Towards a Theory of Marketing

Author(s): Wroe Alderson and Reavis Cox

Reviewed work(s):
Source: The Journal of Marketing, Vol. 13, No. 2 (Oct., 1948), pp. 137-152
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/1246823 .
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THE
w
dJournal
of
VglarketinO
VolumeXIII
OCTOBER,
1948 Number 2
TOWARDS A THEORY OF MARKETING
WROE ALDERSON
Alderson &
Sessions,
Inc.
AND
REAVIS COX
University of Pennsylvania
EDITOR'S NOTE: Theauthors
explain
the
needf or
the
developmentof marketingtheory
and indicatesome
of
the
sources
f rom
which such a
body of knowledge
will comeas
well as some
of
thedirections that
f urther
work
along
these
lines
might
take. Theeditors invitecomments and
papers
concerning
theviews
expressed by
the
authors, gaps
in ex-
istingtheory
notmentioned
by them, possible
additional
areas
upon
which
theory may
draw and the
proper organ-
ization
of marketingtheory
into an
integrated
whole.
I. THE LIVELY INTEREST IN
MARKETING THEORY
C
ONSPICUOUS in the
prof essional study
of
marketing
in recent
years
has
been a
lively
and
growing
interestin the
theory
of
marketing, i.e.,
the
general
or
abstract
principles underlying
the
body
of f acts which
comprise
this f ield.
Perhaps
thebestovertevidenceof this interest
lies in theenthusiasm with which mem-
bers of theAmerican
Marketing
Associa-
tion and its
chapters respond
to invita-
tions that
they
attend
meetings
or
pre-
parepapers
concerned with theoretical
topics.
This interestin
theory
seems to
havearisen
spontaneously
and inde-
pendently
in a number of
places
atthe
sametime.
Courses in
marketingtheory
arenow
beinggiven
in several universities. Theo-
ry
is
assumingincreasingprominence
in
books and articles written
by
men whose
primary background
is in
marketing.
Theory
of
marketing
was
emphasized
in-
itially
in theestablishmentof theParlin
Memorial Lecture. Sections on
theory
havebeen
regularly
scheduled atthena-
tional conf erences of theassociation be-
ginning
with the
Pittsburgh meeting
in
1946.
The
Philadelphia chapter
of the
137
138
American
Marketing
Association has
held
monthly
luncheon
meetings
on this
subject
f or the
past
two
years.
The
Board of Directors of theassociation has
approved
theidea thattheassociation
establish an annual award in the
theory
of
marketing.
A
symposium
on thetheo-
ry
of
marketing
is now in
preparation
which is to be
published
as a
special sup-
plement
to the
JOURNAL
OF MARKETING.
Theinterestin
theory expressed
atone
place
or another and in one
way
or an-
other
by
both theacademic men and the
practitioners
of commercial research is
real and substantial
enough
to merit
caref ul attention. Thetimeseems
ripe
to
evaluateits
signif icance-i.e.,
to deter-
mineas
precisely
as
possible
thenature
of the
interest,
to
survey
thereasons f or
its
appearance,
and to consider thesort
of intellectual
discipline
into which itis
likely
to mould the
study
of
marketingif ,
as seems
probable,
itcontinues to
grow
in
depth
and
scopeduring
the
years
im-
mediately
ahead.
II. THE NATURE OF THE INTEREST IN
MARKETING THEORY
Data do notexist
upon
which to base
a detailed
description
of thenatureof
this interestin
theory amongmarketing
men. Some
part
of itno doubt
represents
simplecuriosity
ata
relatively high
in-
tellectual level. Partof itis a
variety
of
f ollow-the-leader. When some
people
be-
come
avidly
and
outspokenly
interested
in
anything,
others will takea lookto see
whatis
going
on. A f ew will actinterested
because
they
think
they ought
to be.
Thecentral coreof thef oundation
thatunderlies theinterestin a new theo-
retical
approach
to
marketingis,
how-
ever,
much moresubstantial than this.
Apparently
itconsists of two
principal
parts.
Oneis a
very widespread
and
gen-
erally justif ied
conviction thatstudents
of
marketing
thus f ar have
reaped
f rom
their ef f orts
remarkably
small harvests
of
accurate, comprehensive
and
signif i-
cant
generalizations. Marketing
litera-
tureof f ers its readers
very
f ew trueand
important"principles"
or "theories."
Theother
part
is an evidentbelief
among
someobservers thatstudents of market-
ing
haveachieved too littleeven in set-
ting
f undamental and
signif icantprob-
lems f or
themselves,
to
say nothing
of
working
out
procedures
f or
solving
such
problems
once
they
havebeen f ormulated.
Atf irst
glance
the
lively
interestof
marketing
men in thetheoretical
aspects
of their
subjectmay
seem to
spring
chief -
ly
f rom thef irstsource-dissatisf action
with thenumbers and kinds of
general-
ization thus f ar achieved
through
sedu-
lous accumulation of innumerablef acts.
A second look
suggests
thatwhatmar-
keting
men
really
seekis notan immedi-
atestatementof the
generalizations
to
which ef f ective
study
will in duecourse
lead
them,
buta better statementof the
problems
to besolved and more
ingeni-
ous methods to be
applied
in
solving
them. Themultitudeof f acts thus f ar as-
sembled seems to add
up
to
very
little.
Onemustconcludethat
something
has
gonewrong
with themethod of attack-
thata new and creative
analysis
is re-
quired.
Northrop,
in his
stimulatingstudy
of
the
logic
of
research,'
holds thatthemost
dif f icult
part
of an
inquiry usually
is its
initiation. As hesees
matters, inquiry
be-
gins
with a
problem
circumstances have
called to someone's attention.
Ordinarily
the
problem
arises because
newly
discov-
ered f acts
upsetaccepted explanations.
Thef irst
step
is to
analyze
the
problem
imaginatively,
sinceits naturewill dic-
tatethemethods thatmustbeused to
solveit. From the
analysis
of the
prob-
lem
springs
an
understanding
of thesorts
1
F. S. C.
Northrop,
The
Logic of
theSciences and the
Humanities, Macmillan
Co.,
New
York, 1947.
THE
JOURNAL
OF MARKETING
THE
JOURNAL
OF MARKETING
of f actthatmustbeassembled to answer
itand of themethods
by
which
they
can
beassembled. Af ter this cometheactual
assembly
of thef acts
required, descrip-
tion and classif ication of these
f acts,
deri-
vation f rom them of f ruitf ul and relevant
hypotheses,
and verif ication of the
hy-
potheses
thus
deductively
derived
by
in-
ductive
appeal
to f urther f acts.
Apparently
what
marketing
men now
seekin their
appeal
to
theory
is
imagina-
tive
guidance
into such a creativeanal-
ysis
of the
problems
of
marketing.
This
can be
put
another
way.
Events in recent
years
havef orced students of market-
ing
to
put
a
heavy emphasis upon prob-
lems of
privatemanagement
and
public
policy.
Oneresulthas been to reveal the
inadequacy
of theearlier
years
of
study
in the
f ield,
which
proceeded by
almost
haphazard
accumulation of f acts. Ithas
becomeevidentthatif thedif f iculties
raised
by
events in theareas of
public
and
privatepolicy
as
applied
to
marketing
are
to be
solved, they
mustbe
put
into a
f rameworkthat
provides
a much better
perspective
than is now
given by
the
literature.
Only
a sound
theory
of mar-
keting
can raisethe
analysis
of such
prob-
lems abovethelevel of an
empirical
art
and establish
truly
scientif ic criteria f or
settingup hypotheses
and
selecting
the
f acts
by
means of which to testthem.
III. SPECIFIC REASONS FOR THE
INTEREST IN MARKETING
THEORY
Thenatureof thedemand students of
marketing
are
makingupon
their would-
betheorists can beclarif ied f urther
by
considering
someof the
specif ic problems
they
f eel to betreated
inadequately
in
the
existing
literature.
Northrop,
as we
have
seen, suggests
thata
problem
call-
ing
f or theinitiation of some
systematic
inquiry usually
makes its
appearance
when
existing
theories f ail to
satisf y
1_39
students because
they
do notaccountf or
or takeinto consideration all of therele-
vantobserved f acts. In
essence,
this is
today's
situation in the
study
of market-
ing.
Conclusions as to
policy
and
procedure
in thef ield of
marketing,
and
particularly
thosederived f rom theso-called
prin-
ciples
stated in manuals of
management
or in the
greatbody
of
general
economic
theory,
of ten seem notto
jibe
with the
observablef acts.
Furthermore,
a
good
many
such
problems
arethrown atmar-
keting
men wherethef acts havenotbeen
collected
or,
even more
important,
where
no onehas a clear
understanding
of the
sorts of f actthatmustbeassembled and
analyzed.
A f ew illustrations will serveto
makeclear the
present
less-than-satisf ac-
tory position
of
marketingtheory.
(I)
Problems
of
PriceDiscrimination.-
Dif f erencein the
prices competingbuyers
pay
f or
goods bought
f rom a common
sup-
plier
or in the
prices they
receivef rom a
common
buyer
raisecritical
problems
of
managerial
and
public policy. Here,
as in
other
aspects
of economic
lif e,
wecome
up against
thetwentieth
century's
ver-
sion of an ancient
problem-that
of the
just
or f air
price.
Laws havebeen enacted
and thecourts haverendered
judgments
under theselaws thatalter
prof oundly
prevailing
views as to whatis
socially
desirablein
pricing
and whatis not.
Amongmarketing
men thereexists an
uneasy f eeling
thatatleastsomeof the
policies
thus
being
established would be
substantially
dif f erentif thef acts of
marketing
as
they ought
to beknown to
marketing
men wereincluded in the
sup-
porting
theories. In
particular,
itseems
to bef eltthatthe
policy
decisions rest
up-
on a careless
acceptance
of merecon-
ventions as
objective
f acts. Thus the
conventional def inition of
price
in narrow
terms as a ratio between
quantities
of
money
and
quantities
of
goods,
rather
140
THE 7OURNAL OF
MARKETING
than in terms of
completely negotiated
sales
transactions, is taken to denominate
price
in connotations where
only
the
broader def inition can bevalid.2 Yet
marketing
men havedone
virtually
noth-
ing
to correctthesituation
by def ining
a
completely negotiated
sales transaction
and
proceeding
to workouttheories
based
upon
it.
(2) Spatial Aspects of Marketing.-
Students of theeconomics of land uti-
lization have
given
much attention to
problems
raised
by
thelocation of vari-
ous kinds of economic
activity.
Students
of
marketing
havemade
very
littlecon-
tribution to thatdiscussion. This is true
despite
thef actthat
repeatedly they
must
give
attention to related
manageri-
al
problems.
For
example, they
of ten
help
business men determinehow
large
a trad-
ing
area is served
by
a
particular
storeor
by
a
particular
cluster of stores.
They
advise
operators
as to wherewithin a
particular trading
area a retail or whole-
sale
enterprise
should locateits
physical
f acilities.
Neither the
marketing
man nor the
analyst
of land utilization has received
much
help
f rom the
general economist,
with his theories of
pure
rentand his
tendency simply
to assumerather than
to
explain
theexistenceof a
spatial
dis-
tribution of
marketing
activities such
thatf orces of
supply
and demand can in
some
signif icant
sensebe
brought
to a
f ocus in
price. Hence,
it
appears
that
marketing
men should assumethetask
of
working
out
concepts
thathavetrue
signif icance
in
analyzing
thenatureof
thedistributive
spacethrough
which
goods
and services aremarketed and the
natureof thef orces thathave
brought
2
Some
aspects
of this
problem
wereconsidered in an
earlier article
by
oneof the
present
authors: Reavis
Cox,
"Non-Price
Competition and theMeasurementof
Prices," JOURNAL
OF
MARKETING, Vol. X, No.
4, April,
1946,
pp.
370-383.
the
existing
distributive
pattern
into
existence.
(3) Temporal Aspects of Marketing.-
Economic
theory
has sometimes evaded
problems
raised
by
time
through analyz-
ing
instantaneous
relationships
instead
of
utilizingperiod analysis.
This
proced-
urein ef f ectreduces the
economy
to a
timeless universein which other
prob-
lems becomemoreamenableto
analysis.
A marketbecomes an
organization
exist-
ing
in f ull
maturity
ata
given
instantof
time,
rather than an
organism growing
and
changingthrough
time. Pricebe-
comes a unitof behavior taken ata
par-
ticular instantand
resulting
f rom the
interplay
of f orces thatworkthemselves
out
instantaneously,
rather than a struc-
tureor
pattern extending
over time.
Consumption
becomes an instantaneous
process
rather than onethat
requires
appreciableperiods
of time.
Under somecircumstances thesedis-
tortions of f actdo no harm and
may
be
very helpf ul;
but
they
also lead to er-
roneous results when theeconomistf or-
gets
to
drop
his
rigid assumptions
as he
works with
problems
f or which the
pas-
sage
of timeis
critically important,
such
as the
negotiation
of
transactions,
trad-
ing
in
f utures,
and the
consumption
of
consumers' durables.
Unf ortunately, many marketingpeo-
ple
havethemselves
accepted
uncriti-
cally
conclusions
restingupon
such mis-
leadingassumptions. Only
now are
they
coming
to realizethattheories built
upon
this kind of f oundation f ail to conf orm to
what
they
know
concerning
thef acts of
pricestructures and
pricepolicies,
of
commodity exchanges,
and of theuseof
consumer creditto f inancethe
purchase
of durables. Itis clear thatnew
concepts
and new
analyses
based on new and
morerealistic
assumptions
are
required
if thenatureand
signif icance
of market
phenomena
involving
the
passage
of
140 THE OURNAL OF MARKETING
TH 'YOURNAL- OF MAKEIG 4
appreciableperiods
areto be
explored
thoroughly.
(4) EconomicEntities.-Forpurposes
of
economic
analysis
itis conventional to
workwith entities thatarenot
always
readily
observableor measurablein the
f lesh.
They
are
arbitrarily
assumed to
existas identif iableunits thatmakede-
cisions and
engage
in economic behavior.
They consequently
are
extremely
im-
portant
in
analyses
of the
ways
in which
economic decisions arereached. The
f irm,
the
market,
and the
economy
are
excellentillustrations.
Exposure
to
day-to-day problems
and
processes
in
marketing
has
suggested
to
somestudents thatthereare
purposes
f or which other entities
may
bemore
meaningf ul.
Thus in
working
with the
problems
raised
by marketing
f unctions
and thecosts of
perf ormingthem, per-
haps
the
marketing
channel is a more
meaningf ul concept
than
any
of these
others.
Again,
the
dispersion
market
may
be
singled
outf or
meaningf ul analyses.
Yet
again, marketing
men know thatf or
some
purpose
themost
meaningf ul
anal-
ysis emerges when, contrary
to themost
usual custom
amongeconomists,
em-
phasis
is
putupon cooperative
rather
than
upon competitive
behavior. Eco-
nomics as a
pattern
of
mutually
inter-
acting
and
supporting
activities con-
sciously
directed toward
accomplishing
a
common, over-all
task,
is a
concept
as
valid as theonethat
emphasizes rivalry
and
competition
in ef f orts to
gain
indi-
vidual
advantage.
For an
understanding
of
marketing
as a social
instrument,
it
may
betheessential
concept.
Despite
the
need, marketing
men have
madelittle
progress
toward
settingup
new f ruitf ul
concepts
of economic en-
tities derived f rom their
experiences
of
economic
activity
or toward
working
out
theoretical f ormulations based
upon
such
concepts.
In
particular, they
havedone
littletoward
working
outa
theory
of
cooperation
in thebroad
sense, although
they
have
given
much attention to f or-
mally organized enterprises
thatdescribe
themselves as
cooperatives
rather than
as
competitive
businesses.
(5)
Limitations
upon
theAlternatives
Open
to Economic Entities.-Much of the
prevailing
economic
theory
and
many
of
the
public policies
based
upon
it
proceed
upon
the
assumption
thatbusiness man-
agement
and the
management
of con-
sumption
both
operateby making
de-
cisions intended to maximizeresults
under a continuous f unction. Littleor
no
weight
is
given
to thef actthatde-
cisions are
really
discontinuous
(made
in
"lumps"
or
"bundles,"
as it
were)
and
thatreal choices mustbemadef rom
specif ic
alternatives of
quite
limited
number and
scope. Marketing
men know
these
f acts, yetthey
havedone
very
littletoward
settingup
alternativef ormu-
lations based
upon
what
they
know
concerning
thelimitations within which
managers
and consumers
operate.
(6)
Attitudes and Motivations
of Buyers
and
Sellers.-Every theory
of
manage-
mentas well as
every theory
of economic
behavior mustrest
upon
some
concept
of
human motivations and attitudes. The
concepts, implicit
or
explicit,
thatunder-
liemuch of economic
theory, clearly
f all
f ar shortof
conf orming
to thef acts of
human behavior.
Although
oneturns
f irstto
psychologists
f or
correctives,
students of
marketing
themselves have
a better
opportunity
than
anyone
elseto
observehuman
beings
in action as
buyers
and sellers. With theaid of
psychologists,
sociologists
and
statisticians, they
are
developingincreasingly
ef f ective
ways
to
observeand measure.
They
cannot
expect
to
reap
thef ull harvestof their
ef f orts,
however,
until
they
haveworked out
more
meaningf ul concepts, problems,
hypotheses and, eventually,
theories into
141
THE 7OURNAL OF MARKETING
142 THE JOURNAL OF
MARKETING~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
which
they
can f ittheir stores of f act
concerning
what
people
do.
(7)
The
Development of
Market
Organ-
ization.-Characteristic of much eco-
nomic
analysis
is the
underlyingassump-
tion thatthe
complex
of human be-
havior
required
to set
up, operate
and
continuously
remodel a
going
markethas
already
doneits work. The
going
market
simply
exists. Little
thought(perhaps
none)
is
given
to thef actthatthis as-
sumption
is nottenable-thatsomeone
has to exert
great
ef f ort
continuously
if
thereis to betheintricate
organization
required
to inf orm
potential buyers
and
sellers,
to
bring
them
together
in the
actual
negotiation
of a
transaction,
and
to makeit
possible
f or them to
carry
out
all transactions
negotiated.
Much of thecriticism of
marketing
as
wastef ul stems
f undamentally
f rom tak-
ing
this
assumption
as a statementof
observed f act. Itis self -evidentthatif we
assumean ef f ectivemarket
organization
to bein existenceand
operating, any
f urther ef f ortto
organize
and
operate
it
is
by
def inition
unnecessary.
Students of
marketing
need to workouta
theory
built
upon
the
assumption
thatthede-
velopment,
continuous
adjustment,
im-
provement,
and
steady operation
of the
machinery
of
marketing
is an economic
f unction as real and as
important
as
any
of themoref amiliar economic f unctions
thatcan be
perf ormed only
when the
market
organization
as weknow
it,
or
some
acceptable
substitutef or
it,
has
been devised and set
up
and is
kept
in
operation.
IV. SOURCES FOR A THEORY
OF MARKETING3
Itwould bea mistaketo assumethat
theinterestin
marketingtheory springs
8
Formal ref erences to thesources cited in this sec-
tion will bef ound in the
bibliography
attheend of the
article.
solely
f rom a
growing
realization that
the
study
of
marketing
mustremain
f ragmentary, superf icial
and inaccurate
in theabsenceof valid and
prof ound
theoretical f ormulations.
Equally impor-
tant, perhaps,
is the
dawning
of a real-
ization thathereand therein theliter-
atureof several intellectual
disciplines
are
appearing
theelements f rom which
an
adequatetheory
of
marketing
will be
constructed.
Many
of theseelements are
littlemorethan
vague
ideas and
sug-
gestions. Only
thebareststarthas been
madetoward
ref ining
them into
really
meaningf ul concepts
and
procedures
thatwill serveas
guides
to
hypothesis
making
and f act
gathering. They
are
nevertheless numerous
enough
and
sug-
gestiveenough
to
support
a belief thata
theory
of
marketing
is
becoming
f easible
as well as desirable. The
appearance
of
f easibility
has
played
a
part
in
arousing
interestno less
important
than that
played by
therealization of need.
The
accumulating
elements f or at
leasta
rudimentary theory
of
marketing
arescattered
throughout
theliterature
of thesocial sciences.
Many
of them are
isolated
ideas,
of ten littlemorethan
f lashes of
inspiration
to bef ound in
longer
discussions of
entirely
dif f erent
matters. Someof them areindirect
sug-
gestions concerningconcepts
and meth-
odology
thatcan bederived f rom the
ef f orts of workers in economic f ields
other than
marketing.
Someexist
only
in
the
unpublished
and
partially
f ormulated
notes of scholars who haveshared their
ideas with others in talks bef oretechni-
cal
meetings,
discussions bef ore
classes,
or
private
conversations and
correspond-
ence.
Under such
circumstances itis notto
be
expected
that
anyone
can
present
a de-
f initive
bibliography
of
possible
sources
f or a
theory
of
marketing.
All that
will be
attempted
hereis to listsomeof
THE
JOURNAL
OF MARKETING 142
THE --- 'YQRNA OF MAKEIN 143
theideas the
present
writers have
picked
up
in their own
cogitations
and investi-
gations.
Enriched
by
the
analogous
dis-
coveries of
others, they
should
provide
inspiration,
stimulation and cross-f erti-
lization of
concept
and
procedure.
Outof
thesein duecoursewill comea
compre-
hensiveand valid
theory
of
marketing.
(I)
Contributions
f rom
Economic Theo-
ry.-An
obvious
possible
sourcef or con-
tributions to a
meaningf ul theory
of
marketing
is
general
economic
theory
it-
self . Sincea
theory
of
marketing
mustbe
in
part
a revision and correction of eco-
nomic
theory,
itwould
perhaps
bef air to
say
thatthe
principal
contribution eco-
nomic theorists can maketo its
develop-
mentis to workouteconomic theories
thatstimulatea search
by specialized
students of
marketing
f or
something
that
explains
theknown f acts more
f ully.
In
so f ar as economic theorists workout
doctrines thatmeettheneeds and con-
f orm to the
experience
of
marketing
specialists, they will,
of
course,
render
the
development
of a
specialized theory
of
marketingunnecessary.
In
practice, startingpoints
f or a
theory
of
marketingmay
bef ound in thework
of theorists who have
developed concepts
thatare
readily adaptable
to this f ield.
Someof theseareideas
accepted by
the
greatbody
of orthodox
theorists;
others
represent
of f shoots thathaveachieved
only
limited
acceptance.
Institutional
economics,
f or
example,
provides marketing
theorists with a
par-
ticularly
usef ul setof
concepts
and f or-
mulations. As weshall see
shortly,
oneof
themost
promisingpossibleapproaches
to a
theory
of
marketing
is
through
the
study
of whatweshall call
group
be-
haviorism. The
sociologist's concept
of
institutions as
patterns
or
conf igurations
of
group
behavior
provides
thebasic
approach
thathas been
applied by
the
institutionalists
(with
only
limited suc-
cess so
f ar,
itmustbe
admitted)
to the
study
of economic
problems.
Marketing
men,
much of whoseworkconsists of
seeking
out
general patterns
of
group
be-
havior,
should f ind this
approach par-
ticularly
f ruitf ul.
Itshould beremembered thatmarket-
ing
men call oneof their traditional
approaches
to the
study
of
marketing
the
institutional
approach.
As used
by
most
marketing
men
(therecently published
text
by
Edward A.
Duddy
and David A.
Revzan
being
a
conspicuous exception),
theterm has been restricted to ef f orts to
describewhat
goes
on in
marketingby
classif ying, describing
and
analyzing
the
operations
of thetwo million or so indi-
vidual establishments that
participate
in
marketing.
This
approach
is notinsti-
tutional in the
sociologist's
sense. Itis
nevertheless
adaptable
to a moref unda-
mental and
f ar-reachingapproach
that
would treat
retailers,
wholesalers and
other entities activein
marketing
as in-
stitutions in thetrue
sociological usage
of theterm. In this
view,
the
agencies
of
marketing
would become
patterns
of hu-
man behavior and communication clus-
tered aboutsome
physical f acility,
such as
a storeor
warehouse,
thatcan beidenti-
f ied and located f or
counting
and meas-
urement.
Similarly
theeconomic entities
discussed abovecould beviewed as
clusters or
patterns
of
group
behavior.
Individual economists of theinsti-
tutional school also of f er
specif ic
f ruitf ul
ideas f or the
development
of
marketing
theory.
Thus
John
R. Commons
provides
thebasic
inspiration
f or
dividing
trans-
actions into routineand
f ully negotiated
ones.
Upon
this idea can bebuilta mean-
ingf ul analysis
of
changes
in the
ways
buyers
and sellers do business and of the
signif icances
of these
changes
f or costs of
marketing.
Von Neumann and
Morgenstern
have
taken the
f ully negotiated
transaction as
THE 3OURNAL OF MAtRKETING
143
144 THE 7OURNAL OF MARKETING
their
point
of
departure
in a bookthat
brings
a new mathematical
approach
to
the
analysis
of marketbehavior. This
may
turn outto bethe
genuine
revolu-
tion in economic
theory
which has been
presaged by
such diverse
developments
as
Keynes' challenge
to
Says'
Law of
Markets and the
recasting
of
competi-
tive
theory by
Chamberlin and others.
Starting
f rom an exhaustive
analysis
of
the
negotiated
transaction
they
of f er
hope
of a f resh attackon such
problems
as
ef f iciency
in distribution and
monop-
olistic restriction.
Clark's
pioneer
workon overhead
costs
provided
a sourcef rom which stems
directly
or
indirectly,
much of thef ruit-
f ul ef f ortof
marketing
men to workout
def initions of costand of therelations be-
tween costand
price
f rom which in time
will almost
certainly
come
signif icant
contributions to the
theory
of
marketing.
Marketing
is of
necessity
involved
with
competition
and
price.
Theref ore
thecoreof
marketingtheory might
well
bemodern
pricetheory
with its stress on
dif f erent
types
of
competitive
situations.
Theworkof E. H.
Chamberlin, Joan
Robinson,
RobertTrif f in as well as such
men as Bain and others in
analyses
of
non-perf ectcompetition,
of f ers an
espe-
cially
vital
challenge
to
marketing
theo-
rists. M
arketing
men will
certainly
f ollow
their lead in
questioning
the
validity
as
statements of f actof the
assumptions
underlying
much traditional economic
theory.
Atthesame
time, marketing
men
have
every opportunity
to advance
monopolistic competition theory
in
pro-
viding
alternative
assumptions
and
hy-
potheses
drawn f rom
experience
in the
market.
Certainly
thelastword has notbeen
said on
product
dif f erentiation as a f ac-
tor in whatTrif lin calls
heterogeneous
competition-a term, incidentally,
which
well
mightreplace"monopolistic
com-
petition"
as
being
more
descriptive
and
notso
weighted
with
objectionable
con-
notations. Economic discussions tend to
assumethat
product
dif f erentiation al-
ways represents
a
departure
f rom uni-
f ormity
butthereverse
may
betruewith
respect
to units
produced by
thef irm
which dif f erentiates.
Suppose
thereis a
f ield in which each
producer
is
making
a
greatmany
varieties of thesamearticle
in accordancewith thediverse
specif ica-
tions demanded
by purchasers.
Then one
enterprising
f irm has an
opportunty
to
steal a march on
competition by
manu-
f acturingonly
identical units.
By adopt-
ing
a standard f ormula within its own
business it
may
achievesubstantial ad-
vantages
in mass
production
economies
and be
obliged
to use
only
a
part
of the
savings
in sales and
advertisingexpenses
to attractto itself the
buyers
who are
willing
to
accept
its standardized
prod-
uct.
More
broadly
it
may
besaid that
dif f erentiation is a basic f unction of the
marketwhich is carried out
primarily
through
thechannels of distribution and
which is
intimately
related to the
prob-
lem of
ef f iciency
in
marketing.
Chamber-
lin
recognizes
timeand
placeutility
and
all
specialized
services as
aspects
of
prod-
uctdif f erentiation butdoes nottreatthe
subjectexhaustively.
For
marketing
theory
a crucial
problem
is the
point
in
thef low atwhich dif f erentiation does or
should take
place.
As a
general principle
itseems clear thatitshould beavoided
as
long
as
possible
to maximizethe
pro-
portion
of thedistribution
job
which can
enjoy
theeconomies of minimum dif f er-
entiation.
Therelation of sales costto
competi-
tion has been touched
upon by many
writers butremains an item of unf inished
business f or
marketingtheory.
The
gen-
eral
assumption appears
to bethatthe
ef f ectof
competition
in
imperf ect
mar-
THE
JO
URNAL OF MARKETING 144
THE JOURNAL OF MARKETING
145
kets is to raisesales costs. This
assump-
tion needs to betested
against
an
analy-
sis which starts f rom the
negotiated
sale
transaction as thenorm and
recognizes
thatthere
may
be
many ways
of achiev-
ing
therelative
economy
of routinesales
transactions.
Advertisingmay help
to
perf orm
f or oneclass of
products
the
simplif ication
of transactions achieved
through commodity exchanges
in an-
other. Itis not
likely
thatdistribution
can ever achievetheeconomies which
arisef rom theuseof
power machinery
in
production.
Itis well to
remember,
how-
ever,
that
specialization
and routiniza-
tion
provide
the
original
basis f or
improv-
ingef f iciency
in both
production
and
distribution.
Oneof themost
prof ound questions
with
respect
to the
heterogeneous
com-
petition
which
prevails
in our
economy
today
is whether wecan
develop
a
theory
of
competition
which has
any
real rele-
vancef or
public policy
on such matters as
the
regulation
of
marketingpolicy.
The
apparentwillingness
of
many
inf luential
economists to throw over thebenef its of
mass
production
in order to achievea
closer
approach
to atomistic
competition
is
surely
unrealistic.
FollowingJ.
M.
Clarkand Robert
Trif f in,
a radical re-
vision of
competitivetheory may
revolve
around overhead costs and dif f erentiated
market
position
in a
heterogeneous
econ-
omy. Empirical
studies of
competition
indicatethatthesetwo f actors can
pro-
videthebasis f or
dynamic equilibrium.
Thedirection f or advancewhich is in-
dicated hereis an
analysis
of the
process
of
pricenegotiation
and theconditions
f or a balanceof economic f orces achieved
through bargaining. Ordinarily
thereare
limits observed
by
either sideand
prin-
ciples by
which their
bargaining
activ-
ities are
guided
which
may
resultin a
long-run
outcomewith
respect
to
prices
which is nottoo dif f erentf rom the
long-
run outcomeunder the
supposition
of
purecompetition.
In a mass
production
economy
thecentral consideration in
negotiation may generally
be
expected
to
betheendeavor to balanceaccess to mar-
kets
through
diversif ied channels
against
theneed f or
enough
volumeto reach the
breakingpoint
in
production
costs.
The
development
of theso-called
macroeconomics in recent
years largely
under theinf luenceof
Keynes
has con-
centrated theattention of economists on
national
aggregates
such as total con-
sumer
income,
thelevel of
employment,
consumer
expenditures,
and
capital
f or-
mation. Theresults which
may
be
hoped
f or in morereliableestimates and
pre-
dictions of these
aggregates
have
great
practical signif icance
f or
marketing
re-
search,
which is
quitegenerally
con-
cerned with
evaluating
theoutlookf or
individual concerns or
products.
The
theoretical
signif icance
of
Keynes
f or
marketing
lies in other
directions,
as f or
example
in
underscoring
the
importance
of market
organization by advancing
the
thesis thattheautomatic
f unctioning
of
themarketmechanism cannotbetaken
f or
granted.
Worksuch as that
exemplif ied
in Ber-
til Ohlin's
analysis
of
inter-regional
trade
has
already provided
the
conceptual
basis f or onecoursein the
theory
of mar-
keting.4 Ithas also
provided
f oundations
4
This is a coursein the
theory
of domestic commerce
organized by
E. T. Grether atthe
University
of Cali-
f ornia. So f ar as the
present
writers havebeen ableto
discover, only
threecourses are
currently given
in the
colleges
of the
country
that
specif ically
undertakea
systematic presentation
of a
theory
of
marketing.
In
addition to Dean Grether's
course,
thereis one
given
by
E. D.
McGarry
atthe
University
of Buf f alo that
builds
upon
an
analysis
of thef unctions of
marketing.
The
third, given by
Reavis Cox atthe
University
of
Pennsylvania,
is builtaround
analyses
of the
meaning
and measurementof location in and f low
through
dis-
tributive
space
and
time, problems
of human
behavior,
patterns
of social
communication, prices
and
price
structure,
and
problems
of
ef f iciency,
wasteand
pro-
ductivity.
THE O
URNAL
OF MAtRKETING 145
1 4TE JUNLO AKTN
f or more
meaningf ul analyses
than have
been
widely attempted
as
yet
of theeco-
nomics of
tradingareas,
economic re-
gions
within a national
economy,
and the
various sections of a
metropolitan
com-
munity. Beginnings
havebeen madeto-
ward thesesorts of
analyses;
but
they
of f er f ruitf ul
opportunities
f or more
pen-
etrating
studies than have
yet
been made.
(2) Contributionsf rom Systematic
Stud-
ies
of Group
Behavior.-A second
possible
sourcef or contributions to the
evolving
theory
of
marketing
will bef ound in
studies of
group
behavior made
by
social
scientists in f ields other than
economics,
and
notably
in theworkof
anthropol-
ogists, sociologists
and social
psychol-
ogists. GeorgeLundberg's application
to
marketing
in his Parlin lectureof his con-
cepts
of measurable
patterns
and clusters
of
communication,
is an
example
of what
can bedonewith ideas borrowed
directly
f rom
sociology.
Itof f ers a
promising
de-
viceto beused in
analyzing
theeconomic
signif icance
of such entities as
cities,
towns, tradingcenters, trading
areas and
individual retailers with their customers
and their sources of
supply;
of advertis-
ing
media and those
they reach;
and of
themultitudeof other
patterns
of com-
munication
through
which human wants
areconverted into economic
demand,
in-
f ormation is distributed
among
sellers
and
buyers,
and transactions are
negoti-
ated and carried into ef f ect.
Kenneth
Bouldingspeculates
in a re-
centarticleon thelimitations of the
prin-
ciple
of maximization of returns as the
f oundation of the
theory
of theindivid-
ual business
enterprise.
He
suggests
that
the
principle
of
organizational preserva-
tion
may
turn outto bemoref ruitf ul. One
of theauthors of this articlehas
pointed
outthat
organizations
actas if
they
had
a will to surviveand thatthis drivearises
f rom theindividual's
struggle
f or socio-
economic status.5
Amongpsychologists,
the
topological
concepts developed by
thelateKurt
Lewin and
expounded
in somewhatsim-
pler
f orm
by
his f ormer studentRobert
W.
Leeper,
of f er some
promise
of
setting
up procedures
that
may
lead to a more
ef f ective
understanding
of human moti-
vation than has thus f ar been achieved.
In thef ield of industrial
relations,
Elton
Mayo
atHarvard and E. W. Bakkeat
Yalehave
developed promisingconcepts
and
procedures
f or
inquiries
into the
f actors thatdeterminehow human be-
ings
behavein therelations of
employer
to
employee
and in the
development
of
tradeunions. Such
concepts
and
proce-
dures
give
someevidenceof
beingap-
plicable
to
problems
of
marketing
with
good
ef f ect.
Students of
public opinion
and con-
sumer
attitudes, among
whom
Hadley
Cantril
may
be
mentioned,
are
virtually
within thef ield of
marketing;
but
they
havedrawn
heavily upon
other disci-
plines
in their work.
(3)
Contributions
f rom Ecological
Stud-
ies-Research
by
a wide
variety
of stu-
dents into
problems
of human
geography,
population,
traf f ic and
city planning
has
of f ered
many opportunities
f or
enriching
the
theory
of
marketing.
R. M.
Haig's
early essay
on theeconomic f unctions of
the
metropolis
and Harold
Mayer's
clas-
sif ication and
analysis
of the
patterns
of
growth
exhibited
by secondary shopping
centers in
Chicago,
are
examples
of use-
f ul
analyses
derived f rom theworkof
city
planners.
W.
J. Reilly's
law of retail
gravitation
probably
f its bestinto the
ecological
classif ication, although
itcould also be
placed
in thenextsection
among
theex-
amples
of workdonein
marketing
re-
search thatis
leading
to a moref unda-
5
Wroe
Alderson,
"Conditions For a Balanced World
Economy,"
World
Economics,
Vol.
II,
No.
7, October,
1944, PP. 3-25,
THE
YOURNAL
OF MARKETING
146
THE 7OR FMAKTN 4
mental
understanding
of thenatureand
f unction of
marketing. Longneglected,
Reilly's
law has
again begun
to attract
notice. Af ter some
revisions,
ithas
pro-
vided thebasic
procedure
used
by
Paul
D. Converseto determinethedirections
and distances
peoplego
to
shop
f or cer-
tain
types
of
goods
in Illinois. Still f ur-
ther
revised,
ithas
provided
a
system
worked outin detail
by
theCurtis Pub-
lishingCompany
f or
dividing
theentire
country
into
trading
areas f or
shopping
goods. Although
theimmediate
appli-
cation has thus madebeen to the
prob-
lems f aced
by
individual merchants and
individual communities in
building
their
trade,
this law as revised
provides
one
startingpoint
f or a
theory
of therelation-
ships
of individual retailers or clusters
and their customers.
Even more
signif icant
havebeen the
ef f orts of
John Q.
Stewartto
apply
to the
distribution of the
population,
and to the
inf luences individual
people
and clusters
of
people
exert
upon
each other ata dis-
tance,
concepts
much likethosehehas
used in his workas a
physicist
and astron-
omer. His
method,
which hehas sum-
med
up
under theterm social
physics,
may
well lead to theclearestunderstand-
ingyet
attained and themost
precise
measurementthus f ar madeof thef orces
thatdeterminehow
people
assemble
themselves into markets and the
ways
in
which
they
exertinf luence
upon
each
other. It
may
thus
provide
a
procedure
f or
reducing
to
quantitative
measure-
mentthe
concept
of
patterns
of social
communication or inf luencedevised
by
the
sociologists.
(4)
Contributions in
Marketing
Liter-
ature
Itself .-Tentativebeginnings
to-
ward a
meaningf ul theory
of
marketing
may
also bef ound scattered
through
the
literatureof
marketing
itself . Itis
impos-
sibleto makea
completelisting
hereof
the
many signif icantcontributions;
buta
f ew names
may
bementioned so as to in-
dicatethenatureof these
beginnings:
Melvin T.
Copeland's early
workin
theclassif ication of commodities on the
basis of
shopping
methods used
by
the
consumers who
acquire
them.
Theworkdonein
def ining
and describ-
ing
thef unctions of
marketingby
such
men as A. W.
Shaw,
Paul T.
Cherington,
Fred E. Clark
and,
more
recently,
E. D.
McGarry.
E. T. Grether's
use,
noted
above,
of
the
concept
of
interregional
tradeas a
f rame
upon
which to build a
theory
of
marketing,
and his workwith
price
dis-
crimination and
price
structures.
Theef f ort
by
Charles F.
Phillips,
since
widely copied,
to worktheideas and
principles
of value
developed by
neoclas-
sical and
monopolistic-competition
econ-
omists into the
body
of
marketingprin-
ciples.
RobertW. Bartels'
attempt
to cull out
of theliteratureof
marketing
all the
principles
or theories itcontains.
Ralph
W.
Breyer's pioneer
ef f ortto
struggle
with the
problems
of
space
and
timein
marketing,
with the
concept
of
marketing
as a social
institution,
and
with theinf luenceof
changes
in costs im-
posed
atonelevel of thechannel
upon
costs incurred atother levels.
Theworkdone
by John Paver,
Victor
H.
Pelz,
and others in
using
traf f ic f lows
and
pedestrian
movements as indicators
of thestructureof markets and
trading
areas.
Ralph Cassady's analyses
of
price
dis-
crimination and its
legal signif icance,
and theworkdone
by Cassady
and others
with
problems
of decentralization in the
retail tradeof
large
cities.
Theworkof Roland S. Vaile
and,
more
recently,
Neil H. Borden in the
study
of
theeconomic ef f ects of
advertising.
This
is
supplemented by
William B. Ricketts'
workwith
procedures
f or
evaluating
147
THE 7OURN'AL OF MAtRKETING
148
thebusiness ef f ects of
advertising.
Many
other
examples
could be
given;
butthesewill suf f icef or
presentpur-
poses. They
makeitclear thatstudents
who undertaketo build a
systematic
theory
of
marketing
will f ind stones at
hand f or the
purpose.
Thestones mustbe
dug
outof the
existingliterature,
re-
shaped,
and
supplemented by many
oth-
ers thatremain to bediscovered.
They
nevertheless
provide
material f or a start.
V. A POSSIBLE APPROACH TOAN
INTEGRATED THEORY OF
MARKETING
Any comprehensiveapproach
to the
development
of a
marketingtheory
would need to meetseveral tests:
(I)
Itshould
givepromise
of
serving
the
variety
of needs thathave
created thecurrentinterestin
marketingtheory.
(2)
Itshould beableto draw in a com-
prehensiveway upon
thestart-
ingpoints
f or
theory already
avail-
ablein the
literature,
such as those
listed above.
(3)
Itshould
provide
a consistent
theoretical
perspective
f or the
study
of all the
major
classes of
signif icant
entities in
marketing.
Such a
viewpoint
would
appear
to be
availablein what
may
becalled
group
behaviorism as ithas been
developing
in
thesocial sciences. This view dif f ers f rom
thenarrower useof theterm behavior-
ism
by
Pavlov and Watson in thatit
gives
a
sociological
rather than a
physio-
logical emphasis
to the
analysis.
The
basic
concept
of
group
behaviorism is the
organized
behavior
system.
Marketingtheory may
besaid to con-
sistof
making
clear whatwemean
by
be-
havior,
whatwemean
by system,
and
whatwemean
by organization,
all as
applied
to
marketing. Application
to
marketingimplies
that
principles per-
taining
to thesebasic
concepts
should be
given specif ic
f orm and contentin re-
lation to all of the
types
of
organized
be-
havior
systems
thatare
signif icantly
in-
volved in the
marketingprocess.
These
types
of behavior
system include,
as we
have
seen,
thef irms
engaged
in
buying
or
selling,
the
f amily
as an
earning
and con-
sumingunit,
thelocal
dispersion market,
thechannel of
distribution,
the
industry
supplying
a
phase
of consumer or indus-
trial
need,
and theeconomic
system
as a
whole.
Group
behaviorism dif f ers f rom in-
stitutionalism in thatitis
basically
con-
cerned with theconcreteentities thatin-
teractwithin a behavior
system.
Itdif f ers
f rom the
approach
to
systems
thathas
generally
been f ollowed in mathematical
economics in thatittakes accountof the
patterns
of
group
behavior
developed
within
specif ic systems
as
qualif ying
their
operation. Thus,
whileit
may
make
useof
equilibrium concepts,
itdoes not
depend primarily
on
analogies
drawn
f rom the
equilibrium systems
discussed
in
physics.
Group
behaviorism has thef urther dis-
tinction thatit
emphasizes
those
aspects
of individual behavior thattend to
per-
petuateorganized
behavior
systems
and
thus to render them atleastsemicon-
servativein thetechnical sense. Eco-
nomic
theory
tends to assumethatthe
systems
under consideration do not
obey
thelaws of conservation.
The
approach through group
behavior-
ism is most
closely
allied to whatis usu-
ally
called thef unctional
approach
in
marketing.
Itwould undertaketo ana-
lyzemarketingprocesses by takingpri-
mary
accountof the
objectives they
are
designed
to serve. Thus itretains the
emphasis
of the
general
economists on
thef orces of
supply
and demand but
must
go
f urther in order to throw
light
on
specif ic problems
and situations in mar-
THE
JOURNAL
OF MARKETING
THE 7OURNAL OF MARKETING
149
keting. Eventually
itshould enablethe
market
analyst
to f ormulatethe
way
in
which marketf orces interactat
any point
in the
system
hehas under
investigation.
Marketing
is still in what
Northrop
described as thef irst
stage
of scientif ic
study,
namely thatof the
gathering
of
vast
compilations
of f act. Itwas Francis
Bacon,
atthe
very beginning
of modern
scientif ic
awakening,
who f eltthatall
problems
would besolved if
only enough
f acts wereaccumulated. Economic
theory
in themain has remained one
step
f urther backin a
prescientif ic
or
metaphysical stage.
Ithas
occupied
it-
self with theef f orttoward
logical
de-
ductions f rom
assumptions.
Neither economics nor
marketing
can
lay
much claim to
being
scientif ic until
they
attain the
stage
of continuous inter-
action between
theory
and research. The
assumptions
on which
theory
rests must
moreand more
spring
f rom caref ul em-
pirical generalization.
Thef acts which
research
gathers
mustmoreand morebe
relevantto
hypotheses adopted
on theo-
retical
grounds.
VI. AN APPLICATION OF GROUP
BEHAVIORISM TOMARKETING
RESEARCH
The
f easibility
and
signif icance
of
ap-
proaching
a
theory
of
marketingthrough
group
behaviorism will betested in an
exploratory survey
of the
productivity
of
marketing
in
Philadelphia beingorgan-
ized this summer
(I948).
For
purposes
of this
survey,
theeconomic
entity
chosen is the
Philadelphia dispersion
market.
Tentatively
this has been def ined
as an
organized
behavior
system
embrac-
ing
a
group
of
people
to whom
goods
and
services f low
through points
of
entry
located within the
Philadelphia
area in
so f ar as
they
do not
originate
within the
area
itself ;
thef ormal
organizations,
agencies
or entities thatdo theworkre-
quired
to ef f ectuatethef low in so f ar as
theconsumers do notdo itf or them-
selves;
and the
patterns
of social commu-
nication, physical
f low and movement
through
time
by
means of which the
workis
arranged
and ef f ectuated. For
purposes
of
quantitativeanalysis,
some
arbitrary departures
f rom thedetails of
this def inition doubtless mustbemade
becauseof limitations
upon
thesorts of
data to behad within limits of f easible
f inancial
expenditure.
Theseconcessions
to
practical
dif f iculties will beheld to the
narrowest
possible
limits.
The
specif ic objective
of the
project
is
to testthe
f easibility
and
signif icance
of
a
long
listof tentativef ormulas devised
by
oneof theauthors. Thesef ormulas are
intended to serveas indicators of
degrees
of
ef f iciency
in
dispersion marketing.
The
project
will also
give
some
indications,
however,
as to whether thebasic theo-
retical
approach being
madeis valid. In
so
doing
it
will,
if it
succeeds,
meetthe
f irstof thetests
suggested
in the
preced-
ing
section f or the
validity
of
approaches
to the
development
of a
marketing
theo-
ry.
That
is,
itwill
help satisf y
thetwo
basic needs
underlying
thedemand f or
such a
theory: First,
itwill
provide
a
way
of
stating
theoretical
problems
in mar-
ketingthat,
in theterms used
by
Nor-
throp, permits
theinitiation of
really
meaningf ul inquiries. Second,
itwill
make
possible
the
drawingup
of
general-
izations thathave
meaning
and
signif i-
cancebecause
they
can be
subjected
to
thetestof relevantf acts.
The
project,
if it
succeeds,
will also
satisf y
thetestof
makingcomprehensive
draf ts
upon
theliteraturef or
approaches,
concepts
and
procedures.
For
example,
thef rameof ref erencethattreats thedis-
persion
marketas theunitf or observa-
tion comes f rom the
developing
reali-
zation
already
noted thatnew
types
of
economic entities mustbevisualized.
THE
70 URNAAL OF MARKE TING 149
1 OUNLOMAKTG
Thetreatmentof
any
such
entity
as an
organized system
of
group
behavior de-
rives f rom the
sociological concept
of in-
stitutions as
patterns
of social commu-
nication.
Emphasis
will be
placed upon
the
cooperative,
as contrasted with the
competitiveaspects
of the
market,
the
objectivebeing
to determinewhatthe
marketas a whole
accomplishes
f or the
people
who
compose
it.
In
settingup
the
f ormulas,
which are
essentially
ratios between units of
input
and units of
output, heavy
reliancehas
been
placed upon
thef unctional
ap-
proach
to a
study
of
marketing.
"Func-
tions" havebeen redef ined f or the
pur-
poses
of
analysis
atthis
particular
level;
butthe
survey
will hold
closely
to thebasic
concept
of
measuring
the
output
or
product
of
marketing
in
units of workdef ined
by
ref erenceto
thef unctions the
dispersion
marketis
supposed
to
perf orm.6
A kind of
equi-
librium
analysis
will beachieved
through
establishing
a
concept
of unitor
opti-
mum
ef f iciency
f or each taskthemar-
ket
perf orms. Against
this unitef f i-
ciency,
taken as a
goal,
theactual
per-
f ormanceof themarketin each
particu-
lar can beevaluated. Instead of
being
looked
upon
as a deviceto introduceim-
perf ections
into an otherwise
perf ect
market,
thebehavior
system
under anal-
ysis
will betaken as
designed
to reduce
the
degree
of
imperf ection already pres-
ent.
The
specif ic
measures to beused de-
rivein thelast
analysis
f rom thenumer-
ous studies of which a f ew
examples
were
given
aboveunder the
headings
"Eco-
logical
Studies" and
"Marketing
Lit-
6
For a statementof someviews held
by
the
present
writers
concerningways
of
measuringproductivity
in
marketing,
seeReavis
Cox,
"The
Meaning
and Meas-
urementof
Productivity
in
Marketing,"
and Wroe
Alderson,
"A Formula f or
MeasuringProductivity
in
Distribution," JOURNAL
OF
MARKETING,
Vol.
XII, April,
1948, pp.433-448.
eratureItself ." Presentindications are
thatthe
ecological
studies will be
partic-
ularly
usef ul. In order to measuresome
aspects
of ef f ort
expended
and work
done,
reliancecan bestbe
putupon
con-
cepts
of movementor f low
through
some
oneor morevarieties of
space
and time
against
theresistanceof someoneor
morevarieties of obstacle. To usethese
concepts ef f ectively,
clear def initions will
be
required
of distributive
space
and
time,
location or
position,
and f low or
movement. Thedef initions will haveto
beso set
up
thattheterms lend them-
selves to
quantitative
measurement. For
these
purposes,
studies of thesortillus-
trated above
by
ref erenceto
Lundberg,
Paver, Pelz, Reilly,
Converseand Stew-
artwill be
particularly helpf ul.
For the
analysis
of other
aspects
of ef f ort
expend-
ed and work
done,
reliancecan
perhaps
bestbemadeon other sources illustrated
by
Commons'
suggestion
of thecontrast
between
f ully negotiated
and routine
transactions,
various studies of retail
mortality,
and
struggles by many
econ-
omists with
problems
of
price
dif f eren-
tiation and
price
structure.
Thereis
every
likelihood thatthis sort
of
comprehensiveanalysis
of
any entity
such as the
dispersion
marketwill lead to
signif icant
f ormulations of
theory,
as this
term has been def ined
above;
that
is,
this
sortof
study
should
provideclear,
de-
tailed and
specif ic
statements of whatis
meant
by
behavior in
marketing,
what
is meant
by
a
system
or
pattern
of be-
havior,
and whatis meant
by organized
or
group patterns.
Itshould be
partic-
ularly
usef ul in so f ar as it
provides
a
procedure
f or
reducing
thesevarious mat-
ters to
quantitative
measurement.
Furthermore,
thereare
good prospects
thatwhatis worked outin this sortof
survey
will
provide
a theoretical
per-
spectiveapplicable
to the
study
of other
identif iableand
signif icant
entities in
THE
YOURNAL
OF MMARKETING 150
TH URA OF
MREIN 151
marketing.
Thus it
gives promise
of
meeting
thethird test
suggested
above.
Itbids f air to benot
merely
an isolated
empirical study
buta unitin
something
much
larger.
Should it
provesuccessf ul,
itwill contribute
substantially
to creat-
ing
the
general theory
so
earnestly
wanted
by
students of
marketing.
VII. MARKETING THEORY AND
ECONOMIC THEORY
An issue
requiring
themostcaref ul
consideration is whether the
marketing
f ield can
satisf y
its needs f or a
marketing
theory
until ref ormulation of economic
theory
has
progressed
f urther.
Any
mar-
ket
analyst
who sees his roleas thatof
f acilitatingadjustments
of
private
and
public policy
in a world of
change
must
grow impatient
with the
f altering
at-
tempts
of economic theorists to deal with
the
dynamic aspects
of an
enterprise
economy.
Themostacute
marketing
problems
are
precipitated by
thef acts of
technological change.
Themarketan-
alyst
is bound to wonder how theecono-
mists can
expect
to
cope
with
change
so
long
as heis so
generally
inclined to con-
sider
technology
outsidehis
proper
f ield
of interest.
Themarket
analyst
does nothavethe
luxury
of choiceas to whether hewill
adopt
a
dynamic
view. Atthe
very
least
hemusttakeaccountof
technological
change
in
marketing. Progressivechanges
in the
technology
of
distribution,
in the
methods and channels of
marketing,
are
surely signif icant
f or economic
theory.
They
areof theessenceof
any perspec-
tivewhich
might
be
distinguished
as
marketingtheory.
Thus the
marketing
theoristis
obliged
to breaktheecono-
mist's taboo on thediscussion of technol-
ogy
atleastas it
applies
to thetech-
niques
of
marketing.
Thereis another
aspect
of the
dynam-
ics of market
organization
which is f un-
damental f or
marketingtheory
and even-
tually inescapable,
itwould
appear,
f or
economic
theory.
Thatis thef actthatan
organized
behavior
system
is nota neu-
tral f rameworkor container f or theac-
tions and evaluations which take
place
within it. Thatis to
say
thata market
changes day by day through
the
very
f actthat
goods
are
bought
and sold.
Whileevaluation is
takingplace
within a
marketingstructure,
thestructureitself
is
being
rendered weaker or
stronger
and
the
changes
in
organization
which f ollow
will havean
impact
on tomorrow's eval-
uations.
Marketingtheory
will not
pro-
videan
adequateapproach
if it
ignores
this interaction between the
system
and
the
processes
which take
place
within it.
Whether economic
theory
can
dispense
with such considerations is another
question.
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Theideas credited to thevarious au-
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may
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f ollowing
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S.
Bain,
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