The American Marketing Association Definition of Marketing: Moving from Lagging to Leading Indicator

Challenges in Developing a Definition of Marketing

Marketing is an eclectic activity studied and undertaken by people with a wide variety of skills and knowledge bases. Many scholars and practitioners believe that marketing is not just a functional area within an organization but also a philosophy that should permeate all areas of the organization (Webster 2005). Thus, in many organizations, marketing managers have transferred into marketing from other functional areas with little formal training in marketing. Several marketing professors at leading business schools have doctorates in economics, psychology, anthropology, statistics, and operation research, not marketing. Some scholars take an even broader perspective and view marketing as a societal process (e.g., Wilkie 2005) and also a societal institution (e.g., Lusch 2007).

This diversity in the marketing community creates an exciting environment for marketers—an environment that provides the ingredients for combining different perspectives, knowledge, and skills to develop innovative theories and solutions to marketing problems. However, this diversity can also create conflicts between marketers with different mind-sets. Thus, given the wide range of interests and activities of marketers in general, and of AMA members specifically, it is unlikely that a single definition of marketing will be embraced by all marketers.

The lack of a general theory of marketing may contribute to dysfunctional conflicts among the eclectic group of people involved in the teaching, practice, and study of marketing. Whereas some scholars argue that marketing theory and concepts have made remarkable strides over the course of our history (e.g., Achrol and Kotler 2006), others suggest that marketing theory often falls short. For example, Hunt (2002) concludes that the closest thing to a general theory of marketing today is Alderson's (1957, 1965) functionalist theory of market behavior. ¹ In a different vein, Rust (2006, p. 1) argues that “[m]arketing will only become mature as a field when it is realized that it is … possible to have theory that is indigenous to marketing.”

Need for a Definition of Marketing

Definitions are important because they set forth meaning, describe essential qualities, and delineate the boundaries or extent of something and differentiate it from other things. They are at their most powerful when they are used to build theories that explain phenomena of interest (Bernard 2002). A widely accepted definition of marketing offers marketing practitioners and academics, as well as those with whom they want to communicate, some consensus with respect to what marketing is and is not. Because theory building requires a compelling specification of “the proper conceptual domain of the construct labeled ‘marketing'” (Hunt 1976, p. 5), an official definition can provide a common starting point for those who agree with the definition and, more important, a starting point for those who do not. Dissent from prevailing conceptualizations of marketing and the controversies, theory building, and research it provokes have advanced consumer, managerial, and societal interests in tangible ways (e.g., Kotler and Levy 1969; Kotler and Zaltman 1971).

Evolution of Definitions of Marketing

To be sure, “[m]arketing is an activity … not easy to define” (Converse, Huegy, and Mitchell 1965, p. 6), and as a discipline, we have been working to craft a widely accepted definition of marketing for most of our history (Bartels 1974, 1983; Hunt 1976, 2002). Thus, in the absence of a common definition and unified body of marketing knowledge, it is not surprising that many important marketing issues remain unresolved.

Even a cursory examination of early marketing texts reveals a remarkable number of what might be deemed “classic” managerial challenges and social criticisms of marketing that persist to this day. For example, Maynard, Weidler, and Beckman (1927) consider the determinants of primary versus selective demand, costs and contributions of marketing to the firm and consumers, and ethical dimensions of various marketing practices. Duncan (1920) evaluates various personal, regulatory, and social responses by which consumers attempt to exercise their prerogatives in the marketplace. Clark (1922) examines the impact of branding, advertising, price policy, distribution, competition, and government regulation on consumers in particular and on the marketing system as a whole.

In short, we are again engaged in a debate as to what constitutes the proper conceptual domain of marketing, guided by something less than a unifying theory of marketing and faced with enduring questions as to the impact of marketing on the consumer, the organization, and society. In our view, these three challenges are related.

To understand better the evolution of the AMA definition of marketing, we consulted definitions created by textbook authors who characterize a particular school of marketing thought and/or best-selling textbook authors whose various editions might provide a longitudinal perspective on how marketing has been defined. Because textbook authors aggregate and synthesize information reflective of contemporary disciplinary thinking, they reflect and influence the perspectives of future marketers. Although we were faithful to these criteria for these reasons, we recognize that our limited selection of textbooks is illustrative rather than comprehensive.

According to Hunt and Goolsby (1988, p. 35), “four different approaches have dominated the study of marketing: (1) the commodity approach, (2) the institutional approach, (3) the functional approach, and (4) the managerial approach.” Sheth and Gross (1988) provide useful descriptions of these four schools of thought. The commodity school focuses on the objects of market transactions and attempts to differentiate various classes of products on the basis of their physical characteristics and associated buyer behavior. The institutional school focuses on agents or organizations that perform marketing functions. The functional school concerns itself with marketing activities or functions. The managerial schools of thought focus on individual (i.e., consumer and professional) behavior.

Having accepted this taxonomy, one of our tasks was to identify textbook authors associated with each of these approaches, locate all the relevant editions, and compare each with the description that Sheth and Gross (1988) offer. Hunt and Goolsby (1988) cite Brown's (1925) work as an example of the commodity approach and categorize Duncan's (1922) work as institutional. Clark and colleagues (in editions from 1922 to 1942), Maynard and colleagues (in editions from 1927 to 1957), and Converse and colleagues (in editions from 1930 to 1965) take a functional approach (Hunt and Goolsby 1988). We concur with these characterizations and with the commonly held view that McCarthy and colleagues’ (in editions from 1960 to 2005) text signals “the beginning of the end for the functional approach, … [with] the emphasis of the book … on the problems of the marketing manager” (Hunt and Goolsby 1988, pp. 40–41). ² Our next task was to identify texts that typify the managerial school, were published after McCarthy (1960), and continue to be published today. We selected Kotler and colleagues (in editions from 1967 to 2006) and Pride and Ferrell (in editions from 1977 to 2006). Finally, we consulted with the AMA headquarters in Chicago to obtain the official definitions of marketing adopted and/or promulgated by the association (Keefe 2004). The Appendix presents the definitions of marketing that these authors and the AMA offer.

Through 1960, the AMA definition of marketing appears to be consistent with positive definitions typical of early textbook writers in that it describes distribution from producer to consumer in the private sector. Positive definitions define phenomena such as marketing as they actually exist or will exist in the future, whereas normative definitions might contain positive elements but are also concerned with what marketing ought to be (for a detailed discussion, see Hunt 1976).

Between 1960 and 1985, however, the AMA definition becomes “out of step” in its adherence to this positive, distribution focus. Furthermore, Kotler (1972) offers a normative definition that explicitly introduces the notion of “exchange,” Pride and Ferrell (1977) offer a normative definition that explicitly expands the scope of marketing in relation to their reference to organization rather than business, and Kotler (1984) offers a normative definition that characterizes marketing as involving individuals and groups. Meanwhile, McCarthy (1960) moves from a normative definition of marketing per se, to a normative definition of both macro (“social process” [McCarthy and Brogowicz 1981] and “objectives of society” [McCarthy 1971]) and micro (“need-satisfying goods and services” [McCarthy 1978] and “organization's objectives” [McCarthy 1978]) marketing. Similarly, Kotler (1972) augments his normative definition of marketing with a normative definition of marketing management. Apparently reflecting these changes, the 1985 AMA revision takes a normative approach, includes the notion of exchange, adds a process element, considers individuals and organizations, and remains managerial in its emphasis.

Between 1986 and 2004, Pride and Ferrell (1987) incorporate the idea of “exchange relationship.” Kotler (1988) includes the concept of “value” and describes marketing as a “societal process” (Kotler 2003). Likewise, the 2004 AMA definition adopts the notions of relationship and value but, unlike these textbook authors, characterizes marketing as an “organizational function and a set of processes.”

Typically, textbooks synthesize well-accepted knowledge; however, in several cases, they offer new perspectives on marketing that have led to a rethinking of the discipline. It could be concluded that since 1960, the AMA definition of marketing has followed, rather than led, the discipline as represented by these textbooks. Because the AMA wants to play a leadership role in advancing marketing thought and practice, it is disconcerting that the AMA definitions could be considered lagging indicators of mainstream disciplinary thinking.

Thus, the AMA undertook an effort to develop an improved definition of marketing, reflecting current scholarship and practice of marketing. Under the direction of Professor Robert Lusch, comments about the 1985 AMA definition and suggestions for revising it were solicited from a wide range of academics and practitioners around the world (Keefe 2004). Several draft definitions were circulated to academics, practitioners, AMA officers, and members of the AMA board of directors. Through an iterative process that synthesized these inputs, the AMA board of directors approved and presented a final version.

Some marketing academics and practitioners agree that the 2004 definition reflects the current practice and study of marketing better than the 1985 definition (Keefe 2004), but others do not (Gundlach 2005, 2006; Wilkie 2006; Wilkie and Moore 2006). From our perspective, the 2004 definition takes a broader perspective of marketing than the 1985 definition, focusing on “processes for creating, communicating, and delivering value to customers” rather than making decisions about the four Ps. It emphasizes that marketing is a process of creating “value [for] customers and for managing customer relationships” rather than stimulating transactional exchanges. Finally, it recognizes that marketing “benefit(s) the organization and its stakeholders,” not just individuals and organizations. Stakeholders can be broadly interpreted to be all societal institutions. Regardless of the various options of the 2004 definition, we believe that periodic efforts aimed at improving the official definition of marketing are important and that the AMA is the most appropriate organization to manage the review and revision of the official definition.

The AMA's Role in the Definition of Marketing

The AMA has a long history of developing a definition of marketing and terms used in the practice and study of marketing (Keefe 2004). In 1935, the National Association of Marketing Teachers, a predecessor of the AMA, developed one of the first definitions of marketing. This definition was adopted in 1948 by the AMA and again in 1960 when the AMA reviewed the definition and decided not to change it. This original definition stood for 50 years, until it was revised in 1985 and again in 2004.

The potential strength of the AMA and the official definition it develops derives from the size and diversity of its membership. No other marketing association has a growing membership of approximately 36,000, with strong participation from different but related constituencies—approximately 17,000 marketing managers, 3600 marketing researchers, 3200 marketing academics, and 12,000 marketing students. For more than seven decades, the AMA and its members have played a leading role in the development and dissemination of marketing knowledge and information. Making the most of the different perspectives resident in these constituencies will go a long way to ensuring that the official AMA definition is robust and fosters a common understanding of marketing across the discipline.

Need for Broad Participation and Acceptance of a Definition

Most of the criticism of and discussion about the 2004 AMA definition has been by marketing academics. Definitions play a critical role in the development of theories and knowledge. Thus, it is appropriate for academics to be concerned about the definition of marketing. However, the development of a definition of marketing by academics that is not accepted by marketing practitioners would accentuate disconnects between marketing thought and marketing practice (Bolton 2005).

New Process for Reviewing and Refining the AMA Definition of Marketing

Recognizing the need for a formal process that solicits a broad range of inputs in a structured manner, in May 2006, the AMA board of directors adopted a new, formal definition review/revision process. Three critical goals for the periodic review/revision of AMA's definition of marketing are (1) transparency, (2) broad participation, and (3) continuity.

The AMA definition of marketing will now be reviewed every five years, and the next review of the definition of marketing was scheduled to begin in January 2007. The review process will be managed by an ad hoc subcommittee of the AMA Governance Committee appointed by the chair of that committee (AMA chair-elect). The subcommittee will comprise representatives from AMA division councils (i.e., academic, market research, professional chapters, and collegiate chapters), a subcommittee chair, and two at-large members also appointed by the chair of the committee. To provide for continuity in the review process, the chair of the Governance Committee is encouraged to have some overlap between each new review committee and previous review committees. The process will proceed as follows:

The members of the ad hoc subcommittee who will undertake this work in 2007 include Shelby D. Hunt, Texas Tech University; Donald R. Lehmann, Columbia University (committee chair); Wayne McCullough, Daimler-Chrysler; James Peltier, University of Wisconsin–Whitewater; Ric Sweeney, University of Cincinnati; Joan Treistman, M/A/R/C Research; William L. Wilkie, University of Notre Dame; Becky Youngberg, American Marketing Association; and George Zinkhan, University of Georgia.

Marketing Definition, Scholarship, and Society

As this subcommittee begins its work, we do well to consider the potential impact of the 2004 AMA definition (see the Appendix) on scholarship concerned with the subject matter area broadly described as “marketing and society” and the role and responsibility of marketing in society, and vice versa. To some extent, these issues have already been addressed by Grove, John, and Fisk (2006), Gundlach (2005, 2006), Lehmann (2006), Levy (2006), Wilkie (2006), and Wilkie and Moore (2006), among others, who have criticized the 2004 AMA definition.

Grove, John, and Fisk (2006) offer the 2004 AMA definition of marketing as evidence of marketing's “objectification of people.” “In the [2004 AMA] definition the person as customer is narrowly cast as ‘customer value’ to the organization and its stakeholders…. Worse, the definition is presumptuous in asserting the notion that customers want to be ‘managed'” (Grove, John, and Fisk 2006, p. 307).

Gundlach (2005, pp. 1–2, emphasis in the original) describes the 2004 AMA definition as taking “a largely (if not exclusively) marketer perspective, viewing marketing as an ‘organizational function and a set of processes’ engaged in by the firm to ‘benefit the organization and its stakeholders.'” To Gundlach (p. 2, emphasis in the original), employment of “an exclusively marketer perspective” may prevent consideration of perspectives other than those of the firm. Quoting Wilkie and Moore (1999, p. 199), Gundlach cautions (p. 106) that “viewing a topic from a single perspective highlights certain characteristics, but can hide other aspects that also may be important…. In terms of scholarship, circumscribing marketing to those activities and processes of the marketer limits and constrains the relevant domain of interest.”

Lehmann (2006, p. 296) views the 2004 AMA definition to be fairly general and observes that it “does not provide a sense of the key essence of the term.” Levy (2006) takes the 2004 AMA definition to task for being tenaciously traditional. He argues (p. 62) that “[i]t is not superior to Brown's 1925 definition” (see the Appendix) and criticizes it for being normative in nature and narrow in scope. “It ignores the fact that bad marketing is also marketing, that individuals as well as organizations market, and that buying is marketing, too” (Levy 2006, p. 62).

Wilkie (2006) and Wilkie and Moore (2006) observe that beginning with the 1985 version, AMA definitions have become increasingly narrow (i.e., managerial) and normative (i.e., marketing is in the best interests of consumers). They conclude that this makes it more difficult for marketers to adopt more aggregated perspectives of the field. “In our view, this organizational focus for the entire field of marketing does not speak to the concerns of many (even most) scholars who are concerned with the development of knowledge about marketing, including those focusing on consumer behavior, research methods and models, and larger impacts on society” (Wilkie and Moore 2006, p. 277).

Our view of the actual impact of the 2004 AMA definition on scholarship concerned with marketing and society and the role and responsibility of marketing in society is that the definition has energized a healthy debate that has put this important subject matter front and center in current discourse and in the official definition-making process. Rather than constraining scholars who are concerned with marketing's impact on society, this definition provoked warranted criticisms of the previously informal and sporadic AMA definition review/revision process, caused the (since 1985) normative nature of the definition to be questioned, and served as a catalyst for a renewed and vigorous debate about the scope and impact of marketing.

Along with Kotler and Levy (1969), Kotler and Zaltman (1971), Bartels (1974, 1983), Hunt (2002), Lusch and Vargo (2006), and Rust (2006), critics of the 2004 AMA definition implicitly challenge each of us to examine and explicitly acknowledge our views of marketing, theory, and research and what they mean for our work and that of the discipline. We believe that the 2004 AMA definition has had less impact on scholars focused on marketing and society than marketing and society scholars have had, and will continue to have, on individual and collective notions of the definition of marketing. The suggestion that the 2004 AMA definition will somehow constrain those committed to a different view insults scholars and practitioners whose conceptualization of marketing is at odds with the official one. Conversely, an official definition that fosters positive description and normative evaluation; acknowledges marketing activity in the public, private, and nonprofit sectors; and recognizes activity and impacts at the individual, organizational, and societal levels may serve to improve the collective understanding and practice of marketing. This is an opportunity we should fully exploit.

For our own part, this exercise has led to discussions about what we think might be a reasonable definition of marketing. We suggest that a positive (rather than normative) definition can better focus attention on the reality of marketing practice and its impacts; that marketing is a particular sort of effort (i.e., one directed at the creation and exchange of value); and that it is engaged in by individuals, organizations, and the political economies they constitute.

This exercise has also caused us to reflect on Rust's (2006, p. 2) assertion that “[t]he mature marketing discipline will be tolerant, confident, global, technologically savvy, and unashamed to be primarily about marketing.” Any definition-making process, and the result itself, should encompass these attributes. Moreover, the AMA definition of marketing should lead rather than lag. It should address the present and future marketing, not the past. We have every confidence that the 2007 process and its result will do just that.

Appendix: An Overview of Marketing Definitions Throughout the Years