Constructing a partially formalized general theory of the marketing system: insights from the history of marketing thought

Abstract

Purpose The purpose of this paper is to construct a general theory of the marketing system that addresses the fundamental question: why do marketing systems occur, survive and grow? Design/methodology/approach The approach integrates the concepts and constructs contained in special and mid-range theories, scattered throughout the history of marketing thought, into a logically coherent set of propositions (including definitions, axioms, theorems, scientific laws, bridge laws and hypotheses) that comprise a general theory of the marketing system. Findings The theoretical answer to why marketing systems arise, survive and grow is because marketing systems offer the most efficient mechanism for supplying products and services that people demand, thereby increasing economic growth, compared to the opportunity costs of alternative methods of acquisition. Based on just two (of several) marketing efficiency theorems, if the input costs of trading decline (law of reduced transaction costs) and/or the output value increases (law of bulk transactions), then marketing system efficiency rises. This creates an upward spiraling cycle: increasing the extent of the market (law of market size), proliferating opportunities for increasing aggregate production efficiency (through the law of comparative advantage and the law of division of labor), thereby further proliferating opportunities for aggregate marketing system efficiency (e.g. law of central markets, law of marketing specialists), thus fueling further aggregate economic growth (until limited by the law of diminishing returns, the law of the minimum resource or the law of market size). An empirically testable central hypothesis is derived from the propositions: increasing aggregate marketing system efficiency provides both the necessary and sufficient conditions for increasing aggregate economic growth in a society. Originality/value The value of developing a general theory of the marketing system is to advance the marketing discipline as a social science. Additionally, a general theory is likely to enhance academic thinking, improve business practice and facilitate interaction among academicians and practitioners. Further, a general theory could also reduce disciplinary fragmentation, avoid identity confusion and lessen the credibility crisis in marketing, among others.