I’m currently in my 2nd year of an MBA program and I’m a marketing/strategy concentrator. However, my undergraduate areas of study were English and Psychology. So, I’ve never believed in the ‘rational’ view of economics and man. Fortunately, I have chosen a business school where the approach to economics is very behavioral. In fact, two of my classes this semester are Behavioral Finance and Behavioral Economics. So, rest assured, there are plenty out there – even MBAs (or at least the Ph.Ds who teach them)- who are on the same page as you.

As I look for a job post-graduation, I’m pondering the basic question, “What is the future of marketing?” but the question, “Who owns the future of marketing?” is perhaps an even more accurate and helpful question to be asking. As I contemplate a role in marketing vs. consumer insights (marketing research) and consulting vs. corporate, I’m trying to find a) which role most excites me and b) in which role(s) does the future of marketing truly reside. (I will not mention c)a job that pays enough to help me pay off my loans as painlessly as possible).

Perhaps the answer is ‘none of the above’ and it is the cultural anthropologist, hired by industry, who owns the future of marketing. This is, essentially, what corporate roles in marketing reserach or consumer insights do – some of them. You’ve got everything from ethnography groups to quantitative methodologies being used in corporate consumer insights groups. But I digress.

I find it useful to study and understand the history of marketing and to ask seemingly over-simple questions like, “What IS marketing?” to ultimately get at the answer to “What is/Who owns the future of marketing?”. I’m interested in exploring how the answer to the question, “What is Marketing?” has changed over time. This is where the history and evolution of the discipline come in. I believe that understanding the role/goal of marketing and how it has evolved through history will get us to a better understanding of where the future is and who owns (or is currently best poised to own) it.

Having said all that, I’m too busy with my classes in Finance, Strategy, etc. to delve into this topic right now. Almost makes me wish I was in a Ph.D. program where I COULD dive in and figure it out.

Have any of you read any good books/articles relevant to this discussion? Can you recommend any?

Cheers,
Susan

Perhaps its a matter of the lag between the leading edge of research of a discipline and when that reseach finds its way into applications beyond the academy. So, for example, you mention that differentiated-product models have been around since the 1930s. The person marketers usually credit with these models is Kelvin Lancaster, who wrote about them in the 1960s and 1970s. Reading his work, one gets the impression that he faced opposition to his ideas from other economists of the time (ie, the 1960s). As I mention, I’ve faced opposition to these same ideas as late as this decade, with economists telling me that (eg) telecoms service is a commodity.

Models with differentiated products have been around since the 1930s, and empirical methods of hedonic pricing and such have been around since the 1970s. Marketing professors like Hauser and Urban developed quantitative methods for implementing some of these ideas.

As for “rationality”, that plays a number of different roles in different subfields of economics. Game theory (for its own sake) is an almost philosophical inquiry into what rationality means in collective decision processes. Empirical labor economists have little direct recourse to it much of the time. In terms of consumer behavior, rationality usually amounts to nothing more than assuming a stable, complete, and transitive ordering of preferences over options, and supposing that buyers choose the best option based on that ordering. It may be inaccurate, but I don’t think it is an unduly “philosophical” assumption–in fact, many experimentalists claim to have falsified it.

historically speaking marketing had its function in bridging the structural gap between mass-production on the one hand side and human needs for something more than purely rational solutions on the other.

the marketing attempt to close this gap is to build a huge bridge head on the corporate side and to control, to manipulate and to direct the masses.
the dream of manipulative power is an integral part of marketing. it is actually what marketing is about.

today marketing is nothing but an old crutch.
it makes funny noises when you use it and is far, far too complicated. i guess we will just throw it away.

My reason for saying that Marketing starts where the assumptions of Economics end is because I have sat in numerous business strategy meetings with an economist present who has tried to tell the meeting (usually with some insistence) how the world outside behaves, based on assumptions which are demonstrably false to all of us except the economist.

For example, it is a rare corporate economist who does not talk about “commodities”, IME. With the possible exception of some products in financial markets, there are no true commodities in the real world. Even raw materials such as coal have distinct attributes which distinguish one supplier’s product from another (eg, chemical composition, quality, burn-rate, delivery times, propensity of the miners to strike, supplier financing packages, etc), all of which can make a difference to the decisions of a coal-buyer. If a commodity product really does exist, then some marketing manager is not doing his/her job. I have had to say this repeatedly in telecoms firms, where the notion that the core product (telecoms service) is a commodity can have pernicious effects on the company and its fortunes if it takes hold.

My problem is not with economists creating idealized abstractions of reality, such as commodities or unbounded reasoning. My problem is with economists forgetting that their abstraction is not in fact reality; the map is never the territory. Worse is the practice of many economists (at least, until recently) to use the map to tell the territory how it should behave, as in the use of the word “rational”, a term taken and mis-applied from philosophy, to describe one very specific and value-laden type of reasoning (and arguably, not a very sensible form of reasoning at that).

It is possible that my experiences with corporate economists are atypical of them, and that I am therefore wrong in my assessments of mainstream economics and economists. However, the existence of the post-autistic economic movement tells me that my experiences are unfortunately far too common.

This Blog Sits at the: Who owns the future of marketing…

As an economist, I find the notion that marketing steps in where econ ends too restrictive for both subjects. First, there are lots of important topics about demand which are in theory amenable to economic reasoning but with which economists historically have not grappled. The new journal, Quantitative Marketing and Economics seems to be addressing things from this end. (And as a side note, models where the demand of one buyer depends on how many other buyers purchase something have been studied for over 25 years in economics. The work on network externalities in the 1980s, for instance, hinges on just this idea.)

Second, there may be traditional econ topics that could be illuminated better by deploying various insights from marketing. The notion of consideration sets and how they are formed, for example, might have important implications in the study of oligopoly. Anthropological ideas about identity and meaning might be extended from consumption choices to labor choices (e.g. why certain people won’t take certain jobs even if they are pay well and are not unpleasant).

In short, this blog sits at an interesting intersection. I’d hate to think of it as being a hermetically sealed border.