Marketing behaviour and entrepreneurship: A synthesis of Alderson and Austrian economics

Abstract

Marketing is multi-faceted and describes a societal institution and an organisational function as well as prescribing a philosophy of decision making. In all three of these dimensions the main concern is understanding how markets work and how market participants actually behave. As a philosophy of decision making marketing is the process of first determining and then fulfilling consumer wants. It is premised on a recognition of the heterogeneity found in real life markets and on the appreciation of how decision makers go about the matching of market offerings with market demands. Efficiency of want satisfaction is the prime consideration, not Pareto optimality. This, of course, only begs the question. In brief, marketing analysis assumes ab initio that the true state of the world is diversity rather than homogeneity. Hence for decision makers the attainment of efficiency implies some "matching" of the discrepancies between heterogeneous supplies and demands as the source of want satisfaction. This matching is never total. The clearance of markets as described in basic economic theory is viewed as the exception. Hence the role of the decision maker goes beyond that of either a participator in a Walrasian auction for setting price; or that of a selector of quantity as postulated by Marshall. The marketing decision maker must engage in the more complex task of entrepreneurship. The purpose of this article is to merge the ideas of Wroe Alderson, one of the most original marketing theorists, with the recent works in Austrian economics in order to provide a point of departure for an entrepreneurial-based theory of marketing. The discussion is presented in three sections. The first reviews Aldersons concepts of market behaviour and integrates them with the Austrian perspective. The second section is addressed to an investigation of the nature of information required in dynamic markets. It explores the question "How much information is enough?". The final section establishes the role of the entrepreneur in the dynamic market as the means of answering this question. © 2006 Springer Science+Business Media, Inc.