Summary Theories of Marketing
Inhoud
Topic 1 – Developments in marketing thinking.......................................................................................2
Narver 1990 – The effect of a market orientation on business profitability.......................................2
Narver 1998 – Customer-led and market-oriented, let’s not confuse the two...................................3
Homburg 2017 - Customer experience management: toward implementing an evolving marketing
concept...............................................................................................................................................5
Achrol 2022 - Distributed marketing networks: The fourth industrial revolution...............................8
Topic 2 – Consumer insights and motivations.......................................................................................11
Laughlin 2014 - Holistic customer insight as an engine of growth....................................................11
Van den driest 2016 – Building an insights engine............................................................................12
Magids 2015 – The new science of customer emotions...................................................................13
Pai 2013 – user adoption of social networking sites.........................................................................15
Topic 3 - Value equity & innovation......................................................................................................16
Almquist 2016 - The elements of value measuring (and delivering) what consumers really want. . .16
Day 2011 - Closing the Marketing Capabilities Gap..........................................................................19
Lemon 2001 - What drives customer equity?...................................................................................22
Kim 2005 – Blue Ocean Strategy: from theory to practice................................................................23
Burke 2010 - Blue Ocean vs. Five Forces, Harvard business review..................................................26
Topic 4 – Consumer behaviour.............................................................................................................26
Nord 1980 – a behaviour modification perspective on marketing....................................................26
Wells 2014 - Behavioural psychology, marketing and consumer behaviour.....................................29
Gelbrich 2017 – Rewarding customers who keep a product: how reinforcement affects customers
product return decision in online retailing.......................................................................................33
Chen 2011 – Online social interactions: a natural experiment on word of mouth versus
observational learning......................................................................................................................35
Topic 5 – Brand & relationship equity...................................................................................................37
Dwivedi 2010 – Brand extension feedback effects............................................................................37
Hsu 2016 - Brand architecture strategy and firm value: how leveraging, separating, and distancing
the corporate brand affects risk and returns....................................................................................39
Watson 2015 – Building, measuring, and profiting from customer loyalty building.........................41
Hsieh 2005 – maintaining a committed online customer.................................................................43
Silveira 2017 – comparing alternative approaches to estimate customer equity.............................44
,Topic 1 – Developments in marketing
thinking
Narver 1990 – The effect of a market orientation on business
profitability
Purpose and Background
For over three decades, scholars and practitioners have claimed that a market orientation enhances
business performance, yet before this study no valid measure of market orientation existed. The
authors aimed to develop a reliable and valid measure of market orientation and empirically test its
relationship with business profitability.
They argue that market orientation is a form of organizational culture > one that most effectively and
efficiently creates behaviors necessary to deliver superior value to customers, which in turn drives
sustainable competitive advantage (SCA) and profitability.
Sustainable Competitive Advantage (SCA): To achieve superior and sustained performance, a firm
must consistently deliver greater value to customers than competitors do. Value is defined as the
perceived benefits minus total costs. Creating this superior value requires an organizational culture
that continuously generates, shares, and responds to market intelligence > namely, a market
orientation.
Definition and Components of Market Orientation
Market orientation: a one-dimensional construct composed of three behavioral components and two
decision criteria. These components together describe the cultural foundation necessary for
delivering long-run superior customer value and achieving above-average profitability.
Three Behavioral Components
1. Customer Orientation: Understanding target customers’ current and future needs to
continuously create superior value for them. It requires knowledge of the entire value chain of
both buyers and their customers.
2. Competitor Orientation: Understanding both current and potential competitors’ strengths,
weaknesses, and strategies to anticipate and respond effectively.
3. Interfunctional Coordination: The coordinated use of company resources across departments to
create superior value. Marketing is not a department but a shared responsibility across all
functions.
Two Decision Criteria
1. Long-term focus: Maintaining a strategic horizon that prioritizes sustainable profitability.
2. Profitability: Treated as the central objective of a market-oriented business rather than part of
the behavioral construct itself. For nonprofits profitability is survival.
Results
- Overall: Positive relationship confirmed between market orientation and profitability (measured
as relative ROA) across both commodity and noncommodity businesses.
- Noncommodity businesses: Sell unique or differentiated products (like Apple or luxury brands).
Competition is on quality, brand, or innovation, not just price. The relationship was monotonic
and linear: higher market orientation → higher profitability
- Commodity businesses: Sell standard, interchangeable products (like oil or wheat). Competition
is mainly on price. The relationship was U-shaped: very low and very high market orientation
2
, levels corresponded with higher profitability, while medium levels corresponded with lower
performance (“stuck in the middle” phenomenon).
- Explanation: Commodity businesses with strong
market orientation develop closer partnerships with
buyers, enabling differentiation even in traditionally
price-driven markets. Those with medium orientation
attempt partial adoption of customer-oriented
behaviors but fail to achieve cultural coherence or clear
strategic focus.
For Practice
- Firms should view market orientation as a long-term strategic investment, not a short-term tactic.
- Implementation requires interfunctional coordination and consistent leadership commitment to
customer and competitor understanding.
- For managers, the study provides empirical support that fostering a strong market-oriented
culture contributes significantly to profitability.
Narver 1998 – Customer-led and market-oriented, let’s not
confuse the two
Core ideas
The article distinguishes between two strategic philosophies: being customer-led and being
market-oriented. Although both focus on customers, their time horizon, strategic intent, and
learning orientation differ fundamentally. The authors argue that confusing the two can lead to
poor strategic decisions, especially in turbulent or innovative markets.
The marketing concept: says that an organization’s purpose is to discover needs and wants in its
target markets and to satisfy those needs more effectively and efficiently than competitors
Latent needs: hidden or unspoken needs > things people don’t realize they want until they see a
solution that fulfills them.
Expressed needs: what customers say they want. The needs that people can clearly articulate >
what they say they want or ask for directly.
Customer-led philosophy
Customer-led business: focuses narrowly on satisfying customers’ expressed needs. It relies heavily
on traditional market research tools (focus groups, surveys, concept testing) to improve current
offerings and enhance satisfaction.
Reactive, short-term, and adaptive instead of generative learning
Adaptive learning: incremental improvements based on existing customer feedback
Tyranny of the served market: Managers focus so much on existing customers that they fail to
see disruptive opportunities or latent needs.
Limitations:
A valid measure of customer satisfaction can’t be developed, because these surveys are
unreliable indicators of intention to purchase or the likelihood of repeat business.
Can trap firms in short-term optimization and incremental innovation, discouraging risk-taking
and long-term renewal > Customer-led firms often struggle with radical innovation because
current customers may resist or fail to articulate future-oriented needs.
Market-oriented philosophy
Market-oriented business: takes a broader, proactive approach. It seeks to understand both
expressed and latent needs of customers and the capabilities and plans of competitors by evaluating
3
, market information. They create superior customer value by sharing the knowledge in the
organization and by acting coordinated and focused
Long-term, proactive, and generative.
Generative learning: creating new market knowledge and innovating based on insights into
unserved or emerging markets.
Practices:
Uses market research and observation (watching customers use products).
Uses Lead users: customers who experience future needs ahead of the market.
Uses Probe-and-learn experimentation to refine offerings through iterative feedback.
Searches for unserved markets and create advantage through innovation
Market-orientation is not marketing, its a business culture that values cross-functional
collaboration to create superior customer value.
Competitive advantage implications
Customer-led firms may succeed in stable environments, where customer preferences evolve
slowly and satisfaction builds loyalty (e.g., retail banking).
Market-oriented firms outperform in dynamic environments by identifying emerging needs,
embracing innovation, and even cannibalizing existing products (e.g., Hewlett-Packard’s “eat our
own lunch” philosophy).
Market orientation fosters capabilities that are rare, inimitable, and embedded in culture,
aligning with Barney’s (1986) resource-based theory of competitive advantage.
Conclusion
A market orientation is not marketing. Marketing is only one function of the business. A business is
market oriented only when the entire organization embraces the values implicit therein and when all
business processes are directed at creating superior customer value.
Slater and Narver conclude that customer-led and market-oriented businesses differ in depth and
scope of market understanding.
Customer-led: short-term, reactive, and focused on expressed needs and satisfaction metrics.
Market-oriented: long-term, proactive, and focused on latent needs, learning, and innovation.
In stable markets, a customer-led approach may be sufficient; in dynamic markets, only a market-
oriented culture can sustain competitive advantage. They reaffirm that market orientation
integrates both marketing and innovation
Key distinctions
Dimension Customer-led Market-oriented
Strategic focus Expressed wants Latent needs
Adjustment style Reactive Proactive
Temporal focus Short-term Long-term
Learning type Adaptive Generative
Objective Customer satisfaction Superior customer value
Tools Surveys, focus groups Observation, lead users, experimentation
Environment fit Stable Dynamic / Discontinuous
4
Inhoud
Topic 1 – Developments in marketing thinking.......................................................................................2
Narver 1990 – The effect of a market orientation on business profitability.......................................2
Narver 1998 – Customer-led and market-oriented, let’s not confuse the two...................................3
Homburg 2017 - Customer experience management: toward implementing an evolving marketing
concept...............................................................................................................................................5
Achrol 2022 - Distributed marketing networks: The fourth industrial revolution...............................8
Topic 2 – Consumer insights and motivations.......................................................................................11
Laughlin 2014 - Holistic customer insight as an engine of growth....................................................11
Van den driest 2016 – Building an insights engine............................................................................12
Magids 2015 – The new science of customer emotions...................................................................13
Pai 2013 – user adoption of social networking sites.........................................................................15
Topic 3 - Value equity & innovation......................................................................................................16
Almquist 2016 - The elements of value measuring (and delivering) what consumers really want. . .16
Day 2011 - Closing the Marketing Capabilities Gap..........................................................................19
Lemon 2001 - What drives customer equity?...................................................................................22
Kim 2005 – Blue Ocean Strategy: from theory to practice................................................................23
Burke 2010 - Blue Ocean vs. Five Forces, Harvard business review..................................................26
Topic 4 – Consumer behaviour.............................................................................................................26
Nord 1980 – a behaviour modification perspective on marketing....................................................26
Wells 2014 - Behavioural psychology, marketing and consumer behaviour.....................................29
Gelbrich 2017 – Rewarding customers who keep a product: how reinforcement affects customers
product return decision in online retailing.......................................................................................33
Chen 2011 – Online social interactions: a natural experiment on word of mouth versus
observational learning......................................................................................................................35
Topic 5 – Brand & relationship equity...................................................................................................37
Dwivedi 2010 – Brand extension feedback effects............................................................................37
Hsu 2016 - Brand architecture strategy and firm value: how leveraging, separating, and distancing
the corporate brand affects risk and returns....................................................................................39
Watson 2015 – Building, measuring, and profiting from customer loyalty building.........................41
Hsieh 2005 – maintaining a committed online customer.................................................................43
Silveira 2017 – comparing alternative approaches to estimate customer equity.............................44
,Topic 1 – Developments in marketing
thinking
Narver 1990 – The effect of a market orientation on business
profitability
Purpose and Background
For over three decades, scholars and practitioners have claimed that a market orientation enhances
business performance, yet before this study no valid measure of market orientation existed. The
authors aimed to develop a reliable and valid measure of market orientation and empirically test its
relationship with business profitability.
They argue that market orientation is a form of organizational culture > one that most effectively and
efficiently creates behaviors necessary to deliver superior value to customers, which in turn drives
sustainable competitive advantage (SCA) and profitability.
Sustainable Competitive Advantage (SCA): To achieve superior and sustained performance, a firm
must consistently deliver greater value to customers than competitors do. Value is defined as the
perceived benefits minus total costs. Creating this superior value requires an organizational culture
that continuously generates, shares, and responds to market intelligence > namely, a market
orientation.
Definition and Components of Market Orientation
Market orientation: a one-dimensional construct composed of three behavioral components and two
decision criteria. These components together describe the cultural foundation necessary for
delivering long-run superior customer value and achieving above-average profitability.
Three Behavioral Components
1. Customer Orientation: Understanding target customers’ current and future needs to
continuously create superior value for them. It requires knowledge of the entire value chain of
both buyers and their customers.
2. Competitor Orientation: Understanding both current and potential competitors’ strengths,
weaknesses, and strategies to anticipate and respond effectively.
3. Interfunctional Coordination: The coordinated use of company resources across departments to
create superior value. Marketing is not a department but a shared responsibility across all
functions.
Two Decision Criteria
1. Long-term focus: Maintaining a strategic horizon that prioritizes sustainable profitability.
2. Profitability: Treated as the central objective of a market-oriented business rather than part of
the behavioral construct itself. For nonprofits profitability is survival.
Results
- Overall: Positive relationship confirmed between market orientation and profitability (measured
as relative ROA) across both commodity and noncommodity businesses.
- Noncommodity businesses: Sell unique or differentiated products (like Apple or luxury brands).
Competition is on quality, brand, or innovation, not just price. The relationship was monotonic
and linear: higher market orientation → higher profitability
- Commodity businesses: Sell standard, interchangeable products (like oil or wheat). Competition
is mainly on price. The relationship was U-shaped: very low and very high market orientation
2
, levels corresponded with higher profitability, while medium levels corresponded with lower
performance (“stuck in the middle” phenomenon).
- Explanation: Commodity businesses with strong
market orientation develop closer partnerships with
buyers, enabling differentiation even in traditionally
price-driven markets. Those with medium orientation
attempt partial adoption of customer-oriented
behaviors but fail to achieve cultural coherence or clear
strategic focus.
For Practice
- Firms should view market orientation as a long-term strategic investment, not a short-term tactic.
- Implementation requires interfunctional coordination and consistent leadership commitment to
customer and competitor understanding.
- For managers, the study provides empirical support that fostering a strong market-oriented
culture contributes significantly to profitability.
Narver 1998 – Customer-led and market-oriented, let’s not
confuse the two
Core ideas
The article distinguishes between two strategic philosophies: being customer-led and being
market-oriented. Although both focus on customers, their time horizon, strategic intent, and
learning orientation differ fundamentally. The authors argue that confusing the two can lead to
poor strategic decisions, especially in turbulent or innovative markets.
The marketing concept: says that an organization’s purpose is to discover needs and wants in its
target markets and to satisfy those needs more effectively and efficiently than competitors
Latent needs: hidden or unspoken needs > things people don’t realize they want until they see a
solution that fulfills them.
Expressed needs: what customers say they want. The needs that people can clearly articulate >
what they say they want or ask for directly.
Customer-led philosophy
Customer-led business: focuses narrowly on satisfying customers’ expressed needs. It relies heavily
on traditional market research tools (focus groups, surveys, concept testing) to improve current
offerings and enhance satisfaction.
Reactive, short-term, and adaptive instead of generative learning
Adaptive learning: incremental improvements based on existing customer feedback
Tyranny of the served market: Managers focus so much on existing customers that they fail to
see disruptive opportunities or latent needs.
Limitations:
A valid measure of customer satisfaction can’t be developed, because these surveys are
unreliable indicators of intention to purchase or the likelihood of repeat business.
Can trap firms in short-term optimization and incremental innovation, discouraging risk-taking
and long-term renewal > Customer-led firms often struggle with radical innovation because
current customers may resist or fail to articulate future-oriented needs.
Market-oriented philosophy
Market-oriented business: takes a broader, proactive approach. It seeks to understand both
expressed and latent needs of customers and the capabilities and plans of competitors by evaluating
3
, market information. They create superior customer value by sharing the knowledge in the
organization and by acting coordinated and focused
Long-term, proactive, and generative.
Generative learning: creating new market knowledge and innovating based on insights into
unserved or emerging markets.
Practices:
Uses market research and observation (watching customers use products).
Uses Lead users: customers who experience future needs ahead of the market.
Uses Probe-and-learn experimentation to refine offerings through iterative feedback.
Searches for unserved markets and create advantage through innovation
Market-orientation is not marketing, its a business culture that values cross-functional
collaboration to create superior customer value.
Competitive advantage implications
Customer-led firms may succeed in stable environments, where customer preferences evolve
slowly and satisfaction builds loyalty (e.g., retail banking).
Market-oriented firms outperform in dynamic environments by identifying emerging needs,
embracing innovation, and even cannibalizing existing products (e.g., Hewlett-Packard’s “eat our
own lunch” philosophy).
Market orientation fosters capabilities that are rare, inimitable, and embedded in culture,
aligning with Barney’s (1986) resource-based theory of competitive advantage.
Conclusion
A market orientation is not marketing. Marketing is only one function of the business. A business is
market oriented only when the entire organization embraces the values implicit therein and when all
business processes are directed at creating superior customer value.
Slater and Narver conclude that customer-led and market-oriented businesses differ in depth and
scope of market understanding.
Customer-led: short-term, reactive, and focused on expressed needs and satisfaction metrics.
Market-oriented: long-term, proactive, and focused on latent needs, learning, and innovation.
In stable markets, a customer-led approach may be sufficient; in dynamic markets, only a market-
oriented culture can sustain competitive advantage. They reaffirm that market orientation
integrates both marketing and innovation
Key distinctions
Dimension Customer-led Market-oriented
Strategic focus Expressed wants Latent needs
Adjustment style Reactive Proactive
Temporal focus Short-term Long-term
Learning type Adaptive Generative
Objective Customer satisfaction Superior customer value
Tools Surveys, focus groups Observation, lead users, experimentation
Environment fit Stable Dynamic / Discontinuous
4
