the new marketing paradigm

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4. Existing Marketing Paradigms

Disciplines evolve through the progressive refinement and articulation of an accepted paradigm. A paradigm can be described as a loose consensus regarding the fundamental nature of a discipline. The marketing concept, with the allied notions of customer choice and customer satisfaction related to the marketing mix, represents the traditional marketing paradigm. Paradigms have to be adapted when discrepancies between the accepted wisdom and reality become too large to be ignored, or there are too many problems that cannot be solved by the paradigm. What is then needed is a shift to other rules and procedures: a shift to another game. We agree with Gronroos, Gummesson, O’Driscoll and Murray and Piercy  that there is increasing discrepancy between marketing theory and practice.

In our view a marketing paradigm consists of three elements: (1) a concept (idea, philosophy, vision, orientation), which is the core of a paradigm, (2) a set of activities (decisions;

marketing management: the implications of the concept), and (3) a domain (area, field of research where the concept and its implications are applied).In the literature the term ‘marketing’ is used for each of these elements, and the term ‘paradigm’ is often used for an aggregate description, which disallows differentiation between concept, activity and domain. Some authors implicitly make a distinction between several elements, while others use the concepts interchangeably. The description of the concepts elicits ‘the loose consensus’ about the marketing discipline.

Following the market developments we described above, as well as the changing relations between parties, we recommend that the new marketing paradigm:

1. be directed to the realization of individual customer values and the redefinition of these values;

2．encompass the intimacy between partners in the marketing system and, as a consequence, focus on relationships instead of on transactions;

3. match customers’ preferences and the firm’s capabilities;

4. force the fit between customer values and the firm’s capabilities to be based on a market feedback system which measures the behavior, the satisfaction, and unmet needs of individual customers continuously;

5.reflect the idea that marketing is a state of mind which is not restricted to one functional area;

6.stimulate the internal organization to be constantly monitored and adapted to changing needs and preferences of customers, and always take the customer as the focal point.

Marketing concepts and paradigms described in the literature do not satisfy the specified criteria. Kotler’s  ‘enlarged’ definition of the marketing concept holds that: “the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.”

This societal marketing concept replaced the well-known marketing concept which in its turn emerged from the selling concept, and the product concept. All these philosophies are competing concepts under which present organizations conduct their marketing activities.

Marketing management is defined as:

“the process of planning and executing the conception, pricing, promotion, and distribution of goods, services and ideas to create exchanges with target groups that satisfy customer and organizational objectives”.

The definition of marketing as a social and managerial process “by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others” can be interpreted as a description of the marketing domain.

 

If we apply the desiderata, specified earlier, it is clear that the concepts defined by Kotler do not reflect the characteristics of the proposed new marketing paradigm.8 Extant concepts are static, and do not represent the intimacy between partners in the system with whom activities are designed. There is also an emphasis on the capabilities and instruments of the marketing department and there is no explicit attention for requirements with respect to the internal organization.

 

In 1983 Day and Wensley proposed an “integrative paradigm” which says that: “The marketing function initiates, negotiates and manages acceptable exchange relationships with key interest groups or constituencies in the pursuit of sustainable competitive advantages, within specific markets, on the basis of long run consumer and channel franchises”.

 

The integrative paradigm focuses on: 1) exchange relationships between sellers and buyers. Furthermore, it gives explicit attention to: 2) competitive forces and, 3) the dynamic aspects

of marketing’s role in the organization. Also it is grounded in: 4) a constituency-based theory of the firm. In this integrative paradigm no distinction is made between ‘idea,’

‘activities’ and ‘domain.’ Furthermore it does not reflect the idea that marketing is a state of mind (it is seen as a function). Although the concept focuses on exchange relations it is defined from the point of view of the firm, that initiates and wants to realize only its own goals. So, no attention is given to the realization and the redefinition of individual customer values. Customers are seen as one of the key interest groups at the aggregate level.

 

Such criticisms also apply to a paradigm articulated by Gronroos. He states that the “marketing mix management paradigm” is losing its position, because it constitutes a product-oriented definition of marketing: the customer is somebody to whom something is done, not for whom something is done. It misses adaptability, flexibility and responsiveness. The organizational consequences (a separate marketing department) are no longer useful, even counterproductive. According to Gronroos the answer lies in building customer relationships, in addition to using the four Ps. Gronroos develops a marketing strategy continuum, with relationship marketing at one end, and transaction marketing at the other. Relationship marketing is seen as one of the new “paradigms.” Its definition is: “to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfillment of promises”.

 

Webster introduces a loose description of the marketing concept: “a statement of organizational culture, an agreed-on set of shared values among the employees of a company representing a commitment to put the customer first in all management and operational decision making.” His concept reflects the idea that a customer focus should be created throughout the business. The building of customer relationships and loyalty and the intimacy between partners in the marketing system receives much attention in Webster’s monograph. However, Webster does not define his key ideas into a new paradigm. The same holds, for example, for the description of the relationship marketing paradigm by Gummesson.