Institutional Norms and the Institutionalization of Macromarketing: Historical Insights,the Long Macro View,and Service-Dominant Logic

Insights from Shaw (1912)

Although courses labeled “marketing” were being taught at several universities in the United States in the 20th century’s first decade (Bartels 1962), the new area of marketing did not have its own academic journals. Therefore, early marketing articles were published in economics journals. Arch W. Shaw’s (1912) sixty-two page treatise, “Some Problems in Market Distribution,” published in The Quarterly Journal of Economics, is widely considered to mark the beginning of the marketing discipline’s academic journal literature.

Shaw’s (1912) work is appropriately marked as the beginning of the marketing discipline’s academic journal literature on several grounds. First, it is the earliest journal article cited in Bartels’ (1962, pp. 238-271) highly authoritative, “Bibliography of Marketing Literature” and the only journal article cited in the bibliography of Weld’s (1916) classic book, The Marketing of Farm Products. Second, no earlier academic article is cited in other early marketing books, such as Clark (1922, 1924), Rhoades (1927), and Wright and Landon (1926). Third, no earlier academic article is cited in prominent works on marketing history, such as Converse (1945), Schwartz (1965), McCammon and Little (1965), Sheth, Gardner, and Garrett (1988), Bussiere (2000), and Shaw and Jones (2005).

Therefore, there appears to be no earlier journal article that (1) covered issues across the broad range of topics that we now call “marketing,” (2) was cited in early marketing books, and (3) later influenced marketing research sufficiently to be cited by marketing historians. Because it is the only journal article that satisfies all three criteria, it is considered to be the first academic journal article that was genuinely marketing.

Shaw’s (1912) treatise on “market distribution” took an exceptionally broad, distribution systems view of its topic. The article (1) decried the current economics discipline for its “lack of systematic study of market distribution” (p. 703), (2) argued that distribution “involves a tremendous amount of social waste” (p. 706), (3) diagramed the, now standard, box-and-arrow depiction of the market distribution system (p. 726) that Clark (1922) would later label a “channel of distribution” (Shaw and Jones 2005), (4) used channel diagrams both to trace the “evolution of the middleman” from “remote ages” through the “medieval period” to the “modern period” (p. 726) and to explain the “modern tendency to reduce the number of successive middlemen” (p. 729). It also (5) proposed that the five essential functions performed by channel members are “sharing the risk,” “transporting the goods,” “financing the operations,” “selling the goods,” and “assembling, sorting, and re-shipping” (p. 731).

Furthermore, Shaw’s (1912) remarkably broad article (6) discussed the “abuses in connection with advertising today” (p. 742), (7) pointed out that advertising’s abuses “should not cloud the fact that…the steady and remarkable increase in advertising evidences its efficiency as a selling force” (p. 742), (8) recognized that intra-industry demand is not homogeneous by maintaining that the “market contour…is not a level plain…[but] is composed of differing economic and social strata” that require different products (p. 750), (9) defended firms’ “differentiation of commodities” and “trademarks, brands, and tradenames” as providing consumers with products of higher “quality and service” (p. 719, 735-6). Finally, presaging the marketing concept, it (10) concluded that “the increasing communication of ideas by the producer directly to the consumer [by advertising] is an improvement of great social significance [because] the producer is forced to study the consumer’s wants and adjust his product to them” (p. 735; italics in original).

Over a century ago, Shaw’s (1912) seminal article played a major role in the founding of the marketing discipline along lines that we would now call macromarketing. Furthermore, the functional approach to the study and teaching of marketing, which focused on the essential activities of distribution systems, owes much to Shaw’s (1912) article. In the 1920s, the functional approach provided the structure and focus for most of the early “principles of marketing” textbooks. Today, Shaw’s (1912) article provides several suggested norms for the institutionalization of macromarketing as a field of study within marketing. Specifically, we may infer seven institutional norms from Shaw’s (1912) article.

Rationale-in-brief: Distribution systems, channels of distribution, are important and continue to be neglected by neoclassical economics and other disciplines.

Rationale-in-brief: The nature and benefits of distribution systems to society are not widely recognized.

Rationale-in-brief: There will always be, in Shaw’s (1912) terms, “waste” in distribution systems.

Rationale-in-brief: The societal benefits of product differentiation are (1) unrecognized or dismissed by neoclassical economics and (2) unjustified or ignored by modern advocates of product differentiation as an important component of business and marketing strategy.

Rationale-in-brief: The societal benefits of advertising and other forms of promotion continue to be unrecognized or dismissed as nonexistent by neoclassical economics and other disciplines.

Rationale-in-brief: There will always be problems with forms of communications in society that attempt to persuade others to do something.

Rationale-in-brief: The assumption of homogeneous intra-industry demand, a cornerstone of neoclassical economics that is necessary for drawing demand curves, is not just descriptively false, it has pernicious implications for society (Hunt 2000).

The functional approach, a “macro” approach to the study and teaching of marketing, was displaced as the central focus of the marketing discipline by the “micro” managerial approach in the 1950s and 1960s (e.g., Hunt and Goolsby 1988; Hunt, Haas, and Manis 2020; Shaw and Jones 2005; Wilkie and Moore 2003). In the 1970s, a University of Colorado marketing professor organized a conference on marketing from a “societal perspective,” that is, the conference was on the macro dimensions of marketing.

Insights from the First Macromarketing Conference

As discussed in detail in Hunt (2011), the first macromarketing conference (then called a “seminar”) was organized by Charles C. “Chuck” Slater and held August 15-18, 1976, at the University of Colorado in Boulder CO. One week before it started, Chuck called and invited the author to attend the conference because he had just read the recently-published, Journal of Marketing article, “The Nature and Scope of Marketing” (Hunt 1976). Chuck found the article highly pertinent to the conference because it had highlighted the important distinction between micromarketing and macromarketing in a model of marketing that would later come to be called the “three dichotomies model.” Furthermore, he liked the fact that the model viewed macromarketing as important and fully one-half the marketing discipline’s content. I accepted Chuck’s kind invitation and hastily made preparations to attend.

Thirty participants attended the first seminar, and sixteen papers were presented. The proceedings, Distributive Processes from a Societal Perspective, was edited by Chuck Slater and published by Colorado’s Business Research Division. All the sessions contained free-wheeling discussions of a broad range of topics, including macromarketing theory (Bagozzi 1977), Alderson’s theory of market processes (Blair and Uhl 1977), consumerism (Day 1977), economic development (Bartels 1977), and education (Wish 1977).

Furthermore, a spirited discussion took place throughout the entire conference on how to define macromarketing. Much of the discussion focused on the deficiencies of the approach taken in Hunt (1976, p. 20), which had defined macromarketing as being “based on the level of aggregation…usually marketing systems or groups of consumers.” For example, Slater (1977, p. 2) countered Hunt’s (1976) definition by arguing that macromarketing differs from micromarketing on the basis that the former is “from societal perspectives,” while the latter is “from the perspective of the firm.” Other participants also indicated that the “interests of society” should be included in macromarketing’s definition. I agreed with the participants that the definition provided in Hunt (1976) was deficient and that any complete definition of macromarketing must include, in some way, the interests of society.

After the conference, Chuck Slater asked me to write a short paper on how macromarketing should be defined. Based on the attendees’ discussions of the three dichotomies model, I titled the paper “The Three Dichotomies Model of Marketing: An Elaboration of Issues.” Chuck then included it (Hunt 1977) in the proceedings, even though it was not formally presented at the conference. The paper’s conclusion was a tripartite definition of macromarketing: “Macromarketing refers to the study of (1) marketing systems, (2) the impact and consequences of marketing systems on society, and (3) the impact and consequences of society on marketing systems” (Hunt 1977, p. 56).

Just as “marketing” is a significantly broader term than “distribution,” the concept of “marketing system” in Hunt (1977) was meant to be broader than the concept of “distribution system” or “channel of distribution.” Although not specifically defined in Hunt (1977), the concept of marketing system was meant to include the overall, aggregate marketing system of a society. It was also meant to be viewed so that firms, themselves, could be considered to be marketing systems, especially large firms and their impact on society. Furthermore, the institutionalized activities of marketing, such as the practice of advertising and other forms of promotion, would also be considered to be a form of marketing system.

The final wording in Hunt (1977) envisioned “marketing system” to be similar to that of Layton (2009, p. 354), who, three decade later, defined a marketing system as (1) a network of individuals, groups, and/or entities, (2) embedded in a social matrix, (3) linked directly or indirectly through sequential or shared participation in voluntary exchange of value, which (4) jointly creates, assembles, transforms, and makes available, assortments of products, services, experiences, and ideas, that (5) are provided in response to customer demand. Indeed, if anything, the usage in Hunt (1977), as described in the preceding paragraph, was perhaps broader than that of Layton (2009).

In the spring of 1981, Volume 1, Issue 1, of the Journal of Macromarketing appeared, with George Fisk as editor. The early part of the first issue included “What is Macromarketing: A Colloquium (Part 1),” with short articles on the definitions of macromarketing proposed by Hunt (1981), Shawver and Nickels (1981), and White (1981). Although my contribution to the colloquium was a revised version of the paper that had appeared in the proceedings of the 1976 conference (Hunt 1977), the revision kept the same, tripartite definition. Since then, the definition has become widely adopted by those interested in macromarketing. Indeed, over three decades after the 1976 conference, the definition served as the model for the Journal of Macromarketing’s tagline, “Examining the interactions among markets, marketing, and society,” which was adopted by the Journal’s Editorial Policy Board in 2009.

The 1976 conference on macromarketing produced the tripartite definition of macromarketing proposed in Hunt (1977, 1981). Today, it supplements Shaw’s (1912) article and provides three additional, suggested norms for the institutionalization of macromarketing.

Rationale-in-brief: The study of marketing systems was displaced by the “marketing management approach” in the 1950s-1960s as the central focus of the marketing discipline. This displacement resulted in the need for the field of study now called “macromarketing,” which is fully one-half the marketing discipline.

Rationale-in-brief: Though marketing systems impact society both positively and negatively, neoclassical economics and other disciplines focus—often misguidedly—only on the negative consequences.

Rationale-in-brief: Some societal institutions (e.g., those reflecting public policy) promote efficient/effective marketing systems, while others do not.

Insights from the “Four Eras” Historical Analysis

Wilkie and Moore (1999, 2003) draw on the classic works of Cox, Goodman, and Fichlander (1965) and Bartels (1962) as guides for (1) evaluating marketing’s contributions to society, (2) succinctly tracing the history of the marketing discipline, and (3) illuminating current problems in the discipline. Their 1999 article explores the nature of the “aggregate marketing system,” which Fisk (1981, p.4), in the inaugural issue of the Journal of Macromarketing, referred to as one of society’s major “provisioning” systems. The article begins by showing in meticulous detail the myriad of activities that are required for providing a simple breakfast of coffee and pastry for a single consumer, “Tiffany Jones.” These numerous entities and activities need careful articulation because, Wilkie and Moore (1999) argue, they are not obvious to most consumers. Indeed, they must not be obvious to most marketing academics because, otherwise, the Journal of Marketing would not have published the article. (Academic journals do not publish articles whose content is obvious to their primary audience.)

Wilkie and Moore (1999) then discuss the size, scope, and characteristics of the aggregate marketing system and point out the system’s contributions to society. For example, they discuss its contributions to economic development and the quality of life. Furthermore, they point out the benefits that accrue to society from the specific marketing activities of, for example, producing high quality market offerings, using brands/trademarks, deploying salespeople, using advertising/promotion, and developing new products. Moreover, they detail the many criticisms of the aggregate marketing system, for example, that it promotes materialism, negatively affects cultural values, and is manipulative in character.

Wilkie and Moore’s (1999, p. 217) extensive and meticulous analysis concludes by pointing out, “One responsibility of academia is to place a field into proper perspective. We believe the aggregate marketing system should come to occupy a central position in research in the marketing field.” However, they note that doctoral programs in marketing are not equipping new marketing researchers with the knowledge requisite for studying the aggregate marketing system.

Wilkie and Moore’s (2003) follow-up article traces the history of the marketing discipline and argues that the discipline has gone through four eras: (1) Founding the Field (1900-1920), (2) Formalizing the Field (1920-1950), (2) A Paradigm Shift—Marketing, Management, and the Sciences (1950-1980), and (4) The Shift Intensifies—A Fragmentation of the Mainstream (1980-present). Three unfortunate results of the current “fragmentation of the marketing mainstream” are that “(1) communication across the field is breaking down; (2) doctoral education is failing to present sufficient history, scope, and perspective upon which future scholars can build the body of thought about marketing as a field; and (3) cumulative responsiveness to important external challenges is lagging as a result” (Wilkie and Moore 2003, p. 135).

Deploring the fact that doctoral education is failing to transmit the rich history of the marketing discipline to tomorrow’s academic thought-leaders, Wilkie and Moore (2003, p. 142) lament, “Knowledge outside a person’s specialty may first be viewed as noninstrumental, then as nonessential, then as nonimportant, then finally as nonexistent in terms of meriting attention.” Certainly, knowledge of macromarketing, for many in the marketing discipline, has become nonexistent.

The works of Wilkie and Moore (1999, 2003) supplement Shaw (1912) and Hunt (1977, 1981) by providing four additional suggested norms for the institutionalization of macromarketing.

Rationale-in-brief: The aggregate marketing system serves as a “provisioning” system for society (Fisk 1981), and macromarketing has a disciplinary responsibility to place this system “into proper perspective” (Wilkie and Moore 1999, p. 217).

Rationale-in-brief: Other disciplines conventionally highlight only the negative aspects of the aggregate marketing system.

Rationale-in-brief: A discipline that loses its history and lacks coherent, theoretical foundations no longer qualifies as a discipline.

Rationale-in-brief: Marketing education primarily focuses on micro-level issues in marketing management/strategy, quantitative/modeling, and consumer behavior. The macromarketing “half” (Hunt 1976) of the marketing discipline, though important, risks becoming “nonexistent” (Wilkie and Moore 2003).

Insights from Service-Dominant (S-D) Logic

In the late 1990s, Bob Lusch and his colleague, Steve Vargo, began working on a new framework, a new “mindset” (Lusch and Vargo 2014, p. xxiii) for marketing. They labeled this mindset the service-dominant (S-D) logic in their award-winning article, “Evolving to a New Dominant Logic for Marketing” (Vargo and Lusch 2004). Discussions, reviews, commentaries, and symposia on the original article have become so numerous that it has been identified one of the ten most highly cited articles ever published in the Journal of Marketing’s history (Zeithaml et al. 2020).

In three publications, Vargo and Lusch review, summarize, and revise their thinking concerning the essence of the S-D logic mindset (Lusch and Vargo 2014; Vargo and Lusch 2008, 2016). In particular, they (1) revise the wordings (the lexicon) of the foundational premises underlying the S-D logic framework, (2) carefully justify the wording changes, (3) expand the number of premises from the original eight to eleven, (4) identify five premises as having axiom status, and (6) provide a detailed look at the role of institutions in their framework. I suggest that the first two foundational premises, as worded in Vargo and Lusch (2016), have implications for the norms of macromarketing.

As Vargo and Lusch (2004) argue, S-D logic draws extensively on the mid-1800s economist Frederick Bastiat (1860), who argued that services are exchanged for services and that this great economic law, though trivial and commonplace, is the “beginning, the middle and the end of economic science.” Similar to Bastiat’s view, Vargo and Lusch (2016, p. 8) view “service” (note the singular) as the “application of specialized skills and knowledge” and present the updated wording of their first foundational premise:

The reason why FP1 is listed as the first foundational premise is that the rest of S-D logic depends essentially on the truth of FP1. But if service, as Vargo and Lusch (2016, p. 8) define it, is essential to understanding exchange, while at the same time the truth of FP1 is, in Bastiat’ s terms, “trivial” and “commonplace,” then why has this truth gone unrecognized in marketing and neoclassical economics for over a hundred years? Vargo and Lusch (2016, p. 8) answer this question in their second foundational premise:

In short, because the truth of FP1 has been masked from scholars of exchange by the fact that almost all of modern exchange is indirect, a major purpose of the S-D logic framework is to “unmask” it and show the implications of such unmasking.

Drawing on S-D logic, are there major truths with respect to macromarketing that, though perhaps viewed by some as trivial and commonplace, need to be unmasked? The answer is “yes.” First, recall from our discussion of Shaw (1912) that the marketing discipline was founded, in large part, because neoclassical economics was ignoring the important functions of distribution systems. Therefore, the study of the nature of marketing systems, the functions of marketing systems, the contributions of marketing systems to society, and the problems of marketing systems became defining elements of the fledgling marketing discipline in the early part of the 20th century.

Second, recall that the functional approach to the study of marketing, which was the central focus of the study and teaching of marketing for decades, stressed both the societal benefits and problems of marketing systems. Indeed, it is worth noting that the very first sentence of the very first chapter of even the textbook that solidified the marketing management approach to marketing in the early 1960s was a marketing systems question, “Does marketing cost too much?” (McCarthy 1960, p. 1). Also, note that the very last chapter of McCarthy’s (1960, p. 740) seminal book provided a detailed analysis of the first chapter’s question and concluded, “Marketing as an economic institution certainly does not cost too much…It provides a very necessary function in our economy.” Introductory marketing textbooks today provide no similar, macro-analysis of marketing systems and society. Regrettably, they ignore it.

Third, recall that Wilkie and Moore (1999) painstakingly show the myriad of distribution entities and marketing activities that are required to provide a single, simple breakfast to a consumer. It can be argued that the complexity of the aggregate, provisioning marketing system, the magnitude of the number of entities involved, the nature of the entities’ activities, and the taken-for-granted efficiency of the aggregate marketing system should have been, in Bastiat’s words, “trivial” to marketing scholars. Clearly, however, it was not, else the Wilkie and Moore (1999) article, or that section of the article, would not have been published in marketing’s premier journal.

Fourth, again focusing on Wilkie and Moore’s (1999, 2003) work, recall that they point out how knowledge of the aggregate marketing system is being “lost” in the marketing discipline and that doctoral education needs to be revised to expose future thought-leaders to the history and theoretical foundations of marketing. Furthermore, they conclude that “the questions, insights, and discoveries that constitute marketing and society should not be left out of the minds of future marketing thought leaders. It is up to us to get them there and then up to future scholars to retain and build on this base” (Wilkie and Moore 2003, p.142).

The unmasking insight of S-D logic, when combined with the insights from Shaw (1912), other founders of the marketing discipline, and Wilkie and Moore (1999, 2003), suggest that much of the nature of, and benefits accruing from, the aggregate marketing system are masked, not only from the general public, but also from marketing scholars. Therefore, there are macromarketing truths that need unmasking.

The service-dominant logic developed by Vargo and Lusch (2004, 2008, 2016) supplements the works of Shaw (1912), Hunt (1977, 1981), and Wilkie and Moore (1999, 2003) by adding a fifteenth norm. This norm, perhaps, is the most foundational of all.

Rationale-in-brief: The efficient/effective provisioning role of the aggregate marketing system and its contribution to society’s flourishing are so masked that they are (a) taken-for-granted by consumers, (b) unacknowledged or unknown to marketing’s Era IV academics, and (c) continue to be either ignored or misunderstood by neoclassical economics and other disciplines.

Conclusion

Previous macromarketing research has identified six major events and accomplishments that have contributed to the institutionalization of macromarketing: (1) the annual series of macromarketing conferences that were first organized by Charles C. Slater at the University of Colorado in 1976, (2) the promulgation of research projects on macromarketing, (3) the founding of the Journal of Macromarketing in 1981, under the editorship of George Fisk, (4) the establishment of the Macromarketing Society in 2004, with Robert W. Nason serving as its first president, (5) the development of macromarketing teaching materials (e.g., Peterson 2013; Shapiro 2006), and (6) the development of macromarketing courses (Hunt 2012). As pointed out by the “Long Macro View” (Lusch 2017), a deficiency of the institutionalization of macromarketing as an area of study is its lack of well-defined institutional norms to coordinate efficient/effective interactions among macromarketing scholars.

Drawing on insights from (1) the first, truly marketing, academic journal article ever written, that is, Shaw’s (1912) “Some Problems in Market Distribution,” (2) the first macromarketing conference held at the University of Colorado in 1976, which resulted in the Hunt (1977, 1981) articles on defining macromarketing, (3) the “four eras” historical analysis of aggregate marketing systems by Wilkie and Moore (1999, 2003), and (4) the service-dominant (S-D) logic of Vargo and Lusch (2004, 2008, 2016), this article proposes fifteen institutional norms for macromarketing scholars to consider, discuss, and evaluate. The final, fifteenth norm, I argue, may be viewed as the most foundational of all.

Again, I emphasize that the purpose of this article is not to provide a definitive analysis of the macromarketing field’s institutional norms, but to provide a starting point that can stimulate fruitful, informed, illuminating discussion of macromarketing’s institutions and contribute to their further development. That is its purpose; that is the author’s hope.