UK: Perspective - Fundamental flaws of marketing.

UK: Perspective - Fundamental flaws of marketing. - Once we can measure how effective marketing is, we might finally work out what the marketing moniker means, says Winston Fletcher.

Last Updated: 31 Aug 2010

Once we can measure how effective marketing is, we might finally work out what the marketing moniker means, says Winston Fletcher.

The word 'marketing' was launched into the English language, unresearched and without proper testing, in 1561. You would have expected the marketing folk of the time - before saddling themselves with a moniker that would last at least four and a half centuries - to have checked the word out. But our forefathers were often embarrassingly amateur business-wise. And, as a result of their sloppiness, there is still widespread confusion about exactly what marketing is. To be precise, we all think we know what it is but our views frequently differ.

Functional vs fundamental

Principally, that's because there are two quite disparate definitions of marketing: the functional definition and the fundamentalist definition. And, though they overlap, they are sufficiently different to cause chaos and confusion.

The functional definition, the one most people espouse, is that marketing is little more than a hoity-toity word for 'selling'. Marketing, says this definition, is a departmental job description, such as finance or personnel. And marketing people's job is to increase sales. To do so, they are provided with a marketing budget which they can spend on activities that will boost sales in the short term and the long term: advertising, sponsorship, public relations, direct mail, sales promotion and the like. Those are the activities that the leading trade magazine, Marketing, writes about, which is a strong prima facie argument for saying that the functional definition is the correct one.

The fundamentalist definition, by contrast, claims that marketing is a basic business philosophy. Marketing, says this definition, is a credo - the credo of long-term customer satisfaction. This credo has been most powerfully promulgated by Harvard guru Theodore Levitt, who believes, as do all fundamentalists, that any company whose business is not built upon customer satisfaction is inevitably destined for the knacker's yard.

For fundamentalists, customer satisfaction is what 'marketing' means.

And it is not just a departmental responsibility but a doctrine that must be embraced by everyone in the company from chairman to tea lady.

Confused and contradictory

Confused? You are not alone. A recent study, carried out by Flora Kokkinaki and Tim Ambler of the London Business School, concluded that 'imprecise language adds to confusion over what marketing is trying to achieve and, consequentially, over how progress can be measured'. The two definitions are not merely different, they are, at least at first sight, inherently contradictory. Selling involves persuasion - persuading people to buy things that they otherwise might not have wanted. Customer satisfaction means giving customers exactly what they want - not getting them to buy things that they didn't.

Part of the cause of the confusion is that each of the three bodies representing marketing in Britain effectively embraces a different definition. The Chartered Institute of Marketing (CIM), which is much the oldest and much the largest, has become Britain's leading marketing training organisation, constantly running courses that espouse the functionalist definition. Founded in 1911, the CIM now has a record 25,000 members, so its influence is considerable.

The second largest and second oldest body, the Marketing Society, was founded in 1959 and now has some 3,000 members - the elite, it frequently claims, of the marketing profession. In practice, it also embraces the functionalist definition but it is aware of the nebulous meaning of the 'M' word in its title and so begins most of its serious documents by defining it. Unfortunately, this definition does little to clarify matters because it quotes both the functionalist and the fundamentalist approaches, oblivious of any difference between them.

The third marketing body, the Marketing Council, founded less than four years ago, is much the youngest and smallest but the most prestigious.

The Marketing Council was launched by a group of Britain's foremost business people, including Sir Michael Perry, its present chairman, Sir George Bull, Sir Peter Davis, Sir John Egan and Sir Alistair Grant. Sir Colin Marshall was its founder chairman and moving spirit. They set up the council specifically and unequivocally to promote the fundamentalist definition, the Levitt credo. The council is an evangelist pressure group - a crusade if you like - devoted to convincing British industry that customer satisfaction is cardinal to business success and that, only by putting customers at the heart of every company's philosophy, will we improve Britain's competitive performance.

The cost-effective question

To which the sceptical, and there is compelling evidence that scepticism about marketing is rampant, will answer with a resounding 'prove it'.

Well, they are trying. The basic purpose of the aforementioned study by Kokkinaki and Ambler is to establish how marketing performance can be evaluated and thus how it can be improved.

The measurement of marketing effectiveness, like the word itself, has hardly emerged from the Dark Ages. While the 20th century has seen massive improvements in the evaluation of production processes, nobody has the foggiest idea how to evaluate the cost-effectiveness of most marketing processes. That is the crucial challenge for marketing in the next century.

With modern computer power and the cornucopia of data now available, it shouldn't be impossible. And, once we can measure the ways in which marketing works with accuracy and confidence, the definitional problems should rapidly evaporate.

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