1960s-present Marketing management of consumer goods

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LET ME OPEN WITH A NOTE ON MY PERSONAL JOURNEY
FROM THE PAST TO THE PRESENT
1960s-present Marketing management of consumer
goods plus 1970s-present Services marketing and
management plus 1980s-present Quality
management, excellence, value, satisfaction plus 1
990s-present Relationship marketing, CRM,
one-to-one adding up in the 2000s- S-D logic,
service science, many-to-many networks
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AN EXCITING TIME 1. THE MOST PROFOUND
TRANSITION IN THINKING AND CONCEPTUAL
DEVELOPMENT THAT I HAVE EXPERIENCED IN MY CAREER.
2. IT IS INDEPENDENTLY INITIATED AND DRIVEN BY
ACADEMIA AND, THROUGH IBM, BY INDUSTRY.
Its simply UNIQUE!
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Complexity, network theory many-to-many
marketing
Professor Evert Gummesson Stockholm University
School of Business Sweden eg_at_fek.su.se www2.fek.su
.se/home/eg/
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ON MY TERMINOLOGY
The noun complexity stems from the Latin
complexus meaning network accompanied by the
verb complecti meaning to twine together. The
word system is derived from the Greek systema,
meaning a whole composed of many parts.
Context comes from Latin contexere, to join
together. These words and several others, like
ecology and holism, obviously belong to the
same family. I use the word system in its
generic and general sense, for example service
system, but let networks through network theory
(and case study research) be the basis for
analysis and discussion.
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Throughout my research the overriding key
variables are relational in three ways
relationships, networks interaction
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DEVELOPMENT OF THE RELATIONAL APPROACH TO
MARKETING
2000s-
1960s-present
1990s-present
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Definition Many-to-many marketing describes,
analyzes and utilizes the network properties of
marketing.
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Marketing as Complex Networks Many-to-Many
Marketing From one-to-one to many-to-many in the
marketing of the value-creating network economy
PRELIMINARY CHAPTERS 1 From One-to-One to
Many-to-Many 2 B2B Networks in
Business-to-Business 3 B2C/C2B Networks in
Business-to-Consumer and Consumer-to-
Business 4 C2C Customer-to-Customer Networks
5 B2B2C2C2B2B... Everything Is Linked to
Market, Mega and Nano Networks 6
Infrastructure and Mega Networks 7 High
Tech/High Touch Human Beings Are Not Obsolete!
8 Many-to-Many Management From CEO to NEO,
from CMO to NMO, from ROI to RON 9
Traveling the Land of Theory and Research 10
Many-to-Many Science, Internet or Innernet?
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Network theory
both methodology and a theory of life
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The topology of Capri going from a photo to a
network and fractals model
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Air Canada
Air China
3 REGIONAL PARTNERS
Adria
Air New Zealand
Blue 1
ANA All Nippon Airways
19 FULL PARTNERS
Croatia Airlines
Asiana Airlines
Austrian
bmi british midland
Star Alliance
LOT Polish Airlines
Lufthansa
11 SPECIAL SAS PARTNERS
SAS Scandianvian Airlines
Shanghai Airlines
air Baltic Air China air greenland Air
One Atlantic Airways Cimber Air City
Airline Estonian Air Qantas Skyways Wideroe
Singapore Airlines
South African Airways
Spanair
SWISS
THE STAR ALLIANCE, FEBRUARY 2008
TAP Portugal
Thai
United
US Airways
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WHAT IS NETWORK THEORY?
DECENTRALIZED NETWORK
CENTRALIZED NETWORK
HUB
LINK
NODE
DISTRIBUTED NETWORK
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Neural networks Bundles of nerve fibers
running to various organs and tissues of the
body.
Computer representation of the human brain that
tries to simulate its processes.
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11 therapies comprising 41 components
23 diagnosed disorders
5 doctors prescribing 92 pills
an endless amount of capital goods and
disposables
Patient ANNA, 82 Network systems manager
55 specialists
ambulance and taxi drivers
nurses
social insurance people
masseurs
social assistants
Based on Akner, G. (2004). Multisjuklighet hos
äldre. Malmö, Sweden Liber.
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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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THIS IS ABOUT MARKETING, SO WHERE DOES
MANY-TO-MANY MARKETING AND NETWORKS COME IN? WE
HAVE TO ANSWER SEVERAL FUNDAMENTAL QUESTIONS

• Who are the customers and who are the suppliers?
• What do suppliers do best?
• What do customers do best?
• What do third parties do best?
• What should be one-party (individual) action?
• What should be two-party (dyadic) interaction?
• What should be multiparty (network) interaction?
  
• What should be C2C interaction?
• What should be face-to-face interaction,
  ear-to-ear interaction, email
• interaction, Internet interaction, text
  messaging, and interaction with
• automatic machines?
• What do human beings do best?
• What does technology do best?
• Is there a no-mans land where service is
  neglected?

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• In the new service logic the customer and
  supplier roles have merged, although they perform
  different tasks in differnet context
  (value-in-context). The following categories of
  suppliers are found in the market
• business enterprises
• governments on a national, regional and local
  level and
• increasingly on a mega, supra-national level,
  such as the EU
• NGOs and voluntary organizations which arise
  where the first
• two have failed, or act as supplementary to
  them
• In B2B, the suppliers are also customers. In
  B2C/C2B we find
• consumers
• citizens
• who are also co-creators, that is suppliers.

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• Properties of case study research
• and network theory.
• They can accomodate
• Complexity
• Context
• Change
• Non-linearity
• Both parts the whole
• Both structure, hierarchy process
• Both tech human aspects

C O M P L E X I T Y T H E O R Y
No other research methods in social sciences can
do that!
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CLAIMED TO BE SCIENTIFIC SURVEY- DOMINANT LOGIC
STATISTICAL SURVEYS Usually low quality
data Superficial Cannot handle complexity Pseudo-p
reciseness Low validity, high reliability Non-inte
ractive
NETWORK THEORY Verbal Graphical Mathematical Inter
active
CASE STUDY RESEARCH Verbal narratives High
validity, low reliability Interactive
ONLY SPECIAL APPLICATIONS AT BUSINESS SCHOOLS
CLAIMED TO BE ONLY ANECDOTAL AT SOME BUSINESS
SCHOOLS, HIGH ACCEPTANCE AT OTHERS
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But this is not enough. Scientific methodology is
not a technique it is techniques in the context
of a philosophy and worldview. Researchers who
just become technicians are not scholars. To be a
scholar and true scientist you have to consider
other dimensions as well
common sense intuition sound judgment wisdom insig
hts hunches experience instincts visions...
Without these additional aspects, scientific
method is empty!
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Networks are the fundamental stuff of which
new organizations are and will be made.
Source Manuel Castells, Professor of Sociology,
in The Rise of the Network Society. Oxford, UK
Blackwells, 1996. Quotation from p. 168
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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.
Source Mark Buchanan, physicist and former
Editor of Nature and New Scientist, in Small
World, Phoenix, London, 2003. Quotations from
p.165
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understanding network effects becomes the key
to survival in a rapidly evolving new economy.
In reality, a market is nothing but a
directed network. (as opposed to a random,
scale-free network)
Source Albert-László Barabási, Professor of
Physics, in Linked The New Science of Networks,
Perseus, Cambridge, MA, 2002. Quotations from pp.
200 and 208
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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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CEO Chief Executive Offcier
or...
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NEO Network Executive Officer
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CMO Chief Marketing Officer
or...
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Traditional indicator Return on Investment (ROI)
New indicator Return on Networks (RON) is a
measure of the profitability of a companys
networks
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BIBLIOGRAPHY ON RELATIONAL APPROACHES (SELECTED)
Articles Gummesson, E. (1987), "The New
Marketing Developing Long Term Interactive
Relationships". Long Range Planning, Vol. 20/4,
No. 104, August. Lovelock, C. and Gummesson, E.
(2004), Whither Services Marketing? In Search of
a Paradigm and Fresh Perspectives, Journal of
Service Research, vol. 7, no.1, pp. 20-41. Winner
of the 2005 American Marketing Association Best
Services Article Award. Gummesson, E. (2006),
After Relationship Marketing, CRM and
One-to-One Many-to-Many Networks, Finanza
Marketing e Produzione, no.1, pp.
138-144. Gummesson, E. (2007), Exit Services
Marketing Enter Service Marketing. Journal of
Customer Behaviour, Vol. 6, No. 2, pp.
113-141. Gummesson, E. (2007), Case study
research and network theory Birds of a feather,
Qualitative Research in Organizations and
Management, Vol. 2, No. 3, pp.226-248. Gummesson,
E. (2008), Extending the New Dominant Logic
From Customer Centricity to Balanced Centricity.
Commentary for Special Issue of The Journal of
the Academy of Marketing Science (JAMS) on the
New Dominant Logic, 36 (1), pp.15-17. Gummesson,
E. (2008), Quality, service-dominant logic and
many-to-many marketing. The TQM Journal, 20 (2),
pp.143-153. Gummesson, E. and Polese, F. (2009),
B2B is not an island, The Journal of Business
Industrial Marketing 24 (5-6). Gummesson, E.
(2009), The future of service is long overdue,
in Maglio, P. P., Kieliszewski, C. A., and
Spohrer, J., Eds.. Handbook of Service Science.
New York Springer. Book Gummesson, E. (2008),
Total Relationship Marketing, Oxford, UK
Elsevier/ Butterworth-Heinemann (3rd ed.).
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OVERLOAD?
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THE END