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A Generic Concept of Marketing
Philip Kotler
Journal of Marketing, Vol. 36, No. 2. (Apr., 1972), pp. 46-54.
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A Generic Concept
PHlLlP KOTLER
The proposal that marketing is relevant
to all organizations having customer
groups was advanced in the January, 1969
issue of this journal.
It is now stated that the original broadening
proposal should be broadened still further
to include the transactions between an
organization and all of its publics. The author sees marketing as the disciplined task
of creating and offering values to others for
the purpose of achieving a desired response.
The generic view of marketing is defined
by a set of four axioms and leads to new
marketing typologies and views of the
tasks of marketing management.
ABOUT THE AUTHOR.
Philip Kotler is A. Montgomery Ward Professor of
Marketing at the Graduate School of Management,
Northwestern University, Evanston, Illinois.
Journal of Marketing, Vol. 36 (April, 19721, pp. 46-54.
0NE
of the signs of the health of a discipline is its
willingness to reexamine its focus, techniques, and
goals as the surrounding society changes and new problems require attention. Marketing has shown this aptitude in the past. It was originally founded as a branch
of applied economics devoted t o the study of distribution channels. Later marketing became a management
discipline devoted to engineering increases in sales.
More recently, i t has taken on the character of an applied behavioral science that is concerned with understanding buyer and seller systems involved in the marketing of goods and services.
The focus of marketing has correspondingly shifted
over the years. Marketing evolved through a commodity
focus (farm products, minerals, manufactured goods,
services) ; an institutional focus (producers, wholesalers,
retailers, agents) ; a functional focus (buying, selling,
promoting, transporting, storing, pricing) ; a managerial focus (analysis, planning, organization, control) ;
and a social focus (market efficiency, product quality,
and social impact). Each new focus had its advocates
and its critics. Marketing emerged each time with a
refreshed and expanded self-concept.
Today marketing is facing a new challenge concerning
whether its concepts apply in the nonbusiness as well as
the business area. I n 1969, this author and Professor
Levy advanced the view that marketing is a relevant
discipline for all organizations insofar as all organizations can be said to have customers and pr0ducts.l This
“broadening of the concept of marketing” proposal received much attention, and the 1970 Fall Conference of
the American Marketing Association was devoted to
this theme.
Critics soon appeared who warned that the broadening
concept could divert marketing from its true purposes
and dilute its content. One critic did not deny that
marketing concepts and tools could be useful in fund
raising, museum membership drives, and presidential
campaigns, but he felt that these were extracurricular
applications of an intrinsical business technology.2
‘Philip Kotler and Sidney J. Levy, “Broadening the Concept of Marketing,” JOURNAL 01″ MARKETING,
V01. 33
(January, 1969), pp. 10-15.
*David Luck, “Broadening the Concept of MarketingTOOFar, ” JOURNAL O P MARKETING, V O ~33
. (July, 1969),
pp. 53-54.
A Generic Concept of Marketing
Several articles have been published which describe
applications of marketing ideas to nonbusiness areas
such as health services, population control, recycling of
solid wastes, and fund raising.3 Therefore, the underlying issues should be reexamined to see whether a more
generic concept of marketing can be established. This
author concludes that the traditional conception of marketing would relegate this discipline to an increasingly
narrow and pedestrian role in a society that is growing
increasingly post-industrial. I n fact, this article will
argue that the broadening proposal’s main weakness was
not that it went too f a r but that it did not go far
enough.
This article is organized into five parts. The first distinguishes three stages of consciousness regarding the
scope of marketing. The second presents an axiomatic
treatment of the generic concept of marketing. The
third suggests three useful marketing typologies that
are implied by the generic concept of marketing. The
fourth describes the basic analytical, planning, organization, and control tasks that make u p the logic of
marketing management. The fifth discusses some interesting questions raised about the generic concept of
marketing.
Three Stages of Marketing Consciousness
Three different levels of consciousness can be distinguished regarding the boundaries of marketing. The
,present framework utilizes Reich’s consciousness categories without his specific meanings.4 The traditional
consciousness, that marketing is essentially a business
subject, will be called consciousness one. Consciousness
one is the most widely held view in the mind of practitioners and the public. I n the last few years, a marketing consciousness two has appeared among some marketers holding that marketing is appropriate for all organizations that have customers. This is the thrust of
the original broadening proposal and seems to be gaining adherents. Now it can be argued that even consciousness two expresses a limited concept of marketing.
One can propose consciousness three that holds that marketing is a relevant subject for all organizations in their
relations with all their publics, not only customers. The
future character of marketing will depend on the particular consciousness that most marketers adopt regarding the nature of their field.
Consciousness One
Consciousness one is the conception that marketing is
essentially a business subject. It maintains that marketing is concerned with sellers, buyers, and Neconomic”
products and services. The sellers offer goods and services, the buyers have purchasing power and other resources, and the objective is an exchange of goods for
money or other resources.
The core concept defining marketing consciousness one
a J O I J R N A L O F MARKETING, V01. 35
(July, 1971).
4Charles A. Reich, The Greening of America (New York:
Random House, 1970).
Organisath
Product
Customer C7011p
Museum
National Safety
Council
Political
candidate
Family Planning
Foundation
Police
department
Church
University
Cultural appreciation
Safer driving
Driving public
Honest government
Voting public
Birth control
Fertile public
Safety
General public
Religious experience
Education
Church members
Students
General public
is that of market transactions. A market transaction
involves the transfer of ownership or use of an economic good or service from one party to another in
return for a payment of some kind. For market transactions to occur in a society, six conditions are necessary: (1) Two or more parties; (2) a scarcity of
goods ; (3) concept of private property; (4) one party
must want a good held by another; (5) the “wanting”
party must be able to offer some kind o{ payment for
i t ; and (6) the “owning” party must be willing to
forego the good for the payment. These conditions
underlie the notion of a market transaction, or more
loosely, economic exchange.
Market transactions can be contrasted with nonmarket
transactions. Nonmarket transactions also involve a
transfer of resources from one party to another, but
without clear payment by the other. Giving gifts, paying taxes, receiving free services are all examples of
nonmarket transactions. If a housekeeper is paid for
domestic services, this is a market transaction; if she is
one’s wife, this is a nonmarket transaction. Consciousness one marketers pay little or no attention to nonmarket transactions because they lack the element of
explicit payment.
Consciousness Two
Consciousness two marketers do not see payment as
a necessary condition to define the domain of marketing
phenomena. Marketing analysis and planning are relevant in all organizations producing products and services for an intended consuming group, whether or not
payment is required.
Table 1 lists several nonbusiness organizations and
their “products” and “customer groups.” All of these
products, in principle, can be priced and sold. A price
can be charged for museum attendance, safe driving
lessons, birth control information, and education. The
fact that many of these services are offered “free” should
not detract from their character as products. A product
is something that has value to someone. Whether a
charge is made for its consumption is an incidental
rather than essential feature defining value. I n fact,
most of these social goods are “priced,” although often
Journal of Marketing, April, 1972
not in the normal fashion. Police services are paid f o r
by taxes, and religious services are paid f o r by donations.
Each of these organizations faces marketing problems
with respect to its product and customer group. They
must study the size and composition of their market and
consumer wants, attitudes, and habits. They must design
their products to appeal to their target markets. They
must develop distribution and communication prograins
that facilitate “purchase” and satisfaction. They must
develop customer feedback systems to ascertain market
satisfaction and needs.
Thus consciousness two replaces the core concept of
market transactions with the broader concept of organization-client transactions. Marketing is no longer restricted only to transactions involving parties in a twoway exchange of economic resources. Marketing is a
useful perspective f o r any organization producing products f o r intended consumption by others. Marketing
consciousness two states that marketing is relevant in
all situations where one can identify an organization, a
client group, and products broadly defined.
Consciousness Three
The emergence of a marketing consciousness three is
barely visible. Consciousness three marketers do not
see why marketing technology should be confined only
to an organization’s transactions with its client group.
A n organization-or
inore properly its managementmay engage in marketing activity not only with its customers but also with all other publics in its environment.
A management group has to market to the organization’s
supporters, suppliers, employees, government, the general public, agents, and other key publics. Marketing
consciousness three states that marketing applies to an
organization’s attempts to relate to all of its publics,
not just its consuming public. Marketing can be used
in multiple institutional contexts to effect transactions
with multiple targeta.
Marketing consciousness three is often expressed in
real situations. One often hears a marketer say that
his real problem is not outside marketing but inside
marketing; for example, getting others in his organization to accept his ideas. Companies seeking a preferred
position with suppliers or dealers see this as a problem
of marketing themselves. I n addition, companies try to
market their viewpoint to congressmen in Washington.
These and many other examples suggest that marketers
see the marketing problem as extending f a r beyond
customer groups.
The concept of defining marketing in terms of function rather than structure underlies consciousness three.
To define a field in terms of function is to see it as a
process o r set of activities. To define a field in ternis
of structure is to identify i t with some phenomena such
as a set of institutions. Bliss pointed out that many
sciences are facing this ~ h o i c e .I~n the field of political
5Perry Bliss, Marketing Management and the Behavioral
Environment (Englewood Cliffs, N.J.: Prentice-Hall,
Ine., 1970), pp. 106-108, 119-120.
science, f o r example, there are those who adopt a struetural view and define political science in terms of political institutions such as legislatures, government agencies,
judicial courts, and political parties. There are others
who adopt a functional view and define political science
as the study of power wherever it is found. The latter
political scientists study power in the family, in labormanagement relations, and in corporate organizations.
Similarly, marketing can be defined in terms of functional rather than structural considerations. Marketing
takes places in a great number of situations, including
executive recruiting, political_campaigning, church membership drives, and lobbying. Examining the marketing
aspects of these situations can yield new insights into
the generic nature of marketing. The payoff may be
higher than from continued concentration in one type
of structural setting, that of business.
I t is generally a mistake to equate a science with a
certain phenomenon. F o r example, the subject of matter does not belong exclusively to physics, chemistry, o r
biology. Rather physics, chemistry, and biology are
logical systems that pose different questions about matter. Nor does human nature belong exclusively to psychology, sociology, social psychology, o r anthropology.
These sciences simply raise different questions about the
same phenomena. Similarly, traditional business subjects should not be defined by institutional characteristics. This would mean that finance deals with banks,
production with factories, and marketing with distribution channels. Yet each of these subjects has a set of
core ideas that are applicable in multiple institutional
contexts. An important means of achieving progress
in a science is to try to increase the generality of its
concepts.
Consider the case of a hospital as an institution. A
production-minded person will want to know about the
locations of the various facilities, the jobs of the various
personnel, and in general the arrangement of the elements to produce the product known as health care. A
financial-minded person will want t o know the hospital’s
sources and applications of funds and its income and
expenses. A marketing-minded person will want to know
where the patients come from, why they appeared a t
this particular hospital, and how they feel about the
hospital care and services. Thus the phenomena do not
create the questions to be asked; rather the questions are
suggested by the disciplined view brought to the phenomena.
What then is the disciplinary focus of marketing? The
core concept of marketing is the transaction. A transaction is the exchange of values between two parties. The
things-of-values need not be limited to goods, services,
and money; they include other resources such as time,
energy, and feelings. Transactions occur not only between buyers and sellers, and organizations and clients,
but also between any two parties. A transaction takes
place, f o r example, when a person decides to watch a
television program; he is exchanging his time for entertainment. A transaction takes place when a person
A Generic Concept of Marketing
votes for a particular candidate; he is exchanging his
time and support for expectations of better government.
A transaction takes place when a person gives money
to a charity; he is exchanging money for a good conscience. Marketing is specifically concerned with how
transactions are created, stimulated, facilitated, and
valued. This is the generic concept of marketing.
The Axioms of Marketing
The generic concept of marketing will now be more
rigorously developed. Marketing can be viewed as a
category of human action distinguishable from other
categories of human action such as voting, loving, consuming, or fighting. As a category of human action, it
has certain characteristics which can be stated in the
form of axioms. A sufficient set of axioms about marketing would provide unambiguous criteria about what
marketing is, and what i t is not. Four axioms, along
with corollaries, are proposed in the following section.
Axiom 1. Marketing involves two or more social units,
each consisting of one or more human actors.
Corollary 1.1. The social units may be individuals,
groups, organizations, communities, or nations.
Two important things follow from this axiom. First,
marketing is not an activity found outside of the human
species. Animals, for example, engage in production
and consumption, but do not engage in marketing. They
do not exchange goods, set u p distribution systems, and
engage in persuasive activity. Marketing is a peculiarly human activity.
Second, the referent of marketing activity is another
social unit. Marketing does not apply when a person
is engaged in an activity in reference to a thing or
himself. Eating, driving, and manufacturing are not
marketing activities, as they involve the person in an
interactive relationship primarily with things. Jogging,
sleeping, and daydreaming are not marketing activities,
as they involve the person in an interactive relationship
primarily with himself. An interesting question does
arise as to whether a person can be conceived of marketing something to himself, as when he undertakes
effort to change his own behavior. Normally, however,
marketing involves actions by a person directed toward
one or more other persons.
Axiom 2. At least one of the social units is seeking a
specific response from one or more other units concerning some social object.
Corollary 2.1. The social unit seeking the response is
called the marketer, and the social unit whose
response is sought is called the market.
Corollary 2.2. The social object may be a product, service, organization, person, place, or idea.
Corollary 2.3. The response sought from the market
is some behavior toward the social object, usually
acceptance but conceivably avoidance. (More specific descriptions of responses sought are purchase, adoption, usage, consumption, or their
negatives. Those who do or may respond are
called buyers, adopters, users, consumers, clients,
or supporters.)
Corollary 2.4. The marketer is normally aware that
he is seeking the specific response.
Corollary 2.5. The response sought may be expected
in the short or long run.
Corollary 2.6. The response has value to the marketer.
Corollary 2.7. Mutual marketing describes the case
where two social units simultaneously seek a response from each other. Mutual marketing is the
core situation underlying bargaining relationships.
Marketing consists of actions undertaken by persons
to bring about a response in other persons concerning
some specific social object. A social object is any entity
or artifact found in society, such as a product, service,
organization, person, place, or idea. The marketer
normally seeks to influence the market to accept this
social object. The notion of marketing also covers attempts to influence persons to avoid the object, as in a
business effort to discourage excess demand or in a
social campaign designed to influence people to stop
smoking or overeating.6 The marketer is basically trying to shape the level and composition of demand for
his product. The marketer undertakes these influence
actions because he values their consequences. The market may also value the consequences, but this is not a
necessary condition for defining the occurrence of marketing activity. The marketer is normally conscious
that he is attempting to influence a market, but it is
also possible to interpret as marketing activity cases
where the marketer is not fully conscious of his ends and
means.
Axiom 2 implies that “selling” activity rather than
“buying” activity is closer to the core meaning of marketing. The merchant who assembles goods for the purpose of selling them is engaging in marketing, insofar
as he is seeking a purchase response from others The
buyer who comes into his store and pays the quoted
price is engaging in buying, not marketing, in that he
does not seek to produce a specific response in the seller,
who has already put the goods up for sale. If the
buyer decides to bargain with the seller over the terms,
he too is involved in marketing, or if the seller had been
reluctant to sell, the buyer has to market himself as an
attractive buyer. The terms “buyer” and “seller” are
not perfectly indicative of whether one, or both, of the
parties are engaged in marketing activity.
Axiom 3. The market’s response probability is not fixed.
Corollary 3.1. The probability that the market will
produce the desired response is called the market’s
response probability.
Corollary 3.2. The market’s response probability is
greater than zero; that is, the market is capable
of producing the desired response.
Corollary 3.3. The market’s response probability is
less than one; that is, the market is not internally
compelled to produce the desired response.
69ee Philip Kotler and Sidney J. Levy, “Demarketing,
Yes, Demarketing,” Harvard Business Review, Vol. 49
(November-December, 1971), pp. 71-80.
Journal of Marketing, April, 1972
Corollary 3.4. The market’s response probability can
be altered by marketer actions.
Marketing activity makes sense in the wntext of a
market that is free and capable of yielding the desired
response. If the target social unit cannot respond to
the social object, as in the case of no interest o r no
resources, i t is not a market. I f the target social unit
must respond to the social object, as in the case of
addiction o r perfect brand loyalty, that unit is a market
but there is little need f o r marketing activity. I n cases
where the market’s response probability is fixed in the
short r u n but variable in the long run, the marketer may
undertake marketing activity to prevent o r reduce the
erosion in the response probability. Normally, marketing activity is most relevant where the market’s response
probability is less than one and highly influenced by
marketer actions.
Axiom 4. Marketing is the attempt to produce the desired response by creating and ojfering values to
the market.
Corollary 4.1. The marketer assunles that the market’s
response will be voluntary.
Corollary 4.2. The essential activity of marketing is
the creation and offering of value. Value is
defined subjectively from the market’s point of
view.
Corollary 4.3. The marketer creates and offers value
mainly through configuration, valuation, symbolization, and facilitation. (Configuration is the
act of designing the social object. Valuation is
concerned with placing terms of exchange on the
object. Symbolization is the association of meanitigs with the object. Facilitation consists of
altering the accessibility of the object.)
Corollary 4.4. Efective marketing means the choice
of marketer actions that are calculated to produce the desired response in the market. Efficient
marketing means the choice of least cost marketer
actions that will produce the desired response.
Marketing is an approach to producing desired responses in another party that lies midway between coercion on the one hand and brainwmhing on the other.
Coercion involves the attempt to produce a response
in another by forcing or threatening him with agentinflicted pain. Agent-inflicted pain should be distinguished from object-inflicted pain in that the latter may
be used by a marketer as when he symbolizes something
such as cigarettes as potentially harmful to the smoker.
The use of agent-inflicted pain is normally not a marketing solution t o a response problem. This is not to
deny that marketers occasionally resort to arranging a
“package of threats” to get o r keep a customer. F o r
example, a company may threaten to discontinue purchasing from another company if the latter failed to
behave in a certain way. But normally, marketing consists of noncoercive actions to induce a response in
another.
Brainwashing lies a t the other extreme and involves
the attempt to produce a response in another by pro-
foundly altering his basic beliefs and values. Instead of
trying to persuade a person to see the social object as
serving his existing values and interests, the agent tries
to shift the subject’s values in the direction of the social
object. Brainwashing, fortunately, is a very difficult
feat to accomplish. It requires a monopoly of communication channels, operant conditioning, and much patience. Short of pure brainwashing efforts are attempts
by various agents to change people’s basic values in connection with such issues as racial prejudice, birth control, and private property. Marketing has some useful
insights to offer to agents seeking to produce basic
changes in people, although its main focus is on creating
products and messages attuned t o existing attitudes and
values. I t places more emphasis on preference engineering than attitude conditioning, although the latter
is not excluded.
The core wncern of marketing is that of producing
desired responses in free individuals by the judicious
creation and offering of values. The marketer is attempting to get value from the market through offering
value to it. The marketer’s problem is to create attractive values. Value is completely subjective and exists
in the eyes of the beholding market. Marketers must
understand the market in order to be effective in creating value. This is the essential meaning of the marketing concept.
The marketer seeks to create value in four ways. H e
can try to design the social object more attractively (configuration) ; he can put an attractive terms on the social
object (valuation) ; he can add symbolic significance in
the social object (symbolization) ; and he can make it
easier f o r the market to obtain the social object (facilitation). H e may use these activities in reverse if he
wants the social object to be avoided. These four activities have a rough correspondence to more conventional statements of marketing purpose, such as the use
of product, price, promotion, and place to stimulate
exchange.
The layman who thinks about marketing often overidentifies it with one o r two major component activities,
such as facilitation o r symbolization. I n scarcity economies, marketing is often identified with the facilitation
function. Marketing is the problem of getting scarce
goods to a marketplace. There is little concern with
configuration and symbolization. I n affluent economies,
marketing is often identified with the symbolization
function. I n the popular mind, marketing is seen as
the task of encoding persuasive messages to get people
to buy more goods. Since most people resent persuasion attempts, marketing has picked u p a negative
image in the minds of many people. They forget or
overlook the marketing work involved in creating values
through configuration, valuation, and facilitation. I n
the future post-industrial society concern over the quality of life becomes paramount, and the public understanding of marketing is likely to undergo further
change, hopefully toward an appreciation of all of its
functions to create and offer value.
51
A Generic Concept of Marketing
General P u b l i c
Support
Publics
U
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m
0
4
M
0
r(
a
1
I3nployee
Publics
—
.
*
ORGANIZATION
.-I
* Agent
Publics
A
Consumer
Publics
m
a
0
4
4
0
rl
a
a
7
a
7
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ch
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Publics
Competitor P u b l i c s
Typologies of Marketing
The new levels of marketing consciousness make it
desirable to reexamine traditional classifications of marketing activity. Marketing practitioners normally describe their type of marketing according tb the target
market or product. A target-market classification of
marketing activity consists of consumer marketing, industrial marketing, government marketing, and international marketing.
A product classification consists of durable goods
marketing, nondurable goods marketing, and service
marketing.
With the broadening of marketing, the preceding
classifications no longer express the full range of marketing application. They pertain to business marketing,
which is only one type of marketing. More comprehensive classifications of marketing activity can be formulated according to the target market, product, or
marlwter.
Target Market Typology
A target-market classification of marketing activity
distinguishes the various publics toward which an organization can direct its marketing activity. A public is
ally group with potential interest and impact on an
organization. Every organization has u p to nine distinguishable publics (Figure 1). There are three input
publics (supporters, employees, suppliers), two output
publics (agents, consumers), and four sanctioning publics (government, competitors, special publics, and general public). The organization is viewed as a resource
conversion machine which takes the resources of sup-
porters (e.g., stockholders, directors), employees, and
suppliers and converts these into producta that go directly to consumers or through agents. The organization’s basic input-output activities are subject to the
watchful eye of sanctioning publics such as government,
competitors, special publics, and the general public. All
of these publics are targets for organizational marketing activity because of their potential impact on the
resource converting efficiency of the organization. Therefore, a target-market classification of marketing activity
consists of supporter-directed marketing, employee-directed marketing, supplier-directed marketing, agentdirected marketing, consumer-directed marketing, general public-directed marketing, special public-directed
marketing, government-directed marketing, and competitor-directed marketing.
Product Typology
A typology of marketing activity can also be constructed on the basis of the product marketed. Under
the broadened concept of marketing, the product is
no longer restricted to commercial goods and services.
An organization can try to market to a public u p to
six types of products or social objects. A product classification of marketing consists of goods marketing, service marketing, organization marketing, person marketing, place marketing, and idea marketing.
Goods and service marketing, which made u p the whole
of traditional marketing, reappear in this classification.
I n addition, marketers can specialize in the marketing of
organizations (e.g., governments, corporations, or universities), persons (e.g., political candidates, celebrities),
Journal of Marketing, April, 1972
places (e.g., real estate developments, resod areas, states,
cities), and ideas (e.g., family planning, Medicare, antismoking, saf e-driving) .
Marketer Typology
A typology can also be constructed on the basis of
the marketer, that is, the organization that is carrying
on the marketing. A first approximation would call for
distinguishing between business and nonbusiness organization marketing. Since there are several types of nonbusiness organizations with quite different products and
marketing tasks, it would be desirable to build a marketer classificqtion that recognizes the different types of
organizations. This leads to the following classifications :
Business organization marketing, political organization
marketing, social organization marketing, religious organization marketing, cultural organization marketing,
and knowledge organization marketing.
Organizations are classified according to their primary
or formal character. Political organizations would include political parties, government agencies, trade
unions, and cause groups. Social organizations would
include service clubs, fraternal organizations, and private welfare agencies. Religious organizations would include churches and evangelical movements. Cultural