Journal of Marketing Management, 2002,18, 239-247

Special Symposium on Shelhy D. Hunf s ''A General

Theory of Competition: Resources, Competences,
Productivity Economic Growth", Part 3.
ci- lu D.
Shelby T-k Hunt!
u i.n Marketing
^ .. r and a General Theory
^ of
Competition
Resource-advantage ("R-A") theory is a dynamic, process theory of
competition that has been developed in a series of articles in several different
disciplines and research traditions, including marketing (Hunt 1997a, 1999,
2000c, 2001a; Hunt and Arnett 2001; Hunt, Lambe, and Wittmann 2002; Hunt
and Morgan 1995, 1996, 1997), management (Hunt 1995, 2000a, d; Hunt and
Lambe 2000), neoclassical economics (Hunt 1997b), institutional economics
(Hunt 1997c), socio-economics (Hunt 1997d), "Austrian" economics (Hunt
2002c), and general business (Hunt 1998; Hunt and Duhan 2002). A General
Theory of Competition: Resources, Competences, Productivity, Economic Growth
(Hunt 2000b) - hereafter, GTC - pulls together much of the content of the
numerous articles into a single, cohesive work.
To have GTC evaluated by such noted marketing scholars as Robin
Wensley (hereafter, RW) and Bodo B. Schlegelmilch (hereafter, BBS) is
gratifying. I thank RW and BBS for taking the time and effort to both read
and comment on GTC. Although RW and BBS find much of value in GTC
(indeed, BBS refers to it as "fascinating reading," a "gem," and a "treasure-
chest for identifying promising future research avenues"), both raise
significant issues that will be addressed in this reply. However, before
addressing the issues raised by RW and BBS, it is important to point out the
issues they did not raise.
The foundational premises of R-A theory are detailed in Table 5.1 in GTC.
Neither commentator questions a single one of the theory's nine foundational
premises. Furthermore, R-A theory's proposed structure of the process of
competition is provided in GTC's Figures 6.1 and 6.2. Again, neither
commentator raises a single issue concerning this depiction of the process of
competition. Moreover, on pages 258-259 of GTC is a list of 22 summaries of
specific claims about R-A theory's contribution to our knowledge about
competition. Not a single one of these claims is criticized or challenged by
the commentators. In short, neither commentator raises a single challenge to
any substantive issue in GTC. It is always gratifying to a book's author when

1 Shelby D. Hunt, The J.B. Hoskins and P.W. Horn Professor of Marketing, Texas
Tech University, Department of Marketing, P.O. Box 42101, Lubbock, TX 79409 USA
Tel: 806-742-3436 FAX: 806-742-2199 sdh@ba.ttu.edu
ISSN0267-257X / 2002 /1-200239+08 £4.00 / 0 ©Westburn Publishers Ltd.
240 Shelby D. Hunt

commentators either find no errors to report or, at the minimum, find no

error worth reporting. What, then, are the issues they raise? First, both
question the "marketing" of GTC.

On the Marketing of GTC

RW develops his review from a "market based perspective" and quotes Bob
Lusch's review, which concluded that his "only concern is that the book will
not be widely read." RW then compares GTC's sales rank on Amazon.com
with that of George Day's The Market Driven Organization: Understanding,
Attracting, and Keeping Valuable Customers. He points out that Day's book is
ranked about 25,000, whereas GTC's rank is about 350,000.i The implication
appears to be, for RW, that GTC is not very popular with marketing
practitioners. In a similar vein, BBS quotes Bob Lusch as saying that
"executives and entrepreneurs, management consultants, policy makers, and
scholars and students in economics, law, political science and business"
should study and read GTC. BBS then maintains that "R-A theory may be
eclectic, but the readership of this book will not!"
In reply, several points are worth noting. First, the target audience for
GTC is scholars in marketing, management, and economics interested in
competition, economic productivity, economic growth, public policy,
innovation, resources, competences, evolutionary theory, institutions, capital,
comparative economic systems, technological progress, antitrust, business
strategy, and marketing strategy. Just as articles developing R-A theory have
appeared in scholarly journals in management, marketing, and economics,
the evidence to date indicates that scholars in these disciplines are, indeed,
reading both GTC and the articles developing R-A theory. Therefore, contra-
BBS, the readership is extraordinarily eclectic.
Second, neither my publisher nor I expected thousands of business
practitioners to purchase GTC. Therefore, to compare the sales of GTC
through Amazon.com with those of a book specifically targeting
practitioners and authored by one of the most famous (and justifiably so)
experts on marketing strategy in the world, i.e., George Day, is - shall we say
- a bit unfair. Third, it is important to distinguish between GTC (a book) and
resource-advantage (a theory). Those practitioners who have either read the
book or have been in audiences in which R-A theory has been discussed have
been uniformly and strongly supportive of the theory. As numerous
practitioners have told me, the theory "rings true" to them. That is, the
theory seems to them to describe how competition actually works in real
economies. Furthermore, they report that they find the theory - especially
Figure 6.2 - to be very useful as a foundation for developing business and
marketing strategy. (More on strategy later.)
 On Marketing and A General Theory Of Competition 241

Fourth, there are many different ways to communicate with business

practitioners. One could certainly use R-A theory as a foundation for
developing a business and/or marketing strategy book targeted at
practitioners. However, because new knowledge goes through a diffusion
process (Hunt 2002b; Shimp 1994), "direct marketing" is not the only way to
communicate with practitioners. That is, one can also reach them through
influencing the way academics in economics, management, and marketing
teach, write, and consult. GTC takes this indirect route.
Fifth, a book does not have to be an Amazon.com best-seller in order to be
influential. For example, there have been three editions of Marketing Theory
(Hunt 1976,1983,1991). Not one edition ever sold more than a few hundred
copies in any single year. Nevertheless, marketing scholars routinely claim
that the various editions of Marketing Theory have strongly influenced the
marketing discipline. Indeed, even those whose philosophical orientations
lead them to conclude that Marketing Theory has been injurious to the
epistemological health of the marketing discipline acknowledge (by
implication) the book's influence. Likewise, I believe that GTC can be
influential (and by my terms successful) without being a best-seller. My
earnings from Marketing Theory have amounted to less than minimum wage;
I never expected to earn more from GTC (and those expectations are proving
correct).
In summary, criticisms of the marketing of GTC misunderstand its target
market, misreport the eclecticism of its readership, use questionable referents
in gauging its sales success, inaccurately estimate the interest of practitioners
in R-A theory, too narrowly perceive the knowledge diffusion process, and
seem to mistakenly equate sales with influence. The preceding, of course,
does not imply that GTC could not be marketed better. Perhaps the
commentaries by RW and BBS will contribute to the better marketing of
GTC?

On Critique

RW complains that "a wider critique of the market system seems missing
from Hunt's book." He maintains that a major reason that the critique is
missing is that the philosophical foundations of my research, as exemplified
by GTC, make such a critique "off-limits." Therefore, as to philosophical
foundations, "stray [from Hunt's philosophy] one must if we are to confront.
. . the nature of demand in a wider sense." RW then discusses favorably the
work of Naomi Klein (1999) and her critique of the corporate use of brand
names. He concludes by forecasting that the kind of critique of marketing
that he believes is necessary "may well subvert either or both the
philosophical or empirical underpinnings of the R-A approach."
242 Shelby D. Hunt

In reply, as the title of GTC clearly states, the book purports to develop a
general theory of competition. It is not, nor does it claim to be, a social
critique of marketing in general or a critique of the use of trademarks by
corporations in particular. The preceding, of course, does not mean that GTC
is silent on the role that trademarks play in competition. Indeed, trademarks
are viewed as intangible resources for firms (see GTC Table 5.1) and quality-
control institutions for societies (see GTC pages 112-113). Nor does the
preceding imply that R-A theory cannot provide a foundation for serious
scholarship on how societal institutions and public policy influence the
process (and outputs) of competition (see, for starters, GTC's Sections 4.2, 9.2,
9.3,10.2, and Figure 6.1). Indeed, it may be argued - and I do so maintain -
that R-A theory is the only extant theory of the process of competition whose
premises and structure are articulated that provides such a foundation.
Concerning RW's claim that it is absolutely necessary to "stray" from the
philosophical foundations of GTC in order to engage in meaningful social
critique, readers might ask: What are the philosophical underpinnings of my
work in general and GTC in particular? As I discuss elsewhere (Hunt 2001,
2002a), the overall philosophy underlying my work embraces (1) the
importance of critical discussion in knowledge development, (2) the view
that civility in critical discussion is a virtue, (3) a proscription against ad
hominem discourse, (4) a proscription against sophistry, (5) a respect for
reason and evidence, (6) the view that clarity in scholarship is a virtue, (7) the
belief that critical pluralism is desirable, and (8) the view that, of all the
"isms" in the philosophy of science, scientific realism seems to make the
most sense.
It is certainly the case that many writers abjure the philosophical
underpinnings of my research. Indeed, (self-described) activists who seek to
"fuel the next big political movement, a vast wave of opposition squarely
targeting transnational corporations, particularly those with very high name-
brand recognition" (Klein 1999, p. xviii) seem to depart radically from the
philosophy underlying GTC. However, I respectfully suggest that such
departures are not necessary for meaningful social critique. There is a place
for impassioned, political polemics in discourse. There is also a place for
reasoned, theoretically sound, empirically-based analyses - or at least there
should be.

On Marketing and GTC

RW contends that GTC "is not about marketing for a new century." In a
manner less condemnatory, but still critical, BBS complains that "its
perspective is primarily that of an economist rather than that of a business
strategist" and maintains that "from a corporate point of view, R-A theory
lacks specificity." Other marketing scholars view GTC very differently. For
 On Marketing and A General Theory Of Competition 243

example, Sheth (2001) has commented that GTC should have been titled A
General Theory of Marketing. What, then, is the relationship between R-A
theory and the discipline of marketing and the "corporate point of view"?
GTC was not titled A General Theory of Marketing because R-A theory is,
contra-Sheth, not in itself not a general theory of marketing. Furthermore, R-
A theory, contra-RW, is not silent on marketing for a new century.
Moreover, contra-BBS, it is not uninformative for those interested in business
and marketing strategy. Instead, I argue that R-A theory may be viewed as
toward a general theory of marketing. As such, it can contribute significantly
to strategic issues in marketing in the new century. In the next edition of
Marketing Theory (Hunt 2002a), I argue on three different grounds that R-A
theory provides the foundations for developing a general theory of
marketing.
First, because marketing takes place within the context of competition, a
general theory of marketing should be consistent with the most general theory
of competition. Accordingly, I argue in Hunt (2002a) that because R-A theory
is a general theory of competition it is an appropriate foundation for working
toward a general theory of marketing. Second, the closest thing to a general
theory of marketing today is Alderson's (1957; 1965) functionalist theory of
market behavior (Hunt 1983). Therefore, I argue that R-A theory is toward a
general theory of marketing because it accommodates key concepts and
generalizations from Alderson's theory and integrates them into a broader
theory. Third, R-A theory is a positive theory; yet much of marketing is
normative. Furthermore, is does not imply ought. Nonetheless, on the
grounds that good positive theory can provide a foundation for good
normative theory, I argue that R-A is toward a general theory of marketing
because it provides a foundation for the normative area of marketing
strategy.
Space limitations dictate that the arguments concluding that R-A theory is
toward a general theory of marketing cannot be developed here. (Readers
should see Hunt 2002a.) However, given the concern of RW and BBS with
regard to marketing strategy and the "corporate point of view," I ask readers
to consider the topics of segmentation strategy, market orientation, and
relationship marketing. Each of these topics is central to marketing strategy,
and each can be grounded in R-A theory.
The fundamental strategic thesis of market segmentation is that, to
achieve competitive advantage and superior financial performance, firms
should (1) identify different segments of industry demand, (2) target specific
segments of demand, and (3) develop specific marketing "mixes" for each
targeted market segment. Similarly, the fundamental thesis of market
orientation strategy is that, to achieve competitive advantage and superior
financial performance, firms should systematically (1) gather information on
244 Shelby D. Hunt

present and potential customers and competitors and (2) use such
information in a coordinated way to guide strategy recognition,
understanding, creation, selection, implementation, and modification.
Likewise, the fundamental thesis of relationship marketing strategy is that, to
achieve compefitive advantage and superior financial performance, firms
should identify, develop, and nurture a relationship portfolio. A positive
theory of compefition that could ground each of the three normative theories
must (1) permit each strategy to be successful and (2) contribute to
explaining why and/or when (i.e., under what circumstances) each strategy
may be successful. Hunt (2002a), among other things, argues that R-A theory
satisfies both of these criteria for market segmentation, market orientafion,
and relationship markefing.
The preceding finding that R-A theory provides an undergirding for
strategy should surprise no one familiar with R-A theory. After all (1) the
development of the resource-based view of strategy (e.g., Barney 1991;
Wernerfelt 1984) was a catalyst for developing R-A theory, and (2) the works
on compefifive advantage of such eminent scholars as George Day, Michael
Porter, and Robin Wensley (e.g.. Day and Wensley 1988; Porter 1980, 1985)
have strong affinifies with R-A theory. As a consequence, numerous scholars
are using GTC and/or arficles on R-A theory as an integrafive framework for
teaching business and markefing strategy. Interest has been so great that I
prepared (and make available to all those who email requests) a set of
transparencies for classroom purposes.

Conclusion
I wish to again thank professors Robin Wensley and Bodo Schlegelmilch for
taking the fime and effort to both read and comment on GTC. As BBS points
out, "the book is not light airport bookshop reading." I also wish to thank
the editor of the Journal of Marketing Management for believing that A General
Theory of Competition was important enough to warrant this special
symposium.
Although there have been approximately two dozen articles developing
resource-advantage theory since the theory's first arficulafion in Hunt and
Morgan (1995), it is sfill very much a work in progress. I invite the readers of
the Journal of Market Management to participate in its further development.
There is much work to be done - and, quite fortunately, doing it requires
abandoning neither reason nor evidence.

Acknowledgements
I thank RW for alerting me that GTC's sales rank on Amazon.com was
350,000. Before reading his comment, it never occurred to me that GTC
 On Marketing and A General Theory Of Competition 245

would even be listed on Amazon.com. I'm pleased to report to those

concerned about GTC's sales that, as of this writing, the sales rank has
"soared" to 335,000.

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 On Marketing and A General Theory Of Competition

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About the Author

Shelby D. Hunt is the J. B. Hoskins and P. W. Horn Professor of Markefing at

Texas Tech University, Lubbock, Texas. A past editor of the Journal of
Marketing (1985-87), and author of Modern Marketing Theory: Critical Issues in
the Philosophy of Marketing Science (South-Western, 1990), he has numerous
articles on competitive theory, macromarketing, ethics, channels of distribu-
tion, philosophy of science, and marketing theory. Three of his Journal of
Marketing articles, "The Nature and Scope of Marketing" (1976), "General
Theories and Fundamental Explananda of Marketing" (1983), and "The
Comparative Advantage Theory of Competition" (1995), have won the
Harold H. Maynard Award for the "best arficle on marketing theory". He
received the 1986 Paul D. Converse Award from the American Marketing
Associafion for his contribufions to theory and science in marketing. He
received the 1987 Outstanding Markefing Educator from the Academy of
Markefing Science and the 1992 American Markefing Associafion/Richard D.
Irwin Distinguished Marketing Educator Award.