A concise summary of ALL articles for the Marketing and Innovation (1ZM11) exam. The summary is based on the research questions of each article to immediately understand the main objectives of the articles.
- Why do so many products fail?
o Businesses don’t take into account the psychological costs associated with
behavior change (universal, but largely ignored psychological bias)
▪ People irrationally overvalue benefits they currently possess relative to
those they don’t. Consumers then value the advantages of products they
own more than the benefits of new ones
▪ Companies irrationally overvalue their innovations, and they must predict
the buying behavior of consumers, who irrationally overvalue existing
alternatives
→ Consumers reject new products that would make them better off, while
companies are at a loss to anticipate failure (curse of innovation: double-
edged bias)
- What can companies do to improve their chances of success?
o Create smash hits (significant product changes, limited behavior changes)
o Minimize resistance
▪ Make behaviorally compatible products
▪ Find believers
Concluding
All too often, consumers fail to buy products that companies expect them to adopt. The reason
may lie less in the economic value of physical products and more in the minds of people. Until
businesses understand, anticipate, and respond to the psychological biases that both
consumers and executives bring to decision making, new products will continue to fail.
,Woodruff (1997) – Customer value: the next source for competitive advantage Session 1
- What is customer value?
A customer’s perceived preference for and evaluation of those product attributes, attribute
performances, and consequences arising from use that facilitate (or block) achieving the
customer’s goals and purposes in use situations
- What is customer value learning?
There are differences in what managers think their customers
value and what customers say they value. Such gaps create the
potential for mistakes in an organization’s efforts to deliver
value to customers → customer-learning processes are aimed at
reducing such gaps
o Customer value determination (CVD) designed to
provide managers with answers to critical
questions that should guide learning about their
customers
o Customer value-oriented marketing information system (CVOMIS): helps
managers learn about both customer-determined performance outcomes of
customer value delivery and the causes of that performance
o Translation from internal to a more balanced internal and external focus on
customer value
- What are the related skills that managers will need to
create and implement superior customer value
strategies?
o Develop a translation process and then train
managers to use it (see figure right)
o Organizations become highly information driven
o Managers will have to learn how to use different
kinds of data which drives quality initiatives →
need of new information skills
o Customer value-related data are softer (i.e., reflect customers’ preferences and
perceptions), less quantitative, and require a broader set of information tools
o Require more involvement by customer contact personnel in gathering data form
customers (e.g., salespersons may have to become more skilled interviewers
and observers when working with customers to get real-time data)
o Superior translation skills are important (translating customers’ evaluations of
received value on many desired value dimensions into responsive value delivery)
Marketing excellence: a superior ability to perform essential customer-
facing activities that improve customer, financial, stock market, and
societal outcomes
Study I insights:
- Managers understand marketing excellence as aspirational and
difficult to achieve (relates to the ‘excellence’ part)
- Managers understand marketing excellence as a means of achieving organic growth
(relates to ‘marketing’ part)
- Marketing excellence comprises activities that essentially fall into three content-relates
categories (strategy compromises three priorities)
o Marketing ecosystem priority
o End-user priority
o Marketing agility priority
(relates to its nature)
➔ New definition of marketing excellence: type of firm strategy focused on achieving
organic growth by executing the marketing ecosystem priority, the end-user priority, and
the marketing agility priority
- Marketing ecosystem priority: firm’s strategic means of growing
the business by developing mutually beneficial systems of networks
o 4 types of marketing ecosystems divided by participation
and ownership role
- End-user priority: priority as a firm’s strategic emphasis on
engaging with the final customer, who applies or consumes the
offering, and leveraging the final customer insights for growing the
business
- Marketing agility priority: firm’s strategic means for executing growth activities by the
marketing organization and its members through simplified structures and processes,
fast decision making, and trial and error learning
Study II results:
- Investors positively adjust the firm value when reading about marketing excellence
o findings show that firms announcing marketing excellence have significant and
positive one-year abnormal returns relative to market, size, book-to-market, and
momentum factors
- Results reveal the highest abnormal returns for the combination of all three marketing
excellence priorities
Main questions:
(1) How do managers understand and exercise marketing excellence?
(2) How do investors evaluate marketing excellence?
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