Topic 1: Developments in marketing thinking
Knowledge clip: Network Paradigm
What is a paradigm?
● Paradigm: Intellectual perception or view, accepted by an individual or a society as a clear
example, model, or pattern of how things work in the world.
Marketing in the third millennium
● From exchange paradigm (focuses on inter-firm relationships, brought the concept and
theories of the marketing channel to the fore) →
● To network paradigm (a three-tiered framework based on emerging shifts in the
phenomenology of marketing) because changes in:
○ Sub-phenomena: consumption experiences
■ From satisfaction → consumer experiences
■ Companies have to provide customer experiences by appealing to the
different senses, rather than only providing a certain product to satisfy a
concrete need.
● Consumer behavior: from cognitive processes → stimulating senses
● Technology: influencing senses, measurement physiology and
nanotechnology influencing experience
○ Phenomena: marketing networks
■ From dyadic exchange (2 persons) → marketing networks
■ Companies have to interact more with consumers, and they have to include
them in the value creation of a product (co-production and co-creation)
● Supply: Production & innovation networks → outsourcing &
alliances
● Production: Micro-production systems → disintermediation
● Interaction: Consumption networks → vertical & horizontal
○ Super-phenomena: sustainability / society
■ Companies have to recognize social issues and try to do good proactively.
They should recognize external circumstances and consider them in their
marketing strategy.
● Sustainability: Market & resource capacity: over-consumption in
saturated markets, firm & societal effects, superior products &
demarketing
● Poverty: Growth from: emerging markets → bottom of pyramid
market
Example Tony Chocolonely
● Sub-phenomena: experience is important → factory and café
● Phenomena: Co-creation, you can make your own chocolate bar. You are in the network
● Super-phenomena: The chocolate is slave free, the brand thinks about the environment it
operates in.
,Knowledge clip: Customer Experience Management
What is customer experience?
● Customer experience: a totality of cognitive, affective, sensory, and behavioral consumer
responses during all stages of the consumption process including pre-purchase,
consumption, and post-purchase stages.
● Customer experience management: a system of marketing strategies and technologies that
focus on customer engagement, satisfaction, and experience.
Customer experience management
Comparison of MO and the new concept of CEM
Q&A session
Marketing definitions
● 1985: Marketing is the process of planning and executing conception, pricing, promotion 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.
Two main marketing decisions
● Segmentation: Understanding consumers (consumer behavior)
● Value differentiation: Creating customer value! (marketing strategy)
,Market orientation
● Market Orientation: an approach to business that prioritizes identifying the needs and
desires of consumers and creating products and services that satisfy them.
○ It consists of three behavioral components:
■ Customer orientation: the understanding of one's target
buyers to be able to create superior value for them
continuously
■ Competitor orientation: the understanding of the
short-term strengths and weaknesses and long-term
capabilities and strategies of both the key current and the
key potential competitors
■ Interfunctional coordination: the coordinated utilization of
company resources in creating superior value for target
customers. The entire company should know about the customer value.
Cooperation is necessary.
○ And two decision criteria:
■ Long-term focus
■ Profitability
Effect on profit
● Commodity products: products which don't have a lot of
differentiation in their personality (butter)
● Non-commodity products: products which have a lot of
differentiation in their personality (stereo systems)
● In general, investing in MO is profitable. For non-commodity
products, the more investment the better. It is not advantageous for a
commodity if you invest in it on average.
● Effect of Market Orientation over time → organizations are competing,
the first one will get the most out of it, but it will decrease for the next
ones.
Different views on Market Orientation
● Customer-led (reactive):
○ Focuses on understanding the expressed desires of the
customers → develops products and services that satisfy those desires
○ Focus groups and customer surveys to enhance the understanding of customer
wants
○ Develops close relationships with important customers to gain deeper insight into
their desires
○ Successful in relatively predictable environments where it is most important to take
care of a stable served market.
○ The philosophy is reactive and short-term in focus, and generally leads to adaptive
rather than generative learning
○ ‘Tyranny of the served market' in which managers see the world only through their
current customers' eyes
, ● Market-oriented (proactive):
○ Committed to understanding both the expressed and latent needs (a problem that a
consumer doesn't realize they have) of their customers
○ Scans the market more broadly, have a longer-term focus
○ Uses generative learning; conducts market experiments, learns from the results of
those experiments, and modifies their offerings based on the new knowledge and
insight
○ Works closely with lead users/potential customers, who have needs that are
advanced compared to other market members and who expect to benefit
significantly from a solution to those needs
○ It’s the implementation of the marketing concept → 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.
Conclusion
● Marketing thought is context driven → changing market dynamics/customer needs & wants
● But there is consistency as to the basic assumptions since the last ‘marketing concept’
○ Customers (& environment) are starting point for company success
○ Differentiation by superior (network) value delivery
Research questions
Question 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.
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. later they state that it’s
not enough to listen to your customers. An organization needs to be more proactive, and should
therefore also discover latent needs. This will set them apart from competitors, and create a
long-term competitive advantage.
Question 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?
Knowledge clip: Network Paradigm
What is a paradigm?
● Paradigm: Intellectual perception or view, accepted by an individual or a society as a clear
example, model, or pattern of how things work in the world.
Marketing in the third millennium
● From exchange paradigm (focuses on inter-firm relationships, brought the concept and
theories of the marketing channel to the fore) →
● To network paradigm (a three-tiered framework based on emerging shifts in the
phenomenology of marketing) because changes in:
○ Sub-phenomena: consumption experiences
■ From satisfaction → consumer experiences
■ Companies have to provide customer experiences by appealing to the
different senses, rather than only providing a certain product to satisfy a
concrete need.
● Consumer behavior: from cognitive processes → stimulating senses
● Technology: influencing senses, measurement physiology and
nanotechnology influencing experience
○ Phenomena: marketing networks
■ From dyadic exchange (2 persons) → marketing networks
■ Companies have to interact more with consumers, and they have to include
them in the value creation of a product (co-production and co-creation)
● Supply: Production & innovation networks → outsourcing &
alliances
● Production: Micro-production systems → disintermediation
● Interaction: Consumption networks → vertical & horizontal
○ Super-phenomena: sustainability / society
■ Companies have to recognize social issues and try to do good proactively.
They should recognize external circumstances and consider them in their
marketing strategy.
● Sustainability: Market & resource capacity: over-consumption in
saturated markets, firm & societal effects, superior products &
demarketing
● Poverty: Growth from: emerging markets → bottom of pyramid
market
Example Tony Chocolonely
● Sub-phenomena: experience is important → factory and café
● Phenomena: Co-creation, you can make your own chocolate bar. You are in the network
● Super-phenomena: The chocolate is slave free, the brand thinks about the environment it
operates in.
,Knowledge clip: Customer Experience Management
What is customer experience?
● Customer experience: a totality of cognitive, affective, sensory, and behavioral consumer
responses during all stages of the consumption process including pre-purchase,
consumption, and post-purchase stages.
● Customer experience management: a system of marketing strategies and technologies that
focus on customer engagement, satisfaction, and experience.
Customer experience management
Comparison of MO and the new concept of CEM
Q&A session
Marketing definitions
● 1985: Marketing is the process of planning and executing conception, pricing, promotion 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.
Two main marketing decisions
● Segmentation: Understanding consumers (consumer behavior)
● Value differentiation: Creating customer value! (marketing strategy)
,Market orientation
● Market Orientation: an approach to business that prioritizes identifying the needs and
desires of consumers and creating products and services that satisfy them.
○ It consists of three behavioral components:
■ Customer orientation: the understanding of one's target
buyers to be able to create superior value for them
continuously
■ Competitor orientation: the understanding of the
short-term strengths and weaknesses and long-term
capabilities and strategies of both the key current and the
key potential competitors
■ Interfunctional coordination: the coordinated utilization of
company resources in creating superior value for target
customers. The entire company should know about the customer value.
Cooperation is necessary.
○ And two decision criteria:
■ Long-term focus
■ Profitability
Effect on profit
● Commodity products: products which don't have a lot of
differentiation in their personality (butter)
● Non-commodity products: products which have a lot of
differentiation in their personality (stereo systems)
● In general, investing in MO is profitable. For non-commodity
products, the more investment the better. It is not advantageous for a
commodity if you invest in it on average.
● Effect of Market Orientation over time → organizations are competing,
the first one will get the most out of it, but it will decrease for the next
ones.
Different views on Market Orientation
● Customer-led (reactive):
○ Focuses on understanding the expressed desires of the
customers → develops products and services that satisfy those desires
○ Focus groups and customer surveys to enhance the understanding of customer
wants
○ Develops close relationships with important customers to gain deeper insight into
their desires
○ Successful in relatively predictable environments where it is most important to take
care of a stable served market.
○ The philosophy is reactive and short-term in focus, and generally leads to adaptive
rather than generative learning
○ ‘Tyranny of the served market' in which managers see the world only through their
current customers' eyes
, ● Market-oriented (proactive):
○ Committed to understanding both the expressed and latent needs (a problem that a
consumer doesn't realize they have) of their customers
○ Scans the market more broadly, have a longer-term focus
○ Uses generative learning; conducts market experiments, learns from the results of
those experiments, and modifies their offerings based on the new knowledge and
insight
○ Works closely with lead users/potential customers, who have needs that are
advanced compared to other market members and who expect to benefit
significantly from a solution to those needs
○ It’s the implementation of the marketing concept → 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.
Conclusion
● Marketing thought is context driven → changing market dynamics/customer needs & wants
● But there is consistency as to the basic assumptions since the last ‘marketing concept’
○ Customers (& environment) are starting point for company success
○ Differentiation by superior (network) value delivery
Research questions
Question 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.
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. later they state that it’s
not enough to listen to your customers. An organization needs to be more proactive, and should
therefore also discover latent needs. This will set them apart from competitors, and create a
long-term competitive advantage.
Question 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?
