F1-01: What is Marketing?

Ask ten people what marketing is and you will get twelve answers, most of them wrong.

Your uncle thinks it is advertising. Your CEO thinks it is lead generation. Your cousin who just finished a digital marketing bootcamp thinks it is Google Ads and SEO. The LinkedIn influencer with 200,000 followers thinks it is "building a personal brand." The startup founder thinks it is growth hacking. The management consultant thinks it is positioning. Your CFO thinks it is a cost centre.

They are all describing pieces of the elephant. None of them is describing the elephant.

This is not a trivial problem. When an organisation does not agree on what marketing is, it cannot agree on what marketing should do, who should do it, how much to spend on it, or how to measure whether it worked. The definitional confusion is not academic — it is the root cause of most marketing dysfunction in organisations. When marketing means "whatever the marketing department happens to do," the discipline loses its strategic authority and becomes a service bureau for sales enablement, event management, and social media posting.

This lecture will give you a definition of marketing that is both academically rigorous and practically useful. It will not be the only definition you encounter in this curriculum — the field genuinely contains multiple valid perspectives — but it will be the foundation on which everything else is built.

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1. The Definitional Problem: Why Nobody Can Agree

1.1 The AMA's Evolving Definition

The American Marketing Association has revised its official definition of marketing five times since 1935. Each revision tells a story about how the discipline sees itself.

1935: "Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers."

This is marketing as logistics. Move the product from the factory to the customer. The definition assumes the product already exists, the customer already wants it, and marketing's job is distribution. It is a definition born in an era of manufacturing dominance, when the hard problem was making things and getting them to people, not figuring out what to make or for whom.

1985: "Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational objectives."

Fifty years later, the scope has expanded enormously. Marketing now includes "conception" (product development), "pricing" (commercial strategy), and "ideas" (not just physical goods). The definition centres on "exchange" — a concept drawn from microeconomics — and introduces the notion that marketing should satisfy both parties. This is a genuine advance, but it remains a process definition: marketing as a set of activities.

2004: "Marketing is an organisational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders."

Now marketing is explicitly both a "function" (a department) AND "a set of processes" (an activity that extends beyond any single department). The word "value" has replaced "exchange" as the central concept. And "stakeholders" has broadened the beneficiaries beyond just the buying parties. This definition is closer, but still reads like a committee wrote it — because a committee did.

2017 (current): "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 latest revision adds "society at large" to the list of beneficiaries, reflecting the discipline's growing concern with sustainability, ethics, and social impact. It also shifts from marketing as a single "function" to marketing as "activity, set of institutions, and processes" — acknowledging that marketing happens across organisations, agencies, platforms, and ecosystems.

1.2 What the Definitions Miss

Every AMA definition shares a characteristic: it describes what marketing does without quite explaining what marketing is for. They are operational definitions, not strategic ones. They tell you the verbs (creating, communicating, delivering, exchanging) but not the purpose those verbs serve.

For that, we need Peter Drucker.

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2. Drucker's Insight: The Purpose of Marketing

In 1973, Peter Drucker wrote what remains the most penetrating single sentence about marketing ever published:

"The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself."

Read that again. Drucker is not describing advertising. He is not describing promotion, or branding, or content marketing, or social media strategy. He is describing the fundamental economic function of marketing: understanding demand so well that supply aligns with it naturally.

This is a radical claim. It implies that in a perfectly marketed business, the sales function becomes unnecessary. The product is so well designed for the customer's needs, so well priced, so well distributed, and so well known that the customer arrives pre-sold. Marketing, in Drucker's formulation, is not a downstream activity that happens after the product is built — it is an upstream discipline that determines what gets built in the first place.

Drucker went further: "Because the purpose of business is to create a customer, the business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs."

Two things make this statement explosive:

1. Marketing is elevated to one of only two functions that create value. Everything else — finance, HR, operations, legal — is positioned as a support function. This is not how most organisations think about marketing.

2. Marketing is separated from innovation but placed alongside it. They are distinct but co-equal. Innovation creates new value. Marketing identifies what value to create and ensures the market knows it exists. Neither works without the other.

Most organisations operate as if Drucker never wrote this. Marketing is treated as a downstream activity — the department that makes the brochure after the product is built, the team that runs the campaigns after the strategy is set, the budget line that gets cut first when revenues dip. Drucker's formulation insists this is backwards. Marketing should be upstream: informing product decisions, shaping strategy, and driving the organisation's understanding of its market.

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3. Marketing as Orientation vs. Marketing as Function

3.1 The Marketing Concept

One of the most important distinctions in the academic literature is between marketing as a function (what the marketing department does) and marketing as an orientation (how the entire organisation thinks about its market).

The "marketing concept" — the idea that organisations should be oriented around customer needs rather than production capabilities — has been a central tenet of marketing thought since at least the 1950s. Theodore Levitt crystallised it in his landmark 1960 Harvard Business Review article "Marketing Myopia," which argued that companies fail when they define their business by what they make rather than what customer need they serve.

Levitt's examples remain instructive. The railroads declined not because people stopped needing transportation, but because the railroad companies thought they were in the railroad business rather than the transportation business. Hollywood initially dismissed television as a threat because the studios thought they were in the movie business rather than the entertainment business.

The marketing concept says: define your business by the customer need you serve, not the product you make. Organise around the market, not around the factory.

3.2 The Problem with Pure Customer Orientation

But here is where the Both/And lens becomes essential. The marketing concept, taken to its logical extreme, produces its own pathology. If you only build what customers say they want, you will never build anything they did not know they needed.

Steve Jobs's frequently cited observation — "People don't know what they want until you show it to them" — is often used to dismiss market research. That is a misreading. What Jobs understood was that marketing orientation and innovation orientation are not opposites. Apple under Jobs was intensely market-oriented — the company was obsessed with understanding how people actually used technology, what frustrated them, what delighted them. But it combined that market understanding with a willingness to make bold product choices that no focus group would have validated.

This is the first Both/And of this module: marketing as listening to the market AND shaping the market. The best marketers do not simply respond to expressed demand. They understand latent demand — needs that customers cannot yet articulate — and create products and communications that crystallise those needs into conscious desire.

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4. The Scope of Marketing: Broader Than You Think

4.1 Kotler's Framework

Philip Kotler, whose textbooks have defined the academic canon for five decades, describes marketing's scope through a framework that most practitioners have encountered in some form: marketing manages demand by creating, communicating, and delivering value through the elements of the marketing mix.

Kotler & Keller (2016) identify ten types of entities that can be marketed: goods, services, events, experiences, persons, places, properties, organisations, information, and ideas. This breadth is important. Marketing is not limited to consumer packaged goods or B2B SaaS. The principles apply wherever an entity seeks to create and capture value through exchange.

But Kotler's framework also makes an essential point about marketing's strategic scope. Marketing is not just communication. It encompasses:

• Market research — understanding who your customers are, what they need, and how they behave
• Segmentation and targeting — deciding which customers to serve and which to leave to competitors
• Positioning — defining how your offering will be perceived relative to alternatives
• Product policy — determining what to offer, at what quality level, with what features
• Pricing — setting the economic terms of the exchange
• Distribution — ensuring the product is available where and when customers want it
• Communication — informing, persuading, and reminding the market
• Customer relationship management — building ongoing relationships that drive repeat purchase

When your CEO says "marketing" and means "the people who make the social media posts," they are looking at roughly one-eighth of what marketing actually encompasses.

4.2 Marketing's Three Core Tasks

Strip away the jargon and marketing comes down to three tasks:

1. Figure out what to sell to whom. This is the strategic core: segmentation, targeting, positioning, and product-market fit. It requires analytical rigour, market research, and commercial judgment.

2. Make people want to buy it. This is brand building, communications, and demand generation. It requires creative capability, media understanding, and psychological insight.

3. Make it easy to buy. This is distribution, pricing, and customer experience. It requires operational excellence, channel management, and commercial partnerships.

Most organisations only invest in task two. The strategic work of task one is either neglected or delegated to management consultants. The operational work of task three is handed to sales, operations, or e-commerce teams. When marketing is reduced to task two alone — making noise about a product that was developed without marketing input and distributed through channels marketing does not control — the discipline is structurally set up to underperform.

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5. The Art and Science of Marketing

5.1 The False Dichotomy

We arrive at the Both/And tension at the heart of this lecture. Marketing has always been caught between two self-images.

On one side: marketing as science. This is the tradition of quantitative research, statistical analysis, econometric modelling, A/B testing, and evidence-based decision-making. Its patron saints are Byron Sharp (whose "How Brands Grow" insists that marketing laws are as discoverable as physical laws), Andrew Ehrenberg (whose repeat-purchase patterns are among the most replicated findings in social science), and the entire school of marketing science that treats consumer behaviour as a subject for empirical investigation, not philosophical speculation.

On the other side: marketing as art. This is the tradition of creative leap, emotional resonance, cultural insight, and irreducible judgment. Its patron saints are Bill Bernbach ("Nobody counts the number of ads you run; they just remember the impression you make"), David Ogilvy (whose advertising combined rigorous research with creative brilliance), and every planner, creative director, and strategist who has ever known — in their gut, without a data point in sight — that a particular insight was true.

The war between these two camps is real and ongoing. Data-driven marketers dismiss creative instinct as unaccountable romanticism. Creative marketers dismiss data obsession as a recipe for mediocrity — optimising for what is measurable rather than what matters.

5.2 The Both/And Synthesis

Both sides are partially right, and both are dangerously incomplete.

The evidence from Binet & Field's analysis of the IPA Databank — the largest database of advertising effectiveness cases in the world — shows clearly that the most effective campaigns combine emotional, brand-building creative with rational, activation-focused tactics. Neither alone produces optimal results. The famous "60/40 split" (approximately 60% brand, 40% activation) is not a creative philosophy or a media strategy — it is an empirical finding about what actually works in the marketplace.

Sharp's work at the Ehrenberg-Bass Institute has given us genuine marketing laws — patterns of buyer behaviour that hold across categories and markets. These are not opinions. They are findings. Any marketer who ignores them is flying blind. But Sharp himself would acknowledge that knowing the laws of buyer behaviour does not tell you what to say in an advertisement, how to name a product, or what brand story to tell. The science tells you what to optimise for. The art tells you how to get there.

The Synthesis: marketing requires scientific rigour to identify the right problems and creative artistry to solve them. Data without imagination produces predictable mediocrity. Imagination without data produces beautiful irrelevance. The discipline needs both, and the great marketers — from Ogilvy to the IPA Award winners — have always understood this.

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6. What Marketing is Not

It is worth being explicit about what marketing is not, because the misconceptions are so pervasive they corrupt organisational decisions.

Marketing is not advertising. Advertising is one tool within the communications mix, which is itself one element of the marketing mix. Equating marketing with advertising is like equating medicine with prescriptions.

Marketing is not sales support. Marketing and sales are distinct functions with different objectives, different time horizons, and different metrics. Marketing creates demand; sales converts it. Marketing thinks in markets; sales thinks in accounts. Both are necessary. Neither is a subset of the other. (We will explore this in F1-03.)

Marketing is not digital marketing. Digital is a channel set, not a discipline. "Digital marketing" is as meaningless as "television marketing" or "billboard marketing." The principles of marketing — segmentation, positioning, brand building, pricing — are channel-agnostic. A good marketer understands digital channels. But a person who only understands digital channels is a channel specialist, not a marketer. (We will return to this in F8.)

Marketing is not a cost centre. When Drucker said marketing is one of only two functions that produce results, he was making a claim about value creation. Marketing investment — in brand building, in distribution, in market understanding — creates economic value that can be measured over appropriate time horizons. The problem is not that marketing cannot demonstrate ROI. The problem is that most organisations measure it on the wrong time horizon. (We will explore this in F9.)

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7. Why the Definition Matters: Organisational Consequences

The way an organisation defines marketing determines:

Scope. If marketing is "the advertising department," it will not be consulted on pricing, distribution, or product design. If marketing is "the function responsible for understanding and serving customer needs," it has a seat at every strategic table.

Budget. Organisations that see marketing as a cost centre cut it in downturns. Organisations that see it as an investment in demand creation protect it. Binet & Field's data shows that brands that maintain or increase advertising spend during recessions gain market share at significantly lower cost — but this only happens when the C-suite understands marketing as investment, not expense.

Talent. If marketing is perceived as "the colouring-in department," it will attract and retain talent accordingly. The most commercially minded people will gravitate to strategy, finance, or operations. The discipline loses its best minds before they ever arrive.

Authority. A CMO whose definition of marketing stops at communications will never have the authority to influence pricing, product, or distribution. A CMO whose definition encompasses the full Kotler scope — but who can also speak the language of finance and operations — becomes genuinely strategic.

The definitional question is not academic. It is the single most consequential strategic question a marketing leader can answer. Get it wrong and everything downstream is compromised.

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Summary

Marketing is the discipline of creating, communicating, and delivering value to customers and stakeholders. It encompasses far more than advertising, communications, or digital tactics. At its core, it is the organisational function responsible for understanding the market and aligning the organisation's offerings with market needs.

The Both/And of this lecture: marketing is both art and science. It requires the rigour of empirical evidence and the creativity of human judgment. Neither alone is sufficient. The best marketers hold both in productive tension.

Drucker was right: marketing and innovation are the only two functions that produce results. Everything else is cost. The tragedy is that most organisations do not yet know this, and most marketing departments are not yet structured to prove it.

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Sources

• AMA (2017). "Definitions of Marketing." American Marketing Association.
• Binet, L. & Field, P. (2013). The Long and the Short of It. IPA.
• Drucker, P.F. (1973). Management: Tasks, Responsibilities, Practices. Harper & Row.
• Ehrenberg, A.S.C. (1988). Repeat-Buying: Facts, Theory and Applications. Oxford University Press.
• Hunt, S.D. (1976). "The Nature and Scope of Marketing." Journal of Marketing, 40(3), 17-28.
• Kotler, P. & Keller, K.L. (2016). Marketing Management. 15th ed. Pearson.
• Levitt, T. (1960). "Marketing Myopia." Harvard Business Review, 38(4), 24-47.
• Ritson, M. (2024). Mini MBA in Marketing. Marketing Week.
• Sharp, B. (2010). How Brands Grow. Oxford University Press.
• Webster, F.E. (1992). "The Changing Role of Marketing in the Corporation." Journal of Marketing, 56(4), 1-17.