A History of Marketing / Episode 7

“Consumers don't make choices. They reduce choices.” - Jag Sheth

This week my guest is a marketing legend, Dr. Jagdish Sheth. Dr. Sheth is a renowned scholar and has published more than 300 research papers and over 30 books. He’s the namesake of the Jagdish Sheth School of Management and recipient of the Padma Bhushan—the third-highest civilian honor awarded by the Government of India.

In our conversation, we dive into the influence of psychology on marketing, Jag’s contributions to consumer behavior, and Sheth’s incredible life and career.

Dr. Sheth co-authored a landmark 1969 book called The Theory of Buyer Behavior with one of his mentors, John Howard. This laid the foundational framework for what became known as The Howard-Sheth Model of Consumer Behavior.

We also cover Sheth’s book, Marketing Theory: Evolution and Evaluation which chronicles the evolution of marketing theories and the rationales behind them.

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Read the interview transcript, enhanced with links and images:

Dr. Jagdish Sheth’s Early Biography

Andrew: Dr. Jagdish Sheth, welcome to A History of Marketing. Thank you so much for joining me.

Jag Sheth: Thank you, Andrew.

Andrew: You've lived a remarkable life. You were born in Burma, now known as Myanmar, and your family immigrated to India when you were a child. You moved to the United States in your early 20s to enter business school at the University of Pittsburgh. What were your initial impressions of Western advertising and marketing?

Jag Sheth: Quite a shock, because I came from a country where branded products were not as popular yet. For example, you had to make your shirts by buying the cloth and taking it to a tailor. Nothing was really branded except a few shampoos or Western company products, like Unilever products. I came to America, and everything was branded.

Andrew: Everything was branded. Were there any other differences that you noticed in marketing or advertising?

Jag Sheth: My first major encounter was that in India, in a tropical climate, you don't wear white shirts; you wear more colored shirts. So you could buy cloth material. All my shirts were in color – blue, yellow, and so on. There was a dress code at my university that said you have to have a white shirt and a tie, and wear a suit. But I needed to buy a white shirt.

So, I went to a store and said, "I need a white shirt." The sales clerk was a young man. He showed me the white shirt, and I said, "How much?" He said, "$5." My immediate reaction was, "How about $2.50?" I said, "Look, $3, take it or leave it," because my friend was waiting in the car to go back to class. Then my friend educated me that in the consumer market, especially, prices are fixed. He said, "No negotiating." That was my first major encounter with a cultural difference.

Andrew: That's right. We don't haggle too often here in the United States. I've been on the other side of that. When I've grown up here and then traveled internationally, haggling is part of the culture. It's something that's totally unfamiliar to me, and I need to get better at.

Becoming an "Accidental Scholar" and Marketer

Andrew: Your 2014 autobiography is called The Accidental Scholar. So, I take it that your career in academia and your specialization in marketing was not part of your original plan. Can you share what initially drew you to marketing as a field of research?

Jag Sheth: It came by accident. My original intention was to learn production management because my brother had a factory that needed to be mechanized more and more, with a shortage of labor, especially skilled labor. So I said, "I'll go to America, get my MBA, learn the practical side for one year, and then come back and join the family business." That was my intent.

But I got turned on by psychology. The most influential professor, by reading his material, was Maslow and his hierarchy of needs. I resonated with it. Because of that, I said I would like to go and do my doctorate in Behavioral Sciences, not in marketing. Behavioral Sciences. My minor was in social psychology, and then my applied field was marketing, which is understanding the psychology of customers rather than marketing a product.

I needed money to bring my family. I was earning $287 as a monthly stipend; we needed $400. So I looked around, and by accident, John Howard, who was a marketing professor, had funding, and he gave me the extra assistantship. That's how I went into marketing. Otherwise, I would have been in management.

Andrew: I suppose extra money is as good a reason as any to get into marketing.

The Intersection of Psychology and Marketing

Andrew: When it came to researching marketing, do you think that your status as an outsider, somebody coming from India, gave you any advantages compared to your peers who were born and raised in America?

Jag Sheth: Absolutely. Having a different perspective, coming from a different culture and context, became an asset for me. I could see things in a way that others did not see. It's very much as if there's a galaxy out there, but you look at it, and some discover things, and some don't. The same thing happened to me. That has been an advantage, plus traveling all over the world as part of the academic career, consulting, and advising gives you multiple perspectives. So that has been an advantage.

Andrew: You were studying psychology and marketing at the same time. When I spoke to your friend Philip Kotler, he told me about how marketing emerged from economics, but of course, psychology also played a major role. Can you share who the leading thinkers were in marketing when you were a student and describe how psychology came to play a bigger part in marketing?

Jag Sheth: There was a whole body of writing by one single author called Wroe Alderson. He was a brilliant theorist, and he came out with a theory which he called functionalist. I still don't understand it; he used very complex language, even for academics. Pretty much like reading Greek or Sanskrit. But I had an expert who knew Alderson. There are brilliant theories that came out where they talked about sorting things, warehousing, in his own language.

Andrew: I've come across Wroe Alderson in some of my research, and at some point, I'll have to do a full episode on his biography because he seems like a really fascinating person. Can you ground us – what time frame are we talking about here?

Jag Sheth: This is all in the late '50s. Up to this time, then in the late '50s to early '60s, marketing began to shift toward a behavioral perspective, a non-economic perspective. Economics itself embraced behavioral economics much later; in marketing, we did it very early. That led to buyer behavior – let's understand the psychology of customers, not the offering of the market, essentially. That was a key aspect.

And so that led to the buyer behavior school, that led to the whole consumerism movement. Ralph Nader was the world-class activist. The school of thought about the role of marketing with society began much more. Society and marketing – how can they coexist as true institutions?

The Theory of Buyer Behavior and John Howard

Andrew: You mentioned buyer behavior, and you and John Howard co-authored the 1969 book called The Theory of Buyer Behavior. Before I ask you about buyer behavior, can you share more about who John Howard was and what influence he had on you and your career?

Jag Sheth: John Howard was an economist. He got his doctorate from Harvard University, and his professor was Joseph Schumpeter, who was a very well-known economist – "creative destruction" or "constructive destru...