Executive summary and implications for managers and executives

Citation

(2008), "Executive summary and implications for managers and executives", Journal of Business & Industrial Marketing, Vol. 23 No. 2. https://doi.org/10.1108/jbim.2008.08023baf.001

Executive summary and implications for managers and executives

This summary has been provided to allow managers and executives a rapid appreciation of the content of the issue. Those with a particular interest in the topics covered may then read the issue in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

With the pace of change in doing business is the twenty-first century, warning bells should sound whenever someone says “Let’s stick with what works” or “Let’s not make change for change’s sake”.

While BTTWWADI (but that’s the way we’ve always done it) might be one of those deadly attitudes which cramps creativity and encourages complacency, there are also dangers in facing an uncertain future with a headstrong view that there is always a “right” and a “wrong” way of proceeding. Sometimes, seemingly opposed viewpoints are not as mutually exclusive as you might think.

In marketing, it is hard to find a more persuasive argument for refusing to label practices “right” or “wrong” in all circumstances, with no room for compromise or meeting half-way, than the Contemporary Marketing Practices (CMP) research program’s bridge-building between traditional and more modern views of marketing.

In their article “Contemporary Marketing Practices Research Program: a review of the first decade” Roderick J. Brodie, Nicole E. Coviello and Heidi Winklhofer note that since the 1980s there has been a fragmentation of mainstream marketing with greater emphasis now placed on marketing processes, relationships with customers and relationships with other stakeholders including suppliers, channel intermediaries, and other market contacts – in other words “relationship marketing”. When Nicole Covellio examined the nature of marketing in entrepreneurial, technology-based ventures in New Zealand, she found that more successful firms facilitated their growth through use of network relationships, while less successful firms relied on a more transactional (product, price, place, promotion) market approach.

While the arguments for a paradigm shift in marketing were persuasive, it was apparent, however, that all the firms she studied involved a combination of classic transactional practices and a range of different relational practices. It was not a case of having a “correct” theoretical paradigm (i.e. transaction vs relationship marketing), which had been the debate among academics. In practice, the company managers appeared comfortable with multiple (and parallel) marketing practices, and network relationships.

It was this apparent gap between theory and practice which led to a questioning of the academic debate dichotomizing the transactional marketing approach and more process-based relational efforts – questioning which led to the launch of the more formal research program CMP to profile marketing practices in a contemporary environment, and to examine the relevance of relational marketing in different organizational, economic and cultural contexts. A guiding principle was to employ multiple perspectives in conducting research and to balance theoretical arguments with evidence of managerial practice. In examining the relevance of “relational marketing”, CMP researchers wanted to also examine the relevance of “transactional marketing” and allow for a range of other marketing practices to exist beyond the simple transaction vs. relationship marketing dichotomy.

In developing the classification scheme, the initial CMP group conducted a content analysis of previous uses of the various terms associated with marketing. This allowed them to identify two common themes (relational exchange and management activities), underpinned by nine dimensions pertaining to how firms relate to their markets. Five dimensions were associated with relational exchange:

1. 1.

   purpose of exchange;

2. 2.

   nature of communication;

3. 3.

   type of contact;

4. 4.

   duration of exchange; and

5. 5.

   formality of exchange.

The remaining four dimensions pertained to management activities:

1. 1.

   managerial intent;

2. 2.

   managerial focus;

3. 3.

   managerial investment; and

4. 4.

   managerial level of implementation.

The literature was then re-analyzed in order to more clearly define each dimension. This resulted in four rather than two aspects of marketing practice being identified and consequently, the conceptualization extended beyond the classic transaction marketing (TM)/relationship marketing (RM) dichotomy. TM was defined as attracting and satisfying potential buyers by managing the elements in the marketing mix, and actively manages communication “to” buyers in the mass market in order to create discrete, arms-length transactions.

Database marketing (DM) involves using database technology to create a relationship, allowing firms to compete in a manner different from mass transactional marketing. The intent is to retain identified customers, although marketing is still “to” the customer, rather than “with” the customer. Relationships per se are not close or interpersonal, and are facilitated and personalized through the use of database technology.

In contrast, interaction marketing (IM) implies face-to-face interaction between individuals. As such, it is truly “with” the customer, as both parties in the dyad invest resources to develop a mutually beneficial and interpersonal relationship.

Similarly, network marketing (NM) is “with” the customer but occurs across and among organizations. In this practice, managers commit resources to develop their firm’s position in a network of various firm-level relationships.

Importantly, it was only because the CMP classification scheme embraced a multi-theoretical approach that a comprehensive taxonomy could be developed, encompassing a range of marketing practices. This was possible because the authors did not take the view that the alternative aspects of marketing practices were mutually exclusive. Rather, the adoption of a multi-theory position meant that distinct boundaries were not drawn between each aspect of marketing, nor was each aspect implied to be independent and mutually exclusive.

Rather, Coviello et al. attempted to highlight the similarities and differences between each, as determined by the relational exchange and management process dimensions derived from the literature. Thus, the CMP classification scheme used multiple theories to broaden the view of marketing and to identify, recognize and categorize the fullest possible range of relevant empirical phenomena. Its initial survey phase led to certain generalizations about marketing practice, which were:

• •

  While there is some support for consumer goods firms being more transactional, and business and service firms being more relational, there are many exceptions.

• •

  Firms can be grouped equally into those whose marketing practices are predominantly transactional or relational or a transactional/relational hybrid. Each group includes all types of firms (consumer goods, consumer services, business-to-business goods and business-to-business services).

• •

  Marketing practices tend to be pluralistic in that all of TM, DM, IM and NM are in evidence, and managerial practice has not shifted from transactional to relational approaches per se.

As the CMP group’s understanding of marketing practices has evolved since its classification scheme was first developed ten years ago, it is recognized that that its conceptual foundations require ongoing review and redevelopment in order to remain contemporary – for instance, the classification scheme was extended to acknowledge the IT-enabled interactivity of e-marketing (eM).

CMP’s global focus on marketing is evolving. It is clear, however, that its work so far has challenged traditional views of marketing and of practices which might have seemed incongruent or paradoxical.

In seeking to understand marketing practice, and develop theory, CMP researchers are prepared to engage with paradox, pluralism and hybridity. An “either or” exclusionary approach is rejected in favor of an inclusive one of “both and”.

In “Exploring paradox in marketing; managing ambiguity towards synthesis” Aidan O’Driscoll’s argument is that “either or” dilemmas represent an idea of paradox that is unhelpfully exclusive and of limited value in addressing management and marketing problems.

He defines a paradox as “a situation where two apparently contradictory tensions appear to be simultaneously credible and where resolution is pursued in a non-exclusionary way.” In managerial language, one which should enable maximal “win win” or “the best of both worlds” resolutions.

This includes, for instance, the old idea that a brand stands for one thing and one thing only. The USP/share-of-mind argument of traditional positioning theory is yielding to an appreciation that a brand is inherently ambiguous, equivocal, and polymorphic. Not only are brand reputations co-created with consumers, who often ignore or subvert the meanings and messages that advertisers seek to convey, but also there is an argument that ambiguity is central to the personality and aura that surround apparently legendary brands like Apple, Nike and Harley Davidson.

Many products exhibit a paradoxical essence, or “paradessence”, in promising to satisfy simultaneously two opposing consumer/buyer desires. Products blessed with paradessence somehow combine two mutually exclusive states and satisfy both simultaneously. Ice cream melds eroticism and innocence. Air travel offers sanitized adventure. Amusement parks provide terror and reassurance. Automobiles render drivers reckless and safe. Sneakers grasp earth and help consumers soar free. The UK’s long-established Fairy Liquid dishwashing detergent scours grease off plates but is “kind to hands”. It is up to the savvy marketer to exploit this contradiction in developing and communicating a brand identity.

O’Driscoll advocates the concept of paradox as a valuable lens or framework to study issues and problems in marketing theory and practice, identifying marketing domains or phenomena where paradoxical thinking, or “values-in-tension”, reveal themselves.

These include:

• •

  consumer/buyer behavior (cognition/emotion);

• •

  consumer/buyer research (qualitative/quantitative);

• •

  managing exchange (transaction/relationship);

• •

  consumer/buyer value (commoditization/differentiation);

• •

  communication (mass/one-to-one);

• •

  selling (customer acquisition/customer retention);

• •

  branding (multivocal/unique selling proposition);

• •

  pricing (unitary pricing/price discrimination);

• •

  supply/demand chain (vertical integration/market);

• •

  bottom line (growth/profitability):

• •

  green marketing (wasteful marketing/sustainable marketing);

• •

  ethics and marketing (self-interest/responsibility); and

• •

  new product development (product orientation/customer orientation).

Paradox is an embryonic notion in marketing. As marketing managers and theorists adopt paradoxical thinking – as a valuable framework to manage and understand company transformation and response to changing consumer and competitive dynamics – it seems reasonable to assume that a greater balance and inclusion of research methods will come about.

This pluralistic approach underpins the CMP research program which views this very hybridity as injecting necessary vigor into research activity.

It is commonplace to argue that marketing gets done in and delivered by organizations. Organizations, like the people in them and the markets to which they respond, can be complex, contradictory and mercurial. Organizing in these circumstances necessitates coping with ambiguity, equivocation and inherent tensions.

Paradox provides a managerial and theoretical framework to make sense of this ambiguity and resolve an apparently endless choice. Paradoxical tensions arise from perceptions of opposing and interrelated elements. Most individuals apply a formal linear logic, polarizing the elements to stress distinctions rather than interconnections. They are programmed, as it were, in an “either or” mode. But emphasizing one polarity exacerbates the need for the other, often igniting defenses, impeding learning and creating counterproductive reinforcing cycles. Managing paradox, in contrast, entails developing understandings and practices that accept and accommodate tensions. If marketing is to embrace paradox, a deeper understanding of marketing organization will be required.

How marketing is best structured and organized in the firm raises issues of hierarchy/heterarchy, centralization/decentralization, efficiency/creativity, and formulation/implementation, to identify just a few. Further, the type of culture and shared values in the firm is crucial. There is need to analyze the type of marketing leader and leadership necessary to cope with and manage the fluid, equivocal and pluralistic circumstances of paradox.

For practitioner and academic alike, the concept of paradox involves embracing context and process as much as classification and abstraction. Finding a resolution to a paradoxical tension, moving towards a synthesis, is shaped by the efforts of management to engage with the particular circumstances of the marketplace and organization.

In endeavoring to do so, paradox helps to map terrains of contradiction, ambiguity and tension. The authors say: “Paradox assists in identifying novel coordinates in a constantly evolving world of buyer needs/expectations, technology and competitive dynamics. Any synthesis is likely to be short-lived. The penumbra of another shadows any one solution. Yet in this journey the tool of paradox helps the firm to manage ambiguity towards synthesis.”

Another journey in the constantly evolving world of buyer needs and expectations, technology and competitive dynamics is that of the relationship between information and communications technology and the marketing people.

Since the time an eM practice was added to the CMP framework, there has been a significant increase in the penetration of eM in firms, and evidence that firms adopting eM are also likely to show an improvement in marketing performance.

However, despite the much-discussed potential of information communication technology (ICT) for marketing, the last decades have seen a mostly slow and somewhat tentative adoption of ICT by marketing practitioners.

In their paper “Researching the role of information and communications technology (ICT) in contemporary marketing practices” Mairead Brady, Martin R. Fellenz and Richard Brookes say that ICT is now not only a normal, but also a central part of marketing practice and it is important that marketing academics identify, understand, and cater to the conceptual, theoretical and educational requirements of those practitioners that try to successfully deploy an increasingly large range of complex ICTs both internally in their organizations, and at the customer interface.

To achieve this broadened perspective, there is a need to review the benefits to marketing from ICT use, and improved marketing ability and results due to increased use of ICT. It is also crucial to study best practices and opportunities for increased consumer satisfaction, loyalty and profitability. Findings from such research can then be used to widen the scope of the current CMP questionnaire with respect to ICT usage and impact.

For example, companies increase their use of ICT without regard for the impacts both internally and at the customer interface, thus instigating a host of unintended consequences that can raise costs and or cut revenues. ATM and web-based transactions in retail banking resulted in a 15 percent reduction in transaction costs, but also doubled the transaction volume with overall cost increases for servicing each customer. Online bookings in the airline industry reduced distribution costs, but also lowered fares significantly due to the resulting price transparency. What is important is to understand how ICT adds value to the company and the customer from both informational and interactional perspectives.

Part of the challenge in broadening the CMP framework requires a fuller multidisciplinary perspective. Specifically, research that focuses on ICT use in marketing practices necessitates not only a recognition and understanding of the linkages between marketing practitioners and technologists in the introduction and use of ICT, but more fundamentally it also requires an appreciation of the complex organizational context in which marketing’s ICT deployment is located.

Marketing appears to lag behind other organizational functions in their adoption of ICT. A core reason may well be the lack of understanding about what and how ICT can serve marketing and business objectives. Another view is the fact that ICT automation suits functions like production and accounting whereas marketing is a more creative, dynamic, fluid function that cannot be easily automated.

Brady et al. suggest that it is not just uncertainty about the implications of ICT use that have impeded marketers, but also a distinct gap in their typical skill set. Integrating ICT successfully in marketing requires marketers to take an active managerial role far beyond their traditional areas of competence and authority. The move to the transformational or enhancing stage is challenging for marketers, though it should be noted that virtually all firms anticipate they will be heavier users of ICTs in the future.

Successful deployment of ICT requires integration not just of technology but also of technologists and other organizational functions into coherent and concerted strategic and operational approaches to offering and delivering on value propositions for customers. Integral to this improved ICT understanding is the need for marketers to stay abreast of the latest developments in ICT, such as wireless technologies, machine-to-machine communications and sensor networks.

The authors point to an apparent deficiency in marketers’ abilities to maximize the potential value of ICT deployment, not simply because of a lack of imagination, but because of a lack of sufficient insight and skills in appropriately organizing and managing the deployment of advanced ICTs and the information resulting from these.

Therefore part of the most immediate requirements for marketers, trying to deploy ICT more comprehensively, is the ability to constructively deal with the increased information processing and analytical requirements. ICT oriented marketing will rely less on experience, intuition and guesswork and much more on the information provided by ICT systems monitoring every stage of the product/service delivery through to consumption. The increased information provided by ICT needs to be matched with the skills of marketers to analyze the data supplied throughout the supply chain and across every facet of marketing.

While ICT deployment demands a focus on the skill set required by marketers to successfully participate in, or even to lead, the cross-functional challenge of ICT selection, implementation and use, this may not be among the most pressing concerns in businesses in emerging economies. Nevertheless, there are challenges to be faced here and a need to understand the differences (and similarities) of marketing practices in emerging economies compared with those in developed countries.

In their article “Business-to-business marketing practices in West Africa, Argentina and the United States” Kofi Q. Dadzie, Wesley J. Johnston and Jaqueline Pels say that, although the CMP framework has a universal appeal, much more empirical research needs to be done to improve the cumulative understanding of contemporary marketing in global markets – especially emerging and transitioning economies.

As the issue at the heart of CMP is that firms practice transactional marketing, relationship marketing and a hybrid of both with similar levels of intensity, knowledge of the relevance of relationship marketing relative to traditional transactional marketing is important in establishing the validity of the CMP framework in emerging African economies as well as providing benchmarks for new and multinational firms in these nations.

For their business-to-business study, the authors chose two small emerging market economies (SEMs) Ghana and the Ivory Coast, a big emerging economy (BEM) Argentina, and the USA.

They discovered that West African, Argentine, and US firms use transactional marketing and network marketing, more or less, to the same extent. However, database marketing is used only marginally by West African and Argentine firms, while used intensively by US firms. In addition, Argentine firms are similar to US firms in that they use interaction marketing more extensively than do West African firms.

Collectively, the results suggest that, in West Africa, business-to-business marketing practice is still predominantly transactional, followed by a transactional/network marketing hybrid; while in Argentina and the US it is predominantly relational, followed by pluralistic marketing.

Findings also suggest that West African business-to-business marketing practice depends on the level of environmental stability; that is firms characterized as facing more turbulent consumer demand, in a competitive and technological environment, tend to emphasize networking/transactional marketing activities, while firms operating in less dynamic market environments tend to practice very little marketing.

While both Ghana and the Ivory Coast are considered to be among the few African nations with attractive opportunities for foreign direct investments, Ghana’s political environment has been described as very stable during the past three decades, while the Ivory Coast has been embroiled in a civil war, yet, like Ghana, enjoys continued economic growth. Both countries have been implementing market reforms aimed at ensuring private enterprise and free market economy.

The authors consistently found that some firms combine both dimensions of marketing while other firms emphasize one or the other in all four countries. From the perspective of emerging African economies, the findings suggest that both local and foreign competition may use the international benchmarks in establishing marketing programs in Ghana and the Ivory Coast. As in the case of Argentina, some low level of marketing activity occurs for a certain proportion of firms in Ghana and the Ivory Coast, while a combination of transactional and relationship marketing is the norm.

There are distinct differences between West African practices and the international benchmarks involving Argentina and the USA. One is the emphasis on transactional over pluralistic marketing obtained in the USA. and Argentina. While the CMP framework proposes that pluralistic marketing is one of the major international benchmarks across all markets, the West African results suggest that pluralistic marketing is not that common. Rather, transactional marketing is more the norm.

Why is transactional marketing more prevalent than relational marketing in West Africa? In general, West African firms emphasizing transactional marketing and transactional/relational marketing are in the early stages of the evolution of marketing practice. Where market conditions are far less demanding, the norm appears to be a low level of intensity of marketing practice. As free market competitive conditions become more intense, some emerging market firms emphasize transactional marketing and combine these with one aspect of relational marketing.

This stage of “combination” marketing is found in small emerging markets such as those in West Africa as well as in a big emerging market such as Argentina. However, the emphasis is on pluralistic marketing as found in both the big emerging market economy of Argentina and the USA is not prevalent.

The study suggests that managers need to be aware that some of the international benchmarks reflected in other emerging market economies, such as Argentina, and the industrialized nations, such as the USA, may lack relevance for West African firms. This is especially true of database marketing. Hence, heavy investment in database technology may not be the most effective use of limited resources for most West African firms.

CMP’s flexibility in embracing differing usages of transactional or relationship marketing practices, and in eschewing rigid notions of “either or” in favor of a more inclusive approach, is mirrored in its attitude towards learning and research – aims which can, under the right conditions, be achieved contemporaneously.

In their paper “Research informed teaching and teaching informed research: the CMP living case study approach to understanding marketing practice”, Victoria Little, Richard Brookes and Roger Palmer argue that case studies developed for teaching purposes and those developed for research purposes are not mutually exclusive.

Indeed, the needs of both learners and researchers can be met contemporaneously if the research and learning projects are designed and implemented effectively.

The CMP “living” case approach builds on both case research and case teaching traditions, and creates direct linkages between the case or research site, learners and instructors. The case data are sourced directly from the students’ own business contexts. They are encouraged to critically examine and reflect on these contexts or practices through a process of facilitated learning, to construct and refine theory to both interpret and explain these phenomena, and to provide a framework for managerial decisions and practices.

The authors describe examples of such “living” case studies, one on the impact of IT in marketing practice, another on customer value creation and delivery. Managers – currently or recently directly involved with their organization’s daily operations – used a variety of data sources within their firms (including their executive colleagues and observation) to gather information. In each case the teaching learning and research process was tailored to meet student requirements, curriculum requirements, the instructors’ research interests, and personal strengths and weakness. This is the advantage of the living case approach, as it offers a flexible approach to creating knowledge and achieving learning outcomes based on available resources, and the teaching and learning environment.

The key to effective “living” case studies is to acknowledge and leverage from the experience of executive students and their organizations, building on the insights gained by “reflective practitioners” whose knowledge can be accessed and formalized. This undertaking requires an appropriate pedagogical design that delivers real and perceived learning value to the students and other participants in the process, and a design that also delivers quality research outputs.

Rather than viewing a teaching case as a concrete and unchanging entity or established artifact based on third-party organizations from a recognized provider, a teaching case can be viewed as customized, “alive” and evolving according to the experiences of particular students in particular classroom cohorts.

Students are provided with concepts and frameworks that they need to master in their courses, and these are progressively explored, through live application, observation and reflection, enabling an iterative approach to learning and knowledge development. The benefits are that the instructor/ researcher and students can explore the relevance and application of concepts and frameworks across the context of many different organizations.

The advantages of this approach over traditional teaching cases are fourfold:

1. 1.

   students can have a learning experience in a variety of business settings that are directly relevant to them;

2. 2.

   they can compare and contrast experiences in other business settings with their own;

3. 3.

   they can use this process to construct their own frameworks and theories to describe their realities; and

4. 4.

   they can consider the managerial implications for their own managerial practice of their deliberations.

Care must be taken to ensure confidentiality of data used for publication. Confidentiality is a difficult issue in highly competitive markets, particularly when markets are small and it is not unusual for managers from competing firms to participate in the same classes.

The level of involvement of students in the living case process can be viewed as a continuum – ranging from respondents to a survey instrument to empowered co-researchers. At one extreme, individuals are engaged only to the point of “ticking the box”. However, at the other extreme students enjoy actively engaging as co-researchers and colleagues, and are enthusiastic about furthering knowledge in general, in addition to their own learning.

Positive outcomes, however, assume two preconditions: that students are willing and able to embark on a journey of learning and discovery, and that there is sufficient latitude in the curriculum to allow for more innovative means of working with marketing information and understanding organizational settings. The living case approach requires an inquiring, reflective approach, which in turn requires time to investigate phenomena and process those findings.

As marketers pursue strategies relevant to their particular businesses, seeking to promote their organizations’ products and services, another aspect of “selling” has a somewhat different focus. Rather than a product or service, social marketing – perhaps best known for campaigns related to public health and the environment – is the application of marketing principles and exchange to social issues.

We are all familiar with popular themes such as “Fasten you seat belt”, “Wash your hands,” “Don’t drink and drive”, “Eat five fruit and veg a day” and “Reduce, recycle and reuse” – but do existing aspects of marketing practice (TM, DM eM, IM, NM) in the CMP classification scheme accommodate social marketing or are they lacking in some way?

That is the question posed by Christine T. Domegan in her paper “Social marketing: implications for contemporary marketing practices classification scheme”.

She says social marketing puts the behavioral changing individual at the centre of the process and orchestrates a society-wide network of relationships and partnerships to achieve such goals, using extensive research, evidence-based information and evaluation in decision making.

Hence it deepens the understanding of networks, of relationships, of complex economic and social exchanges, conflict, communication, and of the link between performance and practice. Social marketing delivers innovative insights into the communal, relational and economic exchange process that underlies marketing. These insights suggest that marketing practitioners and academics need to give serious attention to the marketplace context and social environment of the exchange, regardless of whether it is a profit or non-profit organization engaging in the exchange.

Interestingly from the CMP perspective, social marketing has adopted and developed this extensive relational approach to marketing without significant reference to the mainstream relational marketing debate.

The CMP scheme resonates with social marketing, particularly networking marketing, but social marketing offers the potential to enrich and expand the horizons of the existing contemporary marketing research agenda. This exploratory social marketing analysis suggests that the CMP dimensions could be modified in two main ways.

First, the classification scheme could be expanded by adding a third layer to the unit of analysis – a community/society aspect. This takes cognizance that marketing exchanges have both a consumption and social component.

Second, the CMP classification scheme could attempt to capture the societal space, beyond the marketplace, where marketing exchanges occur. This could be achieved by the addition of a new dimension, Exchange Context, embracing time, upstream partnerships and evaluation/performance. As to whether social marketing is sufficiently different to the contemporary marketing practices of TM, DM, eM, IM or NM, further investigation is needed.

Like commercial marketing, the unit of analysis in social marketing begins at the micro level of the customer, as in TM and DM. Social marketing also pays attention to the next level of analysis or impact, the inter-organizational relationships of varying content, duration and strength, as seen in NM. This has to be managed with the micro or customer unit. As a sign of this, the term “community-based social marketing” exists.

Social marketing, while incorporating both these levels of analysis, adds a third level or unit of analysis, that of the whole system – a macro, society level, constituting those who control the social context influencing the other two units. This third social context level signals a further complexity for social marketing managers, not normally seen by commercial managers. This is attributable to the fact that individuals influence and are influenced by those surrounding them, thereby requiring this three-tiered analysis approach to the exchange process.

This multiple impact results in social marketing having an extensive constellation of stakeholders and relationships to satisfy. Social marketing stresses relationships beyond the consumer into the traditional market place, including suppliers, distributors, supporting firms, and extending to the broader social context of local communities, regional bodies and government. The relationships are simultaneously active at all levels with the customers, communities and policy makers to achieve synergy between the multiple change agents and bring about the desired behavioral change.

(A précis of the special issue “Contemporary marketing practices”. Supplied by Marketing Consultants for Emerald.)