The marketing concept: what marketing is for

Before segmentation, positioning or a single campaign, there is a prior question: what is marketing for? The answer that most of the discipline still works from is called the marketing concept: a business succeeds by understanding what customers need and serving it better than the alternatives, and every function, not only the marketing department, is organised around that.

• Drucker in The Practice of Management (1954), Peter Drucker argued that the purpose of a business is "to create a customer", and that marketing and innovation are its two basic functions¹.
• Levitt in "Marketing Myopia" (Harvard Business Review, 1960), Theodore Levitt showed what happens to companies that define themselves by their product instead of the need it serves³.
• Kotler needs, wants and demands, customer value and satisfaction are the working vocabulary of the marketing concept in the standard textbooks^5, 7.
• Today the American Marketing Association defines marketing through four verbs, creating, communicating, delivering and exchanging value⁸. Communication is one of them, not all of them.

Drucker's claim was simple and, for 1954, radical: a business is defined by the want a customer satisfies when buying its product, so the customer, not the product or the profit, is the starting point. From that he drew the consequence that marketing and innovation are the two basic functions of any enterprise¹. In a 2009 paper in the Journal of the Academy of Marketing Science, Frederick Webster noted that Drucker is generally acknowledged as the father of the modern marketing management concept, even though he denied being an expert on marketing, and that he saw marketing as a responsibility of management as a whole rather than a separate department¹. The journal gave a special issue to his legacy for the discipline that year².

Two practical readings follow:

• Marketing is not a department's activity; it is the company's point of view Pricing, product design, delivery and service all decide whether a customer is created and kept.
• Growth comes from customers, so count them The Ehrenberg-Bass Institute's research programme, decades later, reaches a compatible conclusion from the data: brands grow mainly by acquiring new customers rather than by squeezing more loyalty from existing ones¹².

Levitt's article is famous for its railroad example. The railroads, he argued, did not stop growing because people and freight stopped moving; demand for transport kept rising. They declined because they saw themselves as being in the railroad business rather than the transportation business, and let cars, trucks and aircraft take the customers³. Harvard Business Review republished the article in 2004, and still sells it as a stand-alone reprint³.

The article also draws the line this whole track depends on: selling is preoccupied with the seller's need to convert products into cash, while marketing is preoccupied with the buyer's need and with everything associated with creating, delivering and consuming what satisfies it³.

Levitt has critics. In a 2018 essay, Henry Mintzberg argued that the idea was useful but over-extended: by putting market opportunity ahead of what a company is actually good at, it could encourage firms to define themselves so broadly that they lose depth⁴. The working lesson is to define the business by the need served, and stay within the needs you can genuinely serve.

Philip Kotler and Gary Armstrong's Principles of Marketing, now in its nineteenth edition, opens with a short chain of terms⁵:

• Needs are states of felt deprivation: physical needs such as food and safety, social needs such as belonging, individual needs such as knowledge and self-expression. Marketers do not invent them.
• Wants are the form a need takes, shaped by culture and individual personality.
• Demands are wants backed by buying power.

Companies answer demands with a market offering: some combination of products, services, information or experiences⁵. The chain matters because each link is a different marketing decision, and communications sit at the end of it, not at the start.

Customers do not judge an offering in isolation; they compare what they get with what they give up. Valarie Zeithaml's 1988 Journal of Marketing article proposed a means-end model in which perceived value follows from weighing perceived quality against perceived sacrifice, and showed that price plays two roles: it is a sacrifice, and it is also a cue to quality⁶. Kotler's textbooks define customer-perceived value in the same spirit, as the customer's evaluation of the difference between all the benefits and all the costs of an offering relative to competing offers^5, 7.

Satisfaction depends on how the product's perceived performance compares with the buyer's expectations⁵. That has a direct consequence for communications: messages set expectations. A campaign that promises more than the product delivers can raise the sale today and lower the satisfaction tomorrow, and the cost lands on service, reviews and repeat purchase. The brand platform and the message house exist partly to stop that from happening.

Kotler and Armstrong describe five orientations a company can take to its market: the production concept (make it cheap and widely available), the product concept (make it better), the selling concept (push hard enough and people will buy), the marketing concept (find out what customers need and serve it better than competitors) and the societal marketing concept (do that while also considering the long-term interests of society)⁵. The textbook contrast between the selling and marketing concepts is worth keeping on one page^5, 7:

The selling concept is not wrong about everything: promotion works, and some goods (insurance, for instance) are rarely sought out unprompted. Its weakness is that it treats the product as fixed and the customer as the variable. Note the word in the marketing column: integrated. In Kotler's account the marketing concept already assumes that all the tools work together for the customer, which is where integrated marketing communications begins.

The American Marketing Association's definition reads: "Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."⁸ It was first released in 2007⁹, and the AMA says its definitions are reviewed and reapproved or modified regularly by a panel of five scholars⁸. The AMA also separates the two words people confuse most: advertising, the promotion of a company and its products through paid channels, is one component of marketing¹³.

The Chartered Institute of Marketing's definition, approved in 1976, is shorter: "Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably."¹⁰

Read the AMA's four verbs as a job description. Creating value is the product, communicating it is promotion, delivering it is distribution and exchanging it is price: the four Ps that Jerome McCarthy proposed in 1960, as Kotler recalled in a 2024 essay for the AMA¹¹. That mapping is ours, but the point is the definition's: communication is one part of marketing, and it works only when the other three keep its promises. The marketing mix takes this further.

The marketing concept turns into a handful of habits for anyone planning communications:

• Brief from the customer's need and decision, not from the channel "We need an email programme" is a channel talking. "Lapsed customers do not know the service now covers their area" is a customer talking. See touchpoints and the customer journey.
• Judge work by customer outcomes Delivered, opened and viewed are channel facts; tried, bought, renewed and recommended are customer facts. Objectives and KPIs sets out how to chain the two.
• Promise what the product can keep Satisfaction is performance against expectation⁵, and communications write the expectation.
• Ask Levitt's question of every message Does it describe the need the brand serves, or only the thing it sells³?

Common mistakes:

• Calling promotion "marketing" It narrows the job to one of the four verbs^8, 13.
• "Customer-centric" as a slogan If no decision changed because of what customers said, the company is still running on the selling concept.
• Over-reading Levitt A need defined so broadly that the company cannot serve it is not a strategy⁴.

A Monday exercise for a brand or a product line, done in an hour with the people who own the product, the price and the service:

A worked example (illustrative). A regional bus operator describes itself as "a bus company", and its communications list routes and fares. Run through the check: the need is getting to work and school reliably; the want, for many commuters, is a predictable journey they can plan around; the value equation is time and certainty against cost and the car; the expectation set by its posters is "frequent service"; the gap, in its complaints log, is late-evening reliability. The business definition becomes "we get people where they need to be, on time, affordably". The next campaign is briefed from that, and the first fix is the evening timetable, not the poster.

Then carry the result into the next steps of this track: segmentation, targeting and positioning decides which customers to serve, and the marketing mix decides how. Founders and small teams will find the same logic on the hub for founders and small businesses.

• Webster on Drucker's view of marketing, in the Journal of the Academy of Marketing Science^1, 2.
• Levitt, "Marketing Myopia", Harvard Business Review³, and Mintzberg's critique⁴.
• Kotler and Armstrong, Principles of Marketing⁵, and Kotler and Keller, Marketing Management⁷.
• Zeithaml on price, quality and value⁶.
• The AMA's definition and its history^8, 9, 13, the CIM's definition¹⁰, and Kotler's reflections for the AMA¹¹.
• Ehrenberg-Bass on how brands grow¹².
• In the glossary: value proposition, positioning and IMC.