In 2004, the American Marketing Association representing mainstream marketing thought and practice
announced a newly updated marketing definition which is as follows:
“Marketing is an organizational function and a set of processes for creating, communicating
and delivering value to customers and for managing customer relationships in ways that benefit
the organization and its stakeholders.”
This new definition is characterized by including value for customers and customer relationships. In
addition, marketing is defined as one organizational function. In this paper, the author attempted to
broaden the discussion on the definition to a generic marketing level and analyze the underpinning logic
of the updated definition, taking mainly service and relationship marketing research as a starting point. In
particular, three elements of the updated definition were discussed:(1) the customer value concept;(2)
marketing as managing customer relationships; and (3) marketing as an organizational function. In
addition,(4) an intermediate stage between what is done and what should be achieved covering the ‘how’
aspect of marketing was discussed. This element is missing in the updated definition, and has been
missing in the previous AMA marketing definitions as well. However, if marketing is a process at least
an outline of the nature and scope of this process should be a central part of any definition.
First, the current research into customer value shows a clear trend away from a value-in-exchange
view toward a notion of value being produced not by the supplier, but by the customer when using
products and when interacting with suppliers in co-creation with them. Suppliers do not deliver value to
customers, but they ‘support customers’ value creation’ in value-generating process of these customers
and possibly get involved in the co-creation of value with customers, by providing them with ‘resource’
such as goods. services. information and other types of solutions.
Second, the new marketing definition does not provide any indications as to how the phrase
‘managing customer relationships’ should be understood, other than that they should be managed ‘in
ways that benefit the organization and its stakeholders.’ The phrase implies that customer relationships
exist. However, only customers can decide whether they have, or want to have, a relationship with a firm,
in other words, whether a customer relationship exists or not. Regardless of how important the issue of
understanding customer relationships and managing relationships with customer is in some or perhaps
even most situations, unless it is clearly demonstrated that customers always want to see themselves in
relationships with suppliers of goods, services, ideas, information and other types of solutions, it is not
advisable, and even be counterproductive to the development of marketing to include the phrase
‘managing customer relationships’ in a generic marketing definition. Therefore, in an implicit way a
definition of marketing must allow both for relational and non-relational marketing strategies and
activities.
Third, according to the new marketing definition, ‘marketing is an organizational function’. In other
words. marketing is one organizational function. Inevitably this approach to understanding marketing has
been very successful for consumer goods. However, already in consumer durables where delivering,
installing and repairing equipment as well as customer advice may be important to success in the market
place, the marketing department and a separate marketing function will find it difficult to manage or even
influence all contacts with the customers. In services and business-to-business sector this is even more
important. Therefore, marketing cannot be implemented by one organizational function of marketing
specialists, the full-time marketers, only. It also needs part-time marketer’s support. In addition, to be
effective marketing requires that technologies, information systems and other systems are designed and
function in a customer-focused manner.
Fourth, in a marketing definition there have to be some general guidelines including ‘how’ marketing activities and processes should be planned and implemented. It is not enough to state that, for example,
‘pricing, communicating and delivering value’ or ‘planing and executing conception, pricing, promotion
and distribution of goods, ideas and services’ should lead to some state(value to customers or satisfy
goals). One of the definitions most generally agreed upon by researchers states that the economic and
other goals of the firm and its customers should be achieved through ‘exchange and fulfilment of
promises’. And promise made are perceived by customers, thus creating expectations regarding what
should be delivered by a firm.
Accordingly, customers have both explicit and implicit expectations and these expectations should be
fulfilled by the performance of the firm. And fulfilment of promise in a customers-focused manner
requires internal marketing efforts as promise enablers. In addition, customer-focused technologies,
information systems and other systems as well as appropriate leadership is also required to support a
customer-focused performance by part-time marketers. Thus, making promises, supported by internal
activities, such as internal marketing geared towards the fulfilment of expectations created by promises
made, as well as technology, systems and leadership support, and fulfilling expectations created by
promises made, form a firm’s marketing process.
Drawing upon the above analysis, the author suggested an alternative marketing definition as follows:
“Marketing is a customer focus that permeates organizational functions and processes and is
geared towards making promises through value proposition, enabling the fulfilment of
individual expectations created by such promises and fulfilling such expectations through
support to customer’s value-generating process, thereby supporting value creation in the firm’s
as well as its customer’s and other stakeholder’s processes.”
The underpinning logic of the suggested definition is the following.
First, the definition is based upon the ‘value-in-use’ notion, according to which customer is created in
the customer sphere, in customer’s value-creating processes. Second, because customers probably do not
always want relationship with firms and firms do not always consider creating relationships with
customers as the foundation of business as the best possible strategy, managing customer relationship as
a phrase is not explicitly included in this definition. However, implicitly this definition included the
potential to develop customer relationships. Third, since one single organizational function cannot take
responsibility for total marketing, the suggested definition states that several organizational functions
have to take a customer focus and take a responsibility for marketing. Fourth, unlike the 4Ps of the
previous marketing definitions and the equivalent list of activities in the renewed AMA definition, the
suggested definition does not include a list of variables that are ‘the’ decision-making areas of marketing.
Such lists, including four or any other number of variables, can never be conclusive and easily become
obsolete. Fifth, enabling promises is explicitly included in the definition and the definition takes into
account the role of expectations. As customer’s perceptions of similar promises differ, it is not the
promises as such that should be met, but rather the customer’s individual expectations created by these
promises.
One could ask whether the suggested definition fits all marketing contexts, or whether another
definition would be equally good or better. It is impossible to answer this question categorically.
However, based on the stated point of departure for the analysis in the present paper and using the
promise concept and the promise metaphor, it seems like a valid generic definition.
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