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Strategic fit creates competitive advantage. Brennan et al. Unfortunately, it is not. By making themselves more efficient e. The Author considered the impact of the internet on strategy and how it might inform as to Web 2. Porter states that many people thought that the internet would make strategy redundant, but argues that the reverse is true. The latter has now been realised e. However, recent work by Chakravarthy and Henderson challenges the hierarchical nature of the relationship and suggests a heterarchical relationship Figure 2.

Examples are email, instant messaging and of course, social networks. Varadarajan and Jayachandran state that corporate, business and marketing strategies interact to define the competitive advantage of SBUs in a company. It is the merging of these strategies that specify the degree to which a business can gain and sustain that advantage. Chakravarthy and Henderson argue that the challenge of this heterarchy is continuous renewal, not just of positioning the firm in a more attractive market space but of developing competencies to defend these positions.

These issues are explored in Chapter 4. Dibb et al. But neither of the above definitions mention value, suggesting something is missing because the essential idea of marketing is to create value Sheth and Uslay, ; Doyle, , a theme which features throughout this study.

Cravens and Piercy include value for the customer, instead of shareholder value: Marketing strategy seeks to deliver superior customer value by combining the customer-influencing strategies of the business into a coordinated set of market- driven actions p. In reality value is now jointly created between the customer and the producer Prahalad and Ramaswamy, a; Payne et al.

However, Day et al. From these definitions it is clear that for some academics marketing strategy is a practical process that ensures the right products are served to the right markets, whilst others place it on a higher strategic plane and consider that it is about achieving value, even having a specific role of providing a competitive advantage.

Wilson and Gilligan, ; Piercy, ; Kotler, But there is no consensus amongst academics on the replacement marketing paradigm Egan, Additionally, there is strong support for it by many academics see Appendix B. Value is also strongly associated with co- creation, innovation and engagement — key properties of social media. There is no consensus amongst academics on either a definition of business strategy or of marketing strategy.

Organisations have two ways to compete — either they differentiate from the competition, or they pursue an ambitious strategy that challenges their resources or offers uncontested market space. For a company to compete successfully, it must be effective and efficient and it is clear that organisations must create value to compete so the goal of marketing strategy must be value creation. The internet offers no competitive advantage due to mass adoption. The relationship between the levels of strategy was examined.

A new framework suggests a heterarchy of strategies that combine to create a competitive advantage. This chapter examines these controversial assertions by exploring areas within marketing that academics find wanting.

The chapter also examines criticism of the marketing mix, highlights the limitations of relationship marketing, and explores the current issues facing branding. This resonates with Hooley et al. Diminishing Corporate Marketing function: The marketing function has all but disappeared at corporate level in large organisations Webster, , a; Wilson and Gilligan, ; Wind, But this often fails because SBU managers lack marketing skills and are driven by short-termism Webster, b.

Marketing is now a cross-functional process Cravens and Piercy, The issue is not how to rebuild the marketing centre, but how to disperse marketing competence across the organisation Webster et al.

This diminishment of the marketing function is commented on by Day : Paradoxically, the deeper marketing is embedded within an organization and becomes the defining theme for shaping competitive strategies, the more likely is the role of marketing as a distinct function to be diminished p.

Marketing is seen as a variable cost that can be cut Sheth and Sisodia, , especially since marketing productivity is hard to measure. Moreover, McGovern et al. This is expounded on by Maklan and Knox : Customer value creation is not captured by the traditional activities associated with brand building that is the USP, the augmented brand, and the 4Ps of product, price, promotion and place.

What matters is perceived value — it is this that attracts a customer or lures him from a competitor Rust and Oliver, Brands can only now compete either on price or by consistently adding value. This is increasingly hard as brands exhaust ways of doing this e.

Difficulties over how Value is created: Traditionally, value creation occurred during the exchange of goods or services with the customer Kotler, ; Hunt, , based on the benefits received Levitt, ; Lovelock, The proposal therefore is that the consumer is now the co-producer co-creator of value Vargo and Lusch, However, Piercy points out that long-term growth requires continual breakthroughs in all areas, not just product development.

Makrides posits that the challenge is to put the innovation back into strategy, arguing that companies must search for new competitive positions continually. Successful innovation is a major business challenge and can be categorised by how novel it is, and the extent to which customer value is created Cravens and Piercy, Instead of innovating, firms compete head-to-head for a greater market share but this is the road to long-term decline Mauborgne and Kim, Roberts and Alpert bemoan rapid innovation cycles caused by competitors copying and improving on new products immediately.

According to Webster et al. Aaker sees a bias against innovation caused by an inherent complacency. Loewe and Dominiquini identify six obstacles to innovation including lack of resources, short-term focus and lack of a systematic innovation process. In recent times, marketers have found it harder and harder to do this Poiesz and van Raaij, ; Wilson and Gilligan, Christopher describes the new consumer as existential and less responsive. Burnett and Hutton state that consumers strive for self-actualisation as they seek to close the gap between their real and ideal selves.

These modern consumers are involved, independent, better informed and more critical Capon and Hulbert ; Lewis and Bridger Additionally, this consumer is time-starved Lewis and Bridger, ; Kumar, ; Poiesz and van Raaij, and low on attention and trust Lewis and Bridger, Problem definition A stimulus from the internal or external environment causes a need to develop in the consumer.

Information is collected in order to satisfy 2. Information search the need. Process of problem-solving — criteria for 3. Evaluation of alternatives comparing products is established. Purchase A product or service is selected. Consumption of product followed by 5. Post-purchase evaluation evaluation to check if need has been met. Poiesz and van Raaij, argue that a downward communications spiral exists Figure 3.

Customers therefore experience information overload which forces them to be very selective, reducing the level of attention they can give to each message. Due to the overload, consumers cannot make rational choices.

Many consumers feel these messages are invasive and actively ignore them Petrecca, and Story, , cited in Keller, ; Thomas, But this merely increases the spiral effect. The ensuing scenario is thus: The market is like an enormous commercial gathering in a large reception hall which suffers from rich acoustics. In order to be heard and understood, everyone is starting to shout louder and louder.

Conversation is reduced to an enormous sound wave of indiscriminate noise that appears to fill the entire space. The end result is that no one can understand anyone any more.

Poiesz and van Raaij, , pp. Practitioner perspective: The Author prefers the marketing funnel metaphor of Li and Bernoff Figure 3. But as big a distraction are the conversations occurring between consumers via social media within the funnel Li and Bernoff, Source: Li and Bernoff, , p.

Impact of the Internet on Consumer Behaviour: The problems identified within the marketing funnel earlier are not eased by the internet.

Poiesz and van Raaij state that it presents no solution to the problem of the communications spiral and cite the low click ratios for online banner ads as proof. Given that the internet has increased competition, Porter, , this is hardly surprising. There are wide views on the definition of relationship marketing Harwood et al. Even the bathroom has no refuge — consider the Wizmark, an interactive urinal communicator www.

But there have been high failure rates of CRM systems Foss et al. For instance, in spite of CRM Brennan et al. Also, Kumar and Reinartz suggest that the relationship between loyalty and profit is much weaker than is realised and challenge existing claims about loyalty, one being that it costs less to serve a loyal customer. However, the above does not mean that brands do not want relationships with their customers since the role of relationship marketing is to help build a competitive advantage Harker and Egan, The challenge is therefore how can organisations reconnect with their customers in a way that benefits both parties?

Practitioner perspective: Newell not only questions the return that companies get for investing in CRM but also whether it actually works. For him, it should not be CRM but CMR, the customer management of relationships, whereby the customer dictates the nature of the relationship.

The mix was originally developed as a concept for the era of mass marketing when brands did not have to accommodate the needs of the customer. Secondly, Constantinides reveals that the mix lacks the ability for personalisation.

Customers now demand a personalised product or service in the form of mass customisation or even mass individualisation see Appendix B for this paradigm. Thirdly, the mix lacks a strategic content, rendering it deficient as a framework for marketing planning in an environment where strategic opportunities and threats are defined by uncontrollable and external factors.

These factors include globalisation, enhanced competition, more demanding and less loyal customers, and technology Wilson and Gilligan, as well as increasing commoditisation, rapid innovation cycles, and media fragmentation Roberts and Alpert, ; Kumar, The latter see the 4Ps each operating as four, downward spirals creating a marketing spiral Figure 3.

Therefore many marketers have switched their attention to the brand because it is capable of creating and maintaining a differential advantage Wilson and Gilligan, Building a strong brand also enables enhanced marketing communications effectiveness Keller, As such, branding is now a major priority for most companies Aaker and Joachimsthaler ; Kapferer, However, at the same time, forces are working against the brand.

This paradox presents a major challenge for marketers. Christodoulides and de Chernatony argue that brand equity, if measured, is a better way of providing an understanding of short and long- term performance than traditional financial methods. They add that consumer- based brand equity CBBE , as opposed to firm-based brand equity FBBE which concerns financial metrics, is an intangible asset that can offer a sustainable advantage. This is supported by Falkenberg who states that brand equity is a key marketing asset and growing it is a key objective.

However, McGovern et al. It enhances the efficiency and effectiveness of marketing, strengthens brand loyalty, and enables higher margins via premium pricing. It also provides a platform for brand extensions, offers leverage in the distribution channel and creates a barrier to stop customers switching. Competition is weakening brands Thomas and Kohl, ; Piercy, ; Sinha, A gap has arisen between brand value and customer value, and the latter is increasingly created by processes outside the auspices of brand managers Maklan and Knox, Internal forces: Thomas and Kohl state that incorrect managerial strategic and tactical actions are responsible for brand decline, for instance raising prices with no increase in benefits.

Webster et al. Distrust and disloyalty arise when favourite brands are shown to be charging premiums for undifferentiated products Sinha, Loss of control: Finally, marketers are ceding much control of brands to consumers Sawhney et al. Brand communities and social networks now lay claim to ownership of brands and influence the brand choices of consumers as well as company decisions Christodoulides, This is a key aspect of the research problem.

Varadarajan and Jayachandran add that the concept is unclear as to how the organisation should compete, who the customer is and what his needs are, and how the company should align its capabilities to these needs. In its defence, Hooley and Saunders have suggested that the problem in the past has lain with marketing managers who have not understood marketing as a concept.

According to Doyle they can only find customers by slashing prices. Corporate marketing can help build capabilities to assist an increase in customer focus Kumar, but the Author argues that with the disappearance of this function, large organisations are less able to do this. Doyle classifies organisations into left-handed and right-handed types. The left-handed ones are financially-driven and look to grow profits by cutting areas such as costs, or trimming the marketing mix, whilst the right-handed ones are market-driven whose main focus is satisfying the customer.

He points out that the latter are the top performing companies Brown, A , cited in Piercy, , p. Poiesz and van Raaij suggest that marketing is becoming less successful at its purpose — to synchronise supply and demand. Consumers buy products they do not need, or cannot use because they do not understand them, or do not buy products that should satisfy them.

Marketing is suffocating under its own weight p. According to Brady and Davis : Brand marketing is in crisis. One brand icon after another has been shaken, if not permanently damaged.

Senior management openly questions the value of their traditional marketing activities and marketing departments cited in Maklan and Knox, , p. He cites Holbrook and Hulbert who say marketing should be given "the dignified burial it deserves" Egan, , p. They quote Rajiv Grover speaking at a symposium: …marketers are being marginalized, in the sense that many strategically important aspects of marketing e. At the same event, they quote Glen Urban remarking: Marketing effectiveness is down.

Marketing is intrusive. Productivity is down. People resent marketing. Marketing has no seat at the table at the board level and top management. And we have an ethical and moral crisis.

Other than that, I think we are in good shape p. But she also warns against those who believe that social media offers a panacea for marketing, by suggesting it is a cause of some of its problems: Customer relationship marketing models involving such constructs of passion, commitment, intimacy, and trust have been bypassed to latch on to the latest cool media technology trends, leaving some consumers feeling abandoned, deceived, or tricked by the brand….

The cyber culprits of technology, social media and interactivity have spawned disconnections for brand marketers and creative executives p. The techniques worked for decades, but while hitting a target audience across ever more channels created a crescendo of voices, its side effects were the creation of an astute form of media literacy, and the potential for marketing scepticism among consumers p.

Practitioner perspective: Practitioners are equally critical of the state of marketing. Weber quotes A. Haven et al. The Author has taken the analysis from this and chapter 2 and created a series of challenges that he believes marketing and the organisation faces in the current climate: Challenge 1: There is no agreement on the current marketing paradigm.

Until this is agreed, the Author suggests that marketing thinking will remain diverged, pulling thinkers and practitioners alike in different directions. Challenge 2: There has been a loss of ascendancy of marketing in organisations and marketing as a corporate function has all but disappeared. Challenge 4: Innovation is key to creating and adding value but there is an innovation spiral, and if organisations are not geared to innovate, how can organisations create value, differentiate and compete?

Challenge 5: Traditional marketing techniques do not work well on the new consumer, compounded by conditions of the marketing funnel due to fragmented media, intense competition, and consumers having conversations with each other. Firms must regain the ability to influence the consumer. Challenge 6: Questions exist about relationship marketing and its ability to deliver its promise.

With consumers increasingly in charge of the relationship, how can firms re-connect with their customers? Challenge 7: The marketing mix is captive to a marketing spiral which produces a commoditised offering, thereby frustrating the brand from creating value and differentiating.

A new paradigm needs to be developed which enables the creation of competitive advantage. Challenge 8: Branding, whilst experiencing some difficulties, offers marketers a way of creating a differentiated product and thus gain a competitive advantage. How can brand equity be built in this new era of marketing?

Challenge 9: Marketing is in a mid-life crisis. Academia is questioning the whole marketing concept. Many firms that claim to be customer-led are in fact product-led. Organisations must therefore re-align with the customer. However, he acknowledges that their very nature means that they are a cause of some of the challenges experienced by marketing.

As a reminder, the Problem is What is the impact of social media on marketing strategy? This chapter therefore seeks to show to what extent social media impact on marketing strategy and thus answer the Problem. Bearing in mind the above, the discussion relating to the nature of marketing strategy Chapter 3 , and the challenges identified for marketing Chapter 4 , the Author suggests that the following questions arise relating to social media: A.

Can social media enable brands to re-connect with their customers? Can social media enable organisations to influence buyer behaviour once again? Can social media bring about change in organisations and make them market-oriented? Do social media enable organisations to create and deliver value for customers and organisations? Can social media help organisations to innovate? Can social media offer a competitive advantage to organisations?

Can social media restore trust in brands and build brand equity? Can social media provide a fix to the marketing mix which, it is claimed, does not work anymore? Tuten Ryan states that there is no accepted definition of customer engagement. For instance, Van Doorn et al. Engaged customers contribute to the brand reputation and recognition via online communities, and can be a crucial source of knowledge and thus co- creation Van Doorn et al.

High customer engagement is also essential for future growth whilst low engagement results in lost sales and negative WOM EIU, , cited in Kumar et al. Consumers have a greater propensity to communicate via both WOM and social media when they are engaged Mangold and Faulds In addition: …engaged customers are not just loyal they also buy additional product lines, and are the most credible, trustworthy and effective sales and communication channel available to marketers today Roberts and Alpert, , p.

Kumar et al. As a result, firms are increasingly pursuing strategies that promote non-transactional behaviour Verhoef et al. Van Doorn et al. External challenges include increased commoditisation, competition, increased cynicism of the consumer, and a scarcity of his time Roberts and Alpert, Internal barriers include a separation within the organisation of responsibility for key elements of engagement, an unhealthy focus on satisfaction, and a lack of employee engagement.

Verhoef et al. Hoffman and Fodor suggest marketers approach measuring social media ROI the wrong way. Reichheld suggests that ultimately what is important is to know "what your customers tell their friends about you" p. However, Chaffey et al. Chaffey et al. However, Saks , states that there is no theoretical basis for measuring engagement, suggesting that it is management fad. But the need to be able to target consumers on the basis of their behaviour is an ever-present objective for marketers since people who have similar views will respond in similar ways to any given marketing mix.

It is therefore argued that a more psychological approach to marketing is required Brennan et al. Constantinides and Fountain therefore suggest a new framework to represent this Figure 4.

Source: Constantinides and Fountain, , p. It is worth noting the cause and effect of social media. Ferguson states that the viral nature of conversations builds awareness and buzz — that is the cause. Positive WOM arising from good experiences being shared, which theoretically leads to trial and acquisition, is the effect. Hoyer and Macinnis suggest that this influence is either marketer-led or WOM from friends and family. Evans et al. Roberts and Alpert suggest that five levels of engagement by customers exist, ranging from level 1 purchaser up to level 5 customer is advocate and promotes the product actively to others.

Harridge- March and Quinton explore the degree of engagement of consumers to define a hierarchy of social media users, and summarise various academic work on this. They suggest that the core concept of traditional relationship marketing can be applied to the social web — loyalty of consumers can be earned by organisations that engage with them correctly.

Source: Harridge-March and Quinton, , p. Practitioner perspective: According to Li and Bernoff , in the groundswell a strategy that treats everyone alike will fail, the reason being that the social web is composed of different types of people, just as society is. These are discussed in section 4. The Author posits that social media is enabling, and in many cases forcing, companies to become customer-focused.

But they also list further benefits including understanding sentiment shifts, more economic and quicker research, identification of market influencers, and the generation of new product ideas. Wilson and Gilligan describe the development of marketing orientation in a company as a long-term process necessitating a number of steps to be taken which are expensive and time-consuming.

Sawhney et al. Aziza argues that social media are changing organisations internally because employees are consumers and use social media at work. Roberts and Alpert posit that the main reason why organisations experience failures is not because of a poor business strategy, but because the strategy execution is flawed Charan and Colvin, , cited in Roberts and Alpert, The latter authors propose that employees should be empowered to create engaged customers as this then produces better customer experiences.

Burnett and Hutton suggest that reputation is built from the inside out by encouraging employees to be brand advocates. Employee innovation: But innovation can also result from empowerment. Over 93, ideas have resulted in 7, projects being implemented Orange, According to Kumar et al. But Prahalad and Ramaswamy b argue that dialogue is difficult without the granting of access to, and transparency of, information. The final building block, risk, refers to risk- benefit balance. But the rewards for both parties for sharing information can be high.

Crowd-sourcing: Crowd-sourcing describes the process by which the power of the many can be brought together on the internet to build and to innovate Howe, Co-creation in Action: There are increasing examples of co-creation in the marketplace.

According to Piercy , the answer lies in continuous innovation. The Author suggests that social media are thus the perfect media for an innovation to be communicated because they are, by nature, social. They add that this re-defines the customer relationship, which can be risky. Value Innovation: Poiesz and van Raaij suggest that value and innovation go hand-in-hand.

An example of this is Kodak, which went against the grain and launched high cost printers for consumers but with low cost ink cartridges Cravens and Piercy, For them, value without innovation does not make the brand stand out, whilst innovation without value tends to be too technology-driven or advanced, exceeding the needs of the customer. Despite this, in a later paper, Kim and Mauborgne argue that what decides success or failure is not innovation, but strategy alignment.

For example, for the firm this value can result from efficiency savings via consumers viewing FAQs on a user forum instead of using a toll-free phone number that costs the firm , or via mining customer comments on products in online forums instead of costly market research Hoffman and Fodor, But by far the greatest value will be created by WOM because of the superior effectiveness of consumer-to-consumer communications and its superior ability to influence over traditional media Brown et al.

The fact that an Inc. Or does it simply deliver a temporary boost on par with other one-off promotions? But the Author found no evidence that academia sees social media as directly giving the organisation a competitive advantage. Although not an empirical study, the report suggests that views differ as to whether social media offer a strategic competitive advantage.

Some think Web 2. But, others think that Web 2. It was also shown how branding and strategy are related and how vital is the need to build brand equity in the current environment. The chapter also revealed the challenges facing brands, including erosion of trust and loss of control. With the above in mind, this section explores how social media can build brands.

In the new era, it is now suggested that brands no longer merely act as signals or identifiers for consumers, but are equated with experiences Pine and Gilmore, ; Schmitt, , ; Christodoulides and de Chernatony, This shift in emphasis of the brand means a change in how marketers manage brands. Newest Videos. Most Viewed. Longest Videos. Top Rated. The best free sex and porn tube PornHD picks up where other porn tubes fold - high definition porn.

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