2004 Ama Definition of Marketing and Gronroos’ Alternative Position Essay

This paper summarises and analyses the criticism of the definition of marketing adopted by the American Marketing Association (AMA) in 2004 and the proposition of an alternative definition offered by Gronroos (2006). Since 1948, the AMA has been responsible for an official definition of marketing used in books, by marketers and in university teaching in the USA. Theirs has historically been perceived as the definition which best represents the discipline (Ferrel ; Lucas 1987).

The first official definition was adopted in 1935 by a preceding organisation and revised in the mid-1980s, then in 2004 (Keefe 2004) and in 2007 (Lotti ; Lehmann 2007). The 2004 AMA definition of marketing follows (Gronroos 2006): 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. Gronroos analyses the underpinning logic of the updated definition and reconsiders how well it reflects the challenges for marketing today, focusing on the definition’s specific elements.

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Gronroos argues that the ‘phrase delivering value to customers implies that value is embedded in the product … ’. Gronroos asserts that ‘in the supplier’s processes value propositions are developed, whereas real value for customers is created in a customer’s value-creating processes’. This requires that marketing’s role be in developing and communicating value propositions as well as in supporting customer’s value creation. Gronroos criticises the inclusion of customer relationships management into the definition, for in certain cases non-relational marketing is beneficent.

Gronroos states that marketing cannot be implemented by one organisational function of marketing specialists (p. 405). It requires a customer focus, which must be maintained throughout the organisation. Gronroos then provides an alternative definition of marketing based on the promise concept, which is founded on an observation by Levitt (in Gronroos 2006): ‘When prospective customers can’t experience the product in advance, they are asked to buy what are essentially promises – promises of satisfaction’.

The alternative definition follows: Marketing is a customer focus that permeates organizational functions and processes and is geared towards making promises through value proposition, enabling the fulfilment of individual expectations created by such promises and fulfilling such expectations through support to customers’ value-generating processes, thereby supporting value creation in the firm’s as well as its customers’ and other stakeholders’ processes.

This definition is based on the idea that value is created in the customer’s processes; it shifts the interest in marketing from structure to process. Gronroos further suggests that the marketing mix metaphor, which is geared towards a structural view of marketing, can be replaced by the process-related promise metaphor. In the analysis of the characteristics for a definition of marketing, Gronroos takes into account that this definition must reflect the current challenges to marketing.

While there is no flaw in the argumentation for these characteristics, Gronroos fails to acknowledge that to regain its credibility marketing should become a phenomenon comprehensible to a wider range of people. And as such, it must have a concise clear definition. In 2007 the AMA adopted a new definition of marketing (Lotti ; Lehmann 2007): 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.

The AMA dismissed the customer relationships notion, shifted from structure to activity (Lotti ; Lehmann 2007). While not utilising the promise metaphor, the AMA has abandoned the marketing mix metaphor and delivering value. It is suggested that while the theory behind Gronroos’ definition is well-developed, the new AMA definition would be preferred as it is brief and clear. List of References Ferrel, OC, Lucas, GH 1987, ‘An Evaluation of Progress in the Development of a Definition of Marketing’, Journal of the Academy of Marketing Science, vol. 5, Fall, pp. 12-23, viewed 26 August 2008, ;http://www. springerlink. com/content/bg4g515562881845/fulltext. pdf;. Gronroos, C 2006, ‘On defining marketing: finding a new roadmap for marketing’, Marketing Theory, vol. 6, January, pp. 395-417. Keefe, LM 2004, ‘What is the meaning of “marketing”? ’, Marketing News, 28 September, viewed 26 August 2008, ;http://market. haloso. net/upfiles/20060527022543. doc;.

Levitt, T 1986, ‘After the Sale is Over’, cited in Gronroos, C 2006, ‘On defining marketing: finding a new roadmap for marketing’, Marketing Theory, vol. 6, January, pp. 399. Lotti, M, Lehmann, D 2007, ‘AMA Definition of Marketing’, viewed 27 August 2008, ;http://marketingpower. com/Community/ARC/Pages/Additional/Definition/default. aspx;. Vandermerwe, S 1996, ‘Becoming a Customer “Owning” Company’, cited in Gronroos, C 2006, ‘On defining marketing: finding a new roadmap for marketing’, Marketing Theory, vol. 6, January, pp. 399.