perspectives in contemporary marketing

PERSPECTIVES INCONTEMPORARY MARKETING

Advanced Studies in Marketing

Sílvia L. L. Pahins

INDEX

1. A contemporary concept of Marketing

2. Consumers in a changing world

3. Managing interactions

4. Value: propositon, creation, in-use

5. Marketing is not an organizational function

6. Service-logic for Marketing (versus goods-logic)

References

Perspectives in Contemporary Marketing

A contemporaryconcept of Marketing

Consumers in a changing world

Managinginteractions

Value: proposition,creation, in-use

Marketing is not a organizational function

Service-logic for Mkt(versus goods-logic)

INDEX

1. A contemporary concept of Marketing

2. Consumers in a changing world

3. Managing interactions

4. Value: propositon, creation, in-use

5. Marketing is not an organizational function

6. Service-logic for Marketing (versus goods-logic)

References








MAIN BIBLIOGRAPHY

EXTRABIBLIOGRAPHY

1. A CONTEMPORARY CONCEPT OF MARKETING








In order to understand the contemporary marketing, we need to remember the paradox between transaction and relationship marketing:

(adapted from Grönroos, 1993)









‘‘Transaction Marketing tends to focus on the exchange process between groups of customers in the market and the organisation supplying products and services’’.

Transaction Marketing, or marketing mix paradigm, ‘‘assumed that consumers were avaiable in great numbers and behaved passively ’’. The marketing objectives are attract the consumer.

(Coviello, Brodie and Munro, 1997, p.503)

(Harker and Egan, 2006, p.221)





Managing interactions




In a relational approach, attraction of new customers should be viewed only as an intermediate step in the marketing process. The real objective is retaining customers.

‘‘An interactive relationship would have bilateral communication and exchange of information (...), but it has become a technique for trapping and imprisoning customers’’

Coviello (1997; 2002) suggested three perspectives of Relational Marketing:» Database marketing: information and economic transaction» Interaction marketing: interactive relationships between buyer and seller» Network marketing: connected relationships between firms

(Coviello, Brodie and Munro, 1997, p.503)

(Harker and Egan, 2006)









Many deffinitions of Marketing was built based on these two approaches: transactional and relational marketing. But, Grönroos (2006b) suggest that, to go further,

‘‘ a definition should be generic enough to cover a large variety of products (...) and contexts (transaction-based as well as relationship-based approaches), yet specific enough to be meaningful as a guiding principle, while still allowing for adoption to

changes customer preferences, technologies and the business environment’’









Marketing is a customer focus that permeates

organizational functions and processes and is geared

towards making promises through value proposition,

enabling the fulfilment of individual expectations created

by such promises and fulfilling such expectations through

support to customer’s value-generating processes,

thereby supporting value creation in the firm’s as well as

its customer’s and other stakeholders’ processes.

(Grönroos, 2006b, p. 407)










Then, let’s talk about Perspectives in Contemporary Marketing taking this concept as a starting point.

Marketing is a customer focus that permeates

organizational functions and processes and is geared

towards making promises through value proposition,

enabling the fulfi lment of individual expectations created

by such promises and fulfi lling such expectations through

support to customer’s value-generating processes,

thereby supporting value creation in the fi rm’s as well as

its customer’s and other stakeholders’ processes.

2. CONSUMERS IN A CHANGING WORLD








‘‘The characteristics of consumers also changed [as the market context]. Standardisation had been the key to mass production, but mass markets had begun to fragment. Customers became more sophisticated and demanding, requiring produtcs and services tailored to their specific needs’’

How are these new consumers?

(Harker and Egan, 2006, p. 219-220)









‘‘The role of the consumer in the industrial system has changed from isolated to connected, from unaware to informed, from passive to active’’.

(Pahalad and Ramaswany, 2004, p. 4)

» Information access: ‘‘knowledgeable consumers can make more informed decisions’’;

» Global view: ‘‘consumers can also access information on firms, products, technologies, performance, prices, and consumer actions and reactions from around the world’’;

» Networking: ‘‘individuals share ideas and feelings without regard for geographic or social barriers, are revolutionizing emerging markets ans transforming established ones.’’ Their power comes from their independence from the firm;

» Experimentation: its possible to use te internet to experiment with and develop products;

» Activism: ‘‘as people learn, they can better discriminate when making choices; and, as they network, they embolden each other to act and speak out. Consumers increasingly provide unsolicited feedback to companies and to each other’’.









What is the net result of the changing role of consumers?









(Pahalad and Ramaswany, 2004, p. 5)

‘‘Companies can no longer act autonomously, designing products, developing processes, crafting marketing messages, and controlling sales channels with little or no interference from consumers.

Consumers now seek to exercise their influence in every part of the business system. Armed with tools and dissatisfied choices, consumers want to interact with firms and thereby co-create value. The use of interaction as a basis of co-creation is at the crux of our emerging reality’’.

interaction + co-creation

What is the net result of the changing role of consumers?

3. MANAGING INTERACTIONS








(Wikström, 1996, p. 361)

Fig. Extending the company-consumer interaction in the value-creating process (Wikström, 1996, p. 371)

‘‘Interaction means that the consumers now take part in activities and processes which used to be seen as the domain of the companies. But (...) also means that companies enter the domain of the consumers and take part in their consumption of the product and even their scrapping of what is left over’’

What is interaction?

4. VALUE








(Prahalad and Ramaswany, 2004, p. 5)

Conventional approach

‘‘Companies and consumers had distinct roles of production and consumption (...). Value creation occurs outside de markets’’.

New approach

‘‘Consumers want to interact and co-create value, not just with one fi rm but whith whole communities of professionals, service providers, and other consumers (...). Co-creation supplants the exchange process’’.

VALUE CREATION PROCESS:

Fig. Customer/consumer entry into the value-creating process in diff erent markets

(Wikström, 1996, p. 361)

4. VALUE








(Grönroos, 2006a, p. 323)

(Ballantyne and Varey, 2006, p. 344-345)


Value-in-exchange

‘‘Traditionally, value is viewed in the literature as embedded in a product that is exchange’’. Value is the product itself.

Value-in-use

‘‘Value is created when products, goods ou services are used by customers (...). Value really emerges for customers when goods and services do something for them. Before this happens, only a potential value exists’’.

VALUE PROPOSITION AND VALUE-IN-USE:

‘‘Delivering value to customers is not possible. What marketers can do is to develop value propositions or suggested value in form of various type of offerings and communicate them to customers and then support customers’ value creation’’

‘‘Value propositions are reciprocal promises of value, operating to and from suppliers and customers seeking an equitable exchange’’.

5. MARKETING IS NOT A ORGANIZATIONAL FUNCTION








(Grönroos, 2006a, p. 321; 2006b; 1989; Harker and Egan, 2006; Coviello, Brodie and Munro, 1997)

A focus on interactions and value-creation process lead to a different perspective on marketing. ‘‘Marketing is not the one function, but several functions:’’

» Traditional external function: ‘‘involving typically specialist activities such as advertising, market research and direct mail’’. A marketing departament.

» Interactive marketing function: ‘‘is what take place during the interactions when the simultaneous production and consumption occur (...). Succesful service marketing becomes the responsability of the part-time marketer for making customers satisfied’’.

6. SERVICE-LOGIC FOR MARKETING (versus GOODS-LOGIC)








(Vargo and Lusch, 2004; Grönroos, 2006a; Ballantyne and Varey, 2006)

In 2004, Vargo and Lusch introduced their own service-domint marketing logic (S-D logic). It supports many of the insights of earlier relationship marketing scholars and contains reworked perspectives on the interaction, relationship, value-in-use, etc.








(adaptaded from Vargo and Lusch, 2004, p. 7)








(Vargo and Lusch, 2004; Grönroos, 2006a)

* Eight of these were put forth in the initial Vargo and Lusch 2004 article in the Journal of Marketing. Two additional premises have been added since and appear in their 2008 article in the Journal of the Academy of Marketing Science.

NORDIC SCHOOL - SERVICE LOGIC:S-D LOGIC:

» service is an open process, where the costumer participate as co-producers;» consumption and production of services are simultaneous processes;» services should support customers in a value-creating way;» goods include an incresing number of service elements. » Points of diff erence:_ Goods are a type of resources among others, such as people, systems, infrastructures and information;_ Goods are value-supporting resources and services are value-supporting processes.








What is the future of marketing?

REFERENCES








Main Bibliography

Coviello, N. E., Brodie, R. J., & Munro, H. J. (1997). Understanding contemporary marketing: development of a classification scheme. Journal of Marketing Management, 13, 501–522.

Grönroos, C. (2006b). On defining marketing: finding a new roadmap for marketing. Marketing Theory, 6(4), 395–417.

Grönroos, C. (1989). Defining marketing: a market-oriented approach. European Journal of Marketing, 23(1), 52–60.

Extra Bibliography

Ballantyne, D., & Varey, R. J. (2006). Creating value-in-use through marketing interaction: the exchange logic of relating, communicating and knowing. Marketing Theory, 6(3), 335–348.

Grönroos, C. (2006a). Adopting a service logic for marketing. Marketing Theory, 6(3), 317–333.

Grönroos, C. (1994). From marketing mix to relationship marketing: towards a paradigm shift in marketing. Asia-Australia Marketing Journal, 32(2), 4–20.

Harker, M. J., & Egan, J. (2006). The past, present and future of relationship marketing. Journal of Marketing Management, 22, 215–242.

Vargo, S. L., & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal of Marketing, 68(January), 1–17.

Wikström, S. (1996). Value creation by company‐consumer interaction. Journal of Marketing Management, 12, 359–374.

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