIAL CONCERN AND AS A FUNCTIONAL UNIT WITHIN THE STAFF OF
THE FORMAL MARKETING DEPARTMENT. ALSO A FEW CRITICS HAVE INDICATED
THAT ADOPTION OF THE MARKETING CONCEPT IMPLIES CONSIDERATION OF
FINISHED INVENTORY CONTROL AS A MARKETING RESPONSIBILITY. FINALLY,
AN EVEN SMALLER GROUP SUGGESTS THAT EFFICIENT FUNCTIONING OF THE
MARKETING CONCEPT IS To A DEGREE DEPENDENT UPON MANAGEMENT'S
RECOGNITION OF BENEFITS AND IMPLEMENTATION OF CONDITIONS SET
FORTH BY STUDENTS OF THE PHYSICAL DISTRIBUTION CONCEPT, INVOLVING
SYSTEMATIC DETERMINATION OF WAREHOUSE LOCATIONS, TRANSPORTATION
AGENCIES, MATERIALS, HANDLING PROCEDURES, PACKAGING AND RELATED
ACTIVITIES.

SUMMARY

THIS CONTENT REVIEW OF THE LITERATURE OF THE MARKETING
CONCEPT REVEALS WIDESPREAD INTEREST IN THE CONCEPT, ITS MEANING, AND

METHODS FOR ITS IMPLEMENTATION AMONG BUSINESSMEN AND ACADEMICIANS

'73

CONCERNED WITH THE STUDY OF BUSINESS ADMINISTRATION GENERALLY,
AND MARKETING MANAGEMENT SPECIFICALLY. DURING THE PAST FIVE YEARS
THE CONCEPT HAS BEEN A POPULAR SUBJECT FOR SPEAKERS AT MARKETING,
MANAGEMENT, AND TRADE ASSOCIATION CONVENTIONS. ALSO, SEVERAL
TRADE PUBLICATIONS HAVE DEVOTED CONSIDERABLE SPACE TO DISCUSSIONS
OF THE CONCEPT, AND TO REPORTS OF HISTORIES OF COMPANIES WHOSE
MANAGEMENTS HAVE INDICATED ITS SUCCESSFUL IMPLEMENTATION WITHIN
THEIR ORGANIZATIONS. WITH FEW EXCEPTIONS COMPARATIVELY LITTLE
ATTENTION HAS BEEN GIVEN TO THE CONCEPT IN THE SCHOLARLY JOURNALs;
FURTHER, TYPICALLY THE FEW SUCH ARTICLES APPEARING IN THESE
PUBLICATIONS AVOID USE OF THE TERM, MARKETING CONCEPT, IN FAVOR
OF TERMS SUGGESTING ITS MANAGERIAL IMPLICATIONS.
ALTHOUGH THE TERM, MARKETING CONCEPT, IS MOST FREQUENTLY
USED IN THE LITERATURETO REFER TO THE GENERAL BODY OF THOUGHT AND
ACTION SUMMARIZED BELOW, FREQUENTLY OTHER TERMS ARE SUBSTITUTED.
LITERATURE SELECTIONFOR CONTENT ANALYSIS IS CONFUSED BY THE
MULTIPLICITY OF TERMS USED TO DESCRIBE THIS COMMON BODY OF THOUGHT
AND FURTHER BY THE PARTIAL DEFINITIONS AND VARYING EMPHASES
ASCRIBED TO THE BASIC TERM. NEVERTHELESS, A COMMON CORE DEFINITION
IS EVIDENT IN MOST DISCUSSIONS: CONSUMER ORIENTATION AND PROFIT
REWARD. TO IMPLEMENT THE TWO BASIC CONCEPT COMPONENTS, A SERIES
OF PHYSICAL MANIFESTATIONS HAS BEEN DESCRIBED BY NUMEROUS WRITERS.
OF THESE CHARACTERISTICS THE MOST FREQUENTLY AND EXHAUSTIVELY
DISCUSSED ARE THOSE CONCERNED WITH ORGANIZATIONAL ASPECTS. ATTENTION
HAS BEEN CEITERED PRIMARILY UPON ESTABLISHMENT OF A FORMAL MARKETING

DEPARTMENT, DESIGNED TO COORDINATE THE OVERALL MARKETING EFFORT 0F

THE ORGANIZATION AND TO PROVIDE THE SALES FORCE WITH NECESSARY STAFF
SUPPORT. THIS HAS LED TO CREATION OF ORGANIZATIONAL UNITS
WHICH PERFORM AS SPECIALISTS REGARDING SPECIFIC MARKETING
FUNCTIONAL AREAS. THE SEVERAL UNITS HAVE BEEN COMBINED INTO A
STRONG CENTRAL MARKETING STAFF, HEADED BY A NEW ORGANIZATIONAL
POSITION, MARKETING MANAGER OR VICE-PRESIDENT IN CHARGE OF MARKETING.
AS A RESULT, THE SALES MANAGER IS FREE FROM STAFF RESPONSIBILITIES
WHICH FORMERLY DETRACTED FROM TIME AVAILABLE TO HIM FOR MANAGING
THE SALES FORCE; HE Is SUPPORTED IN HIS EFFORTS BY THE CENTRAL
MARKETING STAFF; AND THE EFFORTS OF THE OTHER MARKETING FORCES
ARE COORDINATED WITH HIS EFFORTS, SUGGESTING MORE EFFICIENT AND
EFFECTIVE OVERALL MARKETING EFFORT.

ANOTHER SIGNIFICANT ASPECT REPORTED IN THE LITERATURE
IS THAT THE MARKETING CONCEPT IMPLIES MANAGEMENT BY OBJECTIVES,
AND FORMAL PLANNING DIRECTED TOWARD ACHIEVEMENT OF SUCH GOALS.
SUCH PLANS TYPICALLY ARE WRITTEN DOCUMENTS CONCERNED WITH BOTH
SHORT-AND LONG-RANGE GOALS OF THE ORGANIZATION, AND THE STRATEGY
AND TACTICS WHEREBY GOALS ARE TO BE ATTAINED SUCCESSFULLY. FURTHER,
THESE PLANS ARE CONCERNED WITH PRODUCT DEVELOPMENT AND PROFIT
CONTROL. To IMPLEMENT PRODUCT PLANNING AND DEVELOPMENT, MANY
ORGANIZATIONS HAVE CREATED ORGANIZATIONAL UNITS CONCERNED WITH
THIS PROBLEM; VERY OFTEN THESE UNITS ARE PART OF THE CENTRAL
MARKETING STAFF. To IMPLEMENT PROFIT PLANNING AND CONTROL,
PROFIT CENTERS AND INTERDEPARTMENTAL PRICING SYSTEMS HAVE BEEN
ESTABLISHED BY SOME FIRMS. THE PURPOSE OFFERED FOR THIS PLANNING

ACTIVITY IS COMPANY GROWTH AND STABILITY ARISING FROM GOAL-ORIENTED,

'75

CONTROLLED MARKETING EFFORT.

FINALLY, THE RELATIONSHIP OF THE MARKETING RESEARCH FUNCTION
TO UNDERSTANDING AND IMPLEMENTATION OF THE MARKETING CONCEPT IS
STRESSED. IT IS NOTED THAT SUCH RESEARCH PROVIDES THE NECESSARY
FACTUAL BASIS FOR CONSUMER ORIENTATION, FOR DETERMINING PROFIT
POTENTIALS OF PROSPECTIVE PRODUCT ADDITIONS OR ALTERATIONS, AND

FOR OVERALL MARKETING PLANNING.

UPPKRV
AN INTERPRETATION OF THE MARKETING CONCEPT

INTRODUCTION

IN THE PRECEDING CHAPTERS THE SHIFTING MANAGERIAL
ORIENTATIONS OBSERVED IN TWENTIETH CENTURY AMERICAN BUSINESS
HAVE BEEN DESCRIBED, AND SOME OF THE MAJOR FACTORS RESPONSIBLE
FOR SUCH CHANGE DURING THE POSTJWORLD WAR II YEARS HAVE BEEN
DISCUSSED. FORTHER, MANAGERIAL RECOGNITION OF THE INCREASED
SIGNIFICANCE OF MARKETING PROBLEMS, AND<F THE RELATIONSHIP OF
THESE PROBLEMS TO OVERALL COMPANY SUCCESS, HAS BEEN INDICATED.
FINALLY, THE LITERATURE OF THE MARKETING CONCEPT HAS BEEN
EXHAUSTIVELY REVIEWED AND SUMMARIZED. THUS, THE FOUNDATION FOR
A MORE CRITICAL AND MORE COMPLETE STUDY OF THE NATURE OF THE
CONCEPT HAS BEEN ESTABLISHED.

IT IS THE PURPOSE OF THIS CHAPTER, GENERALLY, TO PROVIDE
A MORE KNOWLEDGEABLE INTERPRETATION OF THE MARKETING CONCEPT THAN
IS NOW COMMON AMONG BUSINESSMEN AND ACADEMICIANS. SPECIFICALLY,
THE PURPOSES OF THIS CHAPTER ARE:

I. TO INDICATE THE INADEQUACY OF THE MARKETING CONCEPT
LITERATURE AS A BASIS FOR FULL UNDERSTANDING OF THE CONCEPT,

2. TO ISOLATE THOSE COMPONENTS OF THE MARKETING CONCEPT,
AS DESCRIBED IN THE LITERATURE, WHICH THIS WRITER DEEMS VALID

AND ESSENTIAL TO UNDERSTANDING OF THE CONCEPT,

I76

'77

3. TO DEVELOP A MORE COMPLETE DEFINITION OF THE CONCEPT,
BASED UPON INTEGRATION OF THE COMPONENTS DESCRIBED ABOVE WITH
ADDITIONAL FACTORS DERIVED FROM THIS WRITER'S INTERPRETATION OF
THE CONCEPT, AND

A. TO CONSTRUCT A THEORETICAL MODEL OF THE MARKETING CONCEPT,
BASED UPON THE DEFINITION DESCRIBED ABOVE.

INADEQUACY OF THE LITERATURE AS A BASIS FOR UNDERSTANDING THE
MARKETING CONCEPT

DURING THE PERIOD I955 TO I960, AN EXCELLENT OPPORTUNITY
EXISTED FOR DEVELOPMENT OF THE UNDERSTANDING AND APPLICATION OF
THE MARKETING CONCEPT. VARIOUS PUBLICATIONS, AND ESPECIALLY THE
BUSINESS PUBLICATIONS, DEVOTED CONSIDERABLE EDITORIAL AND REPORTING
SPACE TO DISCUSSIONS OF THE CONCEPT. FURTHER, BUSINESSMEN APPEARED
QUITE WILLING TO CONTRIBUTE PERSONAL COMMENTS AND COMPANY EXPERIENCES
FOR INCLUSION IN THESE DISCUSSIONS. AS A RESULT OF THIS WIDE-
SPREAD PUBLICITY, IT APPEARS DIFFICULT TO DISCOVER A CORPORATE
EXECUTIVE, ESPECIALLY A MARKETING EXECUTIVE, WHO IS NOT ACQUAINTED
WITH THE TERM, MARKETING CONCEPT, AND WHO HAS NOT DEVELOPED A
RATHER WELL-DEFINED ATTITUDE TOWARD IT.

REGRETTABLY, HOWEVER, UNDERSTANDING OF THE SCOPE AND
POTENTIAL OF THE CONCEPT HAS NOT BEEN DEVELOPED BY BUSINESS
MANAGEMENT OR ACADEMICIANS GENERALLY. IT IS THIS WRITER'S OPINION
THAT THE LATTER GROUP IS PRIMARILY RESPONSIBLE FOR THIS LACK OF
UNDERSTANDING. INCREASED ACADEMIC CONCERN WITH THE FULLER MEANING
OF THE CONCEPT, AND SUBSTANTIAL CONTRIBUTION TO THE LITERATURE

DURING THE MID-I950'S, PROBABLY WOULD HAVE HAD THE EFFECT OF

I78

UNIFYING THE FOCUS OF THE NUMEROUS, FRAGMENTARY ARTICLES WHICH
APPEARED. THUS, THE MARKETING CONCEPT MIGHT HAVE BEEN INTERPRETED
MORE WIDELY AS A FRAMEWORK FOR OVERALL CORPORATE DECISION-MAKING
AND ACTION. CERTAINLY THE AMERICAN MARKETING ASSOCIATION, WHICH
COULD HAVE SERVED QUITE NATURALLY AS HEADQUARTERS AND CLEARING-
HOUSE FOR SUCH DEVELOPMENT AND DISSEMINATION OF MARKETING CONCEPT
THOUGHT, GENERALLY HAS NEGLECTED ITS OPPORTUNITY TO DO SO. FAR
MORE SIGNIFICANT CONTRIBUTIONS HAVE BEEN MADE UNDER THE AUSPICES
OF THE AMERICAN MANAGEMENT ASSOCIATION.

AS A RESULT, THE LITERATURE OFFERS A SERIES OF MICROSCOPIC
STUDIES, ABBREVIATED CASE HISTORIES, AND PLATITUDINOUS SUMMATIONS.
THE NON-OBJECTIVE NATURE OF MANY ARTICLES TENDS TO DETRACT FROM
MEANINGFUL INTERPRETATION OF THEIR CONTENT. LACK OF OBJECTIVITY
ALSO HAS LEAD To ABHORRENCE OF THE TERM "MARKETING CONCEPT" BY
SOME WRITERs; AS A RESUU, A NUMBER OF WRITERS HAVE EITHER CONSTRUCTED
SUPPOSEDLY EQUIVALENT PHRASES OR HAVE ELECTED To DISCUSS THE SAME
CONTENT IN THE ABSENCE OF AN IDENTIFYING PHRASE. BREVITY OF MOST
ARTICLES HAS RESULTED EITHER IN CONCERN WITH LIMITED ASPECTS OF
THE CONCEPT, OR IN VAGUE EXPRESSIONS RELATED TO THE DESIRABILITY
OF CORPORATE ACCEPTANCE OF THE CONCEPT. SUCH A BODY OF LITERATURE
IS NOT SUFFICIENT, IN ITSELF, TO CONSTITUTE A BASIS FOR GENERAL
UNDERSTANDING OF THE MARKETING CONCEPT.

ALTHOUGH NUMEROUS FAULTS OF THE LITERATURE HAVE BEEN INDICATED,
BOTH IN THE PRESENT CHAPTER BY THIS WRITER AND IN THE PRECEDING CHAPTERS
BY A NUMBER OF CRITICS, THE LITERATURE DOES CONTAIN MUCH INFORMATION

THAT IS BOTH PERTINENT AND VALID. WHILE THE INNATE NATURE OF THE

'79

MARKETING CONCEPT GENERALLY HAS NOT BEEN DEFINED EXPLICITLY IN
THESE SOURCES, ITS ESSENCE Is IMPLICIT IN A NUMBER OF THE WRITINGS.
THEREFORE, BASED UPON THE LITERATURE REVIEW DESCRIBED IN THE
PRECEDING CHAPTERS, IT IS POSSIBLE TO CLEAN FROM THE WHOLE THOSE
PARTS DEEMED BY THIS WRITER TO BE USEFUL FOR PURPOSES OF DEFINING
AND DESCRIBING THE MARKETING CONCEPT.
RECONSTRUCTION OF THE COMPONENTS
OF THE MARKETING CONCEPT PRESENTED IN THE LITERATURE

THE SEVERAL FACTORS NAMED BELOW HAVE BEEN DESCRIBED IN
THE LITERATURE AS COMPONENTS OF THE MARKETING CONCEPT. HOWEVER,
IT SHOULD BE RECOGNIZED THAT OCCASIONAL INCLUSION OF SOME, AND THE
EXTREMELY INFREQUENT CONSOLIDATION OF MOST, OF THESE FACTORS INTO
A SINGLE DISCUSSION OF THE CONCEPT ARE COMMON IN THE LITERATURE.
IT IS PROBABLE THAT FEW, IF ANY, OF THE SOURCES COMPRISING THE
MARKETING CONCEPT LITERATURE ARE SO COMPREHENSIVE As TO INCLUDE
THE BODY OF THOUGHT EXPRESSED IN THIS SECTION AS THE CONTRIBUTION
OF THE LITERATURE. THE CONTRIBUTION OF THIS SECTION, THEREFORE,
IS DERIVED PRIMARILY FROM THE INTEGRATION OF VALID PORTIONS OF
FRAGMENTARY ARTICLES COMPRISING THE LITERATURE. THE FOLLOWING
COMMENTS, ACCORDINGLY, SHOULD NOT BE CONSIDERED AS A SUMMARY OF
THE LITERATURE; RATHER, THEY COMPRISE A RECONSTRUCTION OF THOSE
PARTS DEEMED VALID BY THIS WRITER.

GIVEN THIS INTERPRETATION IT MAY BE CONCLUDED THAT EMBODIED
IN THE LITERATURE ARE SEVERAL SIGNIFICANT CONTRIBUTIONS TO THE
UNDERSTANDING OF THE MARKETING CONCEPT. THESE CONTRIBUTIONS, WHICH

ARE DISCUSSED BRIEFLY IN THE FOLLOWING PAGES IN THE ORDER

INDICATED BELOW, ARE:

I80

I. RECOGNITION OF THE NEED FOR CONSUMER ORIENTATION,

2. RECOGNITION OF THE NEED FOR PROFIT ORIENTATION,

3. RECOGNITION OF THE NEED FOR MANAGEMENT BY OBJECTIVES,
BASED UPON THE FACTORS NAMED ABOVE,

h. RECOGNITION OF THE NEED FOR PLANS WHICH DIRECT AND
COORDINATE COMPANY EFFORT TOWARD THE ATTAINMENT OF SUCH OBJECTIVES,

5. RECOGNITION OF THE NEED FOR FACTS, UPON WHICH SUCH
ORIENTATIONS, OBJECTIVES, AND PLANS MAY BE BASED,

6. RECOGNITION OF THE NEED FOR COORDINATION OF MARKETING
ACTIVITIES,

7. RECOGNITION OF THE COMPANY-WIDE IMPLICATIONS OF THE
MARKETING CONCEPT,

8. RECOGNITION OF THE RELATIONSHIP OF NEW PRODUCT
DEVELOPMENT TO THE MARKETING CONCEPT, AND

9. RECOGNITION OF THE NEED FOR EVALUATION OF MARKETING
EFFORT.

RECOGNITION OF THE NEED FOR CONSUMER ORIENTATION

 

AS STATED PREVIOUSLY, OF THE-SEVERAL ASPECTS OF THE
MARKETING CONCEPT MENTIONED IN THE LITERATURE, CONSUMER ORIENTATIONS
APPEARS TO BE MOST FREQUENTLY NAMED. IN SEVERAL INSTANCES THE
TERMS "CONSUMER ORIENTATION" AND "MARKETING CONCEPT" ARE USED
SYNONYMOUSLY, THEREBY EMPHASIZING THE SIGNIFICANCE OF SUCH AN
ORIENTATION. ALTHOUGH WIDESPREAD DISCUSSION OF MANAGERIAL CONCERN
WITH THE CUSTOMER MIGHT APPEAR TO BE UNNECESSARY, DUE TO THE
"OBVIOUS TRUTH" EMBODIED IN THE SENTIMENT, MUCH EVIDENCE EXISTS

TO INDICATE THAT SUCH DISCUSSION IS NEEDED. A PRODUCTION EMPHASIS

I8I

AMONG MANAGEMENTS, FOLLOWED RATHER CLOSELY BY A PERIOD OF WAR
PRODUCTION AND SHORTAGES OF CERTAIN GOODS AND FINALLY BY A SELLERS'
MARKET OPERATING IMMEDIATELY AFTER WORLD WAR II, APPEARS TO HAVE
CLOUDED THE ROLE AND SIGNIFICANCE OF THE CONSUMER IN THE EYES OF
NUMEROUS MANAGEMENTS.

THE ATTENTION GIVEN IN THE LITERATURE TO CONSUMER ORIENTATION
MAY BE DESCRIBED PRIMARILY AS A REDISCOVERY OF A BASIC PRINCIPLE
OF ECONOMICS: PRODUCTION ACTIVITY Is CARRIED ON FOR THE PURPOSE OF
ADDING WANT-SATISFYING POWER TO GOODS, OR THE RENDERING OF SERVICES
THAT SATISFY WANTS FOR WHICH PEOPLE ARE WILLING To PAY TO HAVE
SATISFIED. IT IS REASONABLE THAT MANAGEMENTS OPERATING IN MARKET
CONDITIONS SUCH As THOSE DESCRIBED ABOVE WOULD DEVOTE COMPARATIVELY
LESS ATTENTION TO THIS PRINCIPLE DURING A PERIOD INWWHICH THE MARKET
APPEARED TO BE EAGER TO ACCEPT WHATEVER GOODS WERE OFFERED. IT IS
EQUALLY REASONABLE THAT, AS MARKET CONDITIONS AND PRODUCTION
CAPABILITIES CHANGED, MANAGEMENTS WOULD AGAIN EXAMINE THE TRUTH
INHERENT IN THE PRINCIPLE.

THEREFORE, CREDIT MUST BE GIVEN TO NUMEROUS WRITERS WHO
FREQUENTLY EMPHASIZED THE NECESSITY OF A CONSUMER ORIENTATION AMONG
COMPANY MANAGEMENTS. IT IS PROBABLE THAT THIS ATTENTION HAS RESULTED
IN INCREASED AND MORE WIDESPREAD COMPANY CONCERN WITH CONSUMER WANTS
AND NEEDS SOMEWHAT MORE QUICKLY THAN WOULD HAVE BEEN THE CASE IN
THE ABSENCE OF THIS LITERATURE. SIMILARLY, HOWEVER, IT SHOULD BE
NOTED THAT THIS LITERATURE, WHICH HAS EFFECTIVELY LED TO MANAGERIAL
CONCERN, GENERALLY HAS NOT BEEN SUFFICIENTLY SPECIFIC TO LEAD TO FULL

MANAGERIAL UNDERSTANDING OF CONSUMER ORIENTATION. IN THE CONSTRUCTION

OF THE MARKETING CONCEPT DEFINITION AND MODEL, LATER IN THIS CHAPTER,
THIS WRITER WILL ATTEMPT TO PROVIDE A BASIS FOR MORE COMPREHENSIVE
MANAGERIAL INTERPRETATION OF THE MEANING OF CONSUMER ORIENTATION.
RECOGNITION OF THE NEED FOR PROFIT ORIENTATION

ANOTHER FEATURE QUITE FREQUENTLY MENTIONED IN THE LITERATURE
AS REPRESENTING A BASIS OF THE MARKETING CONCEPT IS PROFIT ORIENTATION.
A FEW WRITERS HAVE PRESENTED THEIR DISCUSSIONS IN TERMS OF PROFIT
REWARD FOR SUCCESSFUL COMPANY EFFORTS. HOWEVER, COMMON To PRACTICALLY
ALL DISCUSSIONS IS THE EMPHASIS PLACED UPON PROFIT CONTRIBUTIONS AS
OPPOSED TO INCREASED SALES VOLUMES. AS A RESULT, IT APPEARS THAT
BUSINESSMEN ARE BECOMING INCREASINGLY AWARE OF SALES VOLUME-PROFIT-
RETURN ON INVESTMENT RELATIONSHIPS TO COMPANY DECISION—MAKING.
RETURN ON INVESTMENT, IN MARKETING ACTIVITIES AS WELL AS IN MANu-
FACTURING, HAS BEEN ADVOCATED IN THE LITERATURE AS A MOST DESIRABLE
MEASURE FOR EVALUATION, AND APPARENTLY THIS MEASURE IS GAINING WIDE
MANAGEMENT ACCEPTANCE.

AS WAS TRUE REGARDING CONSUMER ORIENTATION, IN STRESSING
A PROFIT ORIENTATION THE LITERATURE HAS NOT PRESENTED A NEW NOTION
TO BUSINESSMEN. CERTAINLY, PROFIT CONSCIOUSNESS HAS ALWAYS BEEN
PRESENT IN MANAGEMENT, ALTHOUGH TRADITIONALLY SUCH CONCERN MAY HAVE
BEEN LIMITED TO SPECIFIC OFFICERS OF FIRMS. HOWEVER, THE LITERATURE
HAS MADE REAL AND SIGNIFICANT CONTRIBUTIONS TO CONCERN WITH, AND
UNDERSTANDING OF, THE MARKETING CONCEPT. PERHAPS FOR MANY YEARS
IN MANY FIRMS, GIVEN THEIR COSTS, CAPACITIES, AND MARKETS, IT
WAS TRUE THAT NOMINAL INCREASES IN SALES RESULTED IN INCREASES

IN PROFITS. THE LITERATURE HAS QUESTIONED THE VALIDITY OF THIS

I83

ASSUMPTION IN THE CONTEMPORARY ECONOMY, AND FURTHER HAS PROPOSED
EVALUATION BASED IN LARGE PART UPON RETURN ON INVESTMENT. ALSO,
THE ASSIGNMENT OF PROFIT RESPONSIBILITY IN MARKETING OPERATINS AND
THE CREATION OF PROFIT CENTERS TO FACILITATE SUCH CONTROL HAVE
BEEN ADVOCATED.

GENERALLY, THE LITERATURE HAS BEEN QUITE EXPLICIT IN
DESCRIBING THE NEED FOR PROFIT ORIENTATION. ALTHOUGH CONSIDERABLY
FEWER ARTICLES HAVE BEEN WRITTEN REGARDING PROCEDURES BY WHICH SUCH
AN ORIENTATION MIGHT BE IMPLEMENTED, SEVERAL EXCELLENT DESCRIPTIONS
OF INTERDEPARTMENTAL PRICING AND PROFIT CENTER SYSTEMS HAVE BEEN
PRESENTED. PROBABLY THE IMMEDIATE SIGNIFICANCE AND MORE CONCRETE
NATURE OF THE PROFIT ORIENTATION ARE RESPONSIBLE FOR THE MORE
SPECIFIC NATURE OF THESE WRITINGS, AS COMPARED WITH THOSE CONERNED
WITH CONSUMER ORIENTATION.

IF FAULT IS TO BE FOUND WITH THIS SEGMENT OF THE LITERATURE,
IT IS WITH REGARD TO LACK OF SUFFICIENT RECOGNITION OF THE CONSUMER
ORIENTATION - PROFIT ORIENTATION RELATIONSHIP. THAT IS, CONCERN
WITH PROFIT IN THE ABSENCE OF CONCERN WITH CONSUMER WANTS AND
NEEDS IS NO MORE VALID AS A MANAGERIAL ORIENTATION THAN A SALES
VOLUME ORIENTATION, NOR DOES IT CONSTITUTE A DESCRIPTION OF THE
MARKETING CONCEPT.

RECOGNITION OF THE NEED FOR "MANAGEMENT BY OBJECTIVES"

OFTEN MENTIONED IN THE LITERATURE AS BASIC TO IMPLEMENTATION
OF THE MARKETING CONCEPT IS MANAGERIAL DECISION-MAKING AND ACTION
BASED UPON PREDETERMINED OBJECTIVES. IT HAS BEEN SUGGESTED

FREQUENTLY THAT TRADITIONAL MANAGEMENT IS UNSUCCESSFUL IN HIGHLY

COMPETITIVE MARKETS IN PART DUE TO THE LACK OF COMMON AND SPECIFIC
OBJECTIVES WHICH PROVIDE A FOCUS FOR INDIVIDUAL DEPARTMENTS OF THE
FIRMS, AND FOR THE COMPANY GENERALLY. THIS IS NOT TO SUGGEST THAT
MANAGERIAL DECISIONS AND ACTIONS OCCUR IN THE ABSENCE OF OBJECTIVES.
RATHER, THE CONTRIBUTION OF THE LITERATURE IS ITS RECOGNITION THAT
INCREASED DEPARTMENTAL SPECIALIZATION AND EXPANDING SIZE OF
FIRMS FREQUENTLY RESULTS IN LESSENED KNOWLEDGE AND INFREQUENT
REEVALUATION OF COMPANY OBJECTIVES. AS A RESULT, IT HAS BEEN
OBSERVED THAT FREQUENTLY THE SEVERAL DEPARTMENTS OF FIRMS APPEAR TO
BE WORKING AT CROSS PURPOSES.

LACKING IN THE LITERATURE, HOWEVER, IS A STRONG STATEMENT
OF THE RELATIONSHIP OF "MANAGEMENT BY OBJECTIVES" TO THE CONSUMER
AND PROFIT ORIENTATIONS PREVIOUSLY DISCUSSED.
RECOGNITION OF THE NEED FOR MARKETING PLANNING

CLOSELY RELATED TO THE DISCUSSION OF MANAGEMENT BY OBJECTIVES
Is CONCERN WITH THE NEED FOR MARKETING PLANNING. JUST AS INCREASINGLY
COMPLEX BUSINESS ORGANIZATIONS, COMPETITION, AND MARKETS HAVE MADE
THE NEED FOR WELL-DEFINED AND LOGICALLY-BASED OBJECTIVES EVIDENT, THE
LITERATURE SUGGESTS THAT THESE FACTORS ALSO REQUIRE PLANNING TO
FACILITATE AND INSURE ATTAINMENT OF SUCH OBJECTIVES. ALTHOUGH IT IS
REPORTED IN THE LITERATURE THAT RELATIVELY FEW FIRMS TO DATE EMPLOY
FORMAL MARKETING PLANNING, A GROWING NUMBER IS DOING SO.

CONCERN WITH THE DIRECTION AND COORDINATION OF COMPANY
EFFORT IS EXPRESSED IN THE LITERATURE IN RELATION TO SEVERAL AREAS.
FIRST, AS DESCRIBED ABOVE, SOME WRITERS HAVE DIRECTED THEIR ATTENTION

TOWARD FORMAL MARKETING PLANNING, AND SEVERAL COMPREHENSIVE REPORTS,

I85

CONCERNED WITH CONTENT AND USE OF SUCH PLANS, HAVE APPEARED. OTHER
WRITERS HAVE CHOSEN TO DISCUSS DIRECTION AND COORDINATION PRIMARILY
IN TERMS OF ORGANIZATIONAL POSITIONING AND STRUCTURING, AS DESCRIBED
IN A FOLLOWING SECTION.

THE ONLY SIGNIFICANT CRITICISM OF THIS SECTION OF THE
LITERATURE MADE BY THE WRITER IS THAT INSUFFICIENT ATTENTION IS
GIVEN TO THE SIGNIFICANCE AND NECESSITY OF PARTICIPATION AND
INTERACTION OF MANY PERSONS IN THE CONSTRUCTION OF MARKETING
PLANS.

RECOGNITION OF THE NEED FOR FACTS

 

RECOGNITION BY BUSINESSMEN OF THE DESIRABILITY OF MORE
SYSTEMATIC AND FORMAL DECISION-MAKING AND OPERATION HAS RESULTED
IN INCREASED MANAGERIAL ATTENTION TO MARKETING PLANNING.

CONSEQUENTLY, IT Is GENERALLY RECOGNIZED THAT, IF SUCH PLANNING Is

TO BE EFFECTIVE, IT MUST BE BASED UPON AMPLE AND RELIABLE INFORMATION.
THE LITERATURE INDICATES THAT MANAGERIAL AWARENESS OF, AND
APPRECIATION FOR, MARKETING RESEARCH IS ALREADY WIDESPREAD AND

STILL INCREASING.

HOWEVER, COMPARED WITH OTHER FACTORS DESCRIBED IN THIS
SECTION, LITTLE ATTENTION IS DEVOTED IN THE LITERATURE TO THE
DECISION-MAKER'S NEED FOR A MORE SUBSTANTIAL AND COMPREHENSIVE
BODY OF INFORMATION. IT APPEARS FURTHER THAT FAILURE TO UNDERSTAND
THE MARKETING CONCEPT HAS OBSCURED THE KINDS OF FACTS THAT NEED TO
BE OBTAINED. SOME WRITERS STRESS THE RELATIONSHIP OF FACTS TO
PREPARATION OF MARKETING PLANS. FEWER EMPHASIZE THE DIRECT
RELATIONSHIP OF THE NEED FOR FACTS TO CONSUMER AND PROFIT ORIENTATIONS,

HOWEVER.

I86

RECOGNITION OF THE NEED FOR COORDINATING MARKETING ACTIVITIES

 

DURING THE PAST FIVE YEARS BUSINESS PUBLICATIONS HAVE
REPORTED AND DESCRIBED REORGANIZATIONS OF MARKETING FUNCTIONS,
TITLES, AND PERSONNEL IN LITERALLY HUNDREDS OF AMERICAN FIRMS..

THE LITERATURE CONTENT HAS PLACED STRONG EMPHASIS ON THE LACK OF
INTERDEPARTMENTAL COORDINATION WHICH REPORTEDLY HAS BEEN WIDESPREAD
WITHIN FIRMS, RESULTING IN SITUATIONS IN WHICH THE EFFORTS OF
FUNCTIONAL DEPARTMENTS APPEAR TO BE A CRoss-PURPOSES. ANTAGONISM
EXISTING FREQUENTLY BETWEEN THE SALES AND ADVERTISING MANAGERS ALSO
HAS BEEN OBSERVED AND REPORTED. PERHAPS THE GREATEST CONTRIBUTION
OF THE LITERATURE WITH REGARD TO ORGANIZATIONAL ASPECTS OF THE
MARKETING CONCEPT HAS BEEN ITS FOCUS OF ATTENTION ON ACTIONS
INCONSISTENT WITH COMPANY WELFARE, WHICH EXIST WITHIN THE AREA OF
MARKETING ACTIVITY AS WELL AS BETWEEN THE VARIOUS FUNCTIONAL

AREAS.

CONVERSELY, HOWEVER, IT IS PROBABLE THAT SUCH REPORTS
ALSO CONSTITUTE THE LITERATURE'S GREATEST CONTRIBUTION TO MISUNDER-
STANDING OF THE MARKETING CONCEPT. THE MANY ARTICLES CONCERNED WITH
THE FORMATION OF FORMAL MARKETING DEPARTMENTS AND CREATION OF THE
POSTS OF VICE PRESIDENT IN CHARGE OF MARKETING AND MARKETING
MANAGER IMPLICITLY RECOGNIZE THE CURATIVE POWERS OF MARKETING REORGANIZA-
TION. AS A RESULT IT APPEARS THAT MANAGEMENTS OF NUMEROUS COMPANIES
HAVE ESTABLISHED SUCH DEPARTMENTS AND POSITIONS IN THE BELIEF THAT
SUCH ACTION CONSTITUTES IMPLEMENTATION OF THE MARKETING CONCEPT. IT
IS PROBABLE THAT THE EXTENT OF ADOPTION OF THE CONCEPT IS VASTLY

OVER-'STATED PRIMARILY BECAUSE OF MANAGERIAL MISINTERPRETATION OF

I87

THE RELATIONSHIP OF THE ROLE OF MARKETING REORGANIZATION TO EFFECTIVE
IMPLEMENTATION OF THE CONCEPT.

RECOGNITION OF THE COMPANY-WIDE IMPLICATIONS OF THE MARKETING CONCEPT

 

AMONG THE POTENTIALLY MOST SIGNIFICANT CONTRIBUTIONS TO
UNDERSTANDING OF THE MARKETING CONCEPT MADE BY THE LITERATURE IS
RECOGNITION THAT THE CONCEPT HAS IMPLICATIONS NOT ONLY FOR THE
MARKETING DEPARTMENT, BUT FOR THE ENTIRE COMPANY. ACCORDING TO
THIS INTERPRETATION, THE PRODUCTION MANAGER AND THE CHIEF FINANCE
OFFICER SHOULD BE AS ACQUAINTED AND CONCERNED WITH THE MARKETING
CONCEPT AS ARE THE SALES MANAGER AND THE MARKETING RESEARCH DIRECTOR.
ALTHOUGH SOME COMPANY OFFICIALS IN NON-MARKETING DEPARTMENTS
REPORTEDLY INTERPRET THE CONCEPT IN TERMS OF MARKETING INTRUSION
INTO THEIR AREAS OF OPERATION, SEVERAL WRITERS HAVE PRESENTED
STRONG DISTINCTIONS BETWEEN A DEPARTMENT'S RESPONSIBILITY FOR
PERFORMING BASIC MARKETING TASKS AND THE CONCEPT'S INFLUENCE
ON MANAGERIAL POINT-OF-VIEW IN ALL DEPARTMENTS.l

IT IS IMPLIED ABOVE THAT, WITH REGARD TO RECOGNITION OF
COMPANY'WIDE IMPLICATIONS OF THE CONCEPT, THE LITERATURE HAS NOT
MAXIMIZED ITS CONTRIBUTION TO UNDERSTANDING. IT IS SIGNIFICANT THAT
THE MAJORITY OF ARTICLES CONCERNED WITH THE MARKETING CONCEPT HAVE
BEEN CARRIED IN PUBLICATIONS WITH AUDIENCES COMPOSED PRIMARILY OF
PERSONS ENGAGED IN THE PRACTICE AND TEACHING OF MARKETING. FURTHER,

MOST OF THESE ARTICLES EVOKE INTEREST IN THE MEANING OF THE CONCEPT

 

ISEE JOHN E. WAKEFIELD, "THE TEN COGS IN MARKETING FOR
PROFIT," SALES MANAGEMENT, LXXXIII (OCTOBER I6, I959), HOFF.

 

I88

FOR THE MARKETING DEPARTMENTS, SUCH AS ADVERTISING, MARKETING
RESEARCH, CUSTOMER SERVICE, AND SALES PROMOTION. AS A RESULT ONE
MAY GENERALIZE THAT THE CONCEPT HAS BEEN PRESENTED IN THE LITERATURE
PRIMARILY AS A CONCERN OF THE TRADITIONAL MARKETING DEPARTMENT.
DISCUSSIONS REGARDING WHICH MARKETING AREA HEAD IS BEST QUALIFIED
BY HIS REGULAR DUTIES TO ASSUME DIRECTION OF NEWLY ESTABLISHED,
COORDINATED MARKETING DEPARTMENTS APPEAR FAR MORE FREQUENTLY
THAN DO THOSE CONCERNED WITH THE CONCEPT'S IMPLICATION FOR PRODUCTION
AND FINANCE OFFICERS.

IN SUMMARY, WHILE SEVERAL WRITERS ACKNOWLEDGE THE COMPANY-
WIDE IMPLICATIONS OF THE MARKETING CONCEPT, THE MAJORITY DOES
NOT. AS A RESULT, IT APPEARS THAT MANY EXECUTIVES HAVE INTERPRETED
THE CONCEPT PRIMARILY IN TERMS OF ITS MEANING TO MARKETING DEPARTMENT
OFFICERS. THE BROADER IMPLICATIONS OF THE MARKETING CONCEPT ARE
STRESSED IN THIS WRITER'S DEFINITION, LATER IN THIS CHAPTER.

RECOGNITION OF THE RELATIONSHIP OF NEW PRODUCT DEVELOPMENT TO THE
MARKETING CONCEPT

 

 

ANOTHER OF THE TOPICS FREQUENTLY DISCUSSED IN THE MARKETING
CONCEPT LITERATURE IS THE SIGNIFICANCE OF NEW PRODUCT DEVELOPMENT
TO CORPORATE PROFITS. NUMEROUS COMPANY SITUATIONS HAVE BEEN REPORTED,
INCLUDING SUCH DATA AS RATES OF INTRODUCTION AND FAILURE OF NEW
PRODUCTS AND PROFIT CONTRIBUTIONS OF NEW PRODUCTS TO TOTAL PROFIT.
TWO FACTORS ARE SIGNIFICANT REGARDING THE RELATIONSHIP OF PRODUCT
DEVELOPMENT TO THE MARKETING CONCEPT, AS REPORTED IN THE LITERATURE:
THE ROLE OF PRODUCT DEVELOPMENT IN PROFIT PLANNING AND THE NEED
FOR ORGANIZING FOR PRODUCT DEVELOPMENT. A NUMBER OF WRITERS,

RECOGNIZING THAT IN MANY FIRMS AND INDUSTRIES NEW PRODUCTS CONTRIBUTE

HEAVILY TO TOTAL PROFITS, INDICATE THAT PLANNED PRODUCT DEVELOPMENT
IS ONE VALID APPROACH To CORPORATE GROWTH AND STABILITY. FURTHER,
DUE TO THE SIGNIFICANCE OF SUCH PROFIT CONTRIBUTIONS, THEY RECOGNIZE
THAT FIRMS SHOULD BE ORGANIZED IN WAYS COMPATIBLE WITH OPTIMUM
DEVELOPMENT OF NEW PRODUCTS. ONE RESULT OF THIS RECOGNITION HAS
BEEN A GROWING TENDENCY TOWARD CREATION OF NEW PRODUCT DEPARTMENTS,
OFTEN FUNCTIONING WITHIN THE FORMAL MARKETING DEPARTMENT.
WITH REGARD TO THE ROLE OF NEW PRODUCT DEVELOPMENT, THE
LITERATURE HAS MADE AN IMPORTANT CONTRIBUTION TO UNDERSTANDING
OF THE MARKETING CONCEPT. DISCUSSIONS OF NEW PRODUCT DEVELOPMENT
HAVE CENTERED AROUND ITS MEANING TO PROFITS, BOTH PRESENT AND FUTURE,
AND MANAGERIAL ACCEPTANCE OF THE MEASURE, RETURN ON INVESTMENT,
EMPHASIZES THE VALUE OF SUCH ACTIVITY. NEW PRODUCT DEVELOPMENT
IS ALSO VIEWED As A NATURAL CONSEQUENCE OF CONSUMER ORIENTATION.
IT APPEARS THAT CORPORATE MANAGEMENT Is STRONGLY AWARE OF BROADER
1MPLICATIONS, INCLUDING THE INTERDEPARTMENTAL NATURE OF THESE
IMPLICATIONS, OF PRODUCT DEVELOPMENT WITHIN THE FRAMEWORD OF THE
MARKETING CONCEPT.
RECOGNITION OF THE NEED FOR EVALUATION OF MARKETING EFFORT
PREVIOUSLY IT HAS BEEN MENTIONED THAT THE MARKETING CONCEPT
LITERATURE MAKES OCCASIONAL REFERENCE TO MARKETING PLANNING AND
"MANAGEMENT BY OBJECTIVES"; ALSO, CONSIDERABLE ATTENTION IS GIVEN TO
ORGANIZATIONAL ASPECTS OF THE CONCEPT. IT SHOULD BE NOTED THAT TO
A LESSER DEGREE THE LITERATURE CONTRIBUTES TO UNDERSTANDING OF
THE CONCEPTTHROUGH INFREQUENT ARTICLES CONCERNED WITH CONTROL

OF MARKETING EFFORT. ALREADY IT HAS BEEN OBSERVED THAT MANAGERIAL

I90

ACCEPTANCE OF THE MEASURE OF RETURN-ON-INVESTMENT IS BECOMING
WIDESPREAD. ALSO SEVERAL WRITERS HAVE MADE SIGNIFICANT CONTRIBUTIONS
TO UNDERSTANDING OF THE CONCEPT THROUGH DISCUSSIONS, SOME OF WHICH
ARE QUITE DETAILED AND COMPLETE,OF INTERDEPARTMENTAL PRICING SYSTEMS
AND PROFIT CENTER SYSTEMS. SUCH DISCUSSIONS HAVE BEEN PRESENTED WITH
REGARD TO SPECIFIC COMPANY EXPERIENCE AS WELL AS WITH REGARD TO
BASIC ASSUMPTIONS, CONSEQUENCES, AND PROBLEMS RELATED TO SUCH
SYSTEMS.

IF THE LITERATURE HAS CONTRIBUTED LESS THAN ITS POTENTIAL
TO UNDERSTANDING OF THE CONCEPT IN THIS AREA, THE REASONS ARE
PRIMARILY INFREQUENT DISCUSSION AND FAILURE To RELATE CONTROL DIRECTLY
TO THE CONCEPT. CERTAINLY FAR FEWER ARTICLES CONCERNED WITH CONTROL
APPEAR IN THE LITERATURE THAN DO THOSE CONCERNED WITH PLANNING AND
ORGANIZING. ALSO, FEW OF THE MORE SUBSTANTIAL ANALYSES OF
INTERDEPARTMENTAL PRICING SYSTEMS AND PROFIT CENTER SYSTEMS ARE
CONCERNED EXPLICITISE WITH INDICATING THEIR RELATIONSHIP TO THE
MARKETING CONCEPT. RATHER, SUCH WRITINGS TEND TO BE ISOLATED
STATEMENTS RELATED TO CONTROL OF COMPANY OPERATIONS GENERALLY.
HOWEVER, IT APPEARS THAT THE LITERATURE NOT ONLY IS REPORTING
EFFORTS AT CONTROL IN BUSINESS, BUT FURTHER IS TEACHING AND GUIDING
THE LARGER BODY OF MANAGERS TOWARD A FULLER UNDERSTANDING OF
CONTROL DEVICES AND TECHNIQUES. As IS TRUE OF THE SEVERAL AREAS
PREVIOUSLY DISCUSSED, THE NEED FOR CONTROL Is EMPHASIZED IN THE
CONSTRUCTION OF THE DEFINITION OF THE CONCEPT LATER IN THIS

CHAPTER.

I9I

OTHER ELEMENTS NECESSARY FOR UNDERSTANDING THE
MARKETING CONCEPT

IN THE PREVIOUS SECTION OF THIS CHAPTER IT WAS NOTED THAT
LITERATURE OF THE MARKETING CONCEPT HAS BEEN LARGELY RESPONSIBLE
FOR WIDESPREAD MANAGERIAL AND ACADEMIC CONCERN WITH THE CONCEPT,
AND THAT THIS LITERATURE HAS MADE SIGNIFICANT CONTRIBUTIONS TO
UNDERSTANDING OF THE CONCEPT. THE AREAS AND NATURE OF CONTRIBUTION
HAVE BEEN DISCUSSED ABOVE. CONVERSELY, HOWEVER, THE LITERATURE HAS
ALSO SERVED TO COMPLICATE, AND EVEN TO CONFUSE, UNDERSTANDING OF
THE CONCEPT. IN PART THIS IS DUE TO MANY WRITERS' LACK OF PRECISION
IN USE OF TERMINOLOGY, AND ESPECIALLY TO THEIR FAILURE TO ESTABLISH
A DEFINITION OF THE CONCEPT WHICH WOULD BE BOTH SPECIFIC AND
UNDERSTANDABLE TO A MAJORITY. ANOTHER IMPORTANT PROBLEM RELATED
TO LACK OF UNDERSTANDING OF THE CONCEPT IS INSUFFICIENT INTEGRATION
OF THE VARYING INTERPRETATIONS IN THE LITERATURE, WHICH AT PRESENT
COMPOSED PRIMARILY OF NUMEROUS PARTIAL ANALYSES OF THE CONCEPT.

THUS, CERTAIN USE OF TERMINOLOGY, OVER- AND UNDER-EMPHASIS
OF VARIOUS AREAS, AND LACK OF INTEGRATION OF MATERIAL IN THE LITERATURE
HAVE PARTIALLY HINDERED UNDERSTANDING OF THE MARKETING CONCEPT.
HOWEVER, FULL UNDERSTANDING OF THE CONCEPT IS FURTHER PRECLUDED
BY THE OMISSION OF DISCUSSION OF SEVERAL ADDITIONAL FEATURES. IT
IS WITH THESE ELEMENTS THAT THIS SECTION IS CONCERNED. GENERALLY,
THE FEATURES DISCUSSED IN THE LITERATURE HAVE BEEN SUCH PHYSICAL

MANIFESTATIONS AS ORGANIZATIONAL STRUCTURING, THE PREPARATION OF

I92

CERTAIN PLANS, AND SYSTEMATIZING CERTAIN OPERATIONS AND PROCEDURES,
CONCERN HERE Is WITH FOUR ADDITIONAL ELEMENTS WHICH, ALTHOUGH LESS
TANGIBLE THAN THOSE PREVIOUSLY DESCRIBED, ARE NO LESS SIGNIFICANT
REGARDING UNDERSTANDING OF THE MARKETING CONCEPT. THESE FACTORS,
WHICH ARE DISCUSSED IN THE ORDER INDICATED BELOW ARE:

I. THE ROLE OF THE CHIEF CORPORATE EXECUTIVE,

2. PERCEPTIONS AND COMPREHENSIONS OF THE SEVERAL CORPORATE
OFFICERS,

3. PARTICIPATION OF THE SEVERAL CORPORATE OFFICER, AND
H. INTERACTION OF THE SEVERAL CORPORATE OFFICERS.

THE ROLE OF THE CHIEF CORPORATE EXECUTIVE

 

AS MANAGERIAL INTEREST IN THE MARKETING CONCEPT HAS INCREASED,
ESPECIALLY AMONG MARKETING OFFICERS, THE TENDENCY TOWARD PRESENTATION
OF PRESCRIPTIONSFOR IMPLEMENTATION OF THE CONCEPT HAS DEVELOPED IN
THE LITERATURE. HOWEVER, SUCH PRESCRIPTIONS ONLY EMPHASIZE A
RATHER GENERAL LACK OF UNDERSTANDING OF THE MARKETING CONCEPT.

ALREADY IT HAS BEEN NOTED THAT RELATIVELY FEW WRITERS HAVE EXPLICITLY
RECOGNIZED ITS COMPANY-WIDE IMPLICATIONS. EVEN THOSE WHO DO RECOGNIZE
THE CONCEPT'S BROADER MEANING TYPICALLY DESCRIBE "SELLING" THE

CONCEPT TO OTHER DEPARTMENTS OF THE COMPANY AS A RESPONSIBILITY OF THE
MARKETING OFFICERS. GIVEN THE REPORTED TRADITIONAL LACK OF UNDER-
STANDING AND COOPERATION BETWEEN THE MARKETING AND MANUFACTURING
DEPARTMENTS, IT APPEARS UNLIKELY THAT MARKETING OFFICERS CAN
ACCOMPLISH THIS TASK. THE FACT THAT MANY PRODUCTION AND FINANCE
OFFICERS APPEAR TO DISTRUST, OR EVEN RESENT, SUCH EFFORTS BY MARKETING
OFFICERS LENDS SUPPORT TO THIS POSITION.

DUE TO LACK OF UNDERSTANDING OF THE MARKETING CONCEPT THIS

'93

RESPONSIBILITY HAS BEEN PLACED UPON MARKETING OFFICERS. HOWEVER,
IT IS THE CHIEF EXECUTIVE OFFICER OF THE FIRM WHO IS RESPONSIBLE
FOR PROVIDING AN ORIENTATION FOR COMPANY OPERATION FOR ALL OF HIS
SUBORDINATE OFFICERS. As REPORTED IN COST AND PROFIT OUTLOOK:
THE HIGHEST FUNCTION OF THE TOP EXECUTIVE IS TO THINK

IN TERMS OF A SYSTEM OF ACTION, TO CONTROL OR INFLUENCE

THE BEHAVIOR OF THE SYSTEM IN WAYS THAT ARE FAVORABLE TO

MAXIMIZING ITS OUTPUT, AND TO REMODEL OR REBUILD THE

SYSTEM SHOULD CHANGING CONDITIONS RENDER IT OBSOLETE

. . . . THE PROBLEMS WHICH WILL OFFER THE GREATEST

CHALLENGE . . . ARE PROBLEMS WHICH ARISE IN THE MARKET

PLACE. THAT IS WHY THE TOP EXECUTIVE, WHETHER HE LIKES

IT OR NOT, Is TRULY A MARKETING EXECUTIVE.

COMMENTS REGARDING THE ROLE OF THE CHIEF EXECUTIVE WERE
OFFERED BY SEVERAL CORPORATE OFFICERS INTERVIEWED BY THIS WRITER.
GENERALLY, IT WAS AGREED THAT THE MARKETING CONCEPT HAS A GREATER
PROBABILITY FOR "SUCCESS" IN THOSE COMPANIES WHOSE PRESIDENTS
HAVE HAD MARKETING EXPERIENCE. THEY NOTE WITH SOME SATISFACTION
THAT CURRENT TREND TOWARD ELEVATION OF PERSONS WITH SUCH EXPERIENCE
TO CORPORATE PRESIDENCIES. TYPICAL OF THESE COMMENTS ARE THE
FOLLOWING. JEFF GRADY, DIRECTOR OF MARKETING OPERATIONS,
LILY-TULIP CUP CORPORATION, NOTES THAT:

IF THE PRESIDENT OR CHIEF OPERATING OFFICIAL OF A

COMPANY IS A MARKETING MAN, IT IS MORE LIKELY THAT THE

COMPANY OPERATES TOWARD THE MARKETING CONCEPT . . . .

THE PRESIDENT MUST BE A PART OF THE PLAN.3

JOHN WAKEFIELD, A MARKETING DIVISION VICE-PRESIDENT, BARRINGTON

ASSOCIATES, STATED THAT THE MARKETING CONCEPT IS A BUSINESS

2"TOP MANAGEMENT AND MARKET ORIENTATION," COST AND PROFIT
OUTLOOK, XII (APRIL, I959), 5.

3INTERVIEW WITH JEFF GRADY, DIRECTOR OF MARKETING OPERATIONS,
LILY-TULIP CUP CORPORATION, NEW YORK, MARCH 25, I960.

PHILOSOPHY, AND THAT:
. . . BUSINESS PHILOSOPHY DEPENDS UPON A TOP EXECUTIVE
. . . . THE CHIEF OFFICER, HIMSELF, FIRST MUST BE SOLD
ON CUSTOMER ORIENTATION . . . THEN HE CAN SELL OTHER PEOPLE
ON THE NOTION THAT ALL TH Y DO MUST CONSIDER CUSTOMER
SATISFACTION AT A PROFIT.
SIMILARLY, EDWARD S. McKAY OF GENERAL ELECTRIC COMPANY DESCRIBES
THE GENERAL MANAGER'S ROLE AS:
. . . VISUALIZING AND UNDERSTANDING WHAT YOUR BUSINESS
IS, AND WHERE YOU WANT TO TAKE IT, AND THEN DOING THE
OVERALL BUSINESS PLANNING . . . . THE HEAD OF THE
BUSINESS MUST REALLY WANT THE MARKETING VIEW . . . AND THE
MARKETING CONCEPT MUST BE COMPATIBLE WITH THE REST OF
THE BUSINESS PHILOSOPHY OF THE COMPANY.5
IN SUMMARY IT SHOULD BE NOTED THAT THE RATHER GENERAL
EXCLUSION OF CORPORATE PRESIDENTS FROM CONCERN WITH THE MARKETING
CONCEPT NOT ONLY RESULTS IN LACK OF ACCEPTANCE OF THE CONCEPT
BY NON-MARKETING COMPANY OFFICERS, BUT ALSO INDICATES WIDESPREAD
MISINTERPRETATION OF THE SCOPE OF THE CONCEPT.
PERCEPTIONS AND COMPREHENSIONS OF CORPORATE OFFICERS
FREQUENTLY IN THE LITERATURE THE USE OF SUCH PHRASES AS
"ADOPTION OF THE MARKETING CONCEPT" AND "ACCEPTANCE OF CONSUMER
ORIENTATION" IMPLIES THAT SUCH ADOPTION AND ACCEPTANCE ARE
LARGELY MATTERS OF CHOICE BASED UPON THE DISPOSITION OF THE PERSON
CONCERNED. AS A RESULT, A COMPANY OFFICER WHO "RESISTS ACGPTANCE"

OF THE CONCEPT OFTEN IS DESCRIBED AS "TRADITIONAL" OR "UNCOOPERATIVE.'

 

INTERVIEW WITH JOHN E. WAKEEIELD, VICE-PRESIDENT, MARKETING
DIVISION, BARRINGTON ASSOCIATES, NEW YORK, MARCH 28, I960.

5INTERVIEW WITH EDWARD S. MCKAY, MARKETING SERVICES, GENERAL
ELECTRIC COMPANY, NEW YORK, MARCH 25, I960.

'95

SUCH AN INTERPRETATION SUGGESTS BOTH LACK OF UNDERSTANDING OF THE
MARKETING CONCEPT AND UNFAIRNESS TOWARD SUCH OFFICIALS, ESPECIALLY
IN THE ABSENCE OF POSITIVE ACCEPTANCE OF THE CONCEPT AND GUIDANCE
TOWARD ITS IMPLEMENTATION ON THE PART OF THE CHIEF EXECUTIVE.

FOR EXAMPLE, ONE MAY CONSIDER THE POSITION OF THE CORPORATE
FINANCE OFFICER. THIS MAN, CHARGED WITH RESPONSIBLITY FOR THE
FINANCIAL STRENGTH AND STABILITY OF HIS FIRM, BRINGS TO HIS POST A
BACKGROUND OF TRAINING AND EXPERIENCE IN FINANCIAL MATTERS. CUSTOM
AND CORPORATE POLICY HAVE DEFINED HIS AREA OF OPERATION, AND NO SERIOUS
QUESTION HAS BEEN RAISED REGARDING THE PAST EFFECTIVENESS OF SUCH
OPERATION. THE MAN IS A SPECIALIST. IF HE IS THE CONFRONTED

I

WITH AN ILL~DEFINED ALTHOUGH AVIDLY SUPPORTED 'MARKETING CONCEPT,"

THE FINANCE OFFICER NOW COULD ASSUME HIS IS EXPECTED TO BECOME A

'MARKETING MAN,"

AND AS IUCH, HE SHOULD BE CONCERNED WITH COMPANY
EFFORT AIMED AT CONSUMER SATISFACTION WHICH RESULTS IN PROFITABLE
OPERATION. ONE MAY SURMISE THE FINANCE OFFICER'S REACTION TO SUCH
A PROPOSAL.

EVEN AMONG THE MARKETING OFFICERS A SIMILAR, ALTHOUGH
APPARENTLY LESS SEVERE SITUATION EXISTS. CONSIDER THE SITUATION
OF THE ADVERTISING DIRECTOR APPROACHES BY A "DIRECTOR OF MARKETING"
AND REQUESTED TO WORK OUT HIS PLANS IN CONJUNCTION WITH THE SALES
MANAGER. CUSTOM DICTATES THAT THE LATTER DIRECTS THE SALES
FORCE, AND THAT THE FORMER IS CONCERNED WITH OVERALL ADVERTISING
OPERATIONS. CAN COOPERATION EXIST BETWEEN THESE OFFICERS WHEN ONE

HAS LITTLE APPRECIATION OF THE OTHER'S CONTRIBUTION TO OVERALL

MARKETING EFFECTIVENESS? ONE MAY SPECULATE As TO THE POSSIBILITY OF

"I
.I

I96

THESE OFFICERS TURNING COMPETITION INTO COOPERATION, BASED UPON A
REQUEST THAT THEY "ADOPT THE MARKETING CONCEPT."

THE PROBLEM SUGGESTED HERE Is THAT MANY CORPORATE OFFICERS
SIMPLY DO NOT PERCEIVE THE NEED FOR ACCEPTING A BUSINESS ORIENTATION
DIFFERENT FROM ONE ALREADY TESTED AND PROVED, NOR DO THEY COMPREHEND
THE IMPLICATIONS OF THE MARKETING CONCEPT TO THEIR OWN SPECIALIZED
DUTIES. CONSEQUENTLY, IN ADDITION TO ACTIVE TOP MANAGEMENT
SUPPORT OF THE CONCEPT, THERE IS A GREAT NEED FOR BASIC RE-EDUCATION
OF OFFICALS, ESPECIALLY NON-MARKETING AREA OFFICIALS, IN THE MEANING
OF THE CONCEPT GENERALLY, AND REGARDING ITS IMPACT UPON THEIR
TASKS SPECIFICALLY. BASIC TO UNDERSTANDING AND IMPLEMENTATION OF
THE MARKETING CONCEPT IS QUESTIONING BY CORPORATE OFFICIALS, IN
ALL FUNCTIONAL AREAS, OF THE FUNDAMENTAL PURPOSES AND GOALS OF THEIR
FIRMS, AND HOW THE GOALS CAN BE ATTAINED IN THE PRESENT DAY ENVIRONMENT.

PARTICIPATION OF CORPORATE OFFICERS

 

PREVIOUSLY IT WAS SUGGESTED THAT ALTHOUGH COMPANY-WIDE
IMPLICATIONS OF THE MARKETING CONCEPT ARE RECOGNIZED IN THE
LITERATURE, SUCH IMPLICATIONS ARE NOT EMPHASIZED. ACTUALLY,
FEW WRITERS HAVE EXPLICITLY CONCERNED THEMSELVES WITH CONSEQUENCES
OF THE CONCEPT BEYOND THE TRADITIONAL AREAS OF MARKETING ACTIVITY.
HOWEVER, UNDERSTANDING OF THE CONCEPT INVOLVES FAR MORE THAN RECOGNITION
OF THE DESIRABILITY OF COORDINATION OF MARKETING EFFORT AMONG THE
SALES, SERVICE, AND ADVERTISING DEPARTMENTS. AS A RESULT, THE
DECISION REGARDING ADDITION OF A NEW PRODUCT TO A MANUFACTURER'S
LINE Is NOT A MARKETING PROBLEM, AS SUCH, NOR IS IT PRIMARILY

A MANUFACTURING OR FINANCE PROBLEM. OBVIOUSLY SUCH A DECISION HAS

 

III? III"

'97

IMPLICATIONS FOR ALL OF THESE FUNCTIONAL AREAS. THE PROBLEM IS

A COMPANY-WIDE PROBLEM, AND THE ABILITIES AND CONTRIBUTIONS OF

OFFICERS OF EACH AREA ARE NEEDED TO REACH AN OPTIMUM SOLUTION.

SIMILAR ANOLOGIES COULD BE MADE REGARDING DECISIONS RELATED TO

OTHER PROBLEMS, SUCH AS PRICING, PROMOTION, AND PRODUCT DESIGN.
CONSEQUENTLY, THE MARKETING CONCEPT CANNOT BE FULLY EFFECTIVE

IN A FIRM IN WHICH IT IS RELATED TO TRADITIONAL MARKETING AREA

ACTIVITIES ALONE. THE ACTIVE PARTICIPATION OF CORPORATE MANAGEMENT

IN ALL FUNCTIONAL AREAS OF BUSINESS IS BASIC TO UNDERSTANDING AND

EFFECTIVE IMPLEMENTATION OF THE MARKETING CONCEPT.

INTERACTION OF CORPORATE OFFICIALS

 

BASED UPON THE LITERATURE REVIEW PRESENTED PREVIOUSLY IN
THIS STUDY, ONE MAY CONCLUDE THAT, GENERALLY, ORGANIZATIONAL
STRUCTURING OF FIRMS' FUNCTIONAL AREAS HAS RESULTED IN COMPARTMENTALIZA-
TION OF THESE AREAS. WITH REGARD To THIS OBSERVATION, OPERATION
WITHIN THE FRAMEWORD OF MORE TRADITIONAL ORIENTATIONS MAY BE
COMPARED MEANINGFULLY WITH OPERATION UNDER THE MARKETING CONCEPT.
WHEREAS THE FORMER ORIENTATIONS INCORPORATE A TENDENCY TOWARD
ORGANIZATIONAL DIVISION OF EFFORT, THE LATTER SUGGESTS MOBILIZATION
OF OVERALL CORPORATE EFFORT, FACILITATED BY DEFINED AND ACCEPTED
MANAGERIAL FOCUSES AND OBJECTIVES.

IN THE PRECEDING SECTION PARTICIPATION OF CORPORATE OFFICERS
IN THE SEVERAL FUNCTIONAL AREAS OF BUSINESS WAS DESCRIBED AS
BASIC TO UNDERSTANDING AND IMPLEMENTATION OF THE MARKETING CONCEPT.
IMPLICIT IN THIS STATEMENT IS RECOGNITION OF THE NECESSITY FOR

INTERACTION AMONG THESE OFFICIALS. HOWEVER, SPECIAL EMPHASIS UPON

I98

COMPANY-WIDE MANAGERIAL INTER-ACTION APPEARS WARRANTED ON THE BASES
OF THE REPORTED INSUFFICIENCY OF SUCH INTERACTION IN THE PAST,

AND OF THE MARKETING CONCEPT LITERATURE'S INFREQUENT RECOGNITION

OF THE FUNDAMENTAL NEED FOR SUCH PARTICIPATION AND INTERACTION

UNDER THE CONCEPT.

A RESTATEMENT OF THE MEANING OF THE MARKETING CONCEPT

IT Is THE PURPOSE OF THIS SECTION TO ESTABLISH A DEFINITION
OF THE MARKETING CONCEPT WHICH, VIEWED WITHIN THE FRAMEWORK OF
DISCUSSION PRESENTED IN THE TWO PRECEEDING SECTIONS WILL PROVIDE
A CONCISE BUT LUCID STATEMENT OF THE CONCEPT'S NATURE. SUCH A
DEFINITION PROVIDES A FOUNDATION UPON WHICH IMPLEMENTATION OF
THE CONCEPT BY INDIVIDUAL FIRMS MAY BE BASED.

IT IS SUGGESTED THAT THE MEANING OF THE MARKETING CONCEPT
MAY BE DISCOVERED AND APPRECIATED THROUGH ACCEPTANCE OF THE LOGIC
PRESENTED BELOW. A SERIES OF BRIEF BUT BASIC QUESTIONS REGARDING
THE NATURE OF THE FIRM AND ITS OPERATION IS PRESENTED BELOW,
ACCOMPANIED BY ANSWERS WHICH FORM THE BASES OF THE CONCEPT. THESE
QUESTIONS ARE:

I. WHY DOES ANY PARTICULAR FIRM EXIST?

2. WHAT Is THE BASIS OF A FIRM'S SURVIVAL AND GROWTH?

3. BASED UPON THE ABOVE, WHAT SHOULD BE THE ULTIMATE‘
OBJECTIVE OF ALL CORPORATE EFFORT?

A. IN VIEW OF THE ABOVE ANSWERS, WHAT Is THE ROLE OF PROFIT?

5. HOW CAN THE CORPORATE OBJECTIVE AS DESCRIBED ABOVE, BE
ATTAINED? BELOW EACH OF THESE QUESTIONS IS ASKED AND ANSWERED IN

WAYS COMPATIBLE WITH UNDERSTANDING OF THE MARKETING CONCEPT.

'99

BASIS OF FIRM'S EXISTANCE

 

WHY DOES ANY PARTICULAR FIRM EXIST? THE QUESTION, ALTHOUGH
BASIC TO UNDERSTANDING OF COMPANY GORWTH AND SURVIVAL IN A
COMPETITIVE ECONOMIC SYSTEM, PROBABLY Is OF FAR LESS CONCERN TO BUSINESS
MANAGEMENT THAN IS THE QUESTION OF HOW TO HANDLE DAY-To-DAY
OPERATIONAL PROBLEMS. THE TWO QUESTIONS ARE CLOSELY RELATED,
ALTHOUGH A STUDY OF BUSINESS HISTORY REVEALS FREQUENT INSTANCES
WHERE THIS RELATIONSHIP APPARENTLY HAS BEEN INSUFFICIENTLY
UNDERSTOOD AND APPRECIATED.

BUSINESSMEN'S CONCERN WITH PRODUCTION COSTS, SALES VOLUMES
AND RETURN ON INVESTMENT MAY LEAD ONE TO CONCLUDE THAT, ACCORDING
TO THE BUSINESSMEN, THE FIRM EXISTS TO MAKE AND SELL GOODS, SO THAT
PROFITS WILL ACCRUE. PROFIT, THEN, IS THE SOLE REASON FOR EXISTENCE
OF THE FIRM. STUDY OF THE PERIODS OF PRODUCTION AND SALES MANAGEMENT
ORIENTATIONS, PRESENTED IN CHAPTER II, SUPPORT THIS POINT OF VIEW.
HOWEVER, IT WAS EMPHASIZED THAT THE PRESENT ECONOMIC ENVIRONMENT
MAKES SUCH A POSITION UNTENABLE.

THEREFORE, IT IS NECESSARY FOR MANAGEMENT TO REDISCOVER
THE BASIS OF THE FIRM'S EXISTENCE, IF COMPANY SURVIVAL AND GROWTH
ARE TO BE ASSURED. DRUCKER HAS DESCRIBED THIS BASIS, AS FOLLows:

IF WE WANT TO KNOW WHAT A BUSINESS IS, WE HAVE TO START

WITH ITS PURPOSE. AND ITS PURPOSE MUST LIE OUTSIDE OF

THE BUSINESS ITSELF. IN FACT, IT MUST LIE IN SOCIETY

SINCE A BUSINESS ENTERPRISE IS AN ORGAN OF SOCIETY.

THERE IS ONLY ONE VALID DEFINITION OF BUSINESS PURPOSE:

TO CREATE A CUSTOMER . . . . THE CUSTOMER IS HE FOUNDA-
TION OF A BUSINESS AND KEEPS IT IN EXISTENCE.

 

6PETER F. DRUCKER, THE PRACTICE OF MANAGEMENT (NEW YORK:
HARPER & BROS., I95h), 37.

 

200

DRUCKER'S STATEMENT MAY BE EXPANDED TO NOTE THAT THE FIRM EXISTS
FOR THE PURPOSE OF SOLVING SELECTED PROBLEMS OF CONSUMERS. ONLY
IN SO FAR AS A FIRM'S OFFERING OF PRODUCTS AND SERVICES CONTRIBUTE
BY THE SOLUTION OF CONSUMERS' PROBLEMS IS THE EXISTENCE OF THE
FIRM JUSTIFIED.
BASIS OF FIRM'S SURVIVAL AND GROWTH

WHAT IS THE BASIS OF A FIRM'S SURVIVAL AND GROWTH? A STUDY
OF BUSINESS HISTORY MAY LEAD ONE TO CONCLUDE THAT MANAGEMENT
TRADITIONALLY HAS VIEWED COMPANY SURVIVAL AND GROWTH AS BEING DIRECTLY
RELATED TO TRENDS IN SALES VOLUMES. IT WAS EMPHASIZED PREVIOUSLY,
HOWEVER, THAT MANAGERIAL ACCEPTANCE OF THIS GENERALIZATION IN OUR
DYNAMIC ECONOMY IS N'BEST QUITE DANGEROUS. FOR EXAMPLE, GENERALLY
THE PROFIT CONTRIBUTION OF AN ESTABLISHED PRODUCT NOT ONLY IS
SUBJECT TO FAR WIDER FLUCTUATION THAN IS ITS SALES VOLUME, BUT
FURTHER, FOR MANY PRODUCTS THE PERIOD OF SUBSTANTIAL PROFIT
CONTRIBUTION Is SIGNIFICANTLY SHORTER THAN THE PERIOD OF VOLUME
SALES.

PREVIOUSLY IT WAS STATED THAT A FIRM'S OFFERING OF PRODUCTS
AND SERVICES WHICH HELP CONSUMERS SOLVE THEIR PROBLEMS IS ITS
REASON FOR EXISTENCE. SIMILARLY, IT IS THE FIRM'S CONTINUOUS
PERFORMANCE IN SOLVING SUCH PROBLEMS THAT DETERMINES WHETHER OR
NOT A FIRM Is TO SURVIVE AND GROW.
ULTIMATE OBJECTIVE OF CORPORATE EFFORT

BASED UPON THE ABOVE STATEMENTS, WHAT SHOULD BE THE ULTIMATE
OBJECTIVE OF ALL CORPORATE EFFORT? IF THE PRECEDING STATEMENTS ARE

ACCEPTED, THE ANSWER TO THIS QUESTION IS OBVIOUS. ALL CORPORATE EFFORT

2OI

SHOULD BE DIRECTED TOWARD THE DISCOVERY OF CONSUMER PROBLEM AREAS,
THE INNOVATION OF SOLUTIONS TO SUCH PROBLEMS AS THE FIRM IS CAPABLE
OF ADDRESSING ITSELF TO, AND THE PROFITABLE MOBILIZATION OF CORPORATE
EFFORT TO SERVE THE SELECTED MARKET. THE SURVIVING FIRM, THEN,

IS ONE WHICH HAS DISCOVERED AN AREA OF MARKETING OPPORTUNITY,

I.E. A CONSUMER PROBLEM AREA, WHICH IT CAN SERVE PROFITABLY. THE
GROWTH FIRM IS ONE WHICH CONTINUALLY SEEKS OUT SUCH PROBLEM AREAS

AND WHICH IS ACTIVE IN FOCUSING RESOURCES OF MEN AND MATERIALS FOR
THE INNOVATION OF PRODUCT AND SERVICE OFFERINGS WHICH CAN SOLVE

SUCH PROBLEMS WHILE EARNING A PROFIT FOR THE FIRM.

THE ROLE OF PROFIT

 

IN VIEW OF THE ABOVE ANSWERS, WHAT IS THE ROLE OF PROFIT?
THE CONCEPT OF PROFIT AS THE SOLE PURPOSE FOR ALL BUSINESS
ACTIVITY HAS BEEN REJECTED, NOT BECAUSE PROFIT IS UNESSENTIAL TO
CONTINUED EXISTENCE OF THE FIRM, BUT BECAUSE SUCH AN ORIENTATION
IGNORES THE FIRM'S SOCIAL ORIGINS, AND THEREFORE, THE FIRM'S
PRIVELEGE TO EARN PROFITS.

IF PROFIT IS NOT TO BE VIEWED AS THE PURPOSE OF BUSINESS
ACTIVITY, THEN WHAT Is ITs FUNCTION? AS SUMMARIZED BY DRUCKER:

. . . PROFITABILITY IS NOT THE PURPOSE OF BUSINESS ENTERPRISE

AND BUSINESS ACTIVITY, BUT A LIMITING FACTOR ON IT. PROFIT

IS NOT THE EXPLANATION, CAUSE, OR RATIONALE OF BUSINESS

BEHAVIOR AND BUSINESS DECISIONS, BUT THE TEST OF THEIR

VALIDITY.7

THEREFORE, PROFIT BECOMES A MEASURE OF THE SUCCESS OF BUSINESS

EXECUTIVESt DECISIONS AND ACTIONS, WHICH ARE DIRECTED TOWARD THE

 

7IBID., 35.

 

202

SOLUTION OF SELECTED CONSUMER PROBLEMS.

IMPLICATIONS FOR MANAGEMENT

 

HOW CAN THE CORPORATE OBJECTIVE, AS DESCRIBED ABOVE,
BE ATTAINED? BASICALLY, THE QUESTION IS CONCERNED WITH THE
POSSIBILITY OF CONSCIOUSLY PERMEATING AN ORGANIZATION WITH THE BASIC
MANAGERIAL ORIENTATION DISCUSSED IN THIS SECTION. THE FOLLOWING
COMMENTS ARE PRESENTED, NOT As A PRESCRIPTION FOR INDIVIDUAL
FIRMS, BUT RATHER AS A SUMMARIZATION OF THE MINIMUM CONDITIONS
NECESSARY FOR EFFECTIVE APPRECIATION OF THIS MANAGERIAL ORIENTATION.

FIRST, AND MOST BASIC, IS COMPANY-WIDE MANAGERIAL UNDERSTANDING
AND ACCEPTANCE OF THE ROLES OF CONSUMERS AID PROFIT, AND OF THE
RELATIONSHIP OF THESE ROLE TO CORPORATE SUCCESS. SECOND, THERE
MUST BE CONTINUING EFFORT TOWARD DISCOVERY OF POTENTIALLY PROFITABLE
CONSUMER PROBLEM-SOLVING AREAS THROUGH ACCUMULATION AND UTILIZATION
OF FACTS. THIRII, THESE PROBLEM-SOLVING AREAS MUST BE SCREENED
ACCORDING TO THEIR POTENTIAL IMPACT UPON THE FIRM'S PROFIT POSITION,
AND SELECTED AREAS MUST BE TRANSLATED INTO SPECIFIC OBJECTIVES.
FOURTH, BASED UPON THE USE OF FACTS AND CONSISTENT WITH OVERALL
CORPORATE OBJECTIVES, PLANS WILL BE CONSTRUCTED FOR MOBILIZING TOTAL
CORPORATE EFFORT TOWARD THE PROFITABLE SOLUTION OF THESE SPECIFIC
CONSUMER PROBLEMS. RESPONSIBILITIES, INCLUDING PROFIT RESPONSIBILITIES,
ARE SPECIFIED TO INSURE ACTION AND TO FACILITATE CONTROL. FINALLY,
ADJUSTMENTS IN ORGANIZATIONAL STRUCTURE WILL BE MADE AS DEEMED
NECESSARY FOR FACILITATING DIRECTION, COORDINATION, AND CONTROL OF
CORPORATE EFFORT, CONSISTENT WITH THE BASIC MANAGERIAL PHILOSOPHY

AND THE ACCOMPLISHMENT OF RESULTING OBJECTIVES.

203

DEFINITION OF THE MARKETING CONCEPT

 

BASED UPON THE PRECEDING DISCUSSION, IT IS POSSIBLE TO
CONSTRUCT A MEANINGFUL DEFINITION OF THE MARKETING CONCEPT. STATED
BRIEFLY, THE MARKETING CONCEPT IS A MANAGERIAL PHILOSOPHY CONCERNED
WITH THE MOBILIZATION, UTILIZATION, AND CONTROL OF TOTAL CORPORATE
EFFORT FOR THE PURPOSE OF HELPING CONSUMERS SOLVE SELECTED PROBLEMS
IN WAYS COMPATIBLE WITH PLANNED ENHANCEMENT OF THE PROFIT POSITION
OF THE FIRM. MORE SPECIFICALLY THE CONCEPT INVOLVES:

I. A COMPANY-WIDE MANAGERIAL AWARENESS AND APPRECIATION
OF THE CONSUMER'S ROLE AS IT IS RELATED TO THE FIRM'S EXISTENCE,
GROWTH, AND STABILITY.

2. ACTIVE COMPANY-WIDE MANAGERIAL AWARENESS AND CONCERN
WITH INTER-DEPARTMENTAL IMPLICATIoNS OF DECISIONS AND ACTIONS
OF ANY ONE DEPARTMENT. THAT IS, THE FIRM Is VIEWED AS A NETWORK
OF FORCES FOCUSSED ON MEETING A CONSUMER NEED, COMPRISING A SYSTEM
WITHIN WHICH ACTIONS IN ONE AREA FREQUENTLY RESULT IN SIGNIFICANT
REPERCUSSIONS IN OTHER AREAS OF THE FIRM. ALSO, IT IS RECOGNIZED
THAT SUCH ACTIONS MAY EFFECT THE COMPANY'S EQUILIBRIUM WITH ITS
EXTERNAL ENVIRONMENT (ITS CONSUMERS, COMPETITORS, ETC.).

3. ACTIVE COMPANY-WIDE MANAGERIAL CONCERN WITH INNOVATION
OF PRODUCTS AND SERVICES DESIGNED TO SOLVE SELECTED CONSUMER
PROBLEMS.

A. GENERAL MANAGERIAL CONCERN WITH THE EFFECT OF NEW PRODUCT
AND SERVICE INTRODUCTION ON THE FIRM'S PROFIT POSITION, BOTH PRESENT
AND FUTURE.

5. GENERAL MANAGERIAL APPRECIATION OF THE ROLE OF MARKETING

20h

INFORMATION AND INTELLIGENCE, AS WELL AS OF THE CONTRIBUTIONS OF
OTHER FACT—FINDING AND REPORTING UNITS WITHIN AND ADJACENTTO THE
FIRM IN THE MODEL REFERRED TO AS "THE SENSITIVITY MONITOR," IN
TRANSLATING THE GENERAL STATEMENTS PRESENTED ABOVE INTO DETAILED
STATEMENTS OF PROFITABLE MARKET POTENTIALS, TARGETS AND ACTIONS.

6. COMPANY-WIDE MANAGERIAL EFFORT, INVOLVING PARTICIPATION
AND INTER-ACTION OF OFFICERS, IN ESTABLISHING CORPORATE AND DEPARTMENTAL
OBJECTIVES WHICH ARE BOTH UNDERSTAND BY, AND ACCEPT ABLE To THE
SEVERAL OFFICERS, AND YET CONSISTENT WITH ENHANCEMENT OF THE
FIRM'S PROFIT POSITION.

7. FORMAL SHORT- AND LONG-RANGE PLANNING OF CORPORATE
GOALS, STRATEGIES, AND TACTICS, RESULTING IN DEFINED AND COORDINATED
EFFORT OF THE SEVERAL FUNCTIONAL AREAS OF THE FIRM.

8. CREATION, EXPANSION, TERMINATION, OR RESTRUCTURING
OF ANY CORPORATE FUNCTIONS As DEEMED NECESSARY IN MOBILIZING
UTILIZING, AND CONTROLLING TOTAL CORPORATE EFFORT TOWARD THE
SOLUTION OF CONSUMER PROBLEMS IN WAYS COMPATIBLE WITH ENHANCEMENT

OF THE PROFIT POSITION OF THE FIRM.

A MODEL OF THE MARKETING CONCEPT

INTRODUCTION

 

BASED UPON THE PRECEDING DEFINITION OF THE MARKETING CONCEPT,
IT IS POSSIBLE TO DEMONSTRATE SCHEMATICALLY THE SIGNIFICANCE AND
RELATIONSHIP OF THE CONCEPTTO BUSINESS MANAGEMENT. IN RELATING
THE CONCEPT TO MANAGERIAL ACTION AND BEHAVIOR, THREE HYPOTHETICAL
SITUATIONS ARE DISCUSSED IN TERMS OF THE MODEL PRESENTED ON THE

FOLLOWING PAGE. THESE SITUATIONS ARE, RESPECTIVELY:

205

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2. THE FIRM WHICH DISCOVERS THAT MODIFICATION OF THE MARKET
OFFERING, WITHIN THE BOUNDS OF EXISTING CORPORATE POLICY, APPEARS
DESIRABLE, AND

3. THE FIRM WHICH DISCOVERS THAT MARKET CONDITIONS NECESSITATE
MAJOR MODIFICATION OF CORPORATE POLICY AND MARKET OFFERINGS.

THE MODEL ILLUSTRATES THE RELATIONSHIP OF THE FIRM IN
THE MARKET PLACE, THE CONSCIOUS SENSITIVITY OF CORPORATE MANAGE-

MENT TO IMBALANCE BETWEEN MARKET OFFERING AND MARKET DEMAND, AND
THE MECHANISM THROUGH WHICH BALANCE IS REGAINED BY MANAGEMENT.
ESSENTIAL FEATURES OF THE MODEL ARE THE "SENSITIVITY MONITOR" AND

' To WHICH REFERENCE SHALL BE

THE BASES OF "MANAGERIAL ACTION,’
MADE IN THE FOLLOWING PAGES. THE "SENSITIVITY MONITOR: REPRESENTS
THE FIRM'S TOTAL MARKET INTELLIGENCE FORCE, I.E. COMPANY UNITS
AND EXTERNAL AGENCIES, SUCH As MARKETING AND LOGISTICS RESEARCH,
WHICH ARE ENGAGED IN THE COLLECTION OF MARKET INFORMATION AND ITS
INTERPRETATION INTO MARKET INTELLIGENCE. "MANAGERIAL ACTION" REFERS
TO CORPORATE MANAGEMENT'S SELECTION OF A COURSE OF ACTION,
CONSISTENT WITH THE FIRM'S DUAL OBJECTIVES EXPLICIT IN THE
MARKETING CONCEPT, FROM A NUMBER OF ALTERNATIVE DECISION. FOR
CONVENIENCE OF THE READER, EACH COMPONENT OF THE MODEL HAS BEEN
NUMBERED, AND IN THE FOLLOWING DISCUSSION, MENTION OF COMPONENTS
IS ACCOMPANIED BY THE APPROPRIATE IDENTIFYING NUMBER.
OPERATION UNDER CONDITIONS OF BALANCE - SITUATION I

IN THE FIRST SITUATION, IT IS ASSUMED THAT THE FIRM'S

MARKET OFFERING (I) IS FOUND TO BE IN BALANCE WITH DEMANDS OF THE

MARKET PLACE (2). THAT Is, THE MARKET OFFERING IS FOUND TO BE

207

COMPATIBLE WITH THE DUAL OBJECTIVES OF THE FIRM: SATISFACTION OF
SELECTED CONSUMER PROBLEMS IN WAYS PROFITABLE TO THE FIRM. THIS
DETERMINATION IS BASED UPON COMPARISON OF COMPANY PLANS AND
ESTIMATES (I2), UPON WHICH THIS MARKET OFFERING WAS PREDICATED,
WITH ACCEPTANCE OF THE MARKET OFFERING IN THE MARKET PLACE, As
OBSERVED BY THE MARKET SENSITIVITY MONITOR (3). FURTHER, IT IS
ASSUMED THAT CONDITIONS IN THE MARKET PLACE, I.E. CONSUMER,
COMPETITIVE, INDUSTRY, AND ECONOMIC FACTORS, DO NOT INDICATE THE
DESIRABILITY OF CHANGES IN THE MARKET OFFERING. THAT IS, THE
SENSITIVITY MONITOR DETECTS N0 PRESENT OR APPROACHING IMBALANCE
OF MARKET OFFERING AND MARKET PLACE DEMAND WHICH WOULD MAKE
ADJUSTMENT NECESSARY.

WHILE THIS BALANCE BETWEEN MARKET OFFERING AND MARKET
DEMAND EXISTS, THE FIRM CONTINUES "NORMAL" OPERATIONS (H). PLANS
HAVE BEEN CONSTRUCTED BY MANAGEMENT, AND THESE PLANS ARE CARRIED
OUT. THE SENSITIVITY MONITOR CONFIRMS THE VALIDITY OF THESE
PLANS AND REMAINS AS A SENTINAL, WATCHFUL FOR THE APPEARANCE OF
ANY ELEMENT IN THE MARKET PLACE WHICH THREATENS THE SITUATION OF
BALANCE. ACCORDINGLY, THE COURSE OF ACTION Is DESCRIBED IN THE
MODEL BY THE OUTER RING CIRCUIT: MARKET OFFERING - MARKET PLACE -
SENSITIVITY MONITOR - CONTINUANCE OF OFFERING, ETC. (I-2-3-h, ETC.).

THIS SITUATION, WHICH ILLUSTRATES AN EQUILIBRIUM POSITION,
Is OF VALUE PRIMARILY IN THAT IT AFFORDS A FRAMEWORK WITHIN WHICH
CHANGE MAY BE STUDIED. THE ELEMENT OF CHANGE, OR RECOGNITION OF
AND REACTION TO IMBALANCE, Is INJECTED INTO THE MODEL IN THE TWO

FOLLOWING SITUATIONS. HOWEVER, THE EQUILIBRIUM SITUATION ALSO SERVES

208

TO ILLUSTRATE THE BASIC NATURE OF THE MARKETING CONCEPT, INVOLVING:

I. COMPANY-WIDE MANAGERIAL INVOLVMENT IN CREATING A MARKET
OFFERING WHICH SOLVES CONSUMERS' PROBLEMS IN WAYS COMPATIBLE WITH
CONSUMERS' DESIRES AND ENHANCEMENT OF THE FIRM'S PROFIT POSITION, AND

2. CONTINUING SENSITIVITY, INVOLVING RECOGNITION AND
REACTION, TO CHANGES IN MARKET PLACE CONDITIONS WHICH INDICATE
EXISTING OR APPROACHING IMBALANCE IN THE MARKET OFFERING - MARKET
PLACE DEMAND RELATIONSHIP.

RECOGNIZED NEED FOR MINOR ADJUSTMENT - SITUATION 2

 

IN THE SITUATION DESCRIBED ABOVE IT WAS ASSUMED THAT BALANCE
EXISTED BETWEEN MARKET OFFERING AND MARKET PLACE DEMAND, AND THAT
SUCH BALANCE WAS CONTINUALLY MONITORED BY THE SENSITIVITY MONITOR.
SO LONG As NO DISCORD WAS DETECTED BY THE MONITOR, THE FIRM
CONTINUED ITS MARKET OFFERING.

IN THE PRESENT SITUATION, HOWEVER, IT IS ASSUMED THAT
DISCORD IS DETECTED BY THE SENSITIVITY MONITOR (3). AUTOMATICALLY,
THE MONITOR FEEDS BACK THIS INFORMATION To COMPANY MANAGEMENT,
RESULTING IN PROBLEM AWARENESS (5). IT IS FURTHER ASSUMED THAT THE
PROBLEM, SO REPORTED, Is OF SUCH NATURE THAT IT CAN BE RESOLVED
WITHIN THE STRUCTURE OF EXISTING CORPORATE POLICY. THAT IS, THE
PROBLEM INDICATES THE NEED FOR "ROUTINE" MANAGERIAL ACTION (6).
EXAMPLES OF SUCH PROBLEMS ARE THE NEED FOR MINOR CHANGES IN RRDDUCTION
REQUIREMENTS, MARGINAL INCREASES IN PROMOTIONAL EFFORT IN CERTAIN
MARKETS, AND MINOR ADJUSTMENTS IN DISCOUNT STRUCTURES. AS NONE OF

THESE PROBLEMS INVOLVE MAJOR POLICY ACTION BY MANAGEMENT, ALTERNATIVE

DECISIONS (19) ARE FORMULATED CONSISTENT WITH CONDITIONS OF THE

209

MARKETING CONCEPT, ACTION (II) IS TAKEN, RESULTING IN A REVISED
PLAN (I2) OF MARKET ACTION. THUS A MODIFIED MARKET OFFERING

(I) Is MADE IN THE MARKET PLACE (2). ASSUMING THAT THE MODIFIED
OFFERING Is CONSISTENT WITH MARKET PLACE DEMAND, AS OBSERVED

BY THE SENSITIVITY MONITOR (3), THIS OFFERING IS CONTINUED (H).
HOWEVER, SHOULD THE MODIFIED OFFERING (I) BE FOUND BY THE MONITOR
(3) TO BE INCONSISTENT WITH MARKET PLACE DEMAND (2), THE MONITOR
FEEDS BACK THIS INFORMATION TO MANAGEMENT IN THE FORM OF PROBLEM
AWARENESS (5), AND ADDITIONAL MANAGERIAL ATTEMPTS AT ADJUSTMENT
ARE MADE.

AGAIN, THE SENSITIVITY MONITOR AND MANAGERIAL ACTION
INDICATE THE CRUCIAL POINTS IN IMPLEMENTING THE MARKETING CONCEPT.
THAT IS, MANAGEMENT IMMEDIATELY IS MADE AWARE OF PROBLEM AREAS,
AND BASED UPON THE MARKETING CONCEPT PHILOSOPHY, MANAGEMENT
ATTEMPTS TO REGAIN BALANCE, LEADING TO CONSUMER SATISFACTION AND
CORPORATE PROFIT.

RECOGNIZED NEED FOR MAJOR ADJUSTMENT - SITUATION 3

 

IN SITUATION 2 THE SENSITIVITY MONITOR DETECTED A MARKET
OFFERING - MARKET PLACE DEMAND IMBALANCE, LEADING TO PROBLEM
AWARENESS AND ULTIMATELY TO CORRECTIVE ACTION IN THE FORM OF A
MODIFIED MARKET OFFERING. THE PROBLEM WAS RESOLVED WITHIN THE
FRAMEWORD OF EXISTING CORPORATE POLICY. THE PRESENT SITUATION DESCRIBES
CORRECTIVE ACTION INVOLVING A PROBLEM WHICH NECESSITATES MAJOR
POLICY ACTION BY MANAGEMENT.

IT Is ASSUMED THAT THE SENSITIVITY MONITOR (3) DISCOVERS THAT

THE FIRM'S MARKET OFFERING (I) IS OUT OF BALANCE WITH MARKET PLACE

DEMAND. THE AUTOMATIC FEEDBACK INFORMS MANAGEMENT OF THE IMBALANCE (5).

._I

 

2IO

UNLIKE SITUATION 2, HOWEVER, IT Is DISCOVERED THAT CORRECTIVE

ACTION INVOLVES RECONSIDERATION OF BASIC CORPORATE POLICY. FOR
EXAMPLE, IT MAY BE DISCOVERED THAT MAJOR ADDITIONS TO THE FIRM'S
PRODUCT LINE APPEAR DESIRABLE, HOWEVER, SUCH ACTION INVOLVES EXPANSION
OF PRODUCTION CAPACITY AND SUBSTANTIAL MONEY OUTLAY. SUCH A PROBLEM
IS RESOLVED NOT BY "ROUTINE ACTION," BUT THROUGH MANAGERIAL EVALUATION
OF CORPORATE POLICY, BASED UPON RECOGNITION OF THE DUAL OBJECTIVES

OF THE FIRM. THEREFORE, CONSIDERATION OF SUCH PROBLEM AREAS FOLLOWS

A PATTERN DIFFERENT FROM THAT DESCRIBED IN SITUATION 2.

ACCORDINGLY, DUE TO MANAGEMENT'S KEEN AWARENESS OF THE
SERIOUSNESS OF THE EXISTING IMBALANCE, POLICY DECISION CONSIDERATIONS
ARE SUBJECTED TO A CONSUMER ORIENTATION FILTER (7) AND A PROFIT
ORIENTATION FILTER (8), EACH OF WHICH IS SUPPORTED BY INFORMATION
INPUTS (9). BASICALLY, THE FILTERING PROCESS INVOLVES THE
CONSCIOUS AND EXHAUSTIVE CONSIDERATION OF POLICY DECISIONS IN TERMS
OF THE FIRM'S DUAL OBJECTIVES, WHICH PREVIOUSLY WERE SUMMARIZED
IN TERMS OF CONSUMER AND PROFIT ORIENTATIONS. SUCH DELIBERATION
INVOLVES COMPANY-WIDE MANAGERIAL PARTICIPATION, FOR IT Is RECOGNIZED
THAT ALTHOUGH THERE IS A TENDENCY TO ASSOCIATE PROBLEMS WITH SPECIFIC
FUNCTIONAL AREAS OF THE FIRM, "MARKETING PROBLEMS" OFTEN HAVE
SIGNIFICANT AND DIRECT IMPLICATIONS FOR FINANCIAL AND PRODUCTION
MANAGEMENT, AND VICE VERSA. FURTHER, IT IS PROBABLE THAT MAJOR
POLICY DECISIONS, ONCE ESTABLISHED, TEND TO COMMIT THE FIRM'S
RESOURCES TO A RATHER SPECIFIC COURSE OF ACTION FOR A CONSIDERABLE
PERIOD OF TIME. THEREFORE, MANAGEMENT PLACES SPECIAL EMPHASIS UPON

SUCH DECISIONS AND RELIES HEAVILY UPON THE INFORMATION UBOYTSM WGUCG

2II

SUPPLY NECESSARY SPECIFIC DATA RELATED TO CONDITONS IN SUCH AREAS AS
THE CONSUMER AND FINANCIAL MARKETS. SUCH INFORMATION INPUTS ARE
DERIVED FROM SPECIALIZED INTERNAL DATA-COLLECTmG AGENCIES, SUCH AS
MARKETING RESEARCH; FROM KNOWLEDGE WHICH ACCRUES TO INDIVIDUAL
MANAGERS AND THEIR STAFFS IN THE NORMAL COURSE OF BUSINESS
ACTIVITY; AND FROM INFORMATION ACCRUING TO EXTERNAL SOURCES UPON
WHICH THE FIRM DRAWS, SUCH AS ADVERTISING AGENCIES AND FINANCIAL
INSTITUTIONS.

BASED UPON MANAGERIAL CONCERN WITH THE FIRM'S DUAL OBJECTIVES,
AND SUPPORTED BY FACTS, ALTERNATIVE DECISIONS (IO) ARE DEFINED.
MANAGERIAL ACTION (II), CONSISTENT WITH ATTAINMENT OF THESE OBJECTIVES,
LEADS TO SELECTION OF A COURSE OF ACTION AND THE CONSTRUCTION OF
PLANS (I2) WHICH WILL FACILITATE IMPLEMENTATION OF THE SELECTED
COURSE OF ACTION. CONSEQUENTLY, A REVISED MARKET OFFERING (I)
IS MADE IN THE MARKET PLACE (2), AND THE SENSITIVITY MONITOR
CONTINUES ITS SEARCH FOR EVIDENCES OF PRESENT OR IMPENDING IMBALANCE.
ASSUMING THAT THE REVISED MARKET OFFERING IS COMPATIBLE WITH MARKET
PLACE DEMAND, AND THAT THE MONITOR EVIDENCES CORRECTION OF THE
IMBALANCE, THE REVISED OFFERING IS CONTINUED (H). SHOULD THE MONITOR
DISCOVER CONTINUING IMBALANCE, SUCH INFORMATION IS RELAYED TO
MANAGEMENT, AND RECONSIDERATION OF THE PROBLEM RESULTS (5).

THE FOLLOWING COMMENTS ARE PRESENTED As APPLICABLE TO THE
THREE SITUATIONS DISCUSSED ABOVE, AND AS VITAL TO UNDERSTANDING
OF THE MARKETING CONCEPT MODEL.

I) THE DISTINGUISHING AND CRUCIAL FEATURES OF THE MODEL

ARE THE SENSITIVITY MONITOR AND THE BASES OF MANAGERIAL ACTION. THE

2I2

FUNCTIONING OF THE FORMER IS OF RELATIVELY LITTLE CONSEQUENCE IF
COMPANY-WIDE MANAGEMENT LACKS COMPREHENSION OF THE MARKETING

CONCEPT. FULLFILLMENT OF THE DUAL OBJECTIVES OF THE FIRM

REQUIRES GENERAL MANAGEMENT INVOLVMENT, BASED UPON SUCH COMPREHENSION,
IN MOBILIZING, UTILIZING, AND CONTROLLING TOTAL CORPORATE EFFORT.
THEREFORE CLOSE COORDINATION OF PURPOSE BETWEEN THESE TWO FEATURES

IS NECESSARY FOR EFFECTIVE FUNCTIONING OF EITHER.

2) THE SENSITIVITY MONITOR REPRESENTS ACTIVITY BASICALLY

DIFFERENT FROM THAT OF "TRADITIONAL" MARKETING RESEARCH, I.E.

FEEDING BACK SALES, PROFIT AND INVENTORY DATA. RATHER, IT IMPLIES

A CONTINUING ACUTE AWARENESS OF DEVELOPMENTS IN CONSUMER, COMPETITIVE,
INDUSTRY, AND GENERAL ECONOMIC AREAS, IN SO FAR As SUCH DEVELOPMENTS
ARE RELATED TO THE FIRM'S MARKET OFFERING - MARKET PLACE DEMAND
BALANCE.

3) As THE SENSITIVITY MONITOR IS INVOLVED IN OVERALL
CORPORATE INTELLIGENCE SERVICES, ITS FUNCTIONS EXTEND BEYOND REPORTING
"TROUBLE" AREAS. ~THAT IS, THE MONITOR IS SENSITIVE TO EXISTING AND
POTENTIAL OPPORTUNITY, AS WELL AS TO EXISTING OR POTENTIAL DIFFICULTY.
THEREFORE, IT IS CONCERNED ALSO WITH SUCH AREAS AS DEVELOPMENT OF

NEW MARKETS AND PRODUCT INNOVATION.

SUMMARY
THE PAST DECADE HAS WITNESSED THE DEVELOPMENT OF WIDESPREAD
INTEREST IN, AND SEARCH FOR THE MEANING OF, THE MARKETING CONCEPT.
SUCH CONCERN IS EVIDENCED BY THE APPEARANCE OF NUMEROUS ARTICLES
IN BUSINESS PUBLICATIONS, ADDRESSES AND PAPERS READ BEFORE BUSINESS

AND ACADEMIC CONFERENCES, A TREND TOWARD ORGANIZATIONAL RESTRUCTURING

2I3

OF MARKETING DEPARTMENTS AND TITLE CHANGES INVOLVING MARKETING
OFFICERS, ET CETERA.
THE LITERATURE HAS BEEN EFFECTIVE IN ACQUAINTING BUSINESSMEN

AND ACADEMICIANS WITH THE TERM, "MARKETING CONCEPT."

HOWEVER,
THERE APPEARS TO BE WIDESPREAD CONFUSION,AND EVEN DISTRUST, OF THE
TERM. WHILE THE LITERATURE GAVE A GREAT DEAL OF PUBLICITY TO THE
CONCEPT, THE MATERIALS PRESENTED, GENERALLY, FAILED TO DEFINE
IT, AND MATERIALS WHICH DESCRIBED THE CONCEPT TENDED TO DESCRIBE
THE CONCEPT'S IMPACT ON THE MARKETING AREA ONLY. TYPICALLY,
ARTICLES MAY BE CATEGORIZED AS CONCERNED WITH THE PHILOSOPHICAL
BASES OF THE CONCEPT, I.E. CONSUMER AND PROFIT ORIENTATIONS,
OR WITH CERTAIN PHYSICAL MANIFESTATIONS DESCRIBED AS BASIC TO
IMPLEMENTATION OF THE CONCEPT. THE LATTER IS EXEMPLIFIED
BY THE APPEARANCE OF NUMEROUS ARTICLES CONCERNED WITH VARIOUS ASPECTS
OF MARKETING DEPARTMENT ORGANIZATION. APPARENTLY, A SIGNIFICANT
NUMBER OF EXECUTIVES HAVE INTERPRETED THE MARKETING CONCEPT To
MEAN ESTABLISHMENT OF COORDINATED CENTRAL MARKETING STAFFS
HEADED BY MARKETING VICE-PRESIDENTS. THE LITERATURE APPEARS TO
HAVE BEEN FAR LESS SUCCESSFUL IN DISSEMINATING THE MEANING OF THE
MARKETING CONCEPT THAN IN GENERATING INTEREST IN IT.

NEVERTHELESS, THE LITERATURE HAS MADE A SIGNIFICANT C0NTRIBU~
TION TO UNDERSTANDING OF THE CONCEPT. FOR EXAMPLE, VARYING DEGREES
OF EMPHASIS HAVE BEEN GIVEN TO THE NEED FOR CONSUMER AND PROFIT
ORIENTATIONS, MANAGEMENT BY OBJECTIVES, THE ROLE OF MARKETING

PLANNING AND MARKETING RESEARCH, SIGNIFICANCE OF PROFIT CONTRIBUTIONS

OF NEW PRODUCTS, LACK OF COORDINATION OF MARKETING EFFORT, AND THE NEED

2M

FOR EVALUATION OF MARKETING EFFORT. ALTHOUGH OCCASIONALLY MENTIONED,
LITTLE EMPHASIS WAS GIVEN TO THE COMPANY-WIDE IMPLICATIONS OF THE
CONCEPT.

TWO FACTORS IN THE LITERATURE ARE PRIMARILY RESPONSIBLE
FOR THE FAILURE OF THE LITERATURE IN PRESENTING THE MEANING OF
THE MARKETING CONCEPT: UNWARRANTED EMPHASIS ON CERTAIN ASPECTS
ACCOMPANIED BY INSUFFICIENT EMPHASIS OR NON-RECOGNITION OF OTHERS,
AND LACK OF INTEGRATION OF THE MATERIAL INTO A MEANINGFUL WHOLE.
IT IS THE WRITER'S OPINION THAT DISCUSSION OF THE ORGANIZATIONAL
ASPECT WAS FAR OUT OF PROPORTION TO ITS SIGNIFICANCE. HOWEVER,
ONLY NEGLIGIBLE ATTENTION WAS GIVEN TO OTHER ASPECTS OF THE
CONCEPT, SUCH AS COMPANY-WIDE MANAGERIAL PERCEPTION AND COMPREHENSION,
PARTICIPATION, AND INTERACTION. THE ROLE OF THE CHIEF CORPORATE
EXECUTIVE IN IMPLEMENTING THE CONCEPT WAS GENERALLY IGNORED.

BY RECOGNIZING AND INTEGRATING THE CONTRIBUTIONS OF THE
LITERATURE WITH THE ADDITIONAL FACTORS NAMED ABOVE, IT IS POSSIBLE
TO CONSTRUCT A MORE COMPREHENSIVE DEFINITION OF THE MARKETING
CONCEPT. SO CONSIDERED, THE CONCEPT IS A MANAGERIAL PHILOSOPHY
CONCERNED WITH THE MOBILIZATION, UTILIZATION, AND CONTROL OF TOTAL
CORPORATE EFFORT FOR THE PURPOSE OF SOLVING SELECTED CONSUMER PROBLEMS
IN WAYS COMPATIBLE WITH PLANNED ENHANCEMENT OF THE FIRM'S PROFIT
POSITION. SUCH A DEFINITION AFFORDS THE CONCEPT A BROADER PERSPECTIVE
THAN THAT USUALLY PRESENTED IN THE LITERATURE. EMPHASIS IS PLACED
UPON ITS COMPANY-WIDE NATURE, THE NECESSITY OF ADJUSTING BASIC
MANAGERIAL ORIENTATIONS, AND THE DESIRABILITY OF PLANNED, COORDINATED,

AND CONTROLLED ACTIVITY GENERALLY. AS A RESULT, ORGANIZATIONAL ASPECTS

2I5

ARE CONSIDERED SIGNIFICANT ONLY IN SO FAR AS THEY FACILITATE
CORPORATE EFFORTS TOWARD IDENTIFYING AND SOLVING CONSUMER PROBLEMS
PROFITABLY. FURTHER, THE DEFINITION AND ACCOMPANYING COMMENTS
PRESENTED IN THIS CHAPTER SUGGEST TO CORPORATE MANAGEMENT THE
MINIMUM UNDERSTANDING NECESSARY FOR SUCCESSFUL IMPLEMENTATION OF

THE MARKETING CONCEPT.

UMPERVI
SUMMARY AND CONCLUSIONS

THE NATURE OF THE STUDY: A RESTATEMENT

PURPOSE OF THE STUDY

 

IT HAS BEEN THE PURPOSE OF THIS STUDY To INQUIRE INTO THE
RELEVANCE OF "THE MARKETING CONCEPT" As A MANAGEMENT GUIDE TO THE
MOBILIZATION OF CORPORATE EFFORT. ACCORDINGLY, THE STUDY HAD
As AN OBJECTIVE THE DEVELOPMENT OF A BASIC UNDERSTANDING OF THE
NATURE OF THE MARKETING CONCEPT, WHICH WILL:

I. PROVIDE CORPORATE MANAGEMENT WITH THE MINIMUM INSIGHT
NECESSARY FOR APPRECIATION AND ULTIMATE IMPLEMENTATION OF THE
CONCEPT, AND

2. PROVIDE BUSINESS ADMINISTRATION ACADEMICIANS WITH AN
APPROACH TO THE STUDY OF MANAGERIAL ACTION, CONSISTENT WITH THE
PRECEPTS OF THE MARKETING CONCEPT.

IN ORDER TO ACCOMPLISH THE OBJECTIVES NAMED ABOVE, THE
WRITER HAS:

I. EXAMINED BRIEFLY THE EVOLUTIONARY AND ENVIRONMENTAL
BASES OF THE MARKETING CONCEPT,

2. DEFINED THE BASIC NATURE OF MANY BUSINESSMEN'S AND
ACADEMICIANS' INTERPRETATIONS, AS EVIDENCED BY SELECTED BUSINESS
AND ACADEMIC LITERATURE CONTENT,

3. EXAMINED THE COMPLETENESS AND COHERENCE OF SUCH

2I6

2I7

INTERPRETATIONS, AND

H. PRESENTED AN EXPANDED STATEMENT AND MODEL OF THE
MARKETING CONCEPT, BASED UPON INTEG.RATION OF PORTIONS OF THE
LITERATURE CONTENT, INTERVIEWS WITH BUSINESS EXECUTIVES, AND
THE WRITER'S INTERPRETATIONS.

SCOPE AND LIMITATIONS OF THE STUDY

 

AS THE STUDY HAS BEEN CONCERNED WITH THE RELEVANCE OF
THE MARKETING CONCEPT AS A GENERAL MANAGERIAL GUIDE TO THE MOBILIZA-
TION OF CORPORATE EFFORT, MANAGERIALPOINTS OF VIEW AND COMPANY
EXPERIENCE HAVE BEEN USED ILLUSTRATIVELY WITHOUT REGARD TO THE
INDUSTRY CATEGORIES FROM WHICH THEY ORIGINATED. ACCORDINGLY,

FIRMS ENGAGED IN THE MARKETING OF CONSUMER AND INDUSTRIAL GOODS

AND SERVICES HAVE BEEN CITED IN THE LITERATURE REVIEW. WIDTH OF

THE INDUSTRY RANGE IS EVIDENCED BY INCLUSION OF WORTHINGTON CORPORA-
TION, GENERAL FOODS CORPORATION, AND AMERICAN TELEPHONE AND
TELEGRAPH COMPANY. HOWEVER, NO COMPANY CASE STUDIES HAVE BEEN
DEVELOPED. THEREFORE, REFERENCES TO COMPANY EXPERIENCES SHOULD

BE CONSIDERED AS ISOLATED INSTANCES RATHER THAN AS THE NORM.

AS THE MARKETING CONCEPT HAS BEEN STUDIED AS A GENERAL
MANAGERIAL GUIDE, NO INDUSTRY-GROUP LIMITATIONS HAVE BEEN PLACED
UPON THE EXTENT OF ITS APPLICABILITY. THE MARKETING CONCEPT,
THEREFORE, Is PRESENTED AS A RELEVANT GUIDE FOR MANAGEMENTS
OF FIRMS ENGAGED IN THE MARKETING OF CONSUMER AND INDUSTRIAL
GOODS AND SERVICES. WHILE NO PRESCRIPTION FOR THE IMPLEMENTATION
OF THE CONCEPT BY INDIVIDUAL FIRMS IS PRESENTED IN THIS STUDY, THE

BASIC MANAGERIAL UNDERSTANDING WHICH IS FELT NECESSARY FOR

2I8

IMPLEMENTATION IS DEVELOPED HEREIN.

GENERAL SUMMARY AND CONCLUSIONS

BASIC MANAGERIAL ORIENTATIONS

 

ALTHOUGH DEFINITION AND EVALUATION OF MANAGERIAL ORIENTATIONS
ARE COMPLICATED BY THE INSUFFICIENCY OF SUBSTANTIAL TANGIBLE
EVIDENCE AND THE BASICALLY INTANGIBLE NATURE OF SUCH ORIENTATIONS,
IT IS POSSIBLE TO DEVELOP SUCH EMPHASES FOR PURPOSES OF STUDY.
ADDRESSES AND PAPERS READ BY BUSINESSMEN BEFORE BUSINESS AND
ACADEMIC CONFERENCES, THE CONTENT OF ARTICLES APPEARING IN
BUSINESS AND TRADE PUBLICATIONS, TRENDS IN CORPORATE PROMOTION
OF PERSONS WITH SUBSTANTIAL EXPERIENCE IN SPECIFIC FUNCTIONAL
AREAS OF BUSINESS TO TOP MANAGEMENT POSITIONS, AND OTHER RELATED
EVIDENCES PROVIDE AN INDICATION, ALTHOUGH TO A DEGREE ARBITRARY,
OF THE AREAS OF PRIMARY MANAGERIAL CONCERN. BASED UPON A REVIEW
OF SELECTED BUSINESS AND ACADEMIC PERIODICALS, BOOKS, AND
ADDRESSES, THE WRITER HAS OBSERVED THREE DIRECTIONS OF MANAGERIAL
ORIENTATION IN TWENTIETH CENTURY AMERICAN BUSINESS:

I. A PRODUCTION ORIENTATION, I900-I930.

2. A SALES MANAGEMENT ORIENTATION, I930 - I950

3. A MARKETING CONCEPT ORIENTATION, I950 - PRESENT.

THE PERIOD OF PRODUCTION ORIENTATION MAY BE SUMMARIZED
AS AN ERA OF MANAGERIAL CONCERN WITH PROBLEMS OF CAPACITY CREATION,
WORK METHODS, AND VOLUME PRODUCTION. NAMES OF MEN ASSOCIATED
WITH "SCIENTIFIC MANAGEMENT," SUCH AS TAYLOR, EMERSON, AND
GILBREATH, ARE CLOSELY IDENTIFIED WITH THIS PERIOD. WHILE IT Is

NOT SUGGESTED THAT CORPORATE MANAGEMENT GAVE NO CONSIDERATION

2I9

DURING THIS PERIOD TO THE MARKETS FOR WHICH THEY PRODUCED, IT
APPEARS THAT, GENERALLY, PROBLEMS RELATED TO MANUFACTURING ASSUMED
GREATER SIGNIFICANCE THAN DID THOSE RELATED To IDENTIFICATION
AND DEVELOPMENT OF MARKETS.

THE PERIOD OF SALES MANAGEMENT ORIENTATION WITNESSED
AN INCREASING SIGNIFICANCE OF THE POSITION OF THE SALES MANAGER.
RELATIVELY MAJOR MANUFACTURING PROBLEMS HAD BEEN RESOLVED; MASS
MARKETS WERE NEEDED TO ENABLE A CONTINUED HIGH RATE OF UTILIZATION
OF THE CAPACITY CREATED. THE SALES MANAGER GENERALLY WAS PROMOTED
FROM THE RANKS OF SALESMAN; HE QUALIFIED FOR THE POSITION OF SALES
MANAGER THROUGH HIS OUTSTANDING SALES PERFORMANCE. As SALES
MANAGER, IT WAS HIS TASK TO INSPIRE HIS SALES FORCE TO SIMILAR
PERFORMANCE. FREQUENTLY, THE INCOMES OF SALES MANAGERS AND
SALESMEN WERE DIRECTLY DEPENDENT UPON THE ACHIEVEMENT OF SPECIFIC
SALES VOLUMES. DURING THIS PERIOD MARKETING RESEARCH UNITS
WERE ESTABLISHED BY A CONSIDERABLE NUMBER OF FIRMs; THESE UNITS
BECAME ACTIVE IN IDENTIFYING AND QUANTIFYING ACCESSIBLE MARKETS.
ALSO, ADVERTISING ASSUMED GREATER SIGNIFICANCE IN THE TOTAL SELLING
EFFORT OF THE FIRM. IT APPEARS, HOWEVER, THAT THE VARIOUS MARKETING
ACTIVITIES FREQUENTLY WERE NOT CLOSELY COORDINATED, AND THAT
CONSIDERABLE CONTENTION EXISTED BETWEEN THE SALES AND MANUFACTURING
DIVISIONS OF MANY FIRMS.

THE PERIOD OF MARKETING CONCEPT ORIENTATION WAS USHERED IN
AMIDST CONSIDERABLE PUBLICITY IN BUSINESS PUBLICATIONS IN THE
EARLY I950'S. MOST OF THESE ARTICLES, HOWEVER, APPEARED IN PUBLICA-

TIONS WHICH HAD READERSHIP PRIMARILY AMONG MARKETING MANAGEMENT, AND

220

THE CONCEPT GENERALLY WAS DESCRIBED IN TERMS OF ITS IMPLICATIONS
FOR MARKETING PERSONNEL. TYPICALLY, AUTHORS DIFFERENTIATED THE
CONCEPT FROM THE SALES MANAGEMENT EMPHASIS IN TERMS OF MARKETING
MANAGEMENT'S CONCERN WITH PROFITS AND RETURN ON INVESTMENT, NOT
SALES VOLUME ALONE. ALSO, CUSTOMER AWARENESS AND CONCERN, REFERRED

TO AS "CONSUMER ORIENTATION,’ WAS DISCUSSED FREQUENTLY. BY THE
MID-I950'S, MANAGEMENT MEMBERS OF NUMEROUS FIRMS MADE PUBLIC
STATEMENTS, IN ARTICLES AND IN ADDRESSES, REGARDING THEIR FIRMS'
"ACCEPTANCE" AND "IMPLEMENTATION" OF THE MARKETING CONCEPT. IT
APPEARS THAT IMPLEMENTATION, IN THE MAJORITY OF CASES, REFERRED
TO REORGANIZATION OF THE SEVERAL MARKETING ACTIVITIES, RESULTING
IN THE ESTABLISHMENT OF FORMAL MARKETING DEPARTMENTS, CONSISTING
OF CENTRALIZED MARKETING STAFFS, AND HEADED BY A VICE-PRESIDENT
IN CHARGE OF MARKETING, OR A MARKETING DIRECTOR. CONSEQUENTLY,
THE CHIEF MARKETING OFFICER BECAME A "PLANNER", AND THE SALES
MANAGER BECAME A "DOER." THE ABOVE COMMENTS ARE OFFERED AS
TYPICAL OF THE LITERATURE COMMENTs; AN EXPANDED INTERPRETATION

OF THE MARKETING CONCEPT IS PRESENTED LATER IN THIS CHAPTER.

BASES OF CHANGING MANAGERIAL ORIENTATIONS

 

A BASIC FUNCTION OF BUSINESS MANAGEMENT IS THE CONTINUING
SEARCH FOR, AND DEVELOPMENT OF, BALANCE BETWEEN THE FIRM AND
ITS MARKET OFFERING, AND THE ENVIRONMENT IN AND FOR WHICH IT
EXISTS. JUST AS THE TWENTIETH CENTURY AMERICAN ECONOMY HAS BEEN
DYNAMIC, SO HAS BUSINESS MANAGEMENT, ITSORIENTATIONS AND ITS ACTIONS,
BEEN ADAPTABLE TO CHANGE. THE SEVERAL MANAGERIAL ORIENTATIONS

DESCRIBED ABOVE ARE PRODUCTS OF THE ENVIRONMENTS IN WHICH THEY

22|

EXISTED; IT Is THROUGH UNDERSTANDING OF THE CHANGING ECONOMIC
ENVIRONMENT THAT UNDERSTANDING AND APPRECIATION OF THESE ORIENTA-
TIONS MAY BE DEVELOPED.

MANAGERIAL INTEREST IN, AND CONCERN WITH, THE MARKETING
CONCEPT APPEARS TO HAVE DEVELOPED FROM A NUMBER OF GENERAL ECONOMIC,
COMPETITIVE, FIRM, AND CONSUMER FACTORS WHICH EITHER AROSE OR
WERE INTENSIFIED DURING THE YEARS FOLLOWING THE END OF WORLD WAR II.
IN VIEW OF THESE FACTORS, IT SEEMS INEVITABLE THAT MANAGERIAL
ATTENTION WOULD SHIFT AWAY FROM MORE TRADITIONAL ORIENTATIONS TO
ONE BETTER ADAPTED TO PROBLEMS AND OPPORTUNITIES PRESENTED BY
CONTEMPORARY CONDITIONS. SOME OF THE MORE SIGNIFICANT OF THESE
FACTORS ARE:

I. AN INCREASING GAP BETWEEN THE ABILITY OF FIRMS TO
PRODUCE GOODS, AND THEIR ABILITY To DISPOSE OF THOSE GOODS
PROFITABLY.

2. THE PERSISTENCE OF NARROWED PROFIT MARGINS, RESULTING
IN INCREASED ATTENTION TO THE MEASURE OF RETURN ON INVESTMENT,
INCLUDING MARKETING INVESTMENT.

3. THE INCREASING LONG-RANGE COMMITMENTS OF FIRMS'
RESOURCES, DUE IN LARGE PART TO EXPANDING AUTOMATION.

H. RECOGNITION OF THE CONTRIBUTION OF NEW PRODUCTS
TO TOTAL CORPORATE PROFITS, AS WELL AS TO GROWTH AND STABILITY,
WHICH IS EMPHASIZED BY PLANNED OBSOLESCENCE.

5. WIDESPREAD RECOGNITION OF THE NEED FOR BETTER
COORDINATION AND CONTROL OF CORPORATE EFFORT, EMPHASIZED BY

POST-WAR NATURAL GROWTH, MERGER, AND DECENTRALIZATION.

222

6. MANAGERIAL AWARENESS OF THE NEED FOR LONG-RANGE PLANNING,
EMPHASIZED BY INCREASED AUTOMATION, DESIRE FOR PLANNED GROWTH AND
STABILITY, AND THE TIME AND RESOURCES REQUIRED IN NEw-PRODUCT
DEVELOPMENT.

7. THE VAST STOCK OF GOODS ALREADY HELD BY CONSUMERS,
REFLECTING GENERAL SATISFACTION OF THE NECESSITIES OF LIFE.

8. INCREASING CONSUMER KNOWLEDGE OF MARKET OFFERINGS AND
OPTIONS, BASED LARGELY ON IMPROVED TRANSPORATION AND COMMUNICA-
TION.

9. INCREASING CONSUMER DISCRETIONARY SPENDING POWER,
RESULTING IN INTENSIFIED COMPETITION NOT ONLY BETWEEN FIRMS WITHIN
AN INDUSTRY, BUT AMONG FIRMS IN SEVERAL INDUSTRIES AS WELL.

I0. RECOGNITION OF THE RELATIONSHIP OF MARKETING ACTIVITY
TO NATURAL ECONOMIC GROWTH AND STABILITY, AND ULTIMATELY TO
PRESERVATION OF THE CAPITALISTIC SYSTEM.

INADEQUACY OF EXISTING INTERPRETATIONS OF THE MARKETING CONCEPT

 

WHILE CORPORATE MANAGEMENT, ESPECIALLY MARKETING MANAGEMENT,
APPEARS TO BE ACQUAINTED WITH THE TERM, "MARKETING CONCEPT",
COMMENTS PRESENTED IN THE LITERATURE, AS WELL AS THOSE MADE BY
SEVERAL MANAGEMENT MEMBERS WHOM THIS WRITER HAS INTERVIEWED,
GENERALLY INDICATE A LACK OF UNDERSTANDING OF THE CONCEPT. MOST
FREQUENTLY, THE CONCEPT IS VIEWED As A MATTER OF CONCERN OF
MARKETING PERSONNEL ONLY: IT IS A MATTER OF SO ORGANIZING THE
DEPARTMENTS OF SALES, ADVERTISING, MARKETING RESEARCH, CUSTOMER
SERVICE, ETC., THAT THEY WORK TOGETHER TOWARD SATISFYING CUSTOMERS

AND EARNING A PROFIT FOR THE FIRM. SOME ARTICLES IN THE CONCEPT

223

LITERATURE HAVE RECOGNIZED THE CONCEPTS IMPLICATIONS REGARDING
CONSUMER ORIENTATION, PROFIT ORIENTATION, MANAGEMENT BY OBJECTIVES,
MARKETING PLANNING, USE OF FACTS, EVALUATION OF MARKETING EFFORT,
AND THE ROLE OF NEW PRODUCTS.

FEW SUCH DISCUSSIONS, HOWEVER, HAVE ATTEMPTED TO INTEGRATE
MOST OR ALL OF THESE FACTORS INTO AN INTERPRETATION OF THE CONCEPT,
AND EVEN THESE FEW GENERALLY FAIL TO RECOGNIZE THE BROADER
MANAGERIAL IMPLICATIONS OF THE CONCEPT, I.E. ITS MEANING BEYOND
THE MARKETING DEPARTMENT. LACKING IN PRACTICALLY ALL OF THESE
DISCUSSIONS IS RECOGNITION OF THE ROLE WHICH THE CHIEF CORPORATE
OFFICER MUST PLAY IN IMPLEMENTING THE CONCEPT. LITTLE CONSIDERA-
TION IS GIVEN TO THE PERCEPTIONS AND COMPREHENSIONS OF MANUFACTURING
AND FINANCE AREA OFFICERS, FREQUENTLY RESULTING IN REJECTION OF THE
CONCEPT BY THESE PEOPLE WHO NEITHER UNDERSTAND IT, NOR HAVE BEEN
TRAINED TO UNDERSTAND IT. ALSO, THE NECESSITY FOR COMPANY-WIDE
MANAGERIAL PARTICIPATION AND INTERACTION IN IMPLEMENTING THE
CONCEPT HAS BEEN LARGELY IGNORED.

THEREFORE, WHILE THE LITERATURE HAS BEEN EFFECTIVE IN
DEVELOPING MANAGERIAL CURIOSITY REGARDING THE MARKETING CONCEPT,
IT APPEARS TO HAVE BEEN CONSIDERABLY LESS EFFECTIVE IN PRESENTING
THE MEANING OF THE CONCEPT TO MANAGEMENT. THIS FAILURE IS DUE
PRIMARILY TO THE LACK OF INTEGRATION OF THE CONTENT OF NUMEROUS,
FRAGMENTARY ARTICLES, AND THE NON-RECOGNITION OF THE COMPANY-WIDE
IMPLICATIONS OF THE CONCEPT.

RESTATEMENT OF THE MARKETING CONCEPT

 

DEFINITIONS OF THE MARKETING CONCEPT USUALLY ARE BASED UPON

22'4

"CONSUMER ORIENTATION" AND "PROFIT ORIENTATION," ALTHOUGH THESE

TERMS ARE SELDOM DEFINED. IN THIS STUDY CONSUMER ORIENTATION HAS
BEEN DEFINED IN TERMS OF CRITICAL MANAGERIAL AWARENESS OF THE
CONSUMER'S VITAL ROLE IN THE SUCCESS OR FAILURE OF ANY BUSINESS
ACTION. FURTHER, CONSUMER ORIENTATION IMPLIES MANAGERIAL AWARENESS
OF THE PURPOSE OF HELPING CONSUMERS SOLVE SELECTED PROBLEMS. WHEN
THE FIRM NO LONGER MAKES A MARKET OFFERING COMPATIBLE WITH THE
WANTS OF ITS CUSTOMERS, ITS CONTINUED EXISTENCE IS NO LONGER
WARRANTED. PROFIT ORIENTATION HAS BEEN HANDLED SIMILARLY. PROFIT
IS NOT CONSIDERED THE SOLE OBJECTIVE OF BUSINESS ACTIVITY; RATHER,
IT IS VIEWED AS THE TEST OF VALIDITY OF MANAGERIAL BEHAVIOR AND
DECISIONS.

HOWEVER, THE MARKETING CONCEPT CANNOT BE DEFINEDIMEANINGFULLY
IN TERMS OF CONSUMER AND PROFIT ORIENTATIONS ALONE, ALTHOUGH THE
SEVERAL ASPECTS OF THE EXPANDED DEFINITION, OFFERED BELOW, ARE
IMPLICIT IN THESE ORIENTATIONS. A DEFINITION OF THE MARKETING
CONCEPT SHOULD EXPLICITLY ACKNOWLEDGE THE COMPANY-WIDE MANAGERIAL
IMPLICATIONS OF THE CONCEPT. ACCORDINGLY, THE CONCEPT INVOLVES
GENERAL MANAGERIAL CONCERN WITH:

I

I. THE CONSUMER'S ROLE AS IT Is RELATED TO THE FIRMS
EXISTENCE, GROWTH, AND STABILITY.

2. INTERDEPARTMENTAL IMPLICATIONS OF DECISIONS AND
ACTIONS OF THE INDIVIDUAL DEPARTMENTS.

3. INNOVATION OF MARKET OFFERINGS DESIGNED TO SOLVE
SELECTED CONSUMER PROBLEMS.

A. THE EFFECT OF NEW-PRODUCT AND SERVICE INTRODUCTION ON

THE FIRM'S PRESENT AND FUTURE PROFIT POSITIONS.

225

5. THE ROLE OF THE FIRM'S VARIOUS INFORMATION SERVICES,
INCLUDING MARKETING RESEARCH, IN DISCOVERING, DEVELOPING, AND
SERVING AREAS OF CONSUMER DEMAND.

6. ESTABLISHMENT OF OBJECTIVES UNDERSTOOD BY, AND
AGREEABLE TO OFFICERS OF THE SEVERAL DEPARTMENTS, AND CONSISTENT
WITH ENHANCEMENT OF THE FIRM'S PROFIT POSITION.

7. FORMAL SHORT- AND LONG-RANGE PLANNING OF CORPORATE
GOALS, STRATEGIES, AND TACTICS, YIELDING DEFINED AND COORDINATED
EFFORT IN THE FIRM'S FUNCTIONAL AREAS.

8. RESTRUCTURING OF CORPORATE FUNCTIONS As DEEMED NECESSARY
FOR ASSISTING THE FIRM IN ITS EFFORTS TOWARD HELPING CONSUMERS SOLVE
SPECIFIC PROBLEMS IN WAYS COMPATIBLE WITH ENHANCEMENT OF THE
FIRM'S PROFIT POSITION.

BASED UPON THE FACTORS NAMED ABOVE, A BROADER DEFINITION
OF THE CONCEPT CAN BE CONSTRUCTED. AS DEVELOPED IN THIS
THESIS, THE MARKETING CONCEPT IS A MANAGERIAL PHILOSPHY CONCERNED
WITH THE MOBILIZATION, UTILIZATION, AND CONTROL OF TOTAL CORPORATE
EFFORT FOR THE PURPOSE OF HELPING CONSUMERS SOLVE SELECTED PROBLEMS
IN WAYS CONPATIBLE WITH PLANNED ENHANCEMENT OF THE FIRM'S
PROFIT POSITION.

THIS DEFINITION HAS BEEN ILLUSTRATED IN THE FORM OF
A CLOSED SYSTEM, INTO WHICH A CONTROL DEVICE, THE SENSITIVITY
MONITOR, HAS BEEN CONSTRUCTED. WITHIN THIS SYSTEM MANAGEMENT
DETERMINES THE FIRM'S INITIAL MARKET OFFERING IN ACCORDANCE WITH
THE BASES OF THE MARKETING CONCEPT, AS DEFINED ABOVE. THE MARKET

OFFERING IS PRESENTED IN THE MARKET PLACE, AND THE SENSITIVITY

226

MONITOR FUNCTIONS CONTINUOUSLY T0 EVALUATE THE BALANCE EXISTING
BETWEEN THE FIRM'S MARKET OFFERING AND MARKET DEMAND. THE MONITOR
Is SENSITIVE NOT ONLY TO EXISTING AND PREDICTED IMBALANCE, I.E.
"PROBLEMS," BUT FURTHER, IT Is SENSITIVE TO EXISTING AND POTENTIAL
OPPORTUNITIES. WHENEVER THE MONITOR DETECTS IMBALANCE OR NEW
OPPORTUNITIES, IT CAUSES A BREAK IN THE SYSTEM BY CHANNELING SUCH
INFORMATION TO MANAGEMENT. ULTIMATELY, THE RESULT IS A MODIFIED OR
REVISED MARKET OFFERING. WHETHER THE INFORMATION SUBMITTED TO
MANAGEMENT BY THE MONITOR REQUIRES PROBLEM-SOLVING AND CORRECTIVE
ACTION WITHIN OR BEYOND THE BOUNDS OF EXISTING CORPORATE POLICY,
DECISIONS AND ACTIONS ARE BASED UPON THE PRECEPTS OF THE MARKETING
CONCEPT. THEREFORE, DECISIONS AND ACTIONS CONSISTENT WITH
EXISTING POLICY MAY BE CLASSIFIED "POLICY ACTION." THE LATTER
IMPLIES REVIEW AND POSSIBLE REVISION OF CORPORATE POLICY, BASED
UPON THE PRECEPTS OF THE MARKETING CONCEPT. THE DISTINGUISHING
FEATURE OF THE CONCEPT MODEL IS THE COORDINATED FUNCTIONING OF
THE SENSITIVITY MANITOR AND MANAGERIAL ACTION.

THE MARKETING CONCEPT MAY BE DISTINGUISHED FROM TRADITIONAL
MANAGERIAL ORIENTATIONS PRIMARILY BY:

I. ITS DEFINITION OF THE CORPORATE OBJECTIVE AS HELPING
CONSUMERS SOLVE PROBLEMS IN WAYS PROFITABLE TO THE FIRM, AND

2. ITS RECOGNITION OF THE COMPANY-WIDEIANAGERIAL IMPLICA-
TIONS OF THIS OBJECTIVE.
HOWEVER, THE MARKETING CONCEPT DOES NOT REPRESENT A RADICAL DEPARTURE
FROM FORMER MANAGERIAL ORIENTATIONs; RATHER, IT IS A NATURAL STAGE

IN THE EVOLUTION OF MANAGERIAL ORIENTATION. IT IS THE PRODUCT OF

227

CHANGING ENVIRONMENTAL CONDITIONS. FURTHER, IT REPRESENTS A RE'
EVALUATION OF CORPORATE PURPOSE AND GOALS, AND CONSEQUENTLY, A
SHIFT IN MANAGERIAL EMPHASIS IN THE DIRECTION OF MARKETING PROBLEMS

AND OPPORTUNITIES.

IMPLICATIONS OF THE STUDY

PREVIOUSLY IT HAS BEEN STATED THAT THIS STUDY EMBODIES
IMPLICATIONS FOR BUSINESS MANAGEMENT, BUSINESS ADMINISTRATION
ACADEMICIANS, CONSUMERS, AND THE ECONOMY GENERALLY. ALTHOUGH THE
MAJOR FOCUS OF THE STUDY HAS BEEN UPON IMPLICATIONS OF THE MARKET-
ING CONCEPT FOR BUSINESS MANAGEMENT, AND TO A LESSER DEGREE UPON
ACADEMICIANS' INTERPRETATIONS OF THE CONCEPT, SOME GENERAL
COMMENTS REGARDING IMPLICATIONS FOR THE SEVERAL AREAS APPEAR
TO BE WARRANTED HERE.

IMPLICATIONS FOR BUSINESS MANAGEMENT

 

ONE CONTRIBUTOR TO THE MARKETING CONCEPT LITERATURE HAS

' INDEED,

SUGGESTED THAT THE CONCEPT IS "A WAY OF CORPORATE LIFE.‘

ASTDEVELOPED IN THIS STUDY, THE MARKETING CONCEPT DOES PERMEATE

THE ENTIRE ORGANIZATION, INVOLVING UNDERSTANDING, ACCEPTANCE, AND

PARTICIPATION OF CORPORATE MANAGEMENT OF ALL FUNCTIONAL AREAS OF THE

FIRM. FURTHER, IT HAS BEEN STATED THAT THE MARKETING CONCEPT IS A

RELEVANT MANAGEMENT GUIDE TO THE MOBILIZATION OF CORPORATE

EFFORT. ACCORDINGLY, THE STUDY SUGGESTS TO MANAGEMENT THE NEED TO:
I. CONCERN ITSELF WITH THE MEANING OF THE MARKETING CONCEPT.

CONCERN WITH AN EXPANDED DEFINITION OF THE CONCEPT SUCH AS THAT

DEVELOPED IN THIS STUDY, RATHER THAN WITH THE TYPICAL LITERATURE

CONTENT, SHOULD PROVE EXCEEDINGLY BENEFICIAL TO MANAGEMENT.

228

2. APPRECIATE THE COMPANY-WIDE IMPLICATIONS OF THE CONCEPT.
As DEVELOPED IN THIS STUDY, THE CONCEPT NECESSARILY INVOLVES
MANAGEMENT OF THE PRODUCTION AND FINANCE DEPARTMENTS. TYPICALLY,
HOWEVER, CORPORATE MANAGEMENT APPEARS TO HAVE CONSIDERED THE
CONCEPT To BE PRIMARILY, IF NOT TOTALLY, AN AFFAIR OF THE MARKETING
DEPARTMENT.

3. EMPHASIZE THE ROLE OF THE CHIEF CORPORATE OFFICER
IN DEVELOPING MANAGERIAL UNDERSTANDING AND ACCEPTANCE OF THE
CONCEPT. APPARENTLY, IN SOME ORGANIZATIONS WHERE THE CONCEPT Is
MORE CLEARLY UNDERSTOOD, THE SENIOR MARKETING OFFICER HAS BEEN
ASSIGNED THE TASK OF WINNING GENERAL MANAGERIAL ACCEPTANCE OF
THE CONCEPT.

H. RE-EVALUATE THE EXTENT OF ITS CONCERN WITH PHYSICAL
MANIFESTATIONS ASSOCIATED WITH THE CONCEPT. IT APPEARS THAT
IN THEIR HASTE To "IMPLEMENT" THE CONCEPT, SOME MANAGEMENTS
HAVE EMPHASIZED THE ROLE OF SUCH PHYSICAL FEATURES AS ORGANIZATIONAL
STRUCTURE, TITLES OF OFFICERS, AND INCREASED MARKETING RESEARCH
EXPENDITURES. IT IS SUGGESTED THAT SUCH MANIFESTATIONS BE VIEWED
AS SOMETIMES DESIRABLE, ALTHOUGH CERTAINLY NOT ALWAYS NECESSARY,
IN FACILITATING THE KIND OF OPERATION SUGGESTED BY THE PRECEPTS
OF THE CONCEPT.

5. RECOGNIZE THE INDUSTRY-WIDE APPLICABILITY OF THE CONCEPT.
THAT IS, THE BASIC PREMISES OF THE CONCEPT ARE APPLICABLE TO ALL
INDUSTRY CLASSIFICATIONS. MARKETERS OF SERVICES, SUCH AS THE
BELL SYSTEM, INDUSTRIAL GOODS MANUFACTURERS, INCLUDING BULLDOG

ELECTRIC PRODUCTS COMPANY, AND THE POST DIVISION OF GENERAL FOODS

229

CORPORATION AND OTHER CONSUMER GOODS PRODUCERS, FIND THE CONCEPT
TO BE A RELEVANT GUIDE TO MANAGERIAL ACTION.

6. BETTER COORDINATE AND CONTROL THE ORGANIZATION'S
TOTAL RESEARCH ACTIVITY, PROVIDING FOR MORE EFFECTIVE FUNCTIONING
OF THE SENSITIVITY MONITOR; AND THUS FOR GREATER BALANCE
BETWEEN THE FIRM'S MARKET OFFERING AND MARKET PLACE DEMAND.
IMPLICATIONS FOR BUSINESS ADMINISTRATION ACADEMICIANS

TO THIS WRITER IT APPEARS REGRETTABLE THAT FEW ACADEMICIANS
HAVE ACTIVELY CONCERNED THEMSELVES WITH THE MEANING AND SIGNIFICANCE
OF THE MARKETING CONCEPT. ALTHOUGH AMPLE EVIDENCE EXISTS INDICATING
ACADEMICIANS' CONCERN WITH VARIOUS SPECIALIZED TECHNIQUES RELATED
TO THE CONCEPT, FEW ATTEMPTS HAVE BEEN MADE TOWARD INTEGRATING
SUCH MATERIALS INTO A SYSTEMATIC RELATIONSHIP. TO ACADEMICIANS
THIS STUDY SUGGESTS:

I. RECOGNITION OF A PROBLEM OF THE MANAGERIAL COMMUNITY,
IN THE RESOLUTION OF WHICH ACADEMICIANS CAN BE OF CONSIDERABLE
ASSISTANCE. MANAGEMENT'S IMPLICIT CHALLENGE OF MORE FULLY
DEVELOPING THE MARKETING CONCEPT APPARENTLY HAS NOT BEEN ACCEPTED
BY A SUBSTANTIAL NUMBER OF ACADEMICIANS.

2. SEVERAL AREAS WHICH APPEAR TO BE WORTHY OF FURTHER
STUDY IN EXPANDING KNOWLEDGE OF THE MARKETING CONCEPT AMONG BUSINEss-
MEN AND ACADEMICIANS. TO SUCH RESEARCHERS THIS STUDY PROVIDES
A SUMMARIZATION AND BIBLIOGRAPHY OF CONCEPT LITERATURE, AND A
THEORETICAL POSITION AND POINT OF DEPARTUREFOR ADDITIONAL
RESEARCH.

3. A POINT OF VIEW REGARDING THE BASES OF MANAGERIAL

230

ACTION, WHICH SHOULD BE USEFUL TO ACADEMICIANS IN TEACHING STUDENTS
OF BUSINESS MANAGEMENT GENERALLY, AND MARKETING MANAGEMENT
SPECIFICALLY. AGAIN, THE WRITER EMPHASIZES THE INTER-DEPARTMENTAL
IMPLICATIONS OF THE MARKETING CONCEPTS OBVIOUSLY, THIS EMPHASIS
SHOULD BE CARRIED OVER INTO THE CLASSROOM.

IMPLICATIONS FOR CONSUMERS

 

ALTHOUGH THE MARKETING CONCEPT HAS BEEN PRESENTED As A
MANAGERIAL PHILOSOPHY, ITS WIDESPREAD IMPLEMENTATION WOULD AFFECT
CONSUMERS GENERALLY. IT WOULD APPEAR THAT GREATER MANAGERIAL
CONCERN WITH CREATING MARKET OFFERINGS DESIGNED TO SOLVE SPECIFIC
CONSUMER PROBLEMS WOULD RESULT IN INCREASED CONSUMER SATISFACTION.
HOWEVER, NO CONSIDERATION HAS YET BEEN GIVEN TO THE COSTS INVOLVED
IN ESTABLISHING AND MAINTAINING A CORPORATE OPERATION BASED
UPON THE PRECEPTS OF THE MARKETING CONCEPT, AND THE IMPACT OF
SUCH COSTS ON THE PRICES CONSUMERS WOULD BE ASKED TO PAY. IT
WOULD APPEAR THAT SOME ADDITIONAL COSTS WOULD BE INCURRED IN
MANY FIRMS, E.G. INCREASED RESEARCH EXPENDITURES. HOWEVER, THE
COMPETITIVE ADVANTAGES ACCRUING TO THE FIRM, BASED UPON A MORE
ACCEPTABLE MARKET OFFERING AND DECREASED LOSSES DUE TO NEW-PRODUCT
FAILURES, QUITE PROBABLY WOULD INVOLVE NO APPRECIABLE INCREASE IN
MARKET PRICEs; PRICE REDUCTIONS ARE CONCEIVABLE.

IMPLICATIONS FOR THE ECONOMY GENERALLY

 

WIDESPREAD MANAGERIAL IMPLEMENTATION OF THE MARKING

CONCEPT ALSO HAS IMPLICATIONS FOR THE ECONOMY GENERALLY. BETTER

DEFINED MARKET OPPORTUNITIES AND THE CONTINUING SEARCH FOR NEW

OPPORTUNITIES PROBABLY WOULD RESULT IN A HIGHER LEVER OF EMPLOYMENT

23I

AND FULLER UTILIZATION OF NATIONAL RESOURCES, AS WELL AS IN MORE
EFFICIENT USE OF SUCH RESOURCES. SIMILARLY, THE ATTRIBUTES OF
GROWTH AND STABILITY ACCRUING TO THE FIRM, AND INCREASED SATISFAC‘
TION AND HIGHER LEVEL OF LIVING ACCRUING TO THE CONSUMER, WOULD

BE EXPANDED THROUGHOUT THE ECONOMY.

SUGGESTIONS FOR FURTHER RESEARCH

IN REVIEWING THE LITERATURE, CONDUCTING INTERVIEWS, AND
CONSTRUCTING THE MARKETING CONCEPT DEFINITION AND MODEL, THE
WRITER HAS RECOGNIZED SEVERAL PROBLEM AREAS WHICH APPEAR WORTHY
OF FURTHER INVESTIGATION. ALSO, THE INHERENT LIMITATIONS OF THIS
STUDY, AS A GENERAL THEORETICAL STATEMENT OF THE CONCEPT,
SUGGESTS ADDITIONAL RESEARCH PROBLEMS. SEVERAL POTENTIAL
RESEARCH AREAS ARE DESCRIBED HERE BRIEFLY.

ALLEGED IMPLEMENTATION OF THE MARKETING CONCEPT

 

IN THE MARKETING CONCEPT LITERATURE THE NAMES OF SEVERAL
HUNDRED FIRMS HAVE BEEN ASSOCIATED WITH THE MARKETING CONCEPT.
IN SOME INSTANCES COMPANY OFFICIALS EXPLICITLY ACKNOWLEDGE THE
IMPLEMENTATION OF THE CONCEPT WITHIN THEIR FIRMS. MOST REFERENCES
TO COMPANY IMPLEMENTATION, HOWEVER, HAVE BEEN MADE BY BUSINESS
PERIODICAL STAFF WRITERS. SOME ARTICLES PRESENT SUFFICIENT
DATA TO INDICATE MANAGERIAL MISINTERPRETATION OF THE CONCEPT; OTHERS
INDICATE MANAGERIAL AWARENESS OF THE CONCEPT'S BROADER IMPLICATIONS.
IN MOST CASES, HOWEVER, THE READER IS LEFT IN DOUBT REGARDING
THE STATUS OF THE CONCEPT WITHIN SPECIFIC FIRMS. A STUDY OF
THESE FIRMS, BASED UPON THE DEFINITION OF THE MARKETING CONCEPT

PRESENTED PREVIOUSLY, WOULD CLARIFY THE POSITION OF THESE FIRMS

RELATIVE TO THE CONCEPT. SUCH A STUDY WOULD BE BENEFICIAL IN

232

THAT A BETTER INDICATION OF THE EXTENT OF UNDERSTANDING AND
ADOPTION OF THE CONCEPT WOULD BE OBTAINED. ALSO, PROBABLE REMOVAL
OF A NUMBER OF FIRMS FROM CONSIDERATION AS ADOPTERS OF THE CONCEPT
WOULD FOCUS THE LITERATURE CONTENT UPON THOSE FIRMS WHICH MEET

THE DEFINITION'S REQUIREMENTS. AS A RESULT, THE LITERATURE COULD

FUNCTION MORE EFFECTIVELY IN DISSEMINATING TO BUSINESS MANAGEMENT

THE MEANING AND IMPLICATIONS OF THE MARKETING CONCEPT.

CASE STUDIES OF SELECTED COMPANIES

 

NOIMTTERN FOR IMPLEMENTATION OF THE MARKETING CONCEPT HAS
BEEN CONSTRUCTED IN THIS STUDY. HOWEVER, A STUDY OF PROBLEMS AND
PROCEDURE ASSOCIATED WITH IMPLEMENTATION OF THE CONCEPT WITHIN
SELECTED FIRMS COULD SERVE AS A MORE SPECIFIC BASIS FOR MANAGERIAL
ACTION THAN HAS BEEN PRESENTED IN THIS STUDY. FOR EXAMPLE, A
NUMBER OF FIRMS, INCLUDING PILLSBURY COMPANY AND CERTAIN DIVISIONS_
OF GENERAL EOODS CORPORATION AND GENERAL ELECTRIC COMPANY, APPEAR
TO BE OPERATING WITHIN THE FRAMEWORK OF THE MARKETING CONCEPT.
EXPERIENCES OF THESE FIRMS' MANAGEMENTS PROBABLY WOULD BE OF
INVALUABLE ASSISTANCE TO MANAGEMENTS OF OTHER FIRMS IN THEIR
ATTEMPTS AT PUTTING THE CONCEPT INTO PRACTICE. SUCH EXPERIENCE
COULD BE PRESENTED MEANINGFULLY IN THE FORM OF DETAILED CASE
STUDIES.
EFFECTIVENESS OF MANAGERIAL TRAINING PROGRAMS

IN ADDITION TO MANAGERIAL REPRESENTATION AT INTER-COMPANY
CONFERENCES CONCERNED WITH THE MARKETING CONCEPT, A FEW COMPANIES,

E.G. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, HAVE DEVELOPED THEIR

233

OWN MANAGEMENT PROGRAMS FOR DEVELOPING UNDERSTANDING AND
APPRECIATION OF THE CONCEPT. HOWEVER, SUCH PROGRAMS HAVE BEEN
INFREQUENT AND NOT WIDELY REPORTED. IT IS POSSIBLE THAT SUCH
PROGRAMS MAY REPRESENT A SURE AND RAPID ROUTE TO COMPANY~WIDE
MANAGERIAL UNDERSTANDING AND ACCEPTANCE OF THE CONCEPT. A STUDY

IN WHICH SUCH PROGRAMS WERE DEVELOPED AND THE RESULTS MEASURED
WOULD BE OF CONSIDERABLE IMPORTANCE TO THE NUMEROUS MANAGEMENTS
WHICH PROFESS CONCERN WITH PROCEDURES FOR IMPLEMENTING THE CONCEPT.

DEVELOPMENT OF MEASURE OF IMPLEMENTATION

 

RELATED TO DETERMINATION OF THE EFFECTIVENESS OF MANAGERIAL
TRAINING PROGRAMS IN DEVELOPING UNDERSTANDING AND ACCEPTANCE OF THE
CONCEPT, Is THE NEED FOR CONSTRUCTING VALID MEASURES OF IMPLEMENTA-
TION. AS MUCH OF THE IMPLEMENTATION PROCESS IS DIRECTLY
IDENTIFIED WITH COMPANY-WIDE MANAGERIAL PERCEPTION AND COMPREHENSION
OF THE CONCEPT, ATTITUDE SCALES SHOULD PROVE USEFUL. REGARDING
MANAGERIAL PARTICIPATION AND INTERACTION, DIRECT OBSERVATION
PROBABLY WOULD YIELD MORE VALID RESULTS THAN WOULD THE READING OF
CORPORATE POLICY STATEMENTS AND STUDY OF ORGANIZATION CHARTS,
ALTHOUGH THESE SOURCESSHOULD BE RECOGNIZED. ULTIMATELY, IT MAY
BE POSSIBLE TO CONSTRUCT A "MARKETING CONCEPT IMPLEMENTATION
SCALE," AGAINST WHICH THE OPERATION OF A PARTICULAR FIRM COULD
BE EVALUATED. POINTS OF STRENGTH AND OF WEAKNESS COULD THEN BE
OBSERVED, AND APPROPRIATE COORECTIVE ACTION TAKEN.

DEVELOPMENT OF THE SENSITIVITY MONITOR
AS INDICATED IN THE MARKETING CONCEPT MODEL AND THE

ACCOMPANYING DISCUSSION, ORGANIZATIONAL FUNCTIONING WITHIN THE

23A

FRAMEWORK OF THE MARKETING CONCEPT IS DEPENDENT TO A CONSIDERABLE
DEGREE UPON OPERATIOVOF THE SENSITIVITY MONITOR. AS DEVELOPED IN
THIS STUDY, THE MONITOR IS COMPOSED OF VARIOUS MARKETING INTELLIGENCE
AREAS, SUCH AS MARKETING RESEARCH AND LOGISTICS RESEARCH. HOWEVER,
THIS STUDY DESCRIBED THE GENERAL TASK TO BE PERFORMED BY THE

MONITOR, NOT THE PROCEDURES AND STRUCTURING THROUGH WHICH ITS

TASK CAN BE ACCOMPLISHED. ACCORDINGLY, A STUDY CONCERNED WITH

MORE EXTENSIVE DEVELOPMENT OF THE SENSITIVITY MONITOR WOULD BE

OF CONSIDERABLE VALUE TO BUSINESS MANAGEMENT IN ITS ATTEMPTS

TOWARD IMPLEMENTING THE CONCEPT.

BIBLIOGRAPHY

BOOKS

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MARSHALL, LEON CARROLL. BUSINESS ADMINISTRATION. CHICAG0:
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237

THE KIND OF EXECUTIVE NEEDED FOR THE POSITION OF VICE-PRESIDENT
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TOSDAL, HARRY R. INTRODUCTION TO SALES MANAGEMENT. NEW YORK:
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ARTICLES AND PERIODICALS

"AD MANAGER CAN ENLARGE STATURE AS TOTAL MARKETING EXPANDS,
N.|.A.A. TOLD," ADVERTISING AGE, (JUNE 22, I959), 3F.

 

"ADMAN TURNED MARKETING DIRECTOR BOOSTS MONROE CALCULATING'S
SALES," TIDE, XXIX (AUGUST I3, I955), 20-29.

"AIM NOW IS PROFIT, NOT VOLUME," BUSINESS WEEK, NO. IH86
(FEBRUARY 22, I950), IIHF.

 

ALDERSON, WROE. "MARKETING AND MANAGEMENT DECISION," COST
AND PROFIT OUTLOOK, XIII (JANUARY, I960), IFF.

 

ALLEN, LOUIS A. "INTEGRATED MARKETING: THE CUSTOMER KNOWS
' U v N N N Y
BEST,‘ D N's RE IEW A D MODER I DUSTR , LXXIII

(JANUARY, I959),THOFF.

ATCHISON, DAVID J. "WE PUT THE CUSTOMER AT THE TOP OF THE
ORGANIZATION CHART," SALES MANAGEMENT, LXXVIII

(JUNE 2I, I957). 38-I0

 

BANDOLI, MARVIN S. "PENDLETON BOARD MEMBERS LEARN WHAT MAKES
MARKETING CLOCK," SALES MANAGEMENT, LXXXIII

(OCTOBER 2, I959), 36FF.

 

BARNET, EDWARD M. "SHOWDOWN IN THE MARKET PLACE," HARVARD
BUSINESS REVIEW, XXXIV (JULY-AUGUST, I956), 05-95.

 

BARNUM, H. J., JR. "HOW TO SCREEN A NEW PRODUCT IDEA,"
DUN'S REVIEW AND MODERN INDUSTRY, LXIII (JUNE, I95H),
/
3OFF.

BARTLETT, ARTHUR. "THE BATTLE OF THE BUYERS' MARKET,"
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238

BEURET, J. W. "SIX REASONS WHY YOU MUST COORDINATE ALL YOUR
SALES - MAKING FORCES FOR 'SM," PRINTERS' INK, CCXLV

(DECEMBER u, I953), 37-35.

 

BIGELOW, BURTON. "A BLUEPRINT OF THE MODERN SALES MANAGER'S
JOB," SALES MANAGEMENT, LXVII (NOVEMBER I, I95I), 65-72.

 

 

BLACK, JAMES N. "INTEGRATED MARKETING PAYS OFF WHEN INDUSTRY
SALES SLUMP," PRINTERS' INK, CCXXXII (SEPTEMBER 29, I950),
25FF.

BROWN, RICHARD J. "GET EVERYONE INTO THE ACT OR YOUR NEW PRODUCT
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BRUNER, DICK. "FOR McGREGOR CLAN, COORDINATED MARKETING IS
/
KEY," PRINTERS' INK, CCLIV (FEBRUARY l7, I950), 33FF.

 

BUELL, VICTOR P. "HAVE YOU LOOKED AT YOUR MARKETING IDEAS
LATELY?," PRINTERS' INK, CCXLIX (OCTOBER 22, I95h), 29-3l.

 

"ORGANIZING FOR MARKETING PLANNING,' THE JOURNAL

OF MARKETING, XXI (JULY, I956), DO-YI.

 

 

 

BUND, HENRY, AND CARROLL, JAMES W. "THE CHANGING ROLE OF THE
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BURCK, GILBERT, AND PARKER, SANFORD S. "WHAT A COUNTRY,’
FORTUNE, LIV (OCTOBER, I956), I27FF.

BURGER; HENRY 6- "THE NEED FOR MARKETING ENGINEERING,"
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"BUT MERGERS ARE DIFFERENT NOW," BUSINESS WEEK, NO. l3uh

(JUNE A, I955), SMFF.

 

”CALLING THE SHOTS ON l9--," BUSINESS WEEK, NO. I203
(SEPTEMBER 20, I952), EHFF.

 

"CALVERT MARKETER PHIL KELLY: DREAMER AND DRIVER," TIDE,
XXIX (NOVEMBER 5, I955), AO-AI. """

"CAMPBELL SOUP: NEW MARKETING STRATEGY AFTER EIGHTY-FIVE YEARS
OF SUCCESS," TIDE, XXVIII (DECEMBER h, l95h), I7-I9.

CARPENTER, RUSS. "IOO% SALES GAIN IN FOUR YEARS IS A GOAL OF
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CCLVII (DECEMBER 23, I950), 3DFF.

 

CASCINO, ANTHONY E. "A CASE STUDY IN MARKETING MANAGEMENT,"
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239

"THE CHALLENGE TO MANAGEMENT: HOW TC GROW IN THE COMPETITIVE
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CHASE, STUART. "THE AGE OF DISTRIBUTION," THE NATION, CXXXIX

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"CHRYSLER IN TRANSITION," PRINTERS' INK, CCLIII (OCTOBER 20, I955),
2|FF.

 

"CHRYSLER RESTYLES ITS EXECUTIVE STRUCTURE," BUSINESS WEEK,
‘. _ r .
NO. IMIO (NOVEMBER 3, I956), O5FF.

 

COATES, LAWRENCE S. "THIS FIRM THOUGHT IT DID NOT NEED A
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(7-

LXXVIII (FEBRUARY I, I957), MOE.

 

COLLEY, RUSSELL H. "NEEDED: A MARKETING PREPAREDNESS PROGRAM,"

HARVARD BUSINESS REVIEW, XXX (MARCH-APRIL, I952), IOO—II8.

 

"COMPETITION WITHIN THE FAMILY,"

(MARCH 23, I956), M3FF.

BUSINESS WEEK, NO. I356

 

CORRIGAN, JOHN D. "THE TOTAL MARKETING CONCEPT," ADVANCED
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"COST CONTROL HELPS MANAGEMENT IMPROVE MARKETING EFFICIENCY
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COURTNEY, C. J. ”THE JOB OF MARKETING," SALES MANAGEMENT,
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COWAN, DONALD R. G. "THE FUNCTION OF MANAGEMENT IN MARKETING,"
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COX, REAVIS. "THREE-IN-ONE MARKETING," HARVARD BUSINESS REVIEW,
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DAMPIER, LAWRENCE. "THE NEW ROLE OF MODERN MARKETING,"
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DALE, ERNEST. "MARKETING CRISIS: WHERE TO FINK MARKETS FOR
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(FEBRUARY 27, I959), 25-27.

 

DAVIDSON, GEORGE W. "WHY YOU SHOULD BLUEPRINT YOUR MARKETING
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2A0

DAY, CAMERON. "INTEGRATED MARKETING ACTION," PRINTERS' INK,
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"MARKETING DIRECTOR, A NEW POST...,"

- PRINTERS' INK,
CCLI (APRIL 22, I955), 23-2A

 

 

"MARKETING-MINDED EXECUTIVES MOVING INTO MORE TOP
MANAGEMENT POSTS," PRINTERS' INK, CCXLIV (AUGUST 7, I953),
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"NEW MARKETING CONCEPT DOMINATES A.N.A. MEETING,"
PRINTERS' INK, CCLIII (NOVEMBER ll, I955), 26-27.

 

 

"RESERVE AD POWER WHEN YOU NEED IT,"

CCLV (JUNE 22, I956), MIFF.

PRINTERS' INK,

 

 

"WHAT IS THE MARKETING MAN'S JOB?," PRINTERS' INK,
CCLIV (MARCH 2, I956), 25rr.

 

 

DEAN, JOEL. "DECENTRALIZATION AND INTRACOMPANY PRICING,"
HARVARD BUSINESS REVIEW, XXXIII (JULY-AUGUST, I955), 65-7h.

 

DICK, RALPH H. "THE MARKETING PROBLEMS OF A MANUFACTURER
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(FEBRUARY, I929), 29-35.

 

"DISCIPLINED SELLING BASED ON PLANNING Is THE KEY To SUCCESSFUL
MARKETING," PRINTERS' INK, CCLXIII (JUNE 27, I958), 2|FF.

 

DOSCHER, FEN K. "SALES MANAGERS ARE PRODUCT-MINDED - MARKETING
MANAGERS ARE CUSTOMER-MINDED," PRINTERS' INK, CCLXII

(MARcH IA, I958). 33-3A.

 

DRUCKER, PETER F. "SELLING WILL BECOME MARKETING," NATION'S
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DRURY, JAMES G. "Is YOUR PROBLEM OVER-PRODUCTION--OR UNDER-
PRODUCTION OF MARKETS?," PRINTERS' INK, CCLX (JULY 5, I957),
19-2lo

DYER, J. E. "COMPANY-WIDE TEAM PUTS OVER TWO PRODUCTS,"
PRINTERS' INK, CCXLVII (JUNE I8, I95H), 3IFF.

 

EDITORS OF GREY MATTER. "THE SALESMAN'S ENLARGED ROLE UNDER THE
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EDWARDS, CORWIN D. "MARKETING," THE ANNALS OF THE AMERICAN
ACADEMY OF POLITICAL AND SOCIAL SCIENCE, CLXXIII

(MAY, I93h7, 56-92.

 

 

 

——.a—,

——-

 

2AI

"EMERGING 'ELITE' TO MAKE SCIENCE OF MARKETING PLANNING, ULE
PREDICTS," ADVERTISING AGE, (MAY 25, I959), h6-h7.

 

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25-27.

ESTES, BAY E. "DOES THE MARKETING CONCEPT WORK IN THE INDUSTRIAL
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FELTON, ARTHUR P. "CONDITIONS OF MARKETING LEADERSHIP,"
HARVARD BUSINESS REVIEW, XXXIV (MARCH-APRIL, I956),

II7-I27.

"FIGHT TO STAY NUMBER TWO IN ALUMINUM MARKET," BUSINESS WEEK,

NO. I38I (FEBRUARY I8, I956), 88FF.

 

 

"FINGERS POINT AT SALES MANAGERS," BUSINESS WEEK, NO. I506

(JULY I2, I958), A7-A8.

 

FREELAND, WILLARD E. "THE MARKETING PROBLEMS OF A MANUFACTURER
OF RESALE GOODS," BULLETIN OF THE TAYLOR SOCIETY, XIII
(DECEMBER, I920), 223-229.

 

I!

FROST, GEORGE. "MARKETING IS MANAGEMENT'S JOB, DUN'S REVIEW AND
MODERN INDUSTRY, LXXII (OCTOBER, I958), 50F.

 

 

GADDIs, PAUL 0. "THE PROJECT MANAGER,"

HARVARD BUSINESS REVIEW,
XXXVII (MAY-JUNE, I959), 89-97.

 

GALLAGER, A. J. "HOW CAN PROFITS BE PROTECTED," PRINTERS' INK,
CCLIX (MAY 3|, I957), 23rr.

 

GALVIN, ROBERT W., AND TAYLOR, EDWARD R. "CASE HISTORY SHOWS
HOW MOTOROLA TV IS MAKING ITS MARK STICK," PRINTERS'
INK, CCXLVII (APRIL I6, I95u), uO-h3. ' '"' "“'

"G. E. GETS THE SMALL BUSINESS TOUCH," BUSINESS WEEK, NO. II8I
(APRIL I9, I952), ||8FF.

 

GEROT, PAUL S. "DECISION—MAKERS THINK 'PROFITS' UNDER NEW
SETUP AT PILLSBURY," SALES MANAGEMENT, LXXXI
(SEPTEMBER I9, I958), I2H-I26.

 

GERRISH, SARAH LEE. "NEW DISTRIBUTION PIPELINES NEEDED TO
MEET COMPETITION,” _PRINTERS' INK, CCLI (JUNE l0, I955), 26.

GILBERT, NATHANIEL. "HOW RHEEM FINALLY MADE DECENTRALIZATION
WORK," SALES MANAGEMENT, LXXX (MAY I6, I958), 33FF.

 

GILLIAMS, E. LESLIE. "BEATING THE MIDDLEMAN,' HARPER'S WEEKLY,

LVI (AUGUST I7, I9I2), 2I-22.

 

 

__.-

2A2

GREEN, HAROLD E., AND THOMANN, LOUIS F. "THE MARKETING STORY
OF CARNATION," PRINTERS' INK, CCLV (APRIL 27, I956),
27FF.

 

GROSS, I. M. "MULTI-AMP'S NEW PRODUCT TAUGHT A PAINFUL MARKETING
LESSON," SALES MANAGEMENT, LXXIII (OCTOBER I, I95h), OSFF.

 

GUSTAFSON, PHILIP. "SELLING TOMORROW'S MARKET,' NATION'S
BUSINESS, XV (FEBRUARY, I957), 76-87.

HAHN, A. R. "WHAT HAPPENS TO ADVERTISING UNDER MARKETING CONCEPT
OPERATION," SALES MANAGEMENT, LXXXI (NOVEMBER IO, I958),

 

 

 

56-6I.

. "I.C.P.'S 'MARKETING CONCEPT': THREE TOP MANAGEMENT
MgN DEFINE IT," SALES MANAGEMENT LXXIV (MARCH I5, I955),
70F.

. "TRUMBULL REMODELS ITS MANAGEMENT TO MEET 'THE AGE
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37FF.

. "THE MARKETING CONCEPT': A MAJOR CHANGE IN MANAGEMENT
THINKING?," SALES MANAGEMENT, LXXIX (NOVEMBER IO, I957),

6h-75.

 

 

 

 

HAMELFARB, RENA M. "WHY A.T.&T. IS STEPPING UP SALES - AD DRIVE,"
PRINTERS' INK, CCL (MARCH 25, I955), 25-26.

 

"HAMILTON WATCH COMPANY'S NEW MARKETING CONCEPT REINVIGORATES
ITS SALES," PRINTERS' INK, CCLXV (NOFEMBER IN, I958),

72-7A.

HANEY, LEWIS H. "INTEGRATION IN MARKETING," THE AMERICAN
ECONOMIC REVIEW, X (SEPTEMBER, I920), 528-5h5.

 

 

 

HANSEN, V. E. "INTEGRATION FOR BETTER MARKETING," INDUSTRIAL
MARKETING, XLII (NOVEMBER, I957), 57-59.

 

HARRIS, WILLIAM B. "THE OVERHAUL OF GENERAL ELECTRIC," FORTUNE,
LII (DECEMBER, I955), IIOFF.

HERKES, S. R. "FOR MOTOROLA...DIVIDENDS FROM A COST-CUTTING
CRUSADE," SALES MANAGEMENT, LXXX (MARCH 2|, I958) 36FF.

 

HEYEL, CARL. "SALES CHIEF'S PART IN WAREHOUSING," SALES
MANAGEMENT, LXXXI (OCTOBER I7, I958), 73FF.

 

HOLT, ALAN. "TECHNIQUE: COORDINATED MARKETING PROGRAM; RESULT:
SALES RISE 9M% IN FIRST QUARTER," PRINTERS' INK,
CCLV (JUNE 22, I956), 2u-25.

 

2A3

HOUFEK, LYMAN J. "SHORT-TERM SALES FORECASTING - TOP JOB FOR
THE MARKETING TEAM," PRINTERS' INK, CCXXXVIII
(FEBRUARY I5, I952), bOFF.

 

HOUSER, T. V. "THE TRUE ROLE OF THE MARKETING EXECUTIVE,"
THE JOURNAL OF MARKETING, XXIII (APRIL, I959), 363-369.

 

”HOW A MAGAZINE ADOPTS THE MARKETING CONCEPT TO EXPAND ITS
SERVICE," PRINTERS' INK, CCLXIII (MAY 2, I958), M2FF.

 

"HOW AN AGENCY IS ADAPTING THE GENERAL FOODS MARKETING PLANS,"
TIDE, XXVIII (JANUARY I6, I95“), 3“-

”HOW CAN THE MIDDLEMAN BE ELIMINATED?," CURRENT OPINION,
LXX (MARCH, I92I), 396-398.

 

"HOW CHAIN BELT ADOPTED INTEGRATED MARKETING," INDUSTRIAL
MARKETING, XLIV (JULY: I959): '28‘I29-

 

"HOW MANY COMPANIES USE 'TOTAL MARKETING'?" TIDE, XXIX
(DECEMBER 3: I955): "OF0

"HOW MARKETING HELPED BUDD DIVERSIFY," PRINTERS' INK, CCLXVII

(SEPTEMBER h, I959), h8-h9.

 

"HOW NEW PRODUCTS ARE PLANNED - AND WHY," PRINTERS' INK, CCLXIX
(OCTOBER I6, I959), 72FF.

 

"HOW TO BECOME A MARKETING STRATEGIsT;" TIDE: XXIX (JULY 2’ '955)’

2A-25.

"HOW TO CATCH TODAY'S CONSUMER," BUSINESS WEEK, N3. I5|9

(OCTOBER II, I958), 63rr.

 

HUGHES, LAWRENCE M. "BLAw-KNOX GETS A GRIP ON OVER-DECENTRALIZATION,"
SALES MANAGEMENT, LXXIX (SEPTEMBER 6, I957), 29FF.

 

. "GENERAL FOODS ORGANIZES MANAGEMENT AND MARKETING
'FOR THE NEXT TEN YEARS'," SALES MANAGEMENT, LXXV

(JULY I5, I955), 36rr.

 

 

. "G-E SEEKS CONQUEST OF BIGNESS THROUGH FANNED-OUT
MANAGEMENT," SALES MANAGEMENT, LXIX (OCTOBER I, I952),
2MFF.

 

 

. "G-E, UNDER DECENTRALIZATION, REAPS RECORD SALES
AND PROFITS," SALES MANAGEMENT, LXXX (MARCH 7, I958), 3uFF.

 

 

. "HAS GERBER SOLD ITSELF INTO BABY FOOD 'MONOPOLY'?,"

 

SALES MANAGEMENT, LXXVII (JULY 20, I956), 25rr.

 

r.

 

! I".

.I4

 

2AA

. "HEINZ MOBILIZES FOR MASS MARKETS," SALES MANAGEMENT,

 

LXV (DECEMBER I, I950), 37FF.

. "SALES EXECUTIVES JOB GROWS BIGGER...BUT HE ISN'T

 

PAID PROPORTIONATELY," SALES MANAGEMENT, LXXII
(JANUARY I5, I95"): SBFF-

. "SALES WINS A BIGGER VOICE ON BIGGEST-COMPANY BOARDS,"

 

SALES MANAGEMENT, LXX (JANUARY I5, I953), 2HFF.

 

. "TOP MANAGEMENT HELPS SALES GIRD To BEAT THE 'BUYERS

 

MARKET'," SALES MANAGEMENT, LXXII (FEBRUARY I, I959), 36FF.

 

. "'TOTAL SALES' TAKES OVER AT BURROUGHS,” SALES

 

 

MANAGEMENT, LXVII (FEBRUARY I5, I952), 2MFF.

 

. "WESTINGHOUSE COMES BACK SELLING," SALES MANAGEMENT,
LXXVII (SEPTEMBER 2|, I956), 25FF.

 

"INDUSTRIAL ADVERTISERS TAKE BIG STEP, ENDORSE MARKETING CONCEPT,"
PRINTERS' INK, CCLXII (MARCH 2|, I958), I-3.

 

"INDUSTRIAL MARKETER," PRINTERS' INK, CCLVII (DECEMBER 28, I956),
58.

 

"INDUSTRIAL MARKETING ASSOCIATION NEEDED?," INDUSTRIAL MARKETING,

XLI (APRIL, I956), 65-66.

"INNOVATIONS IN MARKETING MANAGEMENT," BUSINESS HORIZONS, II

(FALL, I959): 52-53-

"INSIDE SECRET: WHAT SPECIAL SECRET MADE SCOTT SALES GROW 790%
IN I5 YEARS," PRINTERS' INK, CCLXVII (APRIL 3, I959),
2|FF.

JEFFERY, GRANT. "IT'S SALES CHIEF'S JOB To CUT COSTS," SALES
MANAGEMENT, LXXVIII (APRIL 5, I957), 29FF.

 

JOHNSON, SAMUEL C., AND JONES, CONRAD. "HOW TO ORGANIZE FOR
NEW PRODUCTS," HARVARD BUSINESS REVIEW, XXXV (MAY-

JUNE, I957), u9-62.

KAPLAN, A. D. H. "THE CURRENT MERGER MOVEMENT ANALYZED," \
HARVARD BUSINESS REVIEW, XXXIII (MAY-JUNE, I955), 9I-9b.

KEITH, ROBERT J. "THE MARKETING REVOLUTION," THE JOURNAL OF
MARKETING, XXIV (JANUARY, I960), 35-38.

KLAW, SPENCER. "LEVER'S ARTFUL DODGING," FORTUNE, LIX (JUNE, I959),
l25FF.

2A5

KLINE, CHARLES H. "PRODUCT PLANNING," ADVANCED MANAGEMENT, XVIII

(MARCH, I953), I0-IH.

 

. "THE STRATEGY OF PRODUCT POLICY," HARVARD BUSINESS
REVIEW, XXXIII (JULY-AUGUST, I955), 9l-IOO.

 

 

KELLEY, WILLIAM T. "THE DEVELOPMENT OF EARLY THOUGHT IN MARKETING
AND PROMOTION," THE JOURNAL OF MARKETING, XXI (JULY, I956),

62-67.

 

KELNE, NATHAN. "DOES COMMITTEE MANAGEMENT REALLY WORK?," PRINTERS'
INK, CCXLIX (NOVEMBER 5, I95A), 25-29. """"'

. "INDUSTRIAL ADVERTISERS ADDING MORE CONSUMER LINES,"

 

PRINTERS' INK, CCXLIX (DECEMBER I0, I95h), 23-25.

 

. "REORGANIZATION PAVES WAY FOR AGGRESSIVE ADVERTISING
AND SELLING BY OLD COMPANY," PRINTERS' INK, CCXLI
(NOVEMBER In, I952), M2.

 

 

. "TOP MANAGEMENT GIVES GREEN LIGHT TO INDUSTRIAL
ADVERTISING," PRINTERS' INK, CCLIII (OCTOBER 2|, I955),
2u-26.

 

 

. "WHAT MAKES INTERNATIONAL NICKEL RUN?,"

PRINTERS'
INK, CCLIII (DECEMBER I6, I955), 28rr. ""““’

 

LARRABEE, C. B. "ADVERTISING Is MANAGEMENT'S PROBLEM, TOO,"
PRINTERS' INK, CCXLV (OCTOBER 9, I953), 37-39.

LAZER, WILLIAM. "CHANGING DIMENSIONS IN MARKETING,' THE BUSINESS

QUARTERLY, XXIV (SPRING, I959), 29-27.

 

. "SALES FORECASTING: KEY TO INTEGRATED MANAGEMENT,"
/
BUSINESS HORIZONS, II (FALL, I959), 6I-O7.

 

 

LAZO, HECTOR. "BIG BUSINESS GIVES 0.K. TO MARKETING MANAGEMENT,"
SALES MANAGEMENT, LXXXI (NOVEMBER 2|, I958), 33FF.

 

. "THE MARKETING MANAGER -- WHO THE NEW EXECUTIVE IS.

 

AND WHAT HE WILL DO," PRINTERS' INK, CCLXII (JANUARY 3, I958),
29-3I.

LEBOW, VICTOR. "CONSUMPTION IS THE FUTURE MASTER OF OUR ECONOMY,"
PRINTERS' INK, CCXLV (OCTOBER 2, I953), 38FF.

 

 

LEVITT, THEODORE. "BLUE-SKIES APPROACH TO TOMORROW'S MARKETING,"
BUSINESS HORIZONS, I (SPRING, I958), I20-I29.

 

. "GROWTH AND PROFITS THROUGH PLANNED MARKETING INNOVATION,"

 

THE JOURNAL OF MARKETING, XXIV (APRIL, I960), I-8.

 

 

 

 

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2A6

LEWIS, HOWARD THOMPSON. "DISTRIBUTION," THE ANNALS OF THE
AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCE, CXLIX

(MAY, I930), ga-uu.

 

 

LOUGH, WILLIAM H. "DYNAMIC MARKETING: KEY TO SURVIVAL IN TODAY'S
TURBULENT ECONOMY," PRINTERS' INK, CCLIV (JANUARY 6, I956),
28-30 0

 

"MAKING WAR ON THE MIDDLEMAN AND THE HIGH COST OF LIVING,"

CURRENT LITERATURE, LII (MARCH, I9I2), 289-292.

 

MARTIN, SELDON 0. "THE SCIENTIFIC STUDY OF MARKETING," THE ANNALS

OF THE AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCE,

LIX (MAY, I9I5), 77-05.

 

 

MARVIN, PHILIP. "MANAGEMENT STRATEGY FOR PRODUCT PIONEERING,"
BUSINESS HORIZONS, I (SPRING, I955), ION-IIO.

 

"MARKETER OHME TELLS HOW TO SELL A SMALL," TIDE, XXIX (OCTOBER 8, I955),

32-33.

"MARKETER WOLKENHEIN: RARE MAN WITH A RARE JOB," TIDE, XXIX
(SEPTEMBER 29, I955), 26-27.

I

"A MARKETING CONCEPT FOR HARDWARE WHOLESALERS,’

(MAY: I959): 67FF°

HARDWARE RETAILER,

 

"MARKETING CONCEPT GIVES ADVERTISING NEW JOBS TO DO - AND MORE
CHANCES TO DO THEM," PRINTERS' INK, CCLXIII (JUNE 20, I958),
2|FF.

 

"MARKETING IN THE '605: THE COMING BATTLE FOR DISCRETIONARY
DOLLARS," PRINTERS' INK, CCLXVII (SEPTEMBER II, I959),
23FF.

 

"MARKETING MEN TAKE OVER IN G.E. UNITS," BUSINESS WEEK, NO. I086
(JUNE 2A, I950), 30FF.

 

"MARKETING - NEW HARNESS FOR MANAGEMENT," PRINTERS' INK: CCLVII
(NOVEMBER 23, I956), 2|FF.

 

"MARKETING SOLD TO THE COMPANY,"

“ BUSINESS WEEK, NO. I556 (JUNE 27, I959),
7OF.

 

"MARKETIZING: NEW CONCEPT Is KEY TO INDUSTRIAL SALES," PRINTERS'
INK, CCLVIII (FEBRUARY 6, I959), M6.

McCARTHY, E. JEROME. "ORGANIZATION FOR NEW-PRODUCT DEVELOPMENT?,"
THE JOURNAL OF BUSINESS XXXII (APRIL, I959), I20-I32.

 

MCCREARY, EDWARD. "COUNTERTREND TO DECENTRALIZATION: TOP MANAGEMENT
TIGHTENS CONTROLS," DUN'S REVIEW AND MODERN INDUSTRY, LXXIV

(JULY: I959): 32’3"°

 

 

| "ill" [I II |\|

 

2h?

MCLEAN, JOHN G. "FIVE JOBS FOR MARKETING MANAGEMENT," INDUSTRIAL
MARKETING, XLII (OCTOBER, I957), I97-203.

. "THE NEW RESPONSIBILITIES OF MARKETING MANAGEMENT,"
C
THE JOURNAL OF MARKETING, XXIII (JULY, I950), I-8.

 

MENDELS, ERNEST. "TESTS CUT 'FLOPS' BY THREE-QUARTERS," PRINTERS'
INK, CCLX (AUGUST 2, I957), I9-2I.

MILLER, JOHN D. "WHY TOP MANAGEMENT'S KEY POLICIES STEM FROM
SALES AT SCHILLING," SALES MANAGEMENT, LXVII
(NOVEMBER 20, I95I), 37-39.

MITCHELL, DON G. "TO MARKET, TO MARKET IN SIX STEPS," DuN'S
REVIEW AND MODERN INDUSTRY, LX (MARCH, I952), I3FF.

"MONSANTO'S PLAN: DOUBLE SALES," TIDE, XXIX (DECEMBER 3, I955),

26-29.

"MORE PROSPERITY OR A DOWNSWING? IT'S UP TO TOP MANAGEMENT AND
MARKETING, SAYS ARNO JOHNSON," TIDE, XXVII (AUGUST 29, I953),
2I-23o -

"MOTOROLA'S MAN WITH A MARKETING PLAN," TIDE, XXIX

(SEPTEMBER I0, I955), 38-39.

 

MULLER-MUNK, PETER. "INDUSTRIAL DESIGN AS A FUNCTION OF MARKETING,"
INDUSTRIAL MARKETING, XLIV (FEBRUARY, I959), H5—H7.

NELSON, ROBERT M. "HOW TO CREATE AND SUPPORT NEW MARKETS,"
INDUSTRIAL MARKETING, XLII (AUGUST, I957), H9-5I.

NEWMAN, JOSEPH W. "NEW INSIGHTS, NEW PROGRESS, FOR MARKETING,"
HARVARD BUSINESS REVIEW, XXXV (NOVEMBER-DECEMBER, I957),

95-IO2.

"NEW MARKETING CONCEPT AT WESTINGHOUSE: DECENTRALIZE AND STUDY THE
CONSUMER," PRINTERS' INK, CCLXII (JANUARY 2“, I955), 33-35.

"NEW PRODUCT REVOLUTION: IS MANAGEMENT ORGANIZED FOR IT?,"
)
PRINTERS' INK, CCLVII (OCTOBER 3|, I955), 2|FF.

 

"NEW PRODUCTS HELP A.T.&T. SELL PHONE CALLS," PRINTERS' INK,

CCLX (JULY 3': I959): 53"5"'

"NEW PRODUCTS: WESTINGHOUSE WORKS HARD TO PLAN THEM, MAKE THEM
O
BUILD PROFITS," PRINTERS' INK, CCLXII (JANUARY 3|, I950),

77FF.

"A NEW STYLE MARKETING DIRECTOR HELPS OLD-TIME COMPANY'S SALES,"
TIDE, XXIX (JULY 2, I955), 26-27.

 

2A8

"NOW NEWSPAPERS HAVE MARKETING MANAGERS," SALES MANAGEMENT, LXXXI

(DECEMBER 5, I958), 67.

"OPPORTUNITY AHEAD, DON'T FUMBLE, N.|.A.A. ADMEN URGED," INDUSTRIAL
MARKETING, XLI (JUNE, I956), 97-98.

"PARKER PEN - A CLOSE LOOK AT A MARKETING STORM CENTER," PRINTERS'
INK, CCLII (SEPTEMBER 9, I955), 3|FF.

"PERSUIT OF PROFIT: HOW THE MARKETING CONCEPT BUILDS NEW BALANCE
OF POWER," PRINTERS' INK, CCLXX (FEBRUARY I9, I960),
2|FF.

 

”PH'LCO'S SECRET: ONE FOR ALL; AND ALL FOR SALES," PRINTERS' INK)
CCXXXI (JUNE I6, I950), 25FF,

”A PHILOSOPHY OF CONSUMPTION ACCENTS MARKETING'S NEW ROLE," TIDE,
XXVII (SEPTEMBER I2, I953), 25.

 

PLUNKETT, JAMES G. "IS YOUR MARKETING SET-UP GEARED TO TOMORROW'S
SALES NEEDS?" SALES MANAGEMENT, LXXXIII (OCTOBER 2, I959),
uI-A2.

PRATT, EDWARD EWING. "MARKETING FACILITIES AND THEIR RELATION
TO THE COST OF LIVING," THE JOURNAL OF HOME ECONOMICS,

IV (OCTOBER, I9I2), 329-337.

 

”pRINTERs' INK PREDICTS," PRINTERS' INK, CCLXX (JANUARY I; I960)

I8.

"PRODUCT AND MATERIALS DECISIONS NOW PART OF SALES MANAGER'S JOB,"
SALES MANAGEMENT, LXXI (AUGUST I, I953), YMF.

 

"PROMOTION AT PHILCO NOW UNDER A VICE PRESIDENT," SALES MANAGEMENT,
LXXVII (OCTOBER 5, I956), 5A.

PRUNER, H. E. "CHRONOLOGICAL PLANNING SPARKS NEW-PRODUCT SALES
I!
EiFORT, SALES MANAGEMENT, LXXIII (DECEMBER I5, I959),
O FF.

 

"PUTTING VOLUME BEFORE PROFITS?," BUSINESS WEEK, NO. Ih32

(FEBRUARY 9, I957), I29.

 

RANDLE, C. WILSON. "PROBLEMS OF R & 0 MANAGEMENT," HARVARD BUSINESS
REVIEW, XXXVII (JANUARY-FEBRUARY, I959), l25-|36.

H
. WEIGHING THE SUCCESS OF NEW PRODUCT IDEAS," INDUSTRIAL
MARKETING, XLII (JULY, I957), 37-AO.

 

 

"THE RESHUFFLING OF THE CORPORATE ORGANIZATION PATTERN," SALES
MANAGEMENT, LXXXII (MAY I5, I959), 33FF.

2A9

"THE REYNOLDS STORY: THE MARKETING AND MERCHANDISING PROGRAM OF
REYNOLDS METALS COMPANY," INDUSTRIAL MARKETING, XL

(OCTOBER, I955), 8I-92.

 

"RHEEM PULLS ITSELF TOGETHER," BUSINESS WEEK, NO. I922
(DECEMBER I, I956), I67FF.

 

RIESER, CARL. "THE CHANGES AT WESTINGHOUSE," FORTUNE, LVIII
(AUGUST, I950), 57FF.

"SALES RESEARCH GROWS," BUSINESS WEEK, NO. 95M (DECEMBER I3, I9H7),
72F.

 

SAWYER, CHARLES. "MAIN PROBLEM IS DISTRIBUTION," THE COMMERCIAL
AND FINANCIAL CHRONICLE, CLXXVI (SEPTEMBER ll, I952),

9IIF.

SAYRE, JUDSON. "SALES HEADS SHOULD BE PRESIDENTS, OR AT VERY
LEAST, EXECUTIVE VEEPS," SALES MANAGEMENT, LXXIV

(APRIL I, I955), M3.

”SCHAEFER BREWING TRIES A NEW MARKETING STRUCTURE AND LIKES IT,
TIDE, XXIX (JUNE A, I955), 2A-25.

 

 

 

H

SCHAEFER, ED. "MANAGEMENT MIRACLE AT MINNEAPOLls-MOLINE,"
SALES MANAGEMENT, LXXXIII (AUGUST 7, I959), 33FF.

 

"SEAGRAM ABANDONS CENTRALIZED MARKETING AS BRAGARNICK LEAVES,"
PRINTERS' INK, CCLXVIII (AUGUST IA, I959), I9.

"SHIFTING THE STRESS TO MARKETING," BUSINESS WEEK, NO. I5I8
(OCTOBER M, I950), 57FF.

 

SHILLINGLAW, GORDON. "GUIDES To INTERNAL PROFIT MEASUREMENT,"
HARVARD BUSINESS REVIEW, XXXV (MARCH-APRIL, I957), 82-9h.

 

SILBAR, ROBERT W. "FUSION OF AD AND SALES EFFORTS MEANS COMPLETE
CUSTOMER SERVICE," PRINTERS' INK, CCLIX (APRIL 26, I957),

u2-hh.

 

SMITH, EVERETT R. "THE CUSTOMER WILL BE BOSS, VITAL SPEECHES
OF THE DAY, XI (SEPTEMBER I, I9M5), 693-695.

 

 

SMITH, JOHN M. "G-E X-RAY SPLITS SALES SETUP TO SPECIALIZE BY
MAJOR MARKETS," SALES MANAGEMENT, LXXVII (AUGUST 3, I956),

M6FF.

 

SMITH, RICHARD AUSTIN. "THE CEILING ON SELLING," FORTUNE, LVIII

(AUGUST, I950), 9IFF.

SMITH, STANLEY E. "CARBORUNDUM'S PRODUCT - LINE SETUP PAYS OFF
IN NEW SALES HIGHS," SALES MANAGEMENT, LXXX (MAY 2, I958),
68FF.

 

25o

SMITH, WENDELL R. "MARKETING STRATEGY: WHAT PREPARATION SHOULD
PRECEDE THE MARKETING CONCEPT," PRINTERS' INK, CCLXIV
(SEPTEMBER 26, I950), 37-30.

 

. "THE ROLE OF PLANNING IN MARKETING," BUSINESS HORIZONS,

II (FALL, I959), 53-57-

"SPLITTING A COMPANY LETS IT MOVE FASTER," BUSINESS WEEK, NO. IMMO

(APRIL 6, I957), I7MFF.

 

 

 

"STANDARD'S REFINED ADVERTISING," TIDE, XXXI (SEPTEMBER I3, I957),
23-26.

I

"THE STORY OF COMPBELL SOUP,’ PRINTERS' INK, CCL (FEBRUARY I5, I955),

23FF.

 

H

"SUCCESS IN A SEGMENTED MARKET" HOW TOTAL MANAGEMENT FINDS IT,
PRINTERS' INK, CCLX (SEPTEMBER l8, I959), 2|FF.

 

SWAN, CARROLL J. "HOW SCOTT PAPER DIRECTS ITS SALES POWER,"
PRINTERS' INK CCXXXVI (AUGUST 3, I95I), 38-M0.

 

THAIN, DONALD H. "HOW TO APPROACH MARKETING PLANNING," THE BUSINESS
QUARTERLY, XXIII (FALL, I955), I65-[73.

 

THOMANN, LOUIS F. "HOW TO INTEGRATE PROMOTION PLANS WITH DEPARTMENTS
OF MARKETING, PRODUCT ACCEPTANCE, DEALER SALES, RETAILER
COORDINATION, ADVERTISING AND MANUFACTURING," PRINTERS' INK,
CCXLIV (SEPTEMBER I8, I953), 5I-52.

 

. "MARKETING STRATEGY FOR THE SMALL GUY,"

PRINTERS' INK,
CCLVII (OCTOBER l9, I956), MMFF. ‘

 

 

THOMPSON, EDWARD T. "THE UPHEAVAL AT PHILCO," FORTUNE, LIX
(FEBRUARY, I959), II3FF.

TOLK, BERNARD. "NEW TEAM PACES MARKET EXPANSION AT MEAD JOHNSON
AND COMPANY," PRINTERS' INK, CCLI (JUNE I7, I955), 2I-2M.

 

"TOMORROWS MAJOR TRENDS IN MARKETING," SALES MANAGEMENT, LXXXIII
' F
(SEPTEMBER M, I959), 3OFF.

 

"TOP MANAGEMENT AND MARKET ORIENTATION," COST AND PROFIT OUTLOOK,
XII (APRIL, I959), IFF.

 

ULIN, ROBERT P. "ARE WE BUILDING TOO MUCH CAPACITY?," HARVARD
BUSINESS REVIEW, XXXIII (NOVEMBER-DECEMBER, I955), MI-M7.

 

"UPSWEEP IN BISSELL ADVERTISING-BUDGET TRIPPLES IN ONE YEAR,"
PRINTERS' INK, CCLIII (DECEMBER 2, I955), 2M-26.

 

25I

"U.S. STEEL'S NEW MARKETING PLAN," TIDE: XXIX (NOVEMBER 5’ '955)’

25-32.

VAILE, ROLAND S. "CONSUMPTION, THE END RESULT OF MARKETING,"
THE ANNALS OF THE AMERICAN ACADEMY OF POLITICAL AND SOCIAL
SCIENCE, CCIX (MAY, I9MO), IM-ZI.

 

VERDOORN, P. J. "MARKETING FROM THE PRODUCER'S POINT OF VIEW,"
THE JOURNAL OF MARKETING, XX (JANUARY, I956), 22I-235.‘

 

WAKEFIELD, JOHN E. "MARKETING CONCEPT: THREE STEPS ARE NECESSARY
To PUT IT TO WORK," PRINTERS' INK, CCLXIV (SEPTEMBER I9, I958),

35-36-

"THE TEN COGS IN MARKETING FOR PROFIT," SALES MANAGEMENT,
LXXXIII (OCTOBER I6, I959), MOFF.

 

 

 

WEAKLEY, THOMAS E. "ADVERTISING AND SALES UNDER ONE PROGRAM,"
PRINTERS' INK, CCLIX (APRIL 5, I957), I9-2I.

 

. "HOW AD-SALES COORDINATION WORKS IN DEPARTMENTALIZED
COMPANIES," PRINTERS' INK, CCLIX (JUNE IM, I957), 2M-26.

 

 

WEAVER, ROBERT, JR. "DOES SMALL BUSINESS NEED A NEW CONCEPT OF
SELLING?," DUN'S REVIEW AND MODERN INDUSTRY, LIX
(SEPTEMBER, I95l), IOFF.

 

WEBER, NORTON- "ARE,WE MARKETING MEN...OR WITCHDOCTORS?,"
INDUSTRIAL MARKETING, XLII (NOVEMBER, I957), 5M-56,

 

WEST, HERBERT. "YOUR MARKETING PLAN," ADVERTISING AGENCY,
JANUARY I8, I957, 57-60; FEBRUARY I5, I957, 69FF.;
MARCH I5, I957, 60-62; APRIL I2, I957, 60-6M; MAY I0, I957,
65-72; JUNE 7, I957, 58-60; JULY 5, I957, I8-2I;
AUGUST I6, I957, 20-23; SEPTEMBER I3, I957, 20-22;
OCTOBER II, I957, 2M-26.

 

"WHAT IT TAKES TO BE A MARKETING EXPERT," TIDE, XXIX (MAY 7: I955):

29-3I.

"WHAT NEW PRODUCTS MEAN TO COMPANIES: GROWTH, A LONGER LIFE, BIGGER
PROFITS," PRINTERS' INK, CCLXIII (JUNE 20, I958), 2|FF.

 

"WHAT'S AHEAD FOR MARKETING MANAGEMENT?J" TIDE, XXIX (MAY 7’ '955)’
I0.

"WHEN THE MARKET-MAN IS KING," HARPER'S WEEKLY, XLV (DECEMBER 28, I90I),

I338-I339.

WHITMORE, EUGENE. "THE POOR CUSTOMER IS ALWAYS WRONG," AMERICAN
BUSINESS, XX (JUNE, I950), I6FF.

 

252

"WHY DO SALESMEN HATE ADVERTISING?," PRINTERS' INK, CCXXXV (JULY 6, I95I),

39—M0.

WOLFF, GARWOOD R. "THE CASE FOR THE MARKETING MANAGER," SALES
Q _____.
MANAGEMENT, LXXVIII (JANUARY IU, I957), 52FF.

 

"WORTHINGTON CORPORATION ADOPTS NEW MARKETING PHILOSOPHY, BUILDS
EAPACITY FOR GROWTH," PRINTERS' INK, CCLXV (OCTOBER 3, I958),
IFF. -

"THE WORTHINGTON STORY," INDUSTRIAL MARKETING, XLI (AUGUST, I956),
51"-680

WRAPP, H. EDWARD. "ORGANIZATION FOR LONG-RANGE PLANNING," HARVARD
BUSINESS REVIEW, XXXV (JANUARY-FEBRUARY, I957), 37-57.

 

t

YATES ALBERT. "SIXTY-FOUR QUESTIONS FOR SALES MANAGERS ' PRINTERS'
) 3

Jim, CCXLVI (MARCH I9, I95M), MMFF.

ARTICLES IN COLLECTIONS

"A MARKETING APPROACH To ORGANIZATIONAL PLANNING," MANAGERIAL

MARKETING: PERSPECTIVES AND VIEWPOINTS, EUGENE J. KELLEY
AND WILLIAM LAZER, EDITORS. HOMEWOOD, ILLINOIS: RICHARD
D. IRWIN, INC., I958. PR 237-2M2.

"A MARKETING VIEW OF BUSINESS POLICY," MANAGERIAL MARKETING:
PERSPECTIVES AND VIEWPOINTS, EUGENE J. KELLEY AND WILLIAM
LAZER, EDITORS. HOMEWOOD, ILLINOIS: RICHARD D. IRWIN, INC.,

I958. PP.I28-I36.

OXENFELDT, ALFRED R. "THE FORMULA OF A MARKET STRATEGY,"
MANAGERIAL MARKETING: PERSPECTIVES AND VIEWPOINTS, EUGENE
J. KELLEY AND WILLIAM LAZER EDITORS. HOMEWOOD, ILLINOIS:
RICHARD D. IRWIN, INC., I95é. PP.26M-272.

PHELPS, D. MAYNARD. "INTRODUCTION," EFFECTIVE MARKETING ACTION,
DAVID W. EWING, EDITOR. NEW YORK: HARPER AND BROTHERS,

I958. PP.3-9.

SMITH, WENDELL R. "A RATIONAL APPROACH TO MARKETING MANAGEMENT,"
MANAGERIAL MARKETING: PERSPECTIVES AND VIEWPOINTS, EUGENE J.
KELLEY AND WILLIAM LAZER, EDITORS. HOMEWOOD, ILLINOIS:
RICHARD D. IRWIN, INC., I958. PP.I52-I56.

 

 

253

REPORTS

ALDERSON, WROE. "A MARKETING VIEW OF BUSINESS POLICY," ADVANCING
MARKETING EFFICIENCY, LYNN H. STOCKMAN, EDITOR. PROCEEDINGS
OF THE FORTY-FIRST NATIONAL CONFERENCE, CHICAGO. CHICAGO:
AMERICAN MARKETING ASSOCIATION, I959. PP. IIM-II9.

 

ANSHEN, MELVIN. "INTRODUCING THE MARKETING CONCEPT THROUGH MANAGE-
MENT DEVELOPMENT," ADVANCING MARKETING EFFICIENCY,
LYNN H. STOCKMAN, EDITOR. PROCEEDINGS OF THE FORTY-FIRST
NATIONAL CONFERENCE, CHICAGO. CHICAGO: AMERICAN MARKETING
ASSOCIATION, I959. PP. 250-257.

 

ASPECTS OF MODERN MARKETING. MANAGEMENT REPORT NO. I5. NEW
YORK: AMERICAN MANAGEMENT ASSOCIATION, I958.

 

BECKMAN, THEODORE N. "THE EVOLUTION OF MARKETING AND MARKETING
CONCEPTS," PROCEEDINGS, CONFERENCE OF MARKETING TEACHERS
FROM FAR WESTERN STATES, DELBERT J. DUNCAN, EDITOR.
BERKELEY, CALIFORNIA: UNIVERSITY OF CALIFORNIA, I958.
PP. I-II.

 

BERNSTEIN, S. R. "THE EDITOR LOOKS AT THE MARKETING CONCEPT,"
MARKETING KEYS TO PROFITS IN THE I96O'S, WENZIL K. DOLVA,
EDITOR. PROCEEDINGS OF THE FORTY-SECOND NATIONAL CONFERENCE,
CLEVELAND. CHICAGO: AMERICAN MARKETING ASSOCIATION, I960.

PP. A9-56.

 

BORCH, FRED J. THE MARKETING PHILOSOPHY AS A WAY OF BUSINESS LIFE.
MARKETING INFORMATION BULLETIN. NEW YORK: GENERAL ELECTRIC

COMPANY, I957.

BOWMAN, BURTON F. "THE UTILITY OF MARKETING TOOLS IN THE ACCOMPLISH-
MENT OF MARKETING OBJECTIVES," ADVANCING MARKETING EFFICIENCY,
LYNN H. STOCKMAN, EDITOR. PROCEEDINGS OF THE FORTY-FIRST
NATIONAL CONFERENCE, CHICAGO. CHICAGO: AMERICAN MARKETING
ASSOCIATION, I959. PP. I20-I27.

 

BOYER, FRANCIS. "A MANAGEMENT PHILOSOPHY FOR CREATING NEW PRODUCTS
THROUGH RESEARCH," HOW TO PLAN PRODUCTS THAT SELL.
MANAGEMENT REPORT NO. l3. NEW YORK: AMERICAN MANAGEMENT
ASSOCIATION, I958. PP. 9-I5.

 

BREEN, JOHN J. "HISTORY OF THE MARKETING MANAGEMENT CONCEPT,"
ADVANCING MARKETING EFFICIENCY, LYNN H. STOCKMAN, EDITOR.
PROCEEDINGS OF THE FORTY-FIRST NATIONAL CONFERENCE, CHICAGO.
CHICAGO: AMERICAN MARKETING ASSOCIATION, I959. PP. M58-M6I.

 

25h

CABLE, THOMAS H. "HOW MARKETING IS ORGANIZED - AND WORKS AT KOPPERS,"
THIS Is MARKETING. PROCEEDINGS OF THE THIRTY-FIFTH ANNUAL
CONFERENCE, NEW YORK. NEW YORK: NATIONAL INDUSTRIAL
ADVERTISERS ASSOCIATION, I957. PP. 33-39.

 

CASCINO, ANTHONY E. "IMPLEMENTING THE MARKETING CONCEPT FROM A
COMPANY POINT OF VIEW,“ MARKETING KEYS TO PROFITS IN THE
I960'S, WENZIL K. DOLVA, EDITOR. PROCEEDINGS OF THE
FORTY-SECOND NATIONAL CONFERENCE, CLEVELAND. CHK:AGO:
AMERICAN MARKETING ASSOCIATION, I960. PP. M3-M8.

 

CORBIN, ARNOLD. "TODAY'S MARKETING CONCEPTJWHAT IS IT?," ADVERTISING
AND MARKETING TO MEET TODAY'S ECONOMIC CHALLENGE AND OPPORTUNITY.
MARQUETTE UNIVERSITY STUDIES IN BUSINESS AND ECONOMICS.
MILWAUKEE: MARQUETTE UNIVERSITY, I958. PP. 5-I9.

 

COX, REAVIS. "THE CHANGING MARKET: WHAT LIES AHEAD?," PLANNING
AHEAD FOR PROFITS. MANAGEMENT REPORT NO. 3. NEW YORK:
AMERICAN MANAGEMENT ASSOCIATION, I958. PP. IO-22.

 

DENENHOLZ, RICHARD S. "PHYSICAL DISTRIBUTION AS A NEW STAFF
FUNCTION IN MARKETING,” THE FRONTIERS OF MARKETING THOUGHT
AND SCIENCE, FRANK M. BASS, EDITOR. PROCEEDINGS OF THE
FORTIETH NATIONAL CONFERENCE, PHILADELPHIA. CHICAGO:
AMERICAN MARKETING ASSOCIATION, I957. PP. 95-IOI.

 

 

DEPACE, PAUL. "ORGANIZATION PLANNING: A COORDINATED APPROACH TO
PRODUCT PLANNING," PLANNING AHEAD FOR PROFITS. MANAGEMENT
REPORT NO. 3. NEW YORK: AMERICAN MANAGEMENT ASSOCIATION,

I95 . PP. 7O-78.

 

DICK, ROBERT F. "PRODUCT PLANNING," MARKETING'S ROLE IN SCIENTIFIC
MANAGEMENT, ROBERT L. CLEWETT, EDITOR. PROCEEDINGS OF
THE THIRTY-NINTH NATIONAL CONFERENCE, DETROIT. CHICAGO:
AMERICAN MARKETING ASSOCIATION, I957. PP. 25-39.

 

 

DOSCHER, FEN K. "THE VICE PRESIDENT FOR MARKETING: WHAT KIND OF
MAN MUST HE BE?," THE MARKETING CONCEPT: ITS MEANING TO
MANAGEMENT. MARKETING SERIES NO. 99. NEW YORK: AMERICAN
MANAGEMENT ASSOCIATION I957. PP. I7-30.

 

 

EIGHTH ANNUAL CHICAGO TRIBUNE DISTRIBUTION AND ADVERTISING FORUM.
"TODAY'S MARKETING CONCEPT AT WORK IN MANAGEMENT." AREA I.
CHICAGO: THE CHICAGO TRIBUNE, I957.

. "TODAY'S MARKETING CONCEPT AT WORK IN RETAILING."
AREA II. CHICAGO: THE CHICAGO TRIBUNE, I957.

 

. "TODAY'S MARKETING CONCEPT AT WORK IN ADVERTISING."
AREA III. CHICAGO: THE CHICAGO TRIBUNE, I957.

 

255

ESTES, BAY E. "DOES THE MARKETING CONCEPT WORK IN THE INDUSTRIAL
FIELD?," ADVERTISING AND MARKETING TO MEET TODAY'S ECONOMIC
CHALLENGE AND OPPORTUNITY. MARQUETTE UNIVERSITY STUDIES
IN BUSINESS AND ECONOMICS. MILWAUKEE: MARQUETTE UNIVERSITY,

I958. PP. 3I-M3.

 

 

ETHE, SOLOMON, AND HIGGINS, ELLIOTT F. NEW PRODUCT DEVELOPMENT:
MARKETING. STUDIES IN BUSINESS POLICY No.469. NEW YORK:
NATIONAL INDUSTRIAL CONFERENCE BOARD, I95M.

 

"EXCERPTS FROM A MARKETING ROUNDTABLE." FIRST REGIONAL CONFERENCE
ON MARKETING, CHICAGO, FEBRUARY M, I958.

. SECOND REGIONAL CONFERENCE ON MARKETING, DETROIT,
APRIL IO, I955.

 

FOSTER, E. DORSEY. "THE ROLE OF ECONOMICS AND MARKET RESEARCH
IN LONG-RANGE PLANNING," PLANNING AHEAD FOR PROFITS.
MANAGEMENT REPORT NO. 3. NEW YORK: AMERICAN MANAGEMENT
ASSOCIATION, I956. PP. 33-M6.

 

FOX, SOL. "A BUSINESS EDITOR'S VIEW OF MARKETING TODAY,"

ADVANCING MARKETING EFFICIENCY, LYNN H. STOCKMAN, EDITOR.
PROCEEDINGS OF THE FORTY-FIRST NATIONAL CONFERENCE,
CHICAGO. CHICAGO: AMERICAN MARKETING ASSOCIATION, I959.
PP. Il0-Il3.

 

GAGER, CURTIS H. "CREATIVE MARKETING - A KEY TO SALES SUCCESS,"
BROADENING HORIZONS IN MARKETING. MARKETING SERIES NO. 96.
NEW YORK: AMERICAN MANAGEMENT ASSOCIATION, I956. PP. 52-59.

 

GREGG, VINCENT P. "DEVELOPING SOUND COMPANY POLICIES FOR A NEW-
PRODUCT PROGRAM," ESTABLISHING A NEw-PRODUCT PROGRAM.
MANAGEMENT REPORT NO. 8, NEW YORK: AMERICAN MANAGEMENT
ASSOCIATION, I958. PP. 7-I6.

 

HIGGINS, ELLIOTT F. NEW PRODUCT DEVELOPMENT: RESEARCH AND ENGINEERING.
STUDIES IN BUSINESS POLICY NO. 57. NEW YJRK: NATIONAL
INDUSTRIAL CONFERENCE BOARD, I952.

 

HINES, BENJAMIN M. "THE PRODUCT MANAGER AND THE NEw-PRODUCT
DEVELOPMENT MANAGER," ESTABLISHING A NEw-PRODUCT PROGRAM.
MANAGEMENT REPORT NO. 8. NEW YORK: AMERICAN MANAGEMENT
ASSOCIATION, I958. PP. M9-56.

 

HOWARD, JOHN A. "INTERDEPARTMENTAL COORDINATION IN PRODUCT
DEVELOPMENT," THE FRONTIERS OF MARKETING THOUGHT AND SCIENCE,
FRANK M. BASS, EDITOR. PROCEEDINGS OF THE FORTIETH NATIONAL
CONFERENCE, PHILADELPHIA. CHICAGO: AMERICAN MARKETING
ASSOCIATION, I957. PP. 83-9M.

 

256

. "MARKETING MANAGEMENT: A NEW POINT OF VIEW," ADVANCING

MARKETING EFFICIENCY, LYNN H. STOCKMAN, EDITOR. PROCEEDINGS
OF THE FORTY-FIRST NATIONAL CONFERENCE, CHICAGO. CHICAGO:
AMERICAN MARKETING ASSOCIATION, I959. PP. MMO-M53.

 

 

JEWELL, JAMES. "THE MARKETING CONCEPT," WHAT MODERN MARKETING
MEANS TO CORPORATE SUCCESS. CURRENT ISSUES SERIES NO. 2.
NEW YORK: NATIONAL ASSOCIATION OF MANUFACTURERS, I958. PP. 3-5.

 

 

JONES, CONRAD. "PRODUCT DEVELOPMENT FROM THE MANAGEMENT POINT OF
VIEW," MARKETING'S ROLE IN SCIENTIFIC MANAGEMENT, ROBERT L.
CLEWETT, EDITOR. PROCEEDINGS OF THE THIRTY-NINTH NATIONAL
CONFERENCE, DETROIT. CHICAGO: AMERICAN MARKETING ASSOCIATION

I957. Pp. M0-57.

KEENER, J. W. "MARKETING'S JOB IN THE I960's,' MARKETING KEYS
TO PROFITS IN THE I960'S, WENZIL K. DOLVA, EDITOR.
PROCEEDINGS OF THE FORTY-SECOND NATIONAL CONFERENCE, CLEVELAND.
CHICAGO: AMERICAN MARKETING ASSOCIATION, I960. PP. 3-II.

 

I

 

 

KEITH, ROBERT J. "AN INTERPRETATION OF THE MARKETING CONCEPT,"
ADVANCING MARKETING EFFICIENCY, LYNN H. STOCKMAN, EDITOR.
PROCEEDINGS OF THE FORTY-FIRST NATIONAL CONFERENCE, CHICAGO.
CHICAGO: AMERICAN MARKETING ASSOCIATION, I959. PP. IOM-I09.

 

KRIFFIN, FRED W. THE MODERN CONCEPT OF MARKETING MANAGEMENT:
ITS IMPLICATIONS AND PROBLEMS. INDIANA BUSINESS INFORMATION
BULLETIN NO. 3|. BLOOMINGTON, INDIANA: INDIANA UNIVERSITY
BUREAU OF BUSINESS RESEARCH, I958.

 

 

LEAR, ROBERT W. "THE PRODUCT PLANNING COMMITTEE: ITS OPPORTUNITIES
AND RESPONSIBILITIES," ESTABLISHING A NEw—PRODUCT PROGRAM.
MANAGEMENT REPORT NO. O. NEW YORK: AMERICAN MANAGEMENT
ASSOCIATION, I958. PP. 57-66.

 

LOVEWELL, P. J. "THE KEY FACTORS IN SUCCESSFUL GROWTH," PLANNING
AHEAD FOR PROFITS. MANAGEMENT REPORT NO. 3. NEW YORK:
AMERICAN MANAGEMENT ASSOCIATION, I958. PP. II9-I2M.

 

McKAY, EDWARD S. "HOW TO PLAN AND SET UP YOUR MARKETING PROGRAM,"
BLUEPRINT FOR AN EFFECTIVE MARKETING PROGRAM. MARKETING
SERIES NO. 9|. NEW YORK: AMERICAN MANAGEMENT ASSOCIATION,

I95M. Pp. 3-I7.

McKITTERICK, J. B. "WHAT IS THE MARKETING MANAGEMENT CONCEPT?,"
THE FRONTIERS OF MARKETING THOUGHT AND SCIENCE, FRANK M.
BASS, EDITOR. PROCEEDINGS OF THE FORTIETH NATIONAL CONFERENCE,
PHILADELPHIA. CHICAGO: AMERICAN MARKETING ASSOCIATION,

I957. Pp. 7I-82.

 

O

257

McKNIGHT, LYNN B. "KEEPING PRODUCTION LINES OPEN," BROADENING
THE SALES DEPARTMENT'S ROLE. MARKETING SERIES NO. 9M.
NEW YORK: AMERICAN MANAGEMENT ASSOCIATION, I955. PP. 3-7.

 

 

MOORE, DAVID G. "MARKETING ORIENTATION AND EMERGING PATTERNS
OF MANAGEMENT AND ORGANIZATION," THE FRONTIERS OF MARKETING
THOUGHT AND SCIENCE, FRANK M. BASS, EDITOR. PROCEEDINGS
OF THE FORTIETH NATIONAL CONFERENCE, PHILADELPHIA, CHICAGO:
AMERICAN MARKETING ASSOCIATION, I957. PP. I02-I09.

 

 

MORRIS, KYLE. "ORGANIZATION FOR INNOVATION," HOW TO PLAN PRODUCTS

THAT SELL. MANAGEMENT REPORT NO. I3. NEW YORK: AMERICAN
MANAGEMENT ASSOCIATION, I955. PP. I6-33.

 

NEWTON, ROY C. "WHEN TO SAY 'NO' TO THE SALES DEPARTMENT,"
PLANNING AHEAD FOR PROFITS. MANAGEMENT REPORT NO. 3.
0
NEW YORK: AMERICAN MANAGEMENT ASSOCIATION, I950. PP. 79-8M.

 

OLIVER, ROBERT M. "THE MARKETING CONCEPT IN DEVELOPING PRODUCTS
FOR PROFITS," CONTROL OF NON-MANUFACTURING COSTS. SPECIAL
REPORT NO. 26. NEW YORK: AMERICAN MANAGEMENT ASSOCIATION,

I957. Pp. 75-87.

PLANNED MARKETING - MANAGEMENT'S RESPONSE. "MARKETING FOR
EXECUTIVES" SERIES N0.EM. CHICAGO: AMERICAN MARKETING
ASSOCIATION, I957.

 

 

RASSWEILER, CLIFFORD F. "ESTABLISHING CORPORATE OBJECTIVES FOR
PRODUCT PROGRAMS," PLANNING AHEAD FOR PROFITS. MANAGEMENT
REPORT NO. 3. NEW YORK: AMERICAN MANAGEMENT ASSOCIATION,
|95Vo PP. Ol-Ogo

 

ROESSER, WILLIAM D. "SALEs-SLANTING YOUR ENTIRE COMPANY,"
MAKING BETTER USE OF THE HUMAN FACTOR IN SELLING. MARKETING
SERIES No. 93. NEW YORK: AMERICAN MANAGEMENT ASSOCIATION,

I95M. Pp. 2 -3I.

SEIBERT, JOSEPH C. "MARKETING'S ROLE IN SCIENTIFIC MANAGEMENT,"
MARKETING'S ROLE IN SCIENTIFIC MANAGEMENT, ROBERT L.
CLEWETT, EDITOR. PROCEEDINGS OF THE THIRTY-NINTH NATIONAL
CONFERENCE, DETROIT. CHICAGO: AMERICAN MARKETING ASSOCIATION,

I957. PP. I-3.,

SMITH, CHARLES W. "PLANNED MARKETING: KEY TO INCREASED PROFITS,”
PLANNED MARKETING - MANAGEMENT'S RESPONSIBILITY. CHICAGO:
AMERICAN MARKETING ASSOCIATION, I957.

 

 

 

SMITH, MASON. "HOW TO INITIATE EFFECTIVE LONG-RANGE PLANNING,"
THE DYNAMICS OF MANAGEMENT. MANAGEMENT REPORT NO. IM.
NEW YORK: AMERICAN MANAGEMENT ASSOCIATION, I958. PP. 69-78.

 

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TOGESEN, A. A. ”THE SWITCH FROM SALES TO A MARKETING CONCEPT,"
BROADENING HORIZONS IN MARKETING. MARKETING SERIES NO. 96.

NEW YORK: AMERICAN MANAGEMENT ASSOCIATION, I956. PP. 26-37.
VAN DAGENS, M. L. "DOES THE MARKETING CONCEPT WORK?," ADVERTISING
AND MARKETING TO MEET TODAY'S ECONOMIC CHALLENGE AND

OPPORTUNITY, MARQUETTE UNIVERSITY, STUDIES IN BUSINESS AND
MILWAUKEE: MARQUETTE UNIVERSITY, I958. PP. 20-30.

 

ECONOMICS.

"PRODUCT PLANNING AND SALEs ORGANIZATION,"
CURRENT

WILCOCK, J. W.
WHAT MODERN MARKETING MEANS TO CORPORATE SUCCESS.

ISSUES SERIES NO. 2. NEW YORK: NATIONAL ASSOCIATION OF
PP. 6-90

MANUFACTURERS, I958.

"ORGANIZING A COORDINATED MARKETING STAFF GROUP,"

WINSLOW, RALPH.
ITS MEANING TO MANAGEMENT.

 

THE MARKETING CONCEPT:
MARKETING SERIES NO. 99. NEW YORK: AMERICAN MANAGEMENT
ASSOCIATION, I957. PP. 3I-MO.

UNPUBLISHED MATERIAL

BUND, HENRY. "THE MOVE TOWARD MARKETING - HOW TO DO IT." PAPER
READ BEFORE THE THIRTY-FIFTH ANNUAL CONFERENCE, NATIONAL
I957-

INDUSTRIAL ADVERTISERS ASSOCIATION, NEW YORK, JUNE 9,

COLGATE-PALMOLIVE COMPANY. JOB DESCRIPTION OF POSITION OF VICE-
PRESIDENT OF MARKETING, HOUSEHOLD PRODUCTS DIVISION,
COLGATE-PALMOLIVE COMPANY, NEW YORK, NEW YORK, JANUARY 27, I958.

(TYPEWRITTEN.)

"THE GOLDEN AGE FOR MANAGEMENT." PAPER READ

DICK, ROBERT E.
BEFORE THE THIRTY-SEVENTH ANNUAL CONFERENCE OF THE NATIONAL
INDUSTRIAL ADVERTISERS ASSOCIATION, SAN FRANCISCO,

JUNE IM, I959.

ERB, CHARLES E. ADDRESS BEFORE NEW PRODUCTS WORKSHOP, ASSOCIATION
OF NATIONAL ADVERTISERS, CHICAGO, ILLINOIS, MARCH 29, I960.

GIBSON, ROBERT L. "THE MOVE TOWARD THE MARKETING CONCEPT - WHAT
IT REALLY IS." PAPER READ BEFORE THE THIRTY-FIFTH ANNUAL

CONFERENCE, NATIONAL INDUSTRIAL ADVERTISERS ASSOCIATION,
NEW YORK, JUNE 9, I957.

MARKS, WAYNE C. "HOW TO SECURE MANAGEMENT EFFECTIVENESS IN THE
PAPER READ BEFORE MID-YEAR EXECUTIVE CONFERENCE,

I96OS."
NATIONAL ASSOCIATION OF WHOLESALE GROCERS OF AMERICA,

BERMUDA, OCTOBER 28, I959.

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McKAY, EDWARD S. "A DISCUSSION OF THE NEW RESPONSIBILITIES OF
MARKETING." PAPER READ BEFORE THE MARKETING WORKSHOP
SERIES, NEW YORK CHAPTER, AMERICAN MARKETING ASSOCIATION,
NEW YORK, OCTOBER 22, I956.

. "THE MARKETING CONCEPT IN GENERAL ELECTRIC."
DISCUSSION OF THE DEVELOPMENT OF THE MARKETING CONCEPT
IN GENERAL ELECTRIC COMPANY. NEW YORK, NEW YORK,
SEPTEMBER 30, I955. (TYPEWRITTEN.)

 

. "THE NEW RESPONSIBILITIES OF MARKETING." LECTURE
AT GRADUATE SCHOOL OF BUSINESS ADMINISTRATION, NEW YORK
(‘I
UNIVERSITY, NEW YORK, JANUARY 9, I950. (TYPEWRITTEN.)

 

MORTIMER, CHARLES G. "CHALLENGING OPPORTUNITIES IN A CHANGING
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. "THE CREATIVE FACTOR IN MARKETING." I959 CHARLES
COOLIDGE PARLIN MEMORIAL LECTURE, PHILADELPHIA,
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RANDLE, C. WILSON. "THE MANAGEMENT OF NEW PRODUCTS." PAPER
READ BEFORE THE THIRTY-FIFTH ANNUAL CONFERENCE, NATIONAL
INDUSTRIAL ADVERTISERS ASSOCIATION, NEW YORK, JUNE 9, I957.

ST. THOMAS, CHARLES E. "MARKETING AND THE SMALL BUSINESS." PAPER
READ BEFORE MEETING OF THE NATIONAL FLUID POWER ASSOCIATION,
CHICAGO, NOVEMBER M, I958.

SHULL, FREMONT A., JR. "THE ADVERTISING APPROPRIATION IN THE
RUBBER TIRE INDUSTRY: A STUDY IN DECISION-MAKING."
UNPUBLISHED PH.D. DISSERTATION, MICHIGAN STATE UNIVERSITY,

I958.

SMITH, WENDELL. ADDRESS BEFORE THE MARKETING DIVISION, SOUTHERN
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OTHER SOURCES

BARRINGTON ASSOCIATES. PERSONAL INTERVIEW WITH JOHN E. WAKEFIELD,
VICE-PRESIDENT, MARKETING DIVISION, BARRINGTON ASSOCIATES,
NEW YORK, NEW YORK. MARCH 28, I960.

COLGATE-PALMOLIVE COMPANY. PERSONAL INTERVIEW WITH ROBERT YOUNG, JR.,
VICE-PRESIDENT IN CHARGE OF MARKETING, COLGATE-PALMOLIVE
COMPANY, NEW YORK, NEW YORK. MARCH 29, I960.

260

GENERAL ELECTRIC COMPANY. PERSONAL INTERVIEW WITH EDWARD S. McKAY,
MARKETING SERVICES, GENERAL ELECTRIC COMPANY, NEW YORK,
NEW YORK, MARCH 25, I960.

GENERAL FOODS CORPORATION. PERSONAL INTERVIEWS WITH HOWARD R.
BLOOMQUIST, MARKETING MANAGER; W. R. BOOTH, NATIONAL SALES
MANAGER; AND R. W. LITTLE, MARKET RESEARCH AND NEW PRODUCTS
MANAGER; ALL OF POST DIVISION, GENERAL FOODS CORPORATION,
BATTLE CREEK, MICHIGAN. MARCH IO, I960.

. PERSONAL INTERVIEWS WITH ARCH O. KNOWLTON, ADVERTISING
SERVICES, CORPORATE MARKETING, AND WILLIAM WELP, BIRDS
EYE DIVISION, GENERAL FOODS CORPORATION, WHITE PLAINS,
NEW YORK. MARCH 2M, I960.

 

KELLOGG SALES COMPANY. “PERSONAL INTERVIEWS WITH E. MARD LEAVER,
PRESIDENT, ALSO VICE-PRESIDENT IN CHARGE OF MARKETING,
KELLOGG COMPANY; CHARLES A. TORNABENE, GENERAL SALES MANAGER;
AND H. G. CROSBY, DIRECTOR OF MARKET RESEARCH; ALL OF KELLOGG
SALES COMPANY, BATTLE CREEK, MICHIGAN. MARCH I8, I960.

LEVER BROTHERS COMPANY. PERSONAL INTERVIEW WITH ANTON W. BONDY,
MANAGER OF MARKETING INFORMATION, LEVER BROTHERS COMPANY,
/
NEW YORK, NEW YORK. MARCH 25, I960.

LILY-TULIP CUP CORPORATION. PERSONAL INTERVIEW WITH JEFF GRADY,
DIRECTOR OF MARKETING OPERATIONS, LILY-TULIP CUP CORPORATION,
NEW YORK, NEW YORK. MARCH 25, I960.

NESTLE COMPANY. PERSONAL INTERVIEW WITH H. K. PHILIPS, VICE-PRESIDENT,
ADMINISTRATION, NESTLE COMPANY, WHITE PLAINS, NEW YORK.
MARCH 2M, I960.

SALES MANAGEMENT. PERSONAL INTERVIEW WITH LAWRENCE M. HUGHES,
SENIOR EDITOR, SALES MANAGEMENT, NEW YORK, NEW YORK.
MARCH 29, I960.

F. AND M. SCHAEFER BREWING COMPANY. PERSONAL INTERVIEWS WITH
JOHN T. MORRIS, VICE-PRESIDENT, MARKETING, AND WALTER LEE,
RETAIL SALES MANAGER, F. AND M. SCHAEFER BREWING COMPANY,
BROOKLYN, NEW YORK. MARCH 28, I960.

 

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