AMA Proposes New Definition of Marketing

In 2004, the American Marketing Association revised the official definition of “marketing,” which had been unchanged since 1985  (before that, it was on the books, untouched, for 50 years). Now, showing its true embrace of Internet time, the AMA is revisiting that 3-year-old definition. It has polled AMA members, other professionals, academics and researchers for suggested changes and is currently soliciting feedback on its proposed changes. Here’s the latest revision:

“Marketing is the activity, conducted by organizations and individuals, that operates through a set of institutions and processes for creating, communicating, delivering, and exchanging market offerings that have value for customers, clients, marketers, and society at large.”

By comparision, here’s the 2004 version:

“Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

Here’s the AMA’s stated rationale for the proposed changes:

1. The phrase “Marketing is an organization function” in the 2004 definition was seen to be too strongly associating marketing with a departmental “company silo.” Since it is limiting, we dropped the term “organizational function.”

2. The 2007 definition substitutes “Marketing is the activity, conducted by organizations and individuals,” which recognizes that marketing is an “action word.” That is, marketing is something that organizations (including both formal marketing departments and others in organizations), as well as individuals (e.g., entrepreneurs and consumers), engage in or do. Thus, the definition points out who (i.e. organizations and individuals) actually conducts (i.e. guides or directs) the activity called “marketing.”

3. The 2004 definition included the phrase “a set of processes,” but is ambiguous as to who is engaged in the processes. The 2007 definition substitutes “a set of institutions and processes,” which acknowledges that institutions such as manufacturers, wholesalers, retailers, and marketing research firms are an important part of marketing. The phrase “institutions and processes” implies that marketing systems such as channels of distribution are a part of marketing as are social processes (e.g., regulations and norms).

4. The 2004 definition included “creating, communicating, and delivering,” but not “exchanging.” Exchange was a central construct of the 1985 definition. The 2007 definition thus captures this historical focus of marketing. Because the 2007 definition reads “creating, communicating, delivering, and exchanging,” however, while it acknowledges that exchange continues to be an important part of marketing, it does not make it the central focus.

5. The 2004 definition included “value” but left the concept ambiguous. Indeed it may be argued that organizations do not “create” value at all. We focus on market offerings (i.e. “ideas, goods, and services,” as the 1985 definition put it) that have value (to someone).

6. The 2007 definition maintains that organizations create, communicate, deliver, and exchange “market offerings that have value,” which clarifies what, specifically, is being created (i.e. market offerings).

7. The 2004 definition indicated that organizations create “value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” However, marketing creates market offerings that have value to those who are not “customers.” Also, “managing customer relationships” inappropriately elevates the strategy of “customer relationship management” to such prominence that this one, particular, strategic thrust becomes a part of the very definition of marketing.

8. The 2007 definition maintains that market offerings have value for “customers, clients, marketers, and society at large.”

a. Adding “clients” acknowledges that nonprofit institutions such as the United Way and the Girl Scouts engage in marketing. Such organizations do not see themselves as having “customers.” Rather, they have clients.

b. Adding “marketers” acknowledges that those organizations and individuals that do the marketing benefit from the created, communicated, delivered, and exchanged market offerings.

c. Adding “society at large” incorporates the 2004 definition’s concept of “stakeholders,” and acknowledges the aggregated nature of marketing across competing organizations that impels innovations, improvements, and price competition. Creating market offerings that have value benefits society, as do communications about, and the delivery of, marketing offerings. In short, the practice and activity of marketing benefits society.

Interesting process. It doesn’t looked like they’ve opened the changes up for public comment yet (as I recall them doing with the 2004 version) – which means you’ll have to voice your opinion here. [Full disclosure: I’m doing some project work for the AMA, unrelated to this initiative.]


4 thoughts on “AMA Proposes New Definition of Marketing”

  1. “And we will tell you what our value is and you will like it.” Give me a break. Another variation on the producer – consumer model of the world. What ever happened to “listening” and “conversations”. Of course this is an improvement to a definition I heard last week that marketings function is “To deliver leads so we can sell our products”.

  2. The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals….

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