In this essay, define the marketing concept and summarize its relationship to marketing myopia. Give an example of marketing myopia that you have seen.

◾ Your essay must include an introduction.

◾ You must also reference at least one journal article from the CSU Online Library and one article from a business-related or news website; therefore, your essay should be supported by at least two sources.

◾ Your essay must be at least three pages in length and double-spaced—not counting the title and reference pages.

◾ All sources used must be referenced; paraphrased and quoted material must have accompanying APA citations

Journal of Public Policy & Marketing
Vol. 29 (1) Spring 2010, 4–11
© 2010, American Marketing Association
ISSN: 0743-9156 (print), 1547-7207 (electronic) 4
The New Marketing Myopia
N. Craig Smith, Minette E. Drumwright, and Mary C. Gentile
During the past half century, in general, marketers have heeded Levitt’s (1960) advice to avoid
“marketing myopia” by focusing on customers. In this article, the authors argue that marketers have
learned this lesson too well, resulting today in a new form of marketing myopia, which also causes
distortions in strategic vision and can lead to business failure. This “new marketing myopia” stems
from three related phenomena: (1) a single-minded focus on the customer to the exclusion of other
stakeholders, (2) an overly narrow definition of the customer and his or her needs, and (3) a failure to
recognize the changed societal context of business that necessitates addressing multiple stakeholders.
The authors illustrate these phenomena and then offer a vision of marketing management as an
activity that engages multiple stakeholders in value creation, suggesting that marketing can bring a
particular expertise to bear. They offer five propositions for practice that will help marketers correct
the myopia: (1) map the company’s stakeholders, (2) determine stakeholder salience, (3) research
stakeholder issues and expectations and measure impact, (4) engage with stakeholders, and (5)
embed a stakeholder orientation. The authors conclude by noting the implications for research.
Keywords: marketing myopia, stakeholders, corporate social responsibility, marketing and society,
marketing strategy
N. Craig Smith is the INSEAD Chair in Ethics and Social Responsibility,
INSEAD (e-mail: craig.smith@insead.edu). Minette E.
Drumwright is Associate Professor of Advertising & Public Relations,
Department of Advertising & Public Relations, University of Texas at
Austin (e-mail: mdrum@mail.utexas.edu). Mary C. Gentile is Director
of Giving Voice to Values, and Senior Research Scholar, Babson College
(e-mail: Mgentile3@babson.edu).
Fifty years ago, Ted Levitt (1960) exhorted marketers to
correct their “marketing myopia.” The shortsightedness
that distorted their strategic vision caused them to
define their businesses narrowly in terms of products rather
than broadly in terms of customer needs. The term entered
the vernacular of managers and the pages of textbooks, and
when Harvard Business Review reprinted the article in 2004,
it designated marketing myopia as the most influential marketing
idea of the past half century. No doubt, today’s marketers
do a much better job of focusing on customer needs.
However, we argue that they have learned the lesson of customer
orientation so well that they have fallen prey to a new
form of marketing myopia that, in today’s business environment,
can also cause serious distortions of strategic vision
and the possibility of business failure, or at least exacerbate
the marginalization of the marketing function.
The “new marketing myopia” occurs when marketers fail
to see the broader societal context of business decision
making, sometimes with disastrous results for their organization
and society. It stems from three related phenomena:
(1) a single-minded focus on the customer to the exclusion
of other stakeholders, (2) an overly narrow definition of the
customer and his or her needs, and (3) a failure to recognize
the changed societal context of business that necessitates
addressing multiple stakeholders. This article examines
how the new marketing myopia manifests and illustrates its
strategic implications and consequences. We then identify a
vision for marketing management as an activity that
engages multiple stakeholders in value creation and offer
propositions for practice to help marketers overcome their
myopia.
Why the New Marketing Myopia?
Marketers suffering from the new marketing myopia view
the customer only as a “consumer”—a commercial entity
seeking to satisfy short-term, material needs through consumption
behaviors. The customer is not viewed as a citizen,
a parent, an employee, a community member, or a
member of a global village with a long-term stake in the
future of the planet (for a political theory perspective on
this point, see Jocz and Quelch 2008). We are arguing for a
more sophisticated understanding of consumption that takes
into consideration a wider set of stakeholders who are concerned
about a company’s social and environmental
impacts and recognizes that customers also wear some of
those other stakeholder hats.
These stakeholders and the societal forces they represent
have profoundly changed the business context and business
decision making in recent years (Freeman, Harrison, and
Wicks 2007; Porter and Kramer 2006). Although they are
often excluded from the marketer’s analysis, they clearly
warrant close attention. As Ian Davis (2005, p. 69), Worldwide
Managing Director at McKinsey & Company,
observed, “Companies that treat social issues as either irritating
distractions or simply unjustified vehicles for attacks
on business are turning a blind eye to impending forces that
have the potential to alter the strategic future in fundamental
ways.” Marketers must understand the firm’s deeply
embedded position in society and shift from a narrow focus
on customers to a stakeholder orientation if they and their
firms are to prosper and grow in today’s more complex and
unpredictable business environment.
Attention to stakeholders beyond the consumer often
means engaging with groups that managers sometimes view
as adversaries, such as activists, scientists, politicians, and
the local community (Spar and La Mure 2003; Yaziji 2004).
Collaborating with these stakeholders provides many benefits,
including potentially helping marketers develop foresight
regarding the markets of the future and providing the
impetus for innovation. Consider two topical examples: the
obesity crisis and the plight of the U.S. auto industry.
For generations, food manufacturers and fast-food retailers
catering to children have focused only on satisfying the
short-term appetites of young consumers with little thought
to their longer-term well-being. These firms seem insensitive
to their role in shaping the habits and appetites of children.
They have excluded the opinions of other important
stakeholders who are concerned about health and nutrition,
including parents. As Paine (1992) notes, marketers often
seem to be pitting children against parents, especially with
advertising. Belatedly, food marketers have placed some
restrictions on their marketing to children, but only after a
concerted attack. What if they had led the way by recognizing
the long-term needs of their customers and collaborating
with, rather than resisting, the myriad stakeholders who
were championing healthful eating? Food manufacturers
and retailers should not shoulder the full blame for the obesity
crisis. However, just because other factors have also
contributed to the problem does not lessen the responsibility
of food companies for the part they have played.
Likewise, with their narrow reading of consumers’ preferences,
the Big Three U.S. automobile manufacturers have
largely ignored admonitions from scientists, environmentalists,
politicians, and journalists to attend to the problems
posed by oil and to develop the potential of alternative
energy sources. They have held fast to their long-time
emphasis on large, gas-guzzling cars, trucks, and sportutility
vehicles (SUVs), which have become a symbol of the
United States’ blatant disregard for energy consumption.
Lured by large margins on big vehicles, they catered to only
one component of consumer preference and ignored the
need for cleaner and more fuel-efficient vehicles.
In contrast, consider the Japanese car manufacturers
Honda and Toyota. Honda launched its first low-emission,
fuel-efficient vehicle in 1974 and consistently improved the
fuel efficiency of its cars during the 1970s and 1980s
(ICFAI Center for Management Research 2007). In 1998, it
unveiled the world’s first hybrid car, and in 2002, it became
the first manufacturer to have fuel cell cars certified by the
U.S. government for commercial use. Toyota’s energyefficient
offerings have followed suit, and its Prius hybrid
has sold more than one million units worldwide (Engardio
2007). Today, U.S. manufacturers lament the changing consumer
preferences that are forcing them to close their truck
and SUV plants and take other drastic measures to survive
(Mohr 2008). In an advertisement published in Automotive
Journal of Public Policy & Marketing 5
News in December 2008 as part of an effort to secure the
billions of dollars in federal funding it needed to survive,
General Motors admitted that it had “disappointed” if not
“betrayed” consumers (Krolicki 2008). The government aid
likely will require U.S. manufacturers to produce much
greener cars and trucks. Multiple factors explain the demise
of the U.S. automobile industry, but its prospects certainly
have not been helped by its failure to collaborate with
stakeholders in creating energy-efficient vehicles.
There are many other examples of the new marketing
myopia. Consider, for example, Nike’s failure in the 1990s
to respond to workplace abuses in the factories of its suppliers,
which resulted in worldwide protests and boycotts, or
Monsanto’s blatant disregard of public opinion about genetically
modified food, which was a major contributing factor
in its merger with Pharmacia (Smith 2007). Suffice it to say
that when marketers give insufficient attention to stakeholders,
they do so at great peril; their customers, their companies,
and society at-large likely will be adversely affected.
Marketing and Stakeholder Management
New definitions of marketing are emerging that suggest a
role for stakeholder management in marketing, though discussion
of these definitions also speaks to the myopia found
in practice. The 2004 American Marketing Association
(AMA) definition made specific reference to stakeholders
but was criticized for defining marketing from the perspective
of marketing management and ignoring marketing’s
societal impact (Gundlach 2007).1 Nonetheless, Sheth and
Uslay (2007, p. 303) welcomed its departure from the
exchange paradigm in favor of value creation because they
believed that the former had resulted in “a single-minded
focus on the role of customers,” whereas “multiple stakeholders
are involved,… and value cannot be created in isolation
of the stakeholders.” Lusch (2007, p. 266) also noted
that “more attention to stakeholder theory must be central to
marketing scholarship.”
The current 2007 AMA definition, replacing the 2004
definition, does not make explicit reference to stakeholders
but refers to marketing as an activity involving the
exchange of “offerings that have value for customers,
clients, partners, and society at large.”2 Like its predecessors,
this definition is oriented toward the practice of marketing
management, reflecting the process used to develop
it and the interests of most AMA members (Ringold and
Weitz 2007). Perhaps for this reason, it treats marketing’s
stakeholders as mere beneficiaries of marketing rather than
as stakeholders, as they are traditionally defined—anyone
who is affected by or can affect what a company does
1The 2004 AMA definition read as follows: “Marketing is an organizational
function and 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” (Gundlach 2007, p.
243).
2The 2007 definition reads as follows: “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” (see http://www.marketingpower.com/AboutAMA/Pages/
DefinitionofMarketing.aspx).
(Freeman 1984)—or, for that matter, as partners in value
creation (Lusch 2007).3
It is beyond the scope of this article to tackle all the perceived
shortcomings of the AMA definitions of marketing
(see the JPP&M special issue on the topic [2007, Vol. 26,
Fall]). However, it is apparent from the foregoing discussion
of the new marketing myopia that a more appropriate
definition of marketing management alone (i.e., as a
description of effective marketing practice) should include
recognition of the role of multiple stakeholders in determining
value creation. It is this vision that informs our subsequent
prescriptions for more effective—and socially
responsible—marketing practice.
Stakeholder management is not a new idea. It is well
established within the business and society field, though in
general, this literature does not address how marketing
specifically can be informed by attention to stakeholders. In
a recent account of the history of corporate social responsibility
(CSR), Carroll (2008), while acknowledging its earlier
roots, suggests that CSR is mostly a product of the
twentieth century that began to take shape in the 1950s. At
that time, according to Carroll (citing Frederick 2006),
managers were expected to balance competing claims to
corporate resources—thus prefiguring the idea of stakeholder
management. Although the origins of stakeholder
theory go back much further (Freeman, Harrison, and
Wicks 2007), in general, it is found to have its first formal
expression in Freeman’s (1984) book, Strategic Management:
A Stakeholder Approach.
There have been many contributions to stakeholder
theory since then (for a review, see Mele 2008; Phillips
2003), including some from critics, such as Jensen (2002)
and Sundaram and Inkpen (2004). For our purposes, suffice
it to say that absent from consideration in much marketing
practice—and research—is the idea at the heart of stakeholder
theory, namely, that companies have stakeholders
who are affected by or can affect what a company does.
While some stakeholder theorists make a normative claim
about company obligations to stakeholders (e.g., Evan and
Freeman 1988), others treat the idea simply as a description
of a business and managerial reality (e.g., Mitchell, Agle,
and Wood 1997). In this article, our purpose is to urge
greater attention to this business reality within marketing
practice, as a way of escaping the new marketing myopia.
As we suggest, the need to do so has become increasingly
evident.
The new marketing myopia also can be found in marketing
research. Largely absent from the marketing literature is
attention to the multiple stakeholders who serve in practice
as constraints on marketing strategies, as well as sources of
opportunity for firm and societal value creation. There have
always been streams of research in marketing that acknowledge
marketing’s social aspects, not least in the broadly
defined marketing and society literature (for an overview,
see Bloom and Gundlach 2001). However, much of this lit-
6 The New Marketing Myopia
erature has focused on public policy, particularly as it
relates to consumer protection. There is attention to company
stakeholders, but it is one step removed and mediated
through government, the law, and related regulatory mechanisms.
Attention has been given to topics such as social
marketing, cause-related marketing, and ethical consumerism,
but even in these areas, there has been little
focus on the requirement that the firm consider multiple
stakeholders beyond the consumer. Moreover, marketing
and society is not believed to be at the core of marketing
thought (Wilkie and Moore 2003).
Not long after Levitt’s (1960) seminal article, the marketing
literature included acknowledgments of the relevance of
social responsibility to marketing and attention to questions
of the role of business in society (e.g., Andreasen 1975;
Lavidge 1970; Patterson 1966; for a critique of CSR, see
Levitt 1958). Subsequent attention was sporadic, but
research on CSR and marketing has increased substantially
in the last few years (e.g., Berger, Cunningham, and
Drumwright 2007; Bhattacharya, Smith, and Vogel 2004;
Ellen, Webb, and Mohr 2006; Klein and Dawar 2004;
Maignan and Ferrell 2004; Maignan, Ferrell, and Ferrell
2004; Sen and Bhattacharya 2001; Smith 2008). It has been
encouraged in part by Aspen Institute and Marketing Science
Institute–sponsored conferences, such as the 2007
Stakeholder Marketing Consortium. Nonetheless, there
remains a paucity of marketing research on the implications
of multiple stakeholders for the marketing function and,
more generally, for the firm.4
Propositions for Marketing Practice
How can marketers avoid the new marketing myopia? We
have identified a vision for marketing as a practice that
involves proactively incorporating stakeholders beyond the
customer in creating value for the firm and for society. We
do not suggest that customers are unimportant—they
remain a central consideration—but it is necessary to recognize
that there are other stakeholders who also require marketing’s
attention. For business-to-consumer companies,
these other stakeholders (e.g., employees) are sometimes
customers too, but they need not be (e.g., nontarget market
3A stakeholder is any group or individual who “can affect or is affected
by the achievement of the organization’s objectives” (Freeman 1984, p.
46; refined to refer to the “achievement of the corporation’s purpose” in
Freeman, Harrison, and Wicks 2007, p. 6). For a chronology of stakeholder
definitions, see Mitchell, Agle, and Wood (1997).
4As one indicator, a search in January 2009 on EBSCO-hosted Business
Source Complete using the term “stakeholder” yielded eight articles in
Journal of Marketing, one article in Journal of Consumer Research, and
no articles in Journal of Marketing Research, the 20-year history of the
concept within the management literature notwithstanding. This is not to
say that other articles did not mention stakeholders; these are the only articles
for which stakeholders were sufficiently salient to warrant a mention
in the article abstract (a search of the three journals with “stakeholder” as
the subject term revealed only two articles, both in Journal of Marketing,
whereas the same search of the entire database generated 1959 peerreviewed
articles; 7221 peer-reviewed articles in the database included
“stakeholder” in the abstract). Almost all the articles identified made only
passing mentions to stakeholders, a notable exception being Rao, Chandy,
and Prabhu (2008). More encouragingly, ten articles were identified in a
Journal of Public Policy & Marketing search, with a majority of these articles
giving substantial attention to stakeholders as relevant to marketing,
such as two that examined pharmaceutical marketing and the HIV epidemic
(Calfee and Bate 2004; Kennedy, Harris, and Lord 2004), though
only two articles were identified in a Journal of Public Policy & Marketing
search using “stakeholder” as the subject term (Bhattacharya and
Korschun 2008; Calfee and Bate 2004).
members of the firm’s local community). Marketers are
often viewed as boundary spanners, operating at the interface
between the corporation and its customers, competitors,
and channel intermediaries (Dunfee, Smith, and Ross
1999; Singh 1993). Incorporating multiple stakeholders into
marketing suggests expanding the boundary-spanning role
to include a wider range of interested constituencies. We
offer five propositions that build on the stakeholder management
literature and the limited research to date on stakeholders
in marketing (notably, Bhattacharya and Korschun
2008; Maignan and Ferrell 2004; Maignan, Ferrell, and Ferrell
2004; Sirgy 2008).
Proposition 1: Map the Company’s Stakeholders
The starting point is for marketers to map the company’s
stakeholders (Freeman, Harrison, and Wicks 2007; Krick et
al. 2005). There may be specific departments in the organization
with primary responsibility for certain stakeholder
groups (e.g., investor relations, human resources). However,
we suggest that, at a minimum, marketing needs to be
strategically cognizant of all the firm’s primary stakeholders
(customers, employees, suppliers, shareholders, and
communities) and its key secondary stakeholders (typically,
media, government, consumer advocacy groups, competitors,
and certain nongovernmental organizations [NGOs]),
as well as the interactions between them. Consider, for
example, an electric automobile manufacturer (e.g., Th!nk,
Tesla) with overlapping and interconnected stakeholders in
its customers, employees, investors, suppliers, government,
media, and environmental NGOs—united by a common
interest in reducing climate change.
In some circumstances, it may fall to marketing to have
the strategic oversight of all salient stakeholders in the set.
This is more likely when the organization is marketing led
and when there are many interrelationships between customers
and other stakeholders. In light of our previous discussion
of obesity, illustrative in this regard is Kraft Foods’
decision in 2003 to establish its Global Advisory Council,
an interdisciplinary group of experts on behavior, nutrition,
health, and communication who were assembled to guide
the firm’s response to the growing national furor about obesity.
This initiative was led by Kraft Foods’ co–chief executive
officers (co-CEOs) at the time, Betsy Holden and
Roger K. Deromedi, both of whom came from a marketing
background. As Deromedi observed, “As part of our commitment
to ongoing stakeholder dialogue, we welcome the
council’s knowledge, insight and judgment, all of which
will help us strengthen the alignment of our products and
marketing practices with societal needs.”5
Stakeholder mapping is more difficult than it might at
first appear. Stakeholders must be identified beyond generic
categories—as real people with names and faces (McVea
and Freeman 2005). Companies must also identify the
salient stakeholders—those particularly deserving of management’s
attention—and their interconnections.
Journal of Public Policy & Marketing 7
Proposition 2: Determine Stakeholder
Salience—Who Counts?
Mitchell, Agle, and Wood (1997, p. 853) propose a managerial
approach to stakeholder salience—or “who or what
really counts.” They suggest that the degree to which managers
give priority to competing stakeholder claims reflects
stakeholder power, legitimacy, and/or urgency. According
to Mitchell, Agle, and Wood, “a party to a relationship has
power, to the extent it has or can gain access to coercive,
utilitarian, or normative means, to impose its will in the
relationship” (p. 865) with the company, though the authors
add that this stakeholder power may only be transitory. The
interconnections between stakeholders may well give rise to
increased power—albeit potentially transitory—as, for
example, when consumers lend support to NGO calls for a
boycott (Klein, Smith, and John 2004). Observing that
power and legitimacy together create authority, Mitchell,
Agle, and Wood use Suchman’s (1995, p. 574) definition of
legitimacy as “a generalized perception or assumption that
the actions of an entity are desirable, proper, or appropriate
within some socially constructed system of norms, values,
beliefs, and definitions” (p. 866). They define urgency as
the degree to which stakeholder claims call for immediate
attention.
Mitchell, Agle, and Wood (1997, p. 855) claim that they
“do not argue that managers should pay attention to this or
that class of stakeholders…. [They] argue that to achieve
certain ends, or because of perceptual factors, managers do
pay certain kinds of attention to certain kinds of stakeholders.”
Yet, while this asserts a descriptive account, it also
may be treated as a normative account, at least relative to a
traditional theory of the firm perspective (Donaldson and
Preston 1995). As a prescription, their stakeholder salience
attributes may serve well for managers acting consistent
with shareholder primacy (and, in this respect, stakeholder
theory is acceptable to critics such as Jensen [2002]).
To the extent that we are writing for marketing managers
operating from a shareholder primacy perspective, stakeholder
power, legitimacy, and urgency may well be the key
considerations in determining which stakeholders warrant
attention and how to prioritize among stakeholder groups.
In addition, we anticipate that marketing managers specifically
would give particular attention to stakeholders who
include or are especially influential or relevant in regard to
customers.
Some stakeholder theorists posit a different view of
stakeholder salience. It could be the case that some stakeholders
lack power or legitimacy. Consider, for example,
the developing-country farmers who provide the produce
sourced by the large multinational food companies. Do they
deserve to be heard? It is possible that stakeholders lacking
power may become more powerful in the future, especially
if the public or regulators become concerned about their
issues. Equally, company values may dictate attention to a
stakeholder group absent any perceived threat (Maignan
and Ferrell 2004). A normative ethics perspective (Donaldson
and Preston 1995; Dunfee, Smith, and Ross 1999)
might indicate a prioritization of stakeholders markedly different
from a managerial view dictated primarily by a desire
to mitigate the company’s downside risk.
5See http://findarticles.com/p/articles/mi_m0EIN/is_/ai_107214470
(accessed January 29, 2009).
Consider, for example, AARP (formerly the American
Association of Retired Persons), which states that its mission
is “to enhance the quality of life for all as we age, leading
positive social change and delivering value to members
through information, advocacy and service.”6 Consistent
with its mission and values, its for-profit subsidiary, AARP
Services, makes available “new and better choices” for its
members. Thus, AARP Services seeks to fill consumers’
needs for health insurance, but at the same time, it does
much more to further consumer well-being in combination
with its partners (AARP, Walgreens, the Business Roundtable,
and the Service Employees International Union).
Together, these organizations are attempting to improve the
health insurance marketplace, educate consumers about
wise use of medicines, and ultimately transform the health
care system for the benefit of consumers (Novelli 2007).
The AARP provides testament to the value of having a
broad and enlightened view of customer satisfaction and
giving priority to noncommercial needs of consumers.
Proposition 3: Research Stakeholder Issues and
Expectations and Measure Impact
Having mapped and prioritized the salient stakeholders,
companies must identify their expectations and issues of
concern. This proposition speaks to the particular relevance
of marketing’s role in stakeholder management. Marketing
expertise in marketing research can readily be transferred
from research that primarily considers customers to research
on a full array of stakeholders, using both primary and secondary
data and qualitative and quantitative analysis. In
some cases, marketing researchers’ methodological skills in
investigating sensitive or emotionally charged topics will be
especially useful. Consider, for example, research that an
oil company might conduct on the expectations of the local
community surrounding a petroleum refinery.
Research is a key component of Unilever’s integration of
social, economic, and environmental impacts into brand
innovation. As Patrick Cescau, group CEO, said, “Successful
brands of the future will be those that both satisfy the
functional needs of consumers and address their concerns
as citizens—concerns about the environment and social
justice” (Unilever 2007, p. 12). Key to realizing this is
Unilever’s Brand Imprint Process, a research-led initiative
that has been run on more than 15 of Unilever’s biggest
brands. One of the earliest beneficiaries was its Dove brand
(Cescau 2007). The result was the widely lauded Campaign
for Real Beauty.7 Dove, Unilever’s largest personal care
brand, has as its mission “to make women feel more beautiful
every day by challenging today’s stereotypical view of
beauty and inspiring women to take great care of themselves.”
Launched in 2004, the Campaign for Real Beauty
is described as “a global effort that is intended to serve as a
starting point for societal change and act as a catalyst for
widening the definition and discussion of beauty.” A key
vehicle has been “Evolution,” a short video seen by tens of
millions of people on YouTube (Vranica 2008). It shows
8 The New Marketing Myopia
how an average-looking woman is transformed by beauty
industry techniques, such as airbrushing, into a billboard
supermodel and concludes, “No wonder our perception of
beauty is distorted.” The brand also supports online discussions
and the Dove Self-Esteem Fund. As Unilever has
illustrated with Dove, stakeholder research can serve as a
catalyst for innovation and value creation for the firm as
well as for society.
The methodological expertise of marketing research is
also especially relevant to the metrics challenges of social
impact measurement. Stakeholder issues and expectations
translate into social impacts that reflect corporate social
performance. Most large companies today report on their
social and environmental performance. KPMG’s regular
survey of social responsibility reporting found that 80% of
the G250 (top 250 companies of the Global Fortune 500)
reported on CSR in 2008, up from 50% in 2005.8 However,
the quality of many of these reports leaves much to be
desired. Marketing research methodologies can contribute
to company efforts to better measure company social and
environmental performance not only as a basis for reporting
but also for improving practice when it falls short of expectations
(for current approaches, see Epstein 2008).
Research is also required to evaluate the effectiveness of
the stakeholder management strategy and its implementation.
For example, how do different stakeholders react to
the company’s CSR practices, and how can marketing
approaches, methodologies, and technologies be employed
to understand these reactions and to respond creatively to
them? How can CSR practices be communicated in a credible
manner, and how can skepticism (see Ellen, Webb, and
Mohr 2006) be dealt with effectively?
Proposition 4: Engage with Stakeholders
Research with U.S. companies suggests that many that
claim to give attention to stakeholders often do so at a distance—
they may make efforts to consider the interests of
different stakeholders in their decision making; they may
even do research on stakeholder expectations, but they do
not engage directly with stakeholders (Googins 2008).
Freeman, Harrison, and Wicks (2007, p. 60) identify ten
“managing for stakeholders” principles, including “intensive
communication and dialogue with stakeholders—not
just those who are friendly.” Again, marketing has a particular
expertise to bring to bear. Its success in identifying
how to better listen to customers and how to collaborate
with customers in strategic initiatives, such as product
design, can be used to foster improved two-way communications
and collaboration with other primary and secondary
stakeholders. Indeed, marketing expertise can lend itself to
better understanding of stakeholder needs and, possibly, as
Maignan and Ferrell (2004) suggest, the development of
stakeholder orientation, extending the practice of market
orientation (Kohli and Jaworski 1990). However, as with
market orientation, scale development work is required
to develop valid and reliable measures of stakeholder
orientation.
6See http://www.aarp.org/aarp/About_AARP/ (accessed January 30,
2009).
7See http://www.campaignforrealbeauty.com/press.asp?id=4562&
section=news&target=press.
8See https://www.kpmg.com/SiteCollectionDocuments/Internationalcorporate-
responsibility-survey-2008.pdf (accessed December 3, 2008).
Consider the example of Monsanto. By its own admission,
before 2000, it had failed to take seriously the concerns
of stakeholders about the safety of its agricultural
biotechnology. Monsanto’s customers—farmers and distributors—
loved the genetically engineered crops, but other
stakeholders had grave concerns, which the company
viewed as “nonscientific” and unimportant. The result was
a crisis of public confidence incited by activists, who made
highly effective use of the Internet. They put pressure on
Monsanto’s customers, distributors withdrew their support,
and the stock price plunged. Monsanto merged with Pharmacia
in March 2000, to be spun off a few months later
through a partial initial public offering.
Given these problems, Monsanto identified two challenges
that it needed to address: (1) to broaden its notion of
its stakeholders to include both critics and allies and (2) to
bring stakeholder concerns into internal policy and decision
making. Monsanto then began to engage stakeholders in
dialogue—including its fiercest critics—to understand and
better respond to their concerns. Monsanto’s scientists
received intense training in developing listening skills and
were sent out to conduct hundreds of interviews with stakeholders.
These data were supplemented by a ten-country
tracking study of consumers and opinion leaders and surveys
of trade partners. In November 2000, CEO Bob
Shapiro announced “the New Monsanto Pledge,” based on
five principles reflecting stakeholder expectations: dialogue,
transparency, respect, sharing, and benefits. Through
the years, the stakeholder dialogues and the pledge have
continued to affect Monsanto’s business strategy in profound
ways. For example, under its marketing-led Sustainable
Yield Initiative, announced June 2008, Monsanto
pledged to double the yield of its three key crops by 2030,
reduce by one-third the resources its crops use by 2030, and
improve the lives of five million people in resource-poor
farm families by 2020.9 Monsanto has demonstrated that
stakeholder engagement can benefit the firm and the world
in profoundly positive ways, including some of the least
powerful stakeholders.
Proposition 5: Embed a Stakeholder Orientation
Our final proposition is that marketing managers need to
ensure that a stakeholder orientation becomes central to
day-to-day decision making, rather than a one-off response,
perhaps to adverse publicity. The marketing function has
long been required to lobby internally on behalf of customers.
Avoiding the new marketing myopia suggests that
these efforts need to be extended to include other stakeholders.
More broadly, this would form part of a mainstreaming
of CSR, such that it “is clearly seen to be on the company’s
agenda in a legitimate, credible, and ongoing manner, and it
is incorporated into day-to-day activities in appropriate and
relevant ways” (Berger, Cunningham, and Drumwright
2007, p. 133).
The experience of oil company Shell suggests that
embedding CSR is not only a process of “hardwiring”
through structural responses and formal policies and proce-
Journal of Public Policy & Marketing 9
dures (e.g., Kraft’s Global Advisory Council) but also a
process of “softwiring,” such that it is integrated into the
organizational culture, skills, and competencies (De Wit,
Wade, and Schouten 2006). Thus, to embed attention to
stakeholders, Monsanto established the Pledge Award Program
to recognize and reward employees who find important
ways to live out the pledge to stakeholders. Similarly,
Wal-Mart, as part of its response to multiple challenges
from stakeholders over its social and environmental policies
(Entine 2008; Smith and Crawford 2006), has extended its
sustainability initiative to its employees through Personal
Sustainability Projects, in which employees are asked to
take a pledge to improve their bodies, their families, or the
planet. Through the initiative, Wal-Mart hopes to better
softwire sustainability and, through increased organizational
identification (e.g., Brown et al. 2006; Maignan and
Ferrell 2004), also improve employee morale and productivity
and reduce health care costs. Who better to market a
stakeholder orientation to key internal constituents than
marketers?
Conclusions
We identify how marketing’s myopic focus on customers
and failure to give attention to a broad range of stakeholders
can have serious adverse consequences for marketers, their
firms, and society. In contrast, we propose a vision of marketing
management as involving multiple stakeholders in
value creation. To assist marketers in realizing this vision,
we offer five propositions for improved marketing practice:
(1) map the company’s stakeholders, (2) determine stakeholder
salience, (3) research stakeholder issues and expectations
and measure impact, (4) engage with stakeholders,
and (5) embed a stakeholder orientation. We assert that
marketing can bring a particular, if not unique, expertise to
these initiatives. Although our emphasis is on practice, we
also highlight the paucity of research on stakeholders in
marketing. The propositions for marketing practice suggest
many avenues for research to fill this gap, from research on
communication practices that are salient and effective for
different stakeholders to developing methodologies and
metrics for the measurement of stakeholder orientation and
corporate social performance more broadly. Both marketing
practitioners and researchers need to comprehend better the
firm’s deeply embedded position in society and shift from a
narrow focus on customers to a stakeholder orientation if
firms are to prosper and grow in the unpredictable business
environment of the twenty-first century.
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