BODÖ - » Home Cassino/MERGING...© E. Gummesson 2010 MERGING RELATIONSHIP MARKETING (RM) WITH S-D...

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© E. Gummesson 2010

BODÖ

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MERGING RELATIONSHIP MARKETING (RM) WITH

S-D LOGIC & SERVICE SCIENCE

Experiences from the 30R approach &

many-to-many marketing

Professor Evert Gummesson

Cassino Business School

October 2010

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1960s-present Marketing management of consumer goods

plus

1970s-present Services marketing and management

Relational approaches to B2B

plus

1980s-present Quality management, excellence, value, satisfaction

plus

1990s-present Relationship marketing, CRM, one-to-one

adding up in the

2000s: S-D logic, service science, many-to-

many networks: the new (service) marketing

and a science of service based on co-

creation of value in complex service

systems

MY PERSONAL JOURNEY:

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It’s simply UNIQUE!

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Third, revised edition

from 2007

A hot moment in 1981:

The birth of the Nordic School

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McCarthy, 4Ps

Product

Price

Promotion

Place

THE MARKETING MIX

Booms and Bitner, 7Ps

Product

Price

Promotion

Place

Participant

Physical environment

Process

The marketing management Ps:

The service Ps:

Baumgartner, 15Ps:

Product

Price

Promotion

Place

People

Politics

Public relations

Probe

Partition

Prioritize

Position

Profit

Plan

Performance

Positive implementations

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P

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product: goods/services

price

promotion:

personal selling, advertising, SP

place: distribution

experiences

lifestyles

dreams

events

storytelling

informationcall centers

telemarketing

TV

email

Internet

mobile phones

text messaging

scientific research

education

political influence

public opinion

lobbying

Legal aspects:

contracts

corruption

organized crime

lawyers

courts

public relations, PR

branding

sponsoringCSR, Corporate Social Resonsibility:

ethical behavior

charity

commitment to a cause

”green”: enivironment and health

RALPH NADER atStockholm University,September 23, 2010

http://images.google.se/imgres?imgurl=http://uk.gizmodo.com/Mona.Lisa.smile.by.da.Vinci.jpg&imgrefurl=http://uk.gizmodo.com/2005/12/19/mona_lisa_happy_official.html&h=366&w=320&sz=21&tbnid=PurV1F0NZv_RzM:&tbnh=122&tbnw=107&prev=/images%3Fq%3Dmona%2Blisa%26um%3D1&start=2&ei=oCTAR5m1IJacxAG7nrGFDQ&sig2=zuq3o9pPzv4Aw3iGfd8j4Q&sa=X&oi=images&ct=image&cd=2

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How could I make a contribution by taking RM into a new

logic of service and consider the demands from S-D logic

and service science and my own thoughts about many-to-

many and a desire to put network complexity on the agenda

and go beyond the customer-supplier dyad of RM?

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Weed out the mythology of the IHIPs

Intangibility

Heterogeneity

Inseparability

Perishability

They are no overriding characteristics and

categories separating goods from services;

they are just dimensions together with a host

of others

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Today’s mantra from politicians, economists and the media:

”The service sector is growing.”

”All new jobs come from the service sector.”

”The manufacturing and agricultural sectors

are going down.”

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UHHHU!!!!

I AM THE

SERVICE SECTOR!

Sorry, politicians, economists and the media:

THE SERVICE SECTOR IS A GHOST!

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Service quality is difficult to determine, goods quality is easy

Service quality cannot be assesed before purchase, goods quality can

Better quality costs more

Service productitivity does not improve, manufacturing productivity does

Services are not owned, goods are owned

Services don’t require investment but lots of people

MORE CLAIMS FROM THE OLD SERVICES MARKETING

THAT LACK VALIDITY AND RELEVANCE:

There are pure services and pure goods and mixes between them

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MY DEFINITION OF RELATIONSHIP MARKETING:

“Relationship marketing is

interaction in

networks of relationships.”

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Relationship marketing

was made tangible through the thirty

market,

mega &

nano

relationships

the 30Rs

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Market relationships:R4 Relationships via full-time marketers (FTMs) and part-time marketers (PTMs)

R8 The close versus the distant relationship

R12 The e-relationship

R17 The criminal network

Mega relationships:R18 Personal and social networks

R23 The mass media relationship

R22 Mega alliances change the basic conditions for marketing

Nano relationships:R24 Market mechanisms are brought inside the company

R27 Internal marketing: relationships with the „employee market‟

R30 The owner and financier relationship

A SAMPLE OF THE 30Rs:

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Customer

Traditional marketing management

Customer orientation:

oriented toward one party

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Relationship marketing (RM)

CRM (customer relationship management)

One-to-one marketing

SupplierCustomer

Relationship oriented:

two parties

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Customer

Supplier

Many-to-many marketing

Network centric:

oriented toward many parties,

a network of stakeholders

Balanced centricity:

win-win for all stakeholders

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Definition:

“Many-to-many marketing

describes, analyzes and utilizes

the network properties of marketing.”

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COMPLEXITY

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air Baltic

Air China

air greenland

Air One

Atlantic Airways

Cimber Air

City Airline

Estonian Air

Qantas

Skyways

Wideroe

Adria

3 REGIONAL

PARTNERS

11 SPECIAL

SAS PARTNERS

Blue 1

Croatia Airlines

Star Alliance

TAP Portugal

ThaiUnited

SWISS

US Airways

Spanair

South African Airways

Austrian

Asiana Airlines

Lufthansa

LOT Polish Airlines

bmi british midland

SAS Scandianvian Airlines

Singapore Airlines

Shanghai Airlines

Air New Zealand

Air China

ANA All Nippon Airways

Air Canada

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PARTNERS

THE STAR ALLIANCE,

FEBRUARY 2008

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Social scientists are scared of complexity

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BEWARE!

So far we have settled for

stuck-in-the-middle theoryin marketing and service

GRAND THEORYContinuous movement

toward a higher level of

abstraction & generalization

MIDRANGE THEORYA stepping-stone but not the

end station

SUBSTANTIVE DATAwell-grounded in a

messy reality

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Conventional and orthodox

social sciences research

SIMPLISTIC SCIENCE: A B

Future research must address

complexity and context

through complexity theory:

network theory, systems theory,

case study research...

REALISTIC SCIENCE:

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The network of a

galaxy

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MODERN NATURAL SCIENCES

Theory of relativity

Quantum physics

Chaos theory

Autopoeisis

String theory

Superstring theory

Unified field theory

Systems theory

Network theory

Fractal geometry

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* Nodes and links

* Hubs

* Random networks

* Planned networks

* Clusters

* Connectors

* Preferential attachment

* Rich gets richer

* Fitness

* Fit-get-rich

* Winner-takes-all

* Scale-free networks

* Power laws

* Phase transition

* Robustness, error tolerance

* Cascading failure

* Tipping points

* Thresholds

* Spreading rates

* Self-organizing

* Six degrees of separation

* What is the Internet, really?

A SAMPLE OF

CONCEPTS AND

ISSUES FROM

NETWORK THEORY:

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* Nodes and links

* Hubs

* Random networks

* Planned networks

* Clusters

* Connectors

* Preferential attachment

* Rich gets richer

* Fitness

* Fit-get-rich

* Winner-takes-all

* Scale-free networks

* Power laws

* Phase transition

* Robustness, error tolerance

* Cascading failure

* Tipping points

* Thresholds

* Spreading rates

* Self-organizing

* Six degrees of separation

* What is the Internet, really?

A SAMPLE OF

CONCEPTS AND

ISSUES FROM

NETWORK THEORY:

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Buchanan in Small World continues (p.165) :

“Physicists have entered into a new stage of their science

and have come to realize that physics is not only about

physics anymore, about liquids, gases, electromagnetic

fields, and physical stuff in all its forms.”

“At a deeper level, physics is really

about organization –

it is an exploration of the laws of pure form.”

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Albert-László Barabási, Professor of Physics, in

Linked: The New Science of Networks (2002)

underscores network applications to markets:

“…understanding network effects becomes the

key to survival in a rapidly evolving new economy.” (p. 200)

“In reality, a market is nothing but a

directed network.”(p. 208)

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OVERLOAD?

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MORE

METRICS!!!

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THE CASE OF THE SWINE FLU

A complex service system

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Hospital staff

Pharmacies

Pharmaceutical

companies

Consumers

Citizens

Intermediaries

Logistical systems

Vaccines

Other products

Medical science

Research

Governments

Politicians

National health authorities

WHO

An endless amount

of capital goods

and disposables

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Hospital

staff

Pharmacies

Pharmaceutical

companies

Consumers

Citizens

Intermediaries

Logistical systems

Vaccines

Other products

Medical sciences

Research

Governments

Politicians

National health authorities

WHO

An endless amount

of capital goods

and disposables

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This is not a customer-oriented

service system!

It is too complex to work.

How do we find the necessary

simplicity to make it work?

We are facing a huge challenge!

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Put the network eye-glasses

on your noses!

THE END

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Put the network eye-glasses

on your noses!

THE END

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