The Copenhagen School

Marketing theory between rigor, realism and relevance

By

Erik Kloppenborg Madsen, Ph.DDepartment of Business AdministrationBusiness and social scienceUniversity of Aarhus

Danish marketinghistory: publications so far

• Erhvervsøkonomiens fødsel I industrialismens ånd eksemplificeret ved marketing, Århus Universitetsforlag, 2009

• Emerging Marketing (1860-1960) the case of Denmark, 2010, Conference paper

• Et spejl af tiden?: Hages håndbog I handelsvidenskab, 1894-1954, Erhvervsarkivets Årbog, 2010.

• From price theory to marketing mix, Århus 2011

What is a School of marketing thought?(Shaw & Jones,2005)

• A body of knowledge• Developed by a number of scholars• Describing one or more aspects of marketing activities

This definition produces several schools (9 mentioned)

A certain approach to a certain phenomenon ?Competition between schools?

Schools of marketingaccording to

Shaw & Jones (2005)

• Marketing functions• Marketing commodities• Marketing institutions• Marketing management• Marketing systems• Consumer behavior• Macro-marketing• Exchange• Marketing history

The Marketing management school(Shaw & Jones, 2005)

• Selected Pioners– Alderson 1956, 1965, Howard 1956, Kelley and Lazer 1958, McCarthy 1960, Kotler 1967

• Questions addressed– How should managers market goods to customers

• Level or focus of analysis– Micro: Business firm as seller/supplier + Any individual or organization as supplier

• Key concepts and theories– Marketing mix, Customer orientation, Sementation, tageting and positioning

Max Kjær Hansen

• The builder of the empire• The importance of advertising for the modern society: “a

technical device comparable with the steam engine”. (1937)• Advertising (marketing) links production and consumtion in

modern economies• The purpose of Business Economics “betriebswirtschaft”,

including marketing management, is to look closely into the conditions of profitability of the individual firm.

Mickwitz, 1966

• “the country whose research has above all characterized and encouraged microeconomic theory in Scandinavia. Within the domain of competition and marketing it is not out of place to speak of a separate Danish school, “the Copenhagen school” , which has brought the multi-parameter methodology into the limelight.”

Danish/scandinavian scholars involved

Max Kjær Hansen: relevance and empirical realismFrederik Zeuthen: Problems of monopoly and economic warfare, 1930Ragnar Frisch: (the concept of action parameter), 1933Hans Brems: (the distinction between consumer – and producer criteria)Børge Barfod: first graduate from CBS 1931, first theoretical paper on advertising in a rigorus economic frame, 1937Arne Rasmussen: Codified the theory of action parameters, 1955

F. ZeuthenProblems of Monopoly and Economic Warfare

1930

“This investigation is chiefly dedicated to business economists and other intermediaries between

economic theory and actual trade, who are poorly served by the ordinary theories of competition and

simple monopoly, ….”

The sales function of the individual firm

q = q(D1, D2, D3)

– D1 Primary determinants (needs, buying power, market conditions)

– D2 Secondary determinants (price, promotion, product quality)

– D3 Tertiary determinants (trends, business fluctuations, fashion, seasonal fluctuations)

The action parameters(secondary determinants)

• q = q(a1, a2, ai, ..., an)

– Where

• ai are the firm’s action parameters

Summing up

• An early Danish school in Marketing Management• Strongly based on the “new” microeconomics• Differed from developments in Sweden, US, UK• Developed by at number of mainly danish researchers• Codified by Arne Rasmussen• Not well marketed outside Scandinavia• Peaked in 60s/70s• Last major contribution by Otto Ottesen

Rigor, realism, relevance

• Marketing Management

Relevance

RealismRigor

Marketing Management(Afsætningsøkonomi)

Marketing as a fragmented adhocrazy(see. whitley 1984)

• Marketing as one ideal type characterized by:

• 1. low dependence between researchers– Functional (results and methods used)– Strategic(research issues and perspective)

• 2. High degree of task uncertainty– Technical (choice of approach and method)– Strategic(choice of problems and goals)

Marketing as a fragmented adhocrazy

• Implications for relevance• Implications for realism• Implications for rigor

The new economics of the 30ties

• Clapham, J.H. (1922) Of empty economic boxes• Ed. Chamberlin, 1933: The theory of monopolistic competition• Joan Robinson, 1933: Economics of imperfect competition