Introduction and background

Peter Ferdinand Drucker has been hailed as the man who invented corporate society, father of modern management, and gurus’ guru (Beatty 1998; Prusak and Davenport 2003). While this may well be the case, for marketers, Drucker’s extraordinary career provided a residual effect that was above and beyond that of a prolific author of politics, society, and management books. While Drucker himself may not have been aware, and might even have objected to the very notion, he was arguably the most prominent public marketer of marketing. That he did not consider himself a marketer made him all the more credible. His interviews, books and musings find that he championed marketing with conviction. Drucker maintained that marketing was “certainly the most ‘scientific’ of all functional business disciplines” (Drucker 1958, p.252). Before Drucker, marketing was conceived as applied economics. After Drucker, it was defined as a key managerial activity for business, government, and society. Drucker effectively inaugurated the modern marketing era (Faulkner 2007; Kelley 2007).

His method was simple. Drucker (1978) was an avid bystander. He would observe and make connections. Then, when he wrote, what he constructed was either impressive (connections others did not see) or profound (connections others could not make). His keen followers included Winston Churchill, Margaret Thatcher, Bill Gates, Masatoshi Ito, and corporations such as Ford, Intel, General Electric, Hewlett-Packard, Merck, Johnson & Johnson, Procter & Gamble, Motorola, Sears, and Sony.

He was an interdisciplinary thought leader that constantly fed practitioners, policy-makers and academics with his insights. However, Drucker did not consider himself a scholar, did not trust elaborate statistical analyses, and mostly avoided publishing in academic journals. As an unfortunate result, mainstream academia was not informed of the extent of his work. He was mostly recognized for having a knack for coining phrases: management by objectives (see Greenwood 1981, p.229, tracing it to Drucker 1954), knowledge worker (Drucker 1959), post-capitalist society (Drucker 1993), and profit center (Drucker 1964) to name a few. He was not given due credit for the depth of his thinking. Yet, he was read and read widely (see bibliometrics) and was influential even more so among award winning articles (e.g., Day 1994; Srivastava et al. 1998; Vargo and Lusch 2004; Webster 1992).

Drucker often relied upon others to disseminate the concepts he pioneered. For example, in the roots of market orientation (arguably marketing management’s focal research area during the last two decades) lie Drucker’s insights on the marketing concept (Deshpande and Webster 1989; Kohli and Jaworski 1990, p.1). Similarly, “marketing myopia” is a concept attributed to Theodore Levitt (1960). However, Drucker (1949) was indeed examining the same phenomenon, projecting the future onto the present definition of market/business, more than a decade earlier.Footnote 1 Yet again it was Drucker (e.g., 1964, pp.131–150) who discussed what later came to be recognized as core competencies (Prahalad and Hamel 1990) using the examples of the automobile and aircraft industries among others.

Drucker continued to learn and contribute to our understanding throughout his career. Those who did not know him might have expected him to slow down after 2002 when he was awarded the National Medal of Freedom by US President G.W. Bush in recognition of his work in the field of management. Instead, he went on to win McKinsey’s prestigious best article award in the Harvard Business Review in 2004 (for the seventh time).

It is possible to write several articles on each of the major contributions of this great man of management and marketing. However, this special issue of JAMS aims to create “conversations around many of his ideas related to marketing” and we are constrained by space limitations. Therefore, we limit the scope of our tribute to the following: First, we identify how Drucker has contributed to marketing and demonstrate this influence by means of bibliometric analysis. Then we selectively comment on his insights (i.e., five tenets) and their implications for the future of marketing.

Drucker: a prominent and prolific pathfinder

In the marketing literature, the ‘Matthew Effect’ is a phenomenon that is rarely discussed, seldom challenged, but commonly evident. It describes the process whereby, “the accruing of greater increments of recognition for particular scientific contributions to scientists of considerable repute and the withholding of such recognition from scientists who have not yet made their mark” appears to occur (Merton 1968, p.5). When a scientist of repute introduces a concept or idea it is likely inter alia to receive greater visibility than when the same is provided by a more junior colleague. Our working hypothesis, as we approached the assessment of how Drucker was received as a scholar, was that he did indeed benefit from the Matthew Effect, but potentially more in terms of management practice and public policy than necessarily in a scholarly sense. Indeed Drucker’s ideas have diffused far and wide but the measurable evidence of this in the marketing literature is less clear and immediate.

The information sciences discipline and, more specifically, scientometrics has indicated how bibliometric techniques can be employed to establish an author’s “intellectual image and identity, and how, in turn, this information can enhance our appreciation of the socio-cognitive connections revealed in citations networks” (Cronin and Shaw 2002, p.31). When a single individual is considered as a focal author, as is the case with Drucker here, a technique referred to as “ego-centered analysis” is relevant.Footnote 2 In this sense, “[a]n ego…network consists of a focal person…(ego), a set of alters who have ties to ego, and the measurements on the ties to ego” (Wasserman and Faust 1994, p.53). Therefore, we conduct an ego-centered analysis of Drucker (“ego”) and other authors that are related to him in bibliometric terms (“alters”).

We used the ISI Web of Knowledge in order to have access to a number of scholarly publications categories. Of the three databases ISI services, The Social Sciences Citation Index (SSCI) was most relevant because we were interested in setting the parameters to “Business” and “Management” searches. There are four forms of “ego-alter” data that underpin ego-centered analysis (White 2001): (1) co-author profile: a count of co-authors and their joint appearances; (2) citation identity profile: an author’s citees; (3) citation image: authors who are co-cited with a focal author; and, (4) citation image makers: citers who refer to a focal author.

First, for co-author profile, an analysis of Drucker’s publications in the ISI database (across all subject categories) revealed 113 publications after cleaning the database for other “Drucker, P*” identities. For the business and management-related publications, Drucker published 53 articles that qualify, but the interesting matter is that none of these publications were co-authored. Those that prima facie appear as co-authored works were, upon closer inspection, identified as interviews of Drucker by another. There are few authors that can claim to span a career where they have not co-authored with others (Floyd et al. 1994). Against this backdrop though, it is interesting to note that in Bauerly and Johnson’s (2005) study, 8 of the 13 most frequently cited journal articles on the topic of marketing theory were published by sole authors—Paul F. Anderson (1), Richard P. Bagozzi (1), Shelby D. Hunt (5), J. Paul Peter (1). However, it is conclusive that Drucker was a lone scholar.

Second, Drucker characteristically tended to not list many citees in his articles and consequently his citation identity profile is extremely limited. This is explained largely by the fact that he published in outlets where citations were not required (e.g., Harvard Business Review) or he published thought leadership articles where no reference to existing literature was encouraged.

Third, citation image captures “[T]he set of authors with whom a focal author has been cocited” (White 2001, p.88). However, determining the citation image of Drucker bibliometrically as reflected in academic marketing thought requires us to circumscribe the boundaries of the marketing discipline. There can be little doubt that academic journals provide the basis upon which disciplines are developed and evolve (Bauerly and Johnson 2005). Identifying a core population of marketing (-related) journals therefore enables us to delimit an assessment of Drucker specifically within the marketing discipline. A selection of recent studies that have sought to assess relative differences within a population of marketing (-related) journals include: Hult et al. (1997), Pieters et al. (1999), Tellis et al. (1999), Bakir et al. (2000), Theoharakis and Hirst (2002), and Bauerly and Johnson (2005).

Whereas most studies adopt an expert (delphi) opinion basis to model their analyses, arguably the most robust approach is to adopt a knowledge use perspective in determining the value of an article. Whereas expert opinion captures the perceptions of leading influencers, research that is based on citation outputs tend to prioritize knowledge use as the objective criterion for determining the utility of published journal output (Zinkhan 2004). Consequently, we adopt one of the leading citation-based studies in marketing—the Baumgartner and Pieters (2003) battery of marketing (-related) journals—to delimit the scope of Drucker’s influence on marketing. From their rigorous analysis of 42,023 citations, Baumgartner and Pieters (2003) identified and ranked the structural influence of 49 marketing (-related) journals. In order to reduce noise within the data and also to adopt a proxy for academic rigor, we selected their top ten journalsFootnote 3 on which to perform our Drucker citation image analysis.

Between 1970–2006, Drucker was cited 237 times in these leading marketing journals. As can readily be seen from Table 1, Drucker’s citations are heavily associated with those of Day, Kotler, Webster, Deshpande, and Slater, among others. A scholar is influential to the extent that (s)he contributes significantly to ideas within a field of inquiry. Characterizing this form of impact is challenging especially for an individual such as Drucker because he disseminated his ideas across a wide range of platforms; notoriously cited few other authors; and, his influence tended to transcend scholarly boundaries affecting both policy and practice equally. Although Drucker’s scholarship was recognized in his journalism, oratory, consultancy, and government advisory work, he was foremost considered an author. In seeking to specifically quantify his research output various metrics can be used—one of the most well received and robust metrics is the h-index. Compared with most other indicants of an author’s cumulative impact and relevance of a scholar,Footnote 4 the h-index has many strengths and few limitations. “A scientist has index h if h of his/her N p papers have at least h citations each, and the other (N p  − h) papers have no more than h citations each”; in other words, “h is defined as the number of papers with citation number higher or equal to h” (Hirsch 2005, p.1).

Table 1 Drucker’s citation image in the ‘top-10’ marketing (-related) journals (1970–2006)a
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The distinguishing feature of the h-index is that it captures the broad impact of an author’s work. For example, an author with only a few high impact articles or one with many low-impact articles will never achieve a high h-index. Therefore, the h-index discriminates well and, although generally consistent with raw citation count (Hirsch 2005), the former is a superior indicant than the latter and more accurately reflects enduring performance. It should be appreciated though that the value of h does vary considerably across disciplines. Therefore, due to this field dependence, it is not a question of magnitude but rather relative comparison that is important in interpreting the h-index of authors. Table 1 also reveals the h-index for Drucker’s citation image in marketing, the number of publications, the sum of times cited along with the average citations per item. It can be seen that there is a great deal of variation in h-indexes across these leading scholars. Also, the advantage of the h-index is that it rewards consistency and longevity in impact. Evidently Drucker, in comparison with other authors such as Williamson, scores well in h-index terms given the large volume of publications combined with their consistent citation. However, it is clear that a number of leading marketing scholars do outperform Drucker in terms of h; the overwhelming reason for this is the type of publication. That is, while Drucker wrote a large number of publications as books and fewer journal articles, the reverse is very much the case for R. Cooper, G. Day, M. Holbrook, and S. Hunt. Consequently, other things being equal, the latter are able to generate a greater h than Drucker.

Fourth, citation image makers are those citers who refer to Drucker in their work. If we examine Drucker’s complete citation image profile—“Business” and “Management” subject categories within the SSCI 1970–2007—we find that he has attracted 2,349 citations. Moreover, as can be seen from Fig. 1, the incidence of his citations is increasing over time indicating the longevity of Drucker’s work. In the marketing (-related) journals (n = 49) identified by Baumgartner and Pieters (2003), there are 634 image makers for Drucker. The range of these topics and journals covered varied greatly.

Figure 1
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Drucker citations for ‘Business and Management’ subject categories. (ISI Social Sciences index).

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In order to interpret the themes underlying these attributions to Drucker, we conducted a content analysis of 438 of these articles identified from a subset of this population. The journals defining this subset were where the preponderance of citations was evident: Advances in Consumer Research, Business Horizons, California Management Review, Decision Sciences, European Journal of Marketing, Harvard Business Review, Industrial Marketing Management, International Journal of Research in Marketing, Journal of Advertising Research, Journal of Business, Journal of Business Ethics, Journal of Business Research, Journal of Consumer Affairs, Journal of Economic Psychology, Journal of International Business Studies, Journal of Marketing, Journal of Marketing Research, Journal of Product Innovation Management, Journal of the Academy of Marketing Science, Management Science, Marketing Science, and Sloan Management Review. Of these, we found 92 were unclassified for primarily two reasons: the content of the article was considerably beyond the scope of the marketing subject area or the nature of the Drucker citation was too generalizable. With the remaining 346 articles, we were able to assign a theme to the content of the article. Although there are inherent limitations in this approach, our method is generally consistent with others in marketing (Stremersch et al. 2007). We derived the following frequencies from these themes or tenets: (1) The Marketing Concept—Creating Value for Customers (n = 79); (2) The Broadened Role of Marketing in Society (n = 141); (3) Contributions to Marketing Strategy (n = 43); (4) Marketing-Innovation Interface (n = 49); and (5) Future of Globalization (n = 34). Figure 2 depicts this as a footprint of Drucker’s intellectual image on marketing thought.

Figure 2
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Drucker’s intellectual contributions to marketing thought.

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We posit that these five tenets of Drucker’s academic influence in marketing reasonably meet the mutually exclusive and collectively exhaustive rule of classification. Evidently, most of Drucker’s impact has diffused through the broadened role of marketing in society tenet, while the literature associated with the role of marketing in business (i.e., the marketing concept) has also witnessed a high number of citations. Although less, all three other tenets have produced a substantive number of citations demonstrating, in many cases, that Drucker’s ideas form the nucleus of many research articles and provides the kernel of these developing themes. This is particularly the case with Drucker unlike many other authors in that his citations frequently carry a primacy effect in an article; featuring as among the opening citations thus providing the backdrop to the motivation for a piece of research.

We then sought to develop a citation network analysis. As can be seen from Fig. 3, Drucker is depicted as the ego. The alters or satellite authorsFootnote 5 represent those that have cited Drucker most frequently in the marketing-related journals we used for the previous analysis. We have also overlaid this network with the five Drucker tenets. At the core, those top alters for Drucker are R. Deshpande, M. Schwartz, H. Mintzberg, and M.H. Morris. We considered it revealing to place each of these alters as egos themselves and seek to identify their corresponding top two alters (or Drucker’s secondary alters). The purpose of this was to assess the intellectual association that Drucker has made in these marketing-related journals. In each case, it is evident that Drucker influenced important networks in all except the future of globalization tenet. This is reinforced by the scale of the h-indices of many of these secondary alters. Further network analysis could have been performed, however the permutations become too numerous to convey visually or numerically.

Figure 3
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Drucker’s citation map by Tenet from the marketing-related journals (1970–2006).

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Beyond these alters most closely related to Drucker, a series of other alters that have cited him less frequently have, nonetheless, displayed an important impact on their areas of research. For example, F.E. Webster and L.L. Berry have distinguished themselves as key writers in their respective sub-fields of what we have characterized as the broadened role of marketing in business with emphasis on value. Similarly, in the case of marketing strategy, Drucker’s alters include notable authorities such as R. Glazer, P. Doyle, and N. Capon whose h-indices are considerably high.

In summary, our analyses reveal that Drucker has had enduring and significant influence not only in management but also in the realm of marketing. Although he has been a sole author with few citees, he has nevertheless influenced the thinking of numerous marketing scholars, several of whom are among the most prominent names in the discipline, and who in turn have passed on his insights to their own co-authors, citers, and readers. Drucker’s work has stood the test of time, and remains a pivotal starting point for marketing scholars. Next, we explore the nature of Drucker’s influence in marketing thought through the five main tenets identified through bibliometric analysis.

Tenets of Drucker

The marketing concept: creating value for customers

“There is only one valid definition of business purpose: to create a customer” (Drucker 1973, p.61). “Value and service first, profit later. Maximizing profit, perhaps never.” (Drucker in Bialkowski 2000, p.3).

Drucker (1954) was the first to state the marketing concept—the foundation of modern marketing (Day 1994; Webster 1988). The key “take-away” from Drucker’s life work in management is his devotion to the primacy of the customer. Marketing is “…a central dimension of the entire business. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise” (Drucker 1973, p.63).

With his relentless emphasis, Drucker shifted the attention of businesses (large and small) from making to marketing activities. His actual intent was to make marketing philosophy an integral, organic part of the organization: if marketing was to make selling superfluous (Drucker 1954), then astute management was to make a separate marketing division superfluous. Top executives bought into the marketing concept but they failed to implement it (Barksdale and Darden 1971). Even though Drucker’s vision was never realized in its pure form, it was a forceful plea enough to broaden the role of marketing in the organization and elevate it to the powerhouse that it is today.

Even so, the question on the role of marketing staff within the corporation after marketing permeates throughout the organization has not been fully addressed. Would the distinct marketing function become marginalized as a result? “Should it be another internal consulting group? A firefighting squad? A training school? A watchdog, advising top corporate management?” (Buzzell 1970, p.6). The answer is, perhaps, all of the above. Sheth and Sisodia (2005, p.12) recently opted for “a corporate staff function (similar to finance, information technology, legal issues, and human resource management), with both capital and operating budgets. Marketing’s domain should include branding, key account management, and business development. The head of corporate marketing should report directly to the CEO, and a standing committee of the board should be formed to oversee the company’s marketing activities.” Achrol and Kotler (1999, pp.150–51) argued that its “most important contribution will be enabling the firm process information to knowledge…will act as internal Infomediary…a privacy guard…as an organizational educator…as an integrator…as coordinator and conflict manager.” The use of the political economy paradigm (rather than the microeconomic paradigm) has been deemed necessary to understand and advance marketing (e.g., Arntd 1983; Webster 1992). For marketing to continue its rise to prominence and not lose its identity, we advocate that scholars in marketing refer back to Drucker, a master of both management and political economy.

Broadened role of marketing in society

In addition to broadening the role of marketing within the business organization through the marketing concept, Drucker was a fervent catalyst to grow the utilization of marketing to improve quality of life in a consumption society. He passionately argued for corporate social responsibility, and embraced consumerism as the reaction to poor management. He told his social sector clients that they need marketing to succeed, and his business clients to benchmark the social sector to be innovative. We examine Drucker’s impact in this area in four parts: corporate social responsibility: ultimately shared interests, consumerism: the right marketing concept, social sector: marketing of non-profit enterprises, and lessons from non-profit organizations: public–private partnerships and internal marketing.

Corporate social responsibility: ultimately shared interests

“Society is only meaningful if its purpose, its aims, its ideas and ideals make sense in terms of individual’s purposes, aims, ideas, ideals…there must be a definite functional relationship between individual life and group life.” (Drucker 1942, p.27)

Can marketing help construct this essential bridge between the individual and society? Drucker thought so. He was influenced by Kierkegaard who believed that “human existence is possible only in tension —in tension between man’s simultaneous life as an individual in the spirit and as a citizen in the society” (Drucker 1971, p.53). The same tension exists for the corporation which has a dual role of a competitive enterprise and a corporate citizen of philanthropy. However, these tensions represent ultimately shared interests, and marketing represents potential relief (Drucker 1958).

In a quest to identify what role business ought to play in modern society, Drucker (1978) was influenced by Alfred Sloan of GM, who always insisted that responsibility and authority of businesses go together. However, while Sloan and most corporations actually used this as the excuse to not engage in corporate citizenry, Drucker (1973) passionately argued that corporations have a social responsibility. Through its interplay between customer-centric processes, organizational performance and societal welfare (Deshpande 1999), marketing plays the dominant role in living up to that responsibility (Drucker 1958). “For in a good, a moral, a lasting society, the public good must always rest on private virtue” (Drucker 2004, p.25). In “a society of organizations,” corporations have three main dimensions: economic organization, human organization, and increasingly important, social organization (Drucker 1992b). Marketing can uniquely enhance the value of all three organizations. As such, Drucker’s call for increasing social responsibilities found support in marketing and management circles (e.g., Alderson 1968; Mintzberg 1983; Lavidge 1970; Rostow 1965) and significant benefits to firms’ market value have been empirically shown recently (Luo and Bhattacharya 2006). It seems like Drucker was right in arguing that social responsibilities exist even for the competitive enterprise and that it leads to “ultimately shared interests.” It falls upon us to define the boundaries and develop theories that expose these links. Or consumerism could once again become “the shame of marketing” (Drucker 1969b, p.60).

Consumerism: the right marketing concept

According to Drucker (1969b, p.60), consumerism is the outcome of a mismatch between the perceptions of the manufacturers and the realities of the consumer. In other words, manufacturers have failed to properly study consumers and expect them “to make distinctions which the consumer is neither able nor willing to make” (Drucker 1969b, p.61). The backlash has been the emergence of the consumerism movement which would not have been necessary had the marketing concept been implemented properly.

Nevertheless, it has been suggested that the marketing concept and consumerism are “incompatible” and that it “actually is the result of prostitution of the marketing concept, rather than a malfunction of it” (Buskirk and Rothe 1970, p.62). The stated antecedents of consumerism are admittedly complex [e.g., alleged marketing excesses, inflation, economic recession, questioning of mass consumption society values, increased leisure time, higher education levels, general affluence, low unemployment, complex new products, popular success achieved by individuals such as Ralph Nader (Buskirk and Rothe 1970; Straver 1978)].

Consumerism is defined as “the organized efforts by or for consumers to promote consumption welfare in a mass consumption technological society” (Sheth and Mammana 1974, p.65) and “a social movement designed to augment the rights and powers of buyers in relation to sellers” (Kotler 1972, p.42). Interestingly, there is nothing inherently incompatible about these definitions of consumerism and marketing. It has been observed that consumerism is inevitable, here to stay, pro-marketing and beneficial (Kotler 1972; Straver 1978). However, it is the management’s job (not the consumer’s) to get the right regulation enacted (Drucker 1973).

Often mistaken as a pessimist of consumerism, Drucker was actually an optimist from the beginning:

“[W]e have an interest in a strong and active consumer movement. Don’t make the mistake of thinking this is an enemy. This is the most hopeful thing for us around. How do we really use it, how do we challenge it, how do we really help it? We have to stop seeing the consumer as a threat and look upon him as an opportunity…consumerism actually should be, must be, and I hope it will be, the opportunity of marketing…. The question is: can we anticipate and lead and initiate them constructively…” (Drucker 1969b, p.64).

Drucker’s manifesto has found much support in marketing circles over the years. Regarding all of the basic consumer rights (the right to safety, the right to be informed, the right to choose, and the right to be heard), we have made great strides: extensive product tests to ensure safety have become a part of the new product development process. There has also been a conscious effort to involve the consumer in product/service design “…so that they fit the reality of the consumer, not the ego of our engineers” (Drucker 1969b, p.61). Information flow between the marketers and the consumers has been vastly improved (e.g., labeling and advertising regulations). We have also greatly advanced our understanding of the consumer so as to aid him/her more effectively in the decision process. Currently, issues such as channel captaincy that may interfere with the right to choose are being monitored/worked out. Consumers can share their experiences through company hotlines, Internet blogs, consumer advocates, the media, or government organizations.

That Drucker’s call to embrace consumerism has come a long way is also demonstrated by longitudinal studies of improving consumer sentiment regarding the marketing practice (Gaski and Etzel 1986, 2005). However, it is important to note that the sentiment is still in the unfavorable range (Sheth and Sisodia 2006a; Varadarajan and Thirunarayana 1990). To further improve, marketers need to provide “intelligent leadership” (Drucker 1992a; Lavidge 1970). Still, it is fair to say that consumerism is not a hot issue in the developed world as it was in the 1960s and 1970s, although it is emerging as a hot issue in the fast growing emerging economies of China and India. As the recent wave of product recalls suggest, it could potentially regain its popularity due to globalization. Sheth and Mammana (1974) suggested that the industry take the lead in enhancing physical safety, consumer himself/herself take the lead in economic rationality, consumer advocates take the lead in social safety and inequities, and that the government take the lead in environmental imbalance issues. Considering Al Gore’s Nobel peace prize for garnering public and government attention to climate change, and Mattel’s recall of more than 20 million toys, Drucker’s (1969b) vision still appears to be highly relevant almost four decades later.

The life-cycle concept of consumerism implies that different countries are in different stages (i.e., crusading, popular movement, organizational/managerial, and bureaucracy) in their consumerism activities (Straver 1977; Varadarajan and Thirunarayana 1990). The cycle is assumed to follow a pattern in which self-regulation by business becomes gradually more dominant over government control (Barksdale et al. 1982). This transformation cannot be confined as “there is no longer a ‘Western’ history or a ‘Western’ civilization. There is only world history and world civilization” (Drucker 1992b, p.95). The constituents within developing countries would highly benefit from learning from others’ experiences, and openly collaborating for a smooth transition from early to advanced stages.

Social sector: marketing of non-profit enterprises

“It is not business, it is not government, it is the social sector that may yet save the society” (Drucker in Hesselbein 2005, p.6).

Marketing is just as much, if not more, necessary for the non-profit enterprise (Drucker 1990a). It can enhance societal welfare by alleviating the struggle of the (world’s) poor, by marketing of social organizations and ideas, by increasing the efficiency of the economy, by effectively using and reducing the pollution of the society’s resources, and by making consumerism (the way we know it) obsolete (Lavidge 1970). Alleviation of the world’s poor is gradually happening as marketing takes the lead in enjoining them into the market economy (Alderson 1968; Kaynak 1986; Prahalad 2004). Once considered low-brow, marketing has become a staple of most NGO’s activities (Drucker 1990a; Kotler and Levy 1969) and its value is accepted in design, implementation, and control of social change (Kotler and Zaltman 1971). Any competitive organization cannot meet its objectives without well-managed marketing efforts. The toughest ethical decisions for marketers, and confusing guidance, remain in the area of management of societal resources (should we rather than can we market?) which is the driver of a growing consensus for marketing reform (Sheth and Sisodia 2005, 2006a). Drucker (e.g., 1981b, 1982) was concerned about this issue and warned against business ethics (which he dismissed) replacing social responsibility: “[T]here neither is a separate ethics of business, nor is one needed…the problem is one of moral values and moral education” (Drucker 1973, p.366).Footnote 6

Lessons from non-profit organizations: public–private partnerships and internal marketing

“The 20th century was the century of business, the next century is going to be the century of the social sector” (Drucker in Pollack 1999).

Since the 1950s, Drucker allocated half of his consulting practice to pro-bono service for nonprofit organizations (Beatty 1998). As a result, he was able to foresee many of the developments in the social sector well ahead of other scholars. Drucker held nonprofits in very high regard and tracked their contribution to the economy over time. He characterized social innovation to be more important than that of high-tech, and non-profit organizations as the research labs of the next society (Drucker 1988, 2001). Building upon this insight, Barczak et al. (2006) have recently shown that the new product development (NPD) emphasis of non-profit organizations can be distinctly different than those of their for-profit counterparts.

Drucker’s ongoing attention for the social sector spurred interest and presumably led to the two main waves of scholarship on the topic: first in the late 1970s (e.g., Beltramini 1981; Kotler 1979, 1982; Lovelock and Weinberg 1978, 1984; Rados 1981; Ryans and Weinberg 1978; Weinberg 1980) and the second currently (e.g., Andreasen et al. 2005; Barczak et al. 2006; Bulla and Starr-Glass 2006; Voss et al. 2006). While diverse in their inquiries, the one common theme in both waves of interest was the application (or applicability) of for profit principles to the social sector, not vice versa (a notable exception has been the effort by Sagawa and Segal (1999, 2000) where the emphasis was value creation possibilities through alliances between profit and non-profit sector or what is today referred to as public–private partnerships). Great progress has been made in making the non-profit organization accountable for its bottomline akin their for-profit counterparts (Drucker 1990a, 1993, p.209). However, the bottomline envisioned by Drucker goes beyond financial accountability: an example would be the new AACSB standards for higher education that requires establishment and measurement of learning outcomes.

More importantly, Drucker insisted that there was more “from the nonprofit to be applied to business than the other way around” (Drucker 1989; The Drucker Foundation 2001, p.40). For marketers, Drucker’s most valuable lesson from nonprofits is the emerging area of internal marketing. NGOs have grown faster than both business and government since World War II, and have collectively become America’s biggest employers (Drucker 1988, 1993). Thus, the way they attract and retain their employees and volunteers warrant our attention. First, internal marketing has to address the reputation of the business to attract employees. “The first sign of decline of an industry is loss of appeal to qualified, able, and ambitious people” (Drucker 1973, p.109). Second, internal marketing has to address the reputation of marketing within the business: knowledge workers demand respect for their area of knowledge, if not for themselves (Drucker 2001). Third, the business must treat its employees as volunteers because stock options and bonuses fail to motivate on their own (Drucker 2001). “[T]he management of people is a ‘marketing job.’” (Drucker 1999a, p.21). For if internal marketing fails in employee–job matching (recruitment) and boosting morale in an increasingly competitive world, “knowledge workers…will save their best efforts for non-profit social service organizations where they can make a bigger difference” (Drucker in Pollack 1999, p.2).

Have we learnt all there is to learn from nonprofits and apply that knowledge to businesses? We think not. We echo Drucker in calling upon scholars to uncover the wisdom in NGOs and to make a conscious effort to transfer it to for-profit organizations.

Contributions to marketing strategy: the obvious and not so obvious

“What is our business, what will it be, what should it be?” (Drucker 1973, p.119)

There is no doubt Drucker had several seminal contributions in the area of marketing management/strategy.Footnote 7 His work has touched upon a wide range of marketing topics including advertising, alliances, customer relationship management, distribution strategy, market segmentation, market orientation, niche and differentiation strategies, retailing, sales management, sales promotions, outsourcing, pricing, product lines (pruning), and service and value orientation. In this section, we discuss three of his less obvious contributions.

One of the main conclusions of his first management book, Concept of the Corporation (Drucker 1946; on GM) was that workers were a primary resource of the corporation. Provocative then, widely accepted today, this notion preceded most scholarship on the resource-based view of the firm. According to Drucker (1959; 1993), knowledge was the resource, and the future lied in the application of knowledge to knowledge by knowledge workers. The result of this new emphasis and the ultimate goal of the business enterprise must be to maximize “wealth producing capacity” instead of profit or shareholder value (Drucker 1991).

Another key strategy lesson from Drucker that rings highly relevant today is precaution against growth for the sake of growth. Drucker (1982) distinguished between three types of growth: healthy growth, fat, and cancer. If growth does not impact the productivity of resources, it is fat. Growth that results in a decrease in productivity is precancerous and subject to radical surgery. “By itself there is no virtue in business growth” (Drucker 1982, p.87). As many telecoms and dot-coms have sadly discovered “[b]uying customers doesn’t work” (Drucker 1990b). Market leadership does not necessarily extract disproportionate profits in all markets or industries. Instead, market domination tends to lull the leader to sleep (Drucker 1982, pp.87–91). There is a right size depending on market, economy, and technology. Thus, firms ought to seek optimal not maximum market standing (Drucker 1973). Besides, a fatal and common mistake is to grow in too many areas: growth strategy has to be based on a company’s core capabilities (Drucker 1982). In other words, Drucker took exception to the neoclassical market share–profitability linkage. The nature of the market share–profitability relationship has had its share of debates (e.g., Buzzell and Gale 1987; Buzzell 1990; Jacobson and Aaker 1985; Jacobson 1988). Drucker’s description of markets coincides with that of Sheth and Sisodia (2002) who in their book, The Rule of Three, also describe a non-linear relationship. Dozens of industries have been found to violate the simplistic linear proposition (Sheth and Sisodia 2002). This would have profound corporate, marketing, and investment strategy implications. There is a need to review and revise what we have to profess on this key relationship.

Finally, Drucker advocated that “business enterprise is an entrepreneurial institution” and discussed entrepreneurial mode as a strategy (Drucker 1970, p.10, 1985; Mintzberg 1973, 1978). The commonalities that Drucker observed early on between the contemporary marketing firm and the entrepreneurial organization have been explored (e.g., Morris and Paul 1987; Morris et al. 1988) but there is still much to contribute toward a new paradigm based on the marketing/entrepreneurship interface (Collinson 2002). Drucker has arguably been pivotal in legitimizing the thriving field of corporate entrepreneurship, an area whose potential is also being demonstrated (e.g., Ahuja and Lampert 2001).

Marketing-innovation interface: new product development

“People don’t pay for technology: they pay for what they get out of technology” (Drucker 1999b, p.5)

Drucker’s (1985) other main emphasis for business success (not to mention survival) was systematic innovation. He is well recognized for championing innovation and entrepreneurship due to his seminal book on the subject. However, he is not given enough credit for differentiating among product, market, and process innovations, and emphasizing the latter two over the first. To Drucker (1981a, p.40), innovation was more of a social and economic than a technical term. He (1985) described seven overlapping sources for innovative opportunity: the unexpected (success, failure, or outside event); the incongruity (between reality and assumptions); innovation based on process need; changes in industry structure or market structure (e.g., rapid growth, convergence of technologies that were seen as separate, changes in the way business is done); demographics; changes in perception, mood, and meaning; and new knowledge (scientific or otherwise). Distinct streams of research have emerged in these areas during the past two decades. Due to space limitations, we selectively focus Drucker’s contributions to the area of new product development.

Drucker (1955, p.79) not only correctly predicted the growth of new product planning but also provided a definition for it: “Product planning…is the intelligence service of marketing and of designing, the organization that brings together all the knowledge about the customer’s needs and the market demand, sifts them, appraises them, evaluates them and then reports the conclusions to the men who are responsible for designing and turning out the product.” He was also a big proponent of pilot/market tests that have become a standard practice today: “Neither studies nor marketing research nor computer modeling are a substitute for the test of reality” (Drucker 1999a, p.87).

With his dual focus on marketing and innovation, Drucker has attracted the interest of many marketing scholars to the main outcome of their interaction: new product development (NPD). True to Drucker’s vision, the beneficial role that the marketing concept and its sub-components play in NPD is being empirically demonstrated (e.g., Atuahene-Gima et al. 2005; De Luca and Atuahene-Gima 2007; Li and Calantone 1998). Drucker believed in marketing involvement throughout the NPD process for successful commercialization. His observation on the skewed distribution of NPD investments summarizes the whole process: “for every dollar spent on generating an idea, ten dollars have to be spent on ‘research’ to convert it into a new discovery or a new invention. For every dollar spent on ‘research,’ at least a hundred dollars need to be spent on development, and for every hundred dollars spent on development, something between a thousand and 10,000 dollars are needed to introduce and establish a new product or a new business on the market” (Drucker 1973, p.785).

Drucker’s (1964) categorization of products as yesterday’s, today’s and tomorrow’s breadwinners can also be thought of as the fusion between the product life cycle (Levitt 1965) and the new product development portfolio (Capon and Glazer 1987; Devinney and Stewart 1988). His simple but not simplistic vision for systematic abandonment and opportunity identification can be felt behind the development of several metrics such as the BCG growth–share matrix.

Drucker (1994) also argued that businesses often ignore those who should be customers (but are not). He argued that merely holding on to current customers (no matter how satisfied) was not enough. Knowing one’s customers is important. However, the first signs of fundamental change can be found among one’s non-customers (Drucker 1994, p.102). This notion was later echoed for disruptive innovations (Christensen 1997). “Share of new customers” measure is bound to be an important metric to examine this phenomenon (Drucker 1990b). More recently, the blue ocean concept advocated by Kim and Mauborgne (2005) also reflects Drucker’s thinking.

Future of globalization: rise of non-national enterprises

“The multinational corporation is both the response to the emergence of a common world market and its symbol” (Drucker 1973, p.736). “The multinational business is in every case a marketing business” (Drucker 1973, p.738).

Drucker (e.g., 1973, 1999a, 2002) was also influential in changing the negative attitude against the multinational [i.e., “non-national” (Drucker 1973, p.724)] corporation. Drucker succinctly prognosticated the emergence and growth potential of global markets and underlined global competitiveness as the institutional imperative for both businesses and NGOs. Borderlessness is a main characteristic of the next society because “knowledge travels even more effortlessly than money” (Drucker 2001, p.4). The world is a “global shopping center” with an autonomous economy which is more than the sum of national economies (Drucker 1969a). Drucker (1973) called for a theory of international markets early on. Scholars have responded, in turn legitimizing the area of international marketing research. The next step is to unify these efforts with comprehensive frameworks a la Malhotra et al. (2003) on international market entry modes.

Drucker (1958) perceived protectionism as a threat to the affluence of both developed and developing nations. He envisioned production sharing as the hope of the developing world in an increasingly global economy (Drucker 1980, 1982, pp.187–92). In fact, there may even be innovation benefits for multinational firms that adopt offshore sourcing (Kotabe 1990a, b). Drucker warned against lip service to free trade and expected that the next protectionism wave will not necessarily be dominated by traditional tariffs but by subsidies, quotas, and other regulations. He (Drucker 1969a) argued that there is a choice other than complete government indifference (free global trade) or complete government control (protectionism). Drucker (2001, p.20) characterized the economic regions as an attempt to balance between “the economic sovereignty of the national state and supranational economic decision-making”. His vision that regional blocks such as the EU, NAFTA and Mercosur will become dominant, trade freely internally but become highly protectionist externally (Drucker 2001) has found support in recent literature (Ghemawat 2005; Sheth and Sisodia 2006b).

Tribute

“I have now reached the age where I know that it is not enough to be remembered for books and theories. One does not make a difference unless it is a difference in people’s lives” told Joseph Schumpeter to Peter Drucker and his father on New Year’s Day in 1950 (Beatty 1998, pp. 187–88). Schumpeter died 8 days later. Drucker never forgot that conversation. And it showed in his purposeful achievements for another 55 years. Drucker envisioned a world where building a wealth producing capacity (for the individual, business, government, and society) is the priority. On that account, his works continue to influence our thinking, his mission is ongoing. But he did make a profound difference in people’s lives around the globe by transforming business, government, society, and us as individuals.