EASM

Heidelberg
September 2008

MARKETING IS
MANAGING RELATIONSHIPS,
NETWORKS AND INTERACTION

Professor Evert Gummesson

Stockholms University School of Business
Sweden
eg@fek.su.se
C2C interaction
 HOW ABOUT TRADITIONAL
MARKETING MANAGEMENT &
THE 4Ps OF THE MARKETING MIX:
PRODUCT, PRICE, PROMOTION & PLACE?
The 4Ps
are neither 4
nor Ps
any more!
P
product: goods and services
price
promotion: personal selling, advertising, SP
place: distribution

scientific research
education
experiences
lifestyles VALUE PROPOSITION
dreams Supplier
events
storytelling Customer
VALUE ACTUALIZATION
information

call centers
public relations, PR telemarketing
branding TV
sponsoring email
political influence Internet
public opinion mobile phones
lobbying text messaging
The firm offers a value proposition

and in co-creation with customers and

a network of contributors

the proposition is actualized into service

Traditional American Relationship marketing Many-to-many marketing
marketing management CRM
and marketing mix One-to-one marketing

Customer centric Relationship centric Network centric

Centered on one party Centered on two parties Centered on many parties

Customer Customer Supplier

 My definition:

“Many-to-many marketing
describes, analyzes and utilizes
the network properties of marketing.”
Everything we do in marketing and management is rooted in

interaction in
networks of
relationships

TOGETHER FORMING UNIQUE

MANY-TO-MANY MARKETING
SITUATIONS
Planning the next Olympics – who’s going to get it?
Chinese art and entertainment and...
... Steven Spielberg bringing
Hollywood to Beijing
Beijing Olympics Creates Job
Opportunities In China and Asia
The media, advertising and public relations
sectors in China and Asia (Singapore, Hong
Kong, Japan) are looking for more talents to
fill in positions as the Beijing Olympic
Games is drawing near. International and
local (China) sponsors are looking ways to
maximize their sponsorship dollars in the
Games. Advertisers are also more
interested in online and mobile medium now
as compared to the previous Olympic
games. These activities have in turn drive a
need for qualified talents.
Much of this growth is driven by the demand
for Olympics-related marketing and publicity
projects, which are now moving into the
implementation phase.
Not just a shoe –
a scientific sports
product
Function, fashion and
glamor
Preparing at an early age
 This all forms a
HUGE
HUUGE
HUUUGE
service system!
The ultimate goal of service science
“…is to apply scientific understanding to advance
our ability to design, improve, and scale service
systems for business and societal purposes…”

Source: Maglio, P.P. and Spohrer, J., (2008), “Fundamentals of service science”, Journal of the
Academy of Marketing Science, Vol. 36 No.1, p. 20.
Network theory:
both methodology
and a theory of life
“Networks are
the fundamental
stuff of which new
organizations are
and will be made.”

Source: Castells, Manuel,

The Rise of the Network Society.
Oxford, UK: Blackwells, 1996,
p. 168
 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)
 WHAT IS NETWORK THEORY?

DECENTRALIZED NETWORK
CENTRALIZED NETWORK

HUB

LINK

NODE

DISTRIBUTED NETWORK
 Air Canada

Air China
3 REGIONAL
Air New Zealand Adria PARTNERS
ANA All Nippon Airways Blue 1
19 FULL
Asiana Airlines Croatia Airlines
PARTNERS
Austrian

bmi british midland

LOT Polish Airlines Star Alliance

Lufthansa

SAS Scandianvian Airlines

11 SPECIAL
SAS PARTNERS
Shanghai Airlines air Baltic
Air China
Singapore Airlines air greenland
Air One
South African Airways Atlantic Airways
Cimber Air
City Airline
Spanair Estonian Air
Qantas
SWISS Skyways
Wideroe
THE STAR ALLIANCE, TAP Portugal
FEBRUARY 2008 Thai
United US Airways
 Advantages of a network approach.
It can accomodate:

C
Complexity O
M
Context P
L
Change E
X
Non-linearity I
T
Both parts & the whole Y

T
Both structure & process H
E
Both tech & human aspects O
R
Y
 * Nodes and links
* Hubs
* Random networks
* Planned networks
A SAMPLE OF * Clusters
* Connectors
* Preferential attachment
CONCEPTS AND * Rich gets richer
* Fitness
ISSUES FROM * Fit-get-rich
* Winner-takes-all
* Scale-free networks
NETWORK THEORY: * 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?
 * Nodes and links
* Hubs
* Random networks
* Planned networks
A SAMPLE OF * Clusters
* Connectors
* Preferential attachment
CONCEPTS AND * Rich gets richer
* Fitness
ISSUES FROM * Fit-get-rich
* Winner-takes-all
* Scale-free networks
NETWORK THEORY: * 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?
 R R EL A TED
Y O F I NTE
A GAL A X Y ,
C H N OL O G
N T S , TE
EVE D M OR E . ..
TI O N S , A N
EMO
Many-to-Many Management:
results
leadership
 “Return on Networks (RON)
is the long term effect on profitability
caused by the establishment and
maintenance of an organization’s
networks of relationships.”
Certain things cannot be measured or predicted,
such as:

Leadership
Vision
New value propositions
Discontinuities
Business means risktaking!
 CEO
Chief Executive Offcier

or...
 NEO
Network Executive Officer
 CMO
Chief Marketing Officer

or...
 network management is
lead and follow
lead and follow
lead and follow
lead and follow
lead and follow
lead and follow
To become excellent researchers and educators marketing scholars should:

recognize complexity and deal with it

learn network theory and other methods that address complexity

understand the real roles of suppliers and customers

get out of the box of conventional marketing thinking

OVERLOAD?
Publications 2000-2008 (selected)

On service, relationships and networks

Gummesson, E. (2002), ”Relationship Marketing in the New Economy”. Journal of
Relationship Marketing, vol. 1, no. 1, pp. 37-57.
Gummesson, E. (2002), ”Relationship Marketing and a New Economy: It’s Time
for De-Programming”. Journal of Services Marketing, vol. 16, no. 7, pp. 585-589.
Gummesson, E. (2003), ”Relationship marketing: It all happens here and now!”
Commentary, Marketing Theory, vol. 3. no.1, pp.167-169.
Gummesson, E. (2004), ”Return on Relationships (ROR): The Value of Relationship
Marketing and CRM in Business-to-Business Contexts”. Journal of Business and
Industrial Marketing, vol. 19, no. 2, pp. 136-148.
Gummesson, E. (2004), ”Service Provision Calls for Partners Instead of Parties.”
Commentary, Journal of Marketing, vol. 68, no. 1, pp. 20-21.
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.
Gummesson, E. (2004), Many-to-Many Marketing, Liber, Malmö, Sweden,
244 pp; test edition in English will be available in 2008.
Gummesson, E. (2004), “From One-to-One to Many-To-Many Marketing.” Plenary
Session Presentation at the QUIS 9 Symposium, Karlstad University, Sweden,
June 15-18, 2004. Published in Edvardsson, Bo et al., eds., Proceedings from
the QUIS 9 Symposium, Karlstad, Sweden: Karlstad University, pp.16-25.
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. (2006), “Many-to-many marketing as grand theory: A Nordic School
contribution.” In Lusch, Robert F. and Vargo, Stephen L. (Eds.), Toward a Service-
Dominant Logic of Marketing: Dialog, Debate, and Directions. New York: M.E.
Sharpe.
von Friedrichs Grängsjö, Yvonne and Gummesson, E. (2006), “Hotel Networks
and Social Capital in Destination Marketing,” Service Industry Management,
Vol. 17, No.1, pp. 58-75.
Gummesson, E. (2006), ”Customer-to-Customer Interaction in Service
Development: A Many-to-Many Approach”. In Edvardsson, B. et al. (Eds.),
Involving Customers in New Service Development. Imperial College Press.
Gummesson, E. (2006), “Relationship Marketing: From CRM and One-to-One to
Many-to-Many Networks.” In Lagrosen, S. and Svensson, G. (Eds.), Marketing:
Broadening the Horizons. Lund, Sweden: Studentlitteratur.
Gummesson, E. (2006), “Implementing the marketing concept: from service and
value to lean consumption.” Marketing Theory, vol. 6, no. 3, pp. 291-293.
Gummesson, E. (2007), “Exit Services Marketing – Enter Service Marketing”.
Journal of Customer Behaviour, Vol. 6, No. 2, pp.113-141.
Gummesson, E. (2008), “Quality, service-dominant logic and many-to-many
marketing.” The TQM Journal, 20 (2), pp.143-153.
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), “Customer centricity: reality or a wild goose chase?”,
European Business Reveiew, 20 (4), pp. 315-330.
Gummesson, E (2008), Total Relationship Marketing. Oxford: Elsevier/Butterworth-
Heinemann. (revised 3rd edition).

On theory generation and research methodology

Gummesson, E. (2000), Qualitative Methods in Management Research, Sage,
Thousand Oaks, CA (revised second edition).
Gummesson, E. (2001), ”Are Current Research Approaches in Marketing Leading
Us Astray?”, Marketing Theory, Vol. 1, No.1, pp.27-48.
Gummesson, E. (2002), ”Practical Value of Adequate Marketing Management
Theory.” Europan Journal of Marketing, Vol. 36, No. 3, pp. 325-349. (Also in
Buber,
R., Gadner, J. and Richards, L. (Eds.), Applying Qualitative Methods to Marketing
Mangement Research, Palgrave, Basingstoke, UK.)
Gummesson, E. (2003), “All research is interpretive!”, Journal of Business &
Industrial Marketing, Vol. 18, No. 6/7, pp. 482-492.
Gummesson, E. (2004), ”Qualitative research in marketing: roadmap for a
wilderness of complexity and unpredictability”, European Journal of Marketing,
Vol. 39, No.3/4, pp. 309-327.
Perry, C. and Gummesson, E. (2004), ”Action research in marketing”. Commentary,
European Journal of Marketing, Vol. 38, No. 3/4. pp. 310-320.
Gummesson, E. (2006), “Qualitative Research in Management: Addressing
Complexity, Context and Persona,” Management Decision, vol. 44, no. 2,
(Spring), pp. 167-179.
Gummesson, E. (2007), ”Case Study Research,” in Gustavsson, B., ed,.
The Principles of Knowledge Creation Methods, Cheltenham, UK:
Edward Elgar.
Gummesson, E. (2007), ”Case Studies.” In Dictionary of Management Research,
Sage, London.
Gummesson, E. (2007), “Access to reality: observations on observational methods,
Qualitative Market Research, Vol. 10, No. 2, pp.130-134.
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.