Topics materials, article summaries and quiz answers 2021/2022
2 main topics: Marketing Strategy & Consumer Behavior
Topic 1: Developments in Marketing Thinking – part of Marketing Strategy
This week is all about the development in marketing thinking over time. Firstly, we will discuss the development
up until the ‘modern way’ of marketing thought at the end of the previous century, the basics of which are still
topical. Then we will look at the structural changes that need to be made in our marketing thinking, approach
and actions in order to understand and thrive in an ever-changing environment.
Þ Slides (2)
Þ Articles (4)
Þ Reading questions (4)
Þ Extra material
Þ Quiz + answers
(Intro) Monday slides topic 1
What is Marketing?
Functions and processes/activities that serve to deliver “customer value”. Some examples of these activities
are branding, digital marketing, advertising, social media and PR.
Changing Marketing definitions
§ 1985: Marketing is the process of planning and executing conception, pricing, promoting and
distribution of goods, ideas and services to create exchanges that satisfy individual and organizational
goals
§ 2012: Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society at
large
The definition of Marketing clearly changed from market share (transaction/product driven) to share of
wallet (relation/value driven).
A business can employ two mechanisms to approach the market, strategic and tactical. This is called their
business philosophy. Over the course of time, business philosophies have changed quite a bit. Back in the
day, businesses were more production orientated. This meant that they tried to exploit the technical
capabilities to the fullest extent in order to get maximized profit. Their objective was to profit through
supplying markets where the task is to allocate supplies.
After that came a more selling orientated approach. Businesses would promote the consumption of a
product in order to create demand. This would be a product that the organization is able to make or produce
as much as possible. The objective was to earn profit by persuading people to buy certain products.
Nowadays, the Marketing Concept is the main focus of a lot of organizations. By identifying wants and
needs of the consumers, organizations can match them with their own organizational resources. This way,
they profit through the provision of customer satisfaction by meeting their needs and wants. Those needs
and wants is what creates value for an organization.
Two main Marketing decisions
1. Segmentation: Understanding the consumers
2. Value differentiation: Creating customer value
Even in Marketing research, the perspective has shifted from a ‘how to’ to a ‘what and why’. Instead of
looking at promotion, pricing, place and product effects, researchers ask themselves what the needs, wants,
effects and reactions of the consumer are. Other important topics in research are innovation, customer
journeys, branding and customer relationships.
1
,Friday slides topic 1
Overall, marketing thought is context driven, but there is consistency as to the basic assumptions since
the last ‘marketing concept’. Customers and environment are starting points for company success, as
well as differentiation by superior value delivery. However, there have been many changes in the ‘how
to’, marketing management remains dynamic.
Articles topic 1
Market Orientation – Narver & Slater (1990). The effect of a market orientation on business
profitability. Journal of Marketing.
In their article, Narver and Slater attempt to measure Market
Orientation. At that time, this was very important and generated a
broad stream of research on Market Orientation.
Narver and Slater define Market Orientation as a set of beliefs that put
the customers’ interests first, while not excluding the interests of all
other stakeholders in order to develop a long-term profitable
enterprise. They measure Market Orientation by three behavioral
components: consumer orientation, customer orientation and
interfunctional coordination.
§ Consumer orientation and competitor orientation: all activities involved in acquiring
information about the buyers and competitors in the market and disseminating it throughout
the business.
§ Interfunctional coordination: The businesses coordinated efforts to create superior value for
the buyers, based on consumer and competitor information.
After establishing a reliable measure for Market Orientation, they look at the effects of Market
Orientation on Business Profitability and the differences in this between commodity- and non-
commodity markets. Commodity businesses sell physical products that are identical in quality and
performance to those of their competitors. Non-commodity businesses try to create value by adapting
their generic product to add customer benefit.
Situational variables that could affect a business’s profitability are taken up as control variables (i.e.,
buyer power, supplier power, seller concentration, entry barriers, market growth, technological
change, relative size of business, and relative operational costs).
It was found that Market Orientation is an important determinant
of profitability. With non-commodity businesses, this seems to be
a monotonic relationship, whereas with commodity businesses, a
positive relationship is found only among businesses that are
above the median in Market Orientation. This is because it is very
hard for a commodity business to differentiate their product.
Reading questions for this article:
What is the core definition and how is it related to marketing and the marketing concept?
Market Orientation is an approach to business that prioritizes identifying the needs and wants of
consumers and creating products and services that satisfy them.
Why is it important to measure this concept of Market Orientation?
If the measures are related to Business Profitability, you can make actual assumptions. By measuring
the concept, it gives you more diagnostics on how you are doing as an organization, and how you can
improve.
2
,Why do some companies benefit more from Market Orientation than others?
As stated earlier, this depends on the market that an organization is in. Organizations in the non-
commodity market have an easier time integrating Market Orientation, as they usually sell products
that are modifiable. Moreover, the degree to which an organization profits from Market Orientation
also depends on several external influences (see situational variables).
Market Orientation revisited – Slater & Narver (1998). Customer-led and market-oriented, let’s not
confuse the two. Strategic Management Journal.
This article focuses on the difference between
customer-led business and market-oriented
business, and adds onto the pre-existing definition
of Market Orientation. It describes the need for a
long-term and proactive focus, but also a short-term
and reactive focus. Combining the two will result in
a ‘total’ Marketing Orientation approach.
Different views on Market Orientation:
Responsive MO: customer-led Proactive MO: market-oriented
Orientation Expressed wants Latent needs
Style Responsive Proactive
Time frame Short-term Long-term
Learning type Adaptive Generative
Learning processes Customer surveys Lead-users
Key account/focus groups Experiments
Focus Satisfaction & relationships Innovation & unserved markets
Stable environments Turbulent environment
*both views are relevant
Reading questions for this article
What is the difference between the two described types of Market Orientation in their 1998 article?
See table above.
Does this paper imply that their original idea and definition of MO does not hold anymore?
Not necessarily. The 1998 article goes in depth and describes two approaches within Market
Orientation. Within these two approaches, the importance of (especially) consumer orientation, and
also competitor orientation and interfunctional coordination still exists.
Marketing in the third millennium – Achrol & Kotler (2012). Frontiers of the marketing paradigm in the
third millennium. Journal of the Academy Marketing Science.
Achrol & Kotler establish a three-tiered explanation of the emerging field of marketing.
§ Subphenomena: consumer experiences and sensory systems
§ Phenomena: marketing networks
§ Superphenomena: sustainability and development
They describe a shift from the exchange paradigm to the network paradigm. A paradigm is an
intellectual perception, accepted by an individual or a society as a clear example, model, or pattern of
how things work in the world. A paradigm-shift is a fundamental change in this perception.
Subphenomenal marketing describes a focus on consumption experience and human sensory
processes. It is all about human senses, neurophysiology and nanotechnology. This enables marketers
to target a person based upon individual senses. The aim of this is to enhance the consumption
experience.
3
, On a more organizational/value chain level you have phenomenal marketing, where hierarchies are
swapped for marketing networks in order to bring production and consumption closer together. These
marketing networks for example incorporate innovation, on-demand production or consumption
networks (communities created by consumers).
The last dimension, superphenomenal marketing, describes the societal consequences of marketing. It
focuses on sustainability and development. It is the level where marketing and societal problems meet.
Therefore, businesses have to take more into account than just the value chain.
Reading questions for this article:
How will the ideas expressed here influence our marketing thinking and the marketing actions of
companies?
It will make you look at the bigger picture of marketing and the different stages of it. We go from
focusing on the customer needs to focusing on customer’s experience, innovation, co-creation and
even societal issues and influences.
Can you give examples of described developments on each of the levels?
§ Subphenomena: Nike-ID, creating your own shoes | IKEA, shopping experience
§ Phenomena: YouTube, Twitch and other user-content platforms are co-creation networks
§ Superphenomena: Adidas provides recycled ocean plastic shirts to their sponsored football
clubs (Real Madrid for example)
Will this ‘new paradigm’ make the Market Orientation concept obsolete?
No, these two concepts do not conflict each other. Market Orientation is more like a minimum
requirement for the new network paradigm. Being market-oriented is part of the network paradigm.
Customer Experience Management – Homburg, Jozi & Kuehnl (2017). Customer experience
management: toward implementing an evolving marketing concept. Journal of the Academic
Marketing Science.
Homburg, Jozi & Kuehnl find that customer experience management is the new ‘buzz word’ in the
marketing industry. CEM is the evolvement of a person’s sensorial, affective, cognitive, relational, and
behavioral responses to a firm or brand by living through a journey of touchpoints along pre-purchase,
purchase, and post-purchase situations and continually judging this journey against response
thresholds of co-occurring experiences in a person’s related environment.
They compare Customer Experience Management to Market Orientation (Narver & Slater).
Market Orientation Customer Experience Management
Cultural mindset Cultural mindset
Customer orientation Experiential response orientation
Competitor orientation Alliance orientation (collabs)
Interfunctional coordination Touchpoint journey orientation (also external)
Strategic direction not included Strategic direction added
Firm capabilities Firm capabilities
Exploitative mindset Ambidexterity, exploitative and explorative
(however, MO also states reactive vs
proactive ten years later (1998))
Reading questions topic 1
These reading questions link the articles of week 1.
1. Slater and Narver defined in 1990 the concept of market orientation. Almost ten years later, in
1998, they are coming back on this initial idea. Explain what they initially meant by market
orientation and how that changed in their new article in 1998.
4
, Initially they found that Market Orientation is a culture within an organization that focuses on
consumers and competitors, to create superior value for their customers. This is done by listening
to consumers and analyzing competitors.
Ten years later, their article states that it’s not enough to listen to your customers. An organization
needs to be more proactive, and should therefore discover what the customer wants before they
even know it. This is what will set them apart from competitors, and will create a long-term
competitive advantage.
2. The article on Market Orientation (Narver & Slater 1990) is written in 1990. In the article
‘marketing in the new millennium’ Achrol & Kotler (2012) propose a new network paradigm in
our marketing thinking. Do these new developments and marketing approach make the Market
Orientation idea obsolete?
Not necessarily, but it proposes a way bigger marketing network paradigm that not only focuses
on the consumers’ need and wants, but also bigger societal influences. Achrol & Kotler state that
there are three dimensions that need attention to be successful.
Market Orientation and the new network paradigm do not conflict each other.
3. Homburg et. al. (2017) talks about customer experience management. They quote a CEO who
said: ‘customer experience is the new marketing’. Will CEM make the concept of market
orientation obsolete?
CEM entails and extends the tenets of MO. Customer Experience Management takes Market
Orientation one step further. CEM does not only focus on the customer and what they need, but
also looks for collaborations and experiential response orientation.
4. How is the idea of Customer Experience Management related to the new network paradigm that
Achrol & Kotler (2012) propose – are they contradicting each other or supporting each other?
CEM and the network paradigm are supporting each other. CEM is basically an execution of the
network paradigm. Customer Experience Management represents a comprehensive marketing
management concept that systematizes and serves the implementation of an evolving marketing
concept (aka network paradigm).
Extra materials
External analysis models are necessary knowledge to understand the topics discussed. Within Theories of
Marketing, Consumer Analysis is the main focus. Some well-known models are:
§ Macro environment analysis: DESTEP, PESTEL
§ Meso environment analysis: Porter’s five forces
§ Micro-environment analysis: Competitor group analyses
Quiz
1. The article about the new Market Orientation concept by Narver & Slater (1990) is a clear
example of:
a. A conceptual paper
b. An empirical paper
c. None of the above
d. No idea
2. The article about the new marketing paradigm by Achrol & Kotler (2012) is a clear example of:
a. A conceptual paper
b. An empirical paper
c. None of the above
d. No idea
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