Theories of
Marketing
2015-2016
W Author(s) Title Yr
k
1 Development of marketing theory
Aarons, Van den Driest The ultimate marketing machine 201
& Weed 4
Achrol & Kotler Frontiers of the marketing paradigm in the 201
third millennium 2
Sheth Impact of emerging markets on marketing 201
1
Kumar Evolution of marketing as a discipline 201
5
Narver & Slater The effect of a market orientation on 199
business profitability 0
2 Measuring consumer behaviour in the field
Gneezy, Gneezy, Pay-what-you-want, identity and self- 201
Reiner & Nelson signalling in markets 2
Gneezy & Rustichini A fine is a price 200
0
Goldstein, Suri, The economic and cognitive costs of 201
McAfee, Ekstrand- annoying display advertisements 4
Abueg & Diaz
Wertenbroch & SkieraMeasuing consumers’ willingness to pay at 200
the point of purchase 2
3 Understanding customers and the customer experience
Fournier & Avery The uninvited brand 201
1
Smith, Fischer & How does brand-related user-generated 201
Yongjian content differ across YouTube, Facebook 2
and Twitter?
Kaptein & Eckles Heterogeneity in the effects of online 201
persuasion 2
Griskevicius, Goldstein,Fear and loving in Las Vegas 200
Mortensen, Sundie, 9
Cialdini & Kenrick
4 Multichannel customer management: Online and mobile customer
engagement
Neslin, Grewal, Challenges and opportunities in 200
Leghorn, Teerling, multichannel customer management 6
Thomas & Verhoef
Neslin & Shankar Key issues in multichannel customer 200
management 9
Shankar, Venkatesh, Mobile marketing in the retailing 201
Hofacker & Naik environment 0
Bart, Stephan & Which products are best suited to mobile 201
, Sarwary advertisement? 4
5 Customer power: Shifts in marketing relationships
Lacbreque, Vor dem Consumer power 201
Esche, Mathwick, 3
Novak & Hofacker
Peltier, Milne & Phelps Information privacy research 200
9
Carter & Curry Transparent pricing 201
0
Eisend Two-sided advertising 200
6
6 Marketing and/or development?
Taylor & Broeders In the name of development 201
5
Taylor & Schroeder Is bigger better? 201
4
World Economic Forum Data-driven development 201
5
Verhulst Mapping the next frontier of open data 201
4
Theme 1 Developments in marketing thinking and practice
The effect of a market orientation on business profitability – Narver &
Slater (1990):
Market orientation is the very heart of modern marketing management and
strategy, but no one has developed a valid measure of it or assessed its influence
on business performance.
For an organization to achieve consistently above-normal market performance, it
must create a sustainable competitive advantage (SCA). The desire to create
superior value for customers and attain SCA drives a business to create and
maintain the culture that will produce the necessary behaviours. Market
orientation is the organization culture that most effectively and efficiently creates
the necessary behaviours for the creation of superior value for buyers and
continuous superior value for the business. A market-oriented business
continuously examines all the alternative sources of SCA to see how it can be
most effective in creating sustainable superior value for its present and future
target buyers.
Market orientation consists of three behavioural components:
1. Customer orientation is the sufficient understanding of one’s target buyers to
be able to create superior value for them continuously. It requires a complete
understanding of the value chain.
2. Competitor orientation means that a seller understands the short-term
strengths and weaknesses and long-term capabilities and strategies of both
the key current and the key potential competitors.
3. The inter-functional component coordinate utilization of company resources in
creating superior value for target customers. Everything can contribute to the
creation of value for buyers. It is much more than a marketing function. The
entire business is responsible for the creation of SCA. Effective advocacy and
leadership are needed to overcome each functional area’s isolation from the
other functions.
Two important decision criteria are long-term perspective and profitability. The
authors hold that profitability is appropriately perceived as an objective of a
,business. The sampling unit are 140 SBUs of a major western corporation. An SBU
is defined as an organizational unit with a defined business strategy and a
manager with sales and profit responsibility. The authors hypothesize a one-
dimension construct because the three behavioural components and two decision
criteria are conceptually closely related. They infer that the three behavioural
components are (on average) of equal importance. The sample consisted of
commodity businesses (sell physical products), speciality businesses and
distribution businesses. An SBUs profitability is measured as the top managers’
assessment of the SBU’s return on assets in relation to that of all other
competitors in the SBU’s principal served market over the past year.
The authors expect to find a general positive relationship between market
orientation and business profitability within all three types of businesses in the
sample (commodity, distribution and speciality business). A seller in any industry
must maintain a current and thorough understanding of a buyer´s business if the
seller is to continue to create superior value for the buyer, to continue to discover
and implement profit-improvement programs for the buyer. The most effective
way for a seller to discover opportunities to increase buyer value is to visit a
buyer’s business and the buyer’s customers frequently.
The ultimate marketing machine – Swaan Arons, Van den Driest & Weed
(2014):
What marketers do to engage customers has changed almost beyond
recognition. It has evolved so quickly, tools and strategies that were cutting-edge
a few years ago are fast becoming obsolete. A simple blueprint does not exist
and structure most follow strategy, not the other way around. Marketing is no
longer a discrete entity but now extends throughout the firm. The authors
conduct surveys among many organizations and from many countries and they
divide the companies into two groups: under- and over performers. Shared
principles of high performers’ marketing approaches are:
Big data, deep insights. High performers are distinguished by their ability to
integrate data on what consumers are doing with knowledge of why they’re
doing it. Which yields new insights into consumers’ needs and how to best
meet them. Marketers understand consumers’ basic drives.
Purposeful positioning. Top brands excel at delivering three manifestations of
brand purpose: (1) functional benefits (the job the customer buys the brand to
do), (2) emotional benefits (how it satisfies a customer’s emotional needs) and
(3) societal benefit. A clear brand purpose improves alignment throughout the
organization.
Total experience. Companies are increasingly enhancing the value of their
products by creating customers experiences. High performing brand both
deepen the customer relationship by leveraging what they know about a given
customer to personalize offerings and focus on the breadth of the relationship
by adding touch-points, they provide a ‘total experience’.
This study has identified five drivers of organizational effectiveness:
1. Connecting. High performing brands create a tight relationship with the CEO,
making certain that marketing goals support company goals, bridge
organizational silos by integrating marketing and other disciplines and ensure
that global, regional and local marketing teams work interdependently.
2. Inspiring. High performing marketers are more likely to engage customers and
employees with their brand purpose. Inspiration strengthens commitment. The
key to inspiring is to do internally what marketing does best externally: create
irresistible messages and programs that get everyone on board.
,3. Focusing. High performing brands make sure people focus on a few key
priorities and it is important that everyone is focusing on the same priorities.
Winning companies were more likely to measure brands’ success against key
performance indicators such as revenue growth and profit to tie incentives at
the local level directly to those key performance indicators (KPIs).
4. Organizing for agility. Clarity about organizational structure, roles and
processes is consistently underestimated or even ignored although they are
the toughest leadership challenges. The experience of the authors does
suggest a set of operational and design principles that any organization can
apply. As companies expand internationally, they inevitably reorganize to
better balance the benefits of global scale with the need for local relevance.
The authors found it useful to categorize marketing roles not by title but as
belonging to one of three broad types: (1) think marketers, (2) do marketers
and (3) feel marketers. Combining those types into teams is a useful model to
create task forces for a range of marketing programs.
Building capabilities. None of the above activities can be fully accomplished
without the continual building of capabilities. Training employees is an important
aspect of building capabilities.
Evolution of marketing as a discipline: what has happened and what to
look out for – Kumar (2015):
Since 1996, the marketing discipline has experienced a faster rate of evolution.
The goal of this article is to shed light on the factors that have shaped marketing
and articulate an expectation of where the field is headed. The aim of the author
is to provide an evolutionary perspective regarding the future course of
marketing by observing the current triggers.
A resource-conscious view:
The marketing discipline adopted a resource-conscious view between 1996 and
2004, focusing on customer profitability issues and the use of organizational
resources to enhance marketing effectiveness. Three critical factors seem to have
triggered this wave of research:
1. Developments in database technology. Significant changes with respect to
data storage and processing enabled sophisticated empirical studies.
2. Ability to capture individual customer data. The abundance of data and the
ease of data collection enabled researchers to capture individual customer
data, thereby directing the level of analysis toward the customer level.
3. Ability to perform analyses at the individual level.
By 2004, the efficient allocation of resources had become a top focus of the
academic and business communities.
Marketing in the corporate boardrooms:
The field expanded its investment-based outlook of marketing by bringing more
accountability to marketing activities, consequently earning an important place in
corporate boardrooms. Three factors triggered the expanded marketing focus to
include an investment-based outlook:
1. Advances in technology. The first trigger was technological progress in terms
of sophisticated data management applications. It enabled managers to gain
timely access to customer product inventory and market intelligence data and
thus respond to customer questions more quickly and with better information.
2. New level of customer insights. The advanced technologies have paved the
way for a deeper level of insights than was possible previously.
3. Marketing investment activities directed at the customer level. This has
contributed to the investment-oriented approach. It enables managers to make
, decisions regarding customer behaviour and company actions more easily. The
marketing investments at the customer level led to a concerted focus on
investments from a marketing standpoint.
The focus on marketing initiative accountability was also accompanied by a
change from a product-centric philosophy to a customer-centric marketing
approach. Such a shift highlighted the importance of nurturing profitable
customer relationships and offering products that satisfy customer needs rather
than driving product profitability and market share.
Marketing at the helm:
The emerging paradigm for marketing seems clear: it must be an integral part of
the organization’s decision making framework. This calls for a complete
integration of marketing activities with the other business functions and creates
unique opportunities for marketing scholars whereby research studies must now
consider not only the marketing function but also its interface with other
functions. The emerge of this phase is also triggered by three developments:
1. Changes in media usage patterns. People are spending more time on
interactive media than on traditional media. Social media is a game changer
as well. Social media enables customers to talk to each other and business to
communicate with customers. It influence one another’s purchase decisions.
2. Focus on marketing efficiency and effectiveness. Marketers are under
increasing pressure to establish how marketing investments improve their
company’s bottom-line profits. Shareholders want better accountability and
documentation of the value added by the marketing function. There is a clear
need to demonstrate the efficiency and effectiveness of marketing activities.
3. Firm value through customer engagement. Customer engagement leads to
sustained profits. Beyond just encouraging customers to buy more intensively
over time, it is critical to encourage them to (1) refer more people to buy
products/services from the firm, (2) talk to other customers and prospects
about the firm, consequently influencing them to transact with the firm and (3)
exchange information with the firm.
The scholarly footprint is evident in the creation of new knowledge and in
addressing practitioners’ concerns. The author predicts that the practitioner
community, the ongoing developments in society and the new thinking in
marketing at large will affect scholarly work in marketing such that issues from
these three sources will continue to feed marketing scholars with ideas.
It is crucial to understand that the interface of multiple business functions is
beginning to radically change the way research is conducted, and it will continue
to do so.
Impact of emerging markets on marketing: rethinking existing
perspectives and practices – Sheth (2012):
,The purpose of this article is to analyse and propose the impact of emerging
markets on existing marketing perspectives and practices. The emerging markets
have unique characteristics. Our existing practices and perspectives of marketing
have been historically developed in the context of industrialized markets. But
marketing is a contextual discipline. The fundamentals to marketing are at odds
with the realities of emerging markets. And the growth of emerging markets offer
great opportunities to develop or discover new perspectives and practices in
marketing, which may become valuable for the neglected and economically
nonviable markets in advanced markets.
The question is: will the emerging markets be driven by marketing as we know it
today, or will the emerging markets drive future marketing practice and the
discipline. Several factors are responsible for the growth of the emerging
markets: (1) economic reforms in Brazil, Russia, India and China (BRIC) have
unlocked markets protected by ideology and socialism, (2) all advanced countries
are aging rapidly, (3) worldwide liberalization of trade and investment, bilateral
trade agreements and regional economic integrations have resulted in global
competition and global product and service offerings with unprecedented choices
of branded products and (4) the emergence of the new middle class is creating
large-scale first-time buyers of everything. The growth is further enabled by the
democratization of information, communication, and technology and the rise of
local entrepreneurs.
The author identified five dimensions on which emerging markets are distinctly
different from mature markets. Each one has significant impact on at least one of
the four areas of marketing (theory, strategy, policy and practice). The five
characteristics of emerging markets are:
Market heterogeneity. Emerging markets tent to have very large variance
relative to the mean across almost all products and service. This is because
markets are local, fragmented, low scale and mostly served by owner-
managed small enterprises. Most of the consumers are below the official
poverty level of less than two dollars a day. The heterogeneity is less driven by
diversity of needs and wants and more driven by resource constraints. It is less
of a case of demand generation and more a case of demand fulfilment.
Socio-political governance. It is not usual to have numerous government-
owned and –operated enterprises serving the markets with monopoly powers.
A few diversified trading and industrial groups dominate the emerging
countries. The market imperfection and asymmetry of market power by
national marketers will require us to rethink our theories of competitive
advantage anchored to industry structure or resource advantage perspective.
Unbranded competition. Many branded products and services are not available
in rural markets. A household is not just a consumption unit, but also a
production unit, they produce their own goods.
Chronic shortage of resources. Emerging markets tend to have a chronic
shortage of resources in production, exchange and consumption. Resource
improvisation perspective may be a key to the future of product innovation,
product distribution and product usage.
Inadequate infrastructure. Infrastructure includes not only physical roads,
logistics and storage but also market transaction enablers, and basic banking
functions. Non-traditional channels and innovative access to consumers may
be both necessary and profitable in emerging markets.
There are three areas in which the emerging markets seem to have competitive
advantage:
, 1. Policy-based comparative advantage. Unlike in advanced countries, it is the
state-owned enterprises of emerging markets that have emerged as domestic
market leaders and are now aspiring to become global leaders. The range of
government policy as a comparative advantage is also impressive. It ranges
from government as the largest customer to providing economic incentives for
exports to developing special economic zones.
2. Raw material-based comparative advantage. Emerging markets have
enormous raw material advantages ranging from human capital, industrial raw
materials, energy and other natural resources. Empirical research is needed on
exit strategy based on the theory of comparative advantage to enhance
market capitalization value.
3. NGO-based comparative advantage. Previous research extended the generic
concept of marketing, articulating that marketing as we know it today is
generalizable to all types of market and social transactions that result in
exchange or some form of reciprocity. The reverse seems to be occurring in
emerging markets. The NGOs in emerging markets are pioneering new and
non-traditional marketing practices on a scale unimagined at one time. There
are two concepts with respect to the NGOs from emerging markets: (1)
inclusive marketing, how can one serve a vast majority of consumers who are
below the poverty level and (2) public-private partnership: both the
government and the private sector agree to pool resources and expertise to
focus on societal needs that the free market processes and marketing fail to
address.
The four many areas of marketing are theory, strategy, policy and practice.
Because of the emerging markets, we have to rethink existing perspectives and
practices of all these four main areas.
Rethinking market theory:
Marketing theory presumes that consumers have choices and that the role of
marketing for a company is to make its offerings the customer’s choice. Three
concepts are:
1. From differential advantages to aggregation advantage. Differential advantage
results in better margins or profits for the firm, this is simply not true in
emerging markets. There is too much competition (highly fragmented),
businesses exist more on cash flows and wage-less family labour. They survive
not as much for growth as they do simply for survival. Greater standardization
by reducing the variety and aggregating demand to achieve scale efficiency
and better ROI is needed in emerging markets.
P1 : In a highly heterogeneous demand and heterogeneous supply market,
aggregation advantage results in better financial performance than
differential advantage.
2. From industry structure to government policy. The profitability of an industry is
determined by the five forces of Porter and a company must focus in activities
in its value chain to offer a superior value in its chosen strategy. The
presumption of industry structure theory is that market size is fixed and is a
zero-sum game of gaining market share. However, it is the opposite situation
for emerging markets.
P2 : In markets in which growth has been regulated by government policy,
growing the total market demand by policy changes result in better
financial performance than industry concentration.
3. From resource possession to resource improvisation. Resource-based
advantage theory (valuable, rare, imperfectly mobile and inimitable resources)
