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Customer centricity: reality or a wild goose chase?

Evert Gummesson
Stockholm University School of Business, Stockholm, Sweden
Abstract
Purpose With Sweden and Europe and the present and the future as vantage points, the purpose of this paper is to challenge the viability of customer centricity (or customer orientation) and its axiom, the marketing concept, as the basis for marketing and protability. Design/methodology/approach The paper is part of a project in Sweden to stimulate a dialogue on the importance and role of marketing. As such the paper draws on the authors experience as professor, practicing marketer, consumer and citizen and expresses a personal and unorthodox synthesis of ongoing developments in marketing. Findings Although customer orientation has been on the agenda for at least half a century it is not whole-heartedly implemented. The reason may be that it is unrealistic as a general guideline for marketing. First, a single stakeholder can only in special instances be treated as the nucleus of marketing and business; a tradeoff between several stakeholders balanced centricity stands out as more realistic. Second, the gullibility of human nature and the customers limited knowledge and time open up for the deployment of diverse tricks in marketing practice. The current evolution of marketing theory and the advent of better methodology to handle complexity could be a step forward once the marketing discipline embraces it fully. Gaps between what marketing textbooks prescribe and the real world confronting marketers need to be narrowed. Practical implications Just focusing on the customer and customer satisfaction is not possible in practice; businesses have to balance the interests of many stakeholders, thus balanced centricity. Originality/value Customer centricity is hardly ever challenged in the research literature and textbooks and its strategic value is often not understood and accepted in practice. Keywords Customer orientation, Marketing strategy, Networking, Service levels Paper type Viewpoint

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Introduction A project with the purpose to increase the awareness of marketing among business managers, governments, the media and academe is in progress in Sweden, since 2007. It assumes both a commercial and political/societal perspective on the role of markets and marketing in todays economies. This paper is an adapted version of a chapter from a book where researchers express their views on different aspects of marketing and how marketing can be improved (Mattsson, 2008). My contribution is to position customer centricity (or customer orientation) in a theoretical and practical context. The paper looks ahead, assisted by current marketing theory developments, and does not review past literature on customer orientation. There are problems and possibilities with customer centricity which invite both business managers and professors to reconsider their stance. The paper discusses whether customer centricity with its message of benign and harmonic balance in relationships between suppliers and customers is just a desk ideology, a hopeless quest. It ends with the idea of balanced centricity in which stakeholder interests are considered within a network frame. It reects what I nd important and connects to an ongoing international discussion.

European Business Review Vol. 20 No. 4, 2008 pp. 315-330 q Emerald Group Publishing Limited 0955-534X DOI 10.1108/09555340810886594

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The paper speaks out and takes positions, for or against. It is based on my experience as professor, marketer, consumer and citizen. I interpret customer centricity in my way which of course, does not give me amnesty against objections. But that is unimportant; the important thing is to prompt constructive rethinking of marketing to the benet of our society and economy. Underpinning my way of approaching reality, criticize and offer propositions is a vision about the good market as a contributor to the good society. Perhaps a utopia, but for me an important direction. What is customer centricity? There has been talk about customer orientation as long as I can remember, perhaps longer. The AGA corporation once became a world celebrity through its many innovations, among them the AGA lighthouse and cooker. It was a product-oriented company that rst developed products, then sought customers. AGAs current strategy is customer centric within gas applications which are developed with consideration of customer needs and in close cooperation with customers. But back in the early 1900s, Gustav Dalen, Inventor, Nobel Prize Winner, and CEO of AGA said: Solve the customers problem. Give them possibilities to increase protability, security and quality in their operations. Help them introduce new and better technology. In the 1950s Peter Drucker until his death in 2005, almost 96 years old, listed as number one among management thinkers in America wrote that marketing is seeing your business through the eyes of the customers. As new CEO of Scandinavian Airlines, SAS, in the early 1980s, Jan Carlzon found an industry where passengers customers were treated as disturbances and residuals in a system created for the administration of aircraft, pilots and ight attendants. His battle cry Customer in Focus! circled the globe and affected both business and governments. So customer centricity is not new, but how well do we handle it today? In accordance with the American marketing concept companies should learn about customer needs and wants and satisfy these; this is a prerequisite for survival and protability. Its opposite is production or product orientation where technology, resources, product knowledge, systems and organization structure control the behaviour of companies. Both in literature and practice the concepts of customer and marketing orientations are mixed up. Marketing orientation is broader, not only including customers but also competitors and how markets function. This paper is focused on the customer, but at the same time wants to consider the customer as part of a larger context, a network of relationships. The border between customer and citizen is fuzzy. Since customer centricity reached the public sector in the 1980s it is claimed that patients are customers, students and parents are customers of the school, and so on. This is well, but it is too limited. As citizen you have partly different and more basic needs than those that can be satised commercially. Citizens have obligations and rights, pay for societal service primarily through taxes and do it in relation to ability, not in relation to individual needs. When there is talk about competition and that we live in an afuent society, the most basic service such as humane elder care, efcient emergency service, legal security, and good schools and housing are left out. This should not stop a doctor from being partially customer centric, for example in communicating with patients.

Furthermore, the boundary between the private and public sectors is not so obvious; there is an overlap and they both cooperate and compete. When marketing is discussed, especially in American books and media, the emphasis is usually on consumer marketing, business-to-consumer or B2C. This however is only part of all marketing, even the smaller part. Marketing to companies and governments, business-to-business or B2B, is both different from and similar to B2C. The two are also connected as everything that is B2B sooner or later must reach customers and citizens, that is transcend into B2C. In this paper both B2C and B2B and the roles as customer and citizen are considered. What is said sometimes concerns all of this, sometimes only some part. There are contradictory perceptions about the value of customer centricity as a guiding star for business: . Customer orientation has become a commodity. If every supplier invests in customers it becomes a must and no competitive advantage is attained. Expectations are raised and a supplier cannot refrain without losing ground. Costs rise and customers may become more and more demanding, even spoilt. . Genuine customer centricity has never been implemented. There has been lots of rhetoric but little practice, more talk than walk. Perhaps, customer centricity cannot even be implemented? Can we indeed give one of many stakeholders priority? In periods there has been a lot of talk about the needs of employees as the nucleus of a companys operations. Now most of the talk is about owners shareholder value and corporate governance and the only thing that counts is the share price. Finance, accounting, mergers and acquisitions, bonuses and fees to management and the board are topping the agenda rather than marketing and customer centricity. And looking at the issue with customers eyes: how intimate do they really want to get with suppliers? . Price, quality and value are hard-to-catch concepts. Customer centricity should mean that companies strive to give the customer value for money. Therefore, price, quality and value are constantly present in marketing. They are not only hard to catch but also must be traded off and they are inuenced by a customers individual personality, lifestyle and group belonging. There are no theories that more than partially explain their connections. For lack of theory, an example will have to do. During the 1990s, a new type of competition emerged in the airline industry. Low price no frills airlines challenged the traditional full service airlines. How do customers evaluate a low price and low service compared to a higher price, more departures, more comfort, and so on? That price is important for consumers who pay out of their own pocket is no news but business travellers also use the low-price alternatives. The price differences are so big; Ryanair even gives away tickets or just charges nominal fares. Companies nd that their travel budget can be drastically cut. Paradoxically, low-price airlines sometimes offer better service. For example, they use smaller airports where it is easier for the traveller to nd the way and they have non-stop ights to popular destinations. But members of the full service airlines frequent ier programs can, even when travelling on a budget ticket, count on access to lounges, priority when problems arise, and upgrades.

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What conclusions should be drawn from this? We can only establish that reality is complex and that a lot in marketing is built on beliefs and assumptions both in business and academe. This creates challenges, and some of these will be addressed below. Challenges Proper understanding of customer centricity is a challenge to academe and businesses alike. It is unlikely that we will get a denitive and general answer to the secrets of customer centricity. However, in specic situations companies can nd answers that t their situation. Challenges for business Enterprises are both quick-sighted and sluggish. Some are continuously successful like IKEA and H&M. But for most companies there are peaks and valleys; Ericsson and ABB are such examples. Many handle change well and come out as winners whereas others get stuck in their historical success. It becomes particularly critical when thorough change is necessary. Here, are two cases for consideration: (1) After World War II, Swedish quality became a trademark. Having stayed out of the war with its factories intact, Sweden had an advantage over the rest of Europe. Swedish quality was customer-oriented in the sense that customers trusted Swedish products; they were strong, functional and lasting. When quality management in its Japanese and American new version made its entry in the 1980s, Swedish quality had faded as a competitive edge. Business was defensive and kept chanting the mantra: With higher quality it will be more expensive! Finally, it became obvious that this was counterproductive. Better quality sometimes costs more, sometimes the same, sometimes less and it is sometimes protable, sometimes not. There are no general answers, just specic applications. That is how simple it is. (2) The consumer cooperative movement has been of critical importance by challenging among others the retailing and housing markets. These markets did not operate well and the customer was the underdog. Customers formed co-ops owned by themselves and the needs and wants of customers and owners could be synchronized. In Sweden the original business mission and ideology of the Konsum retailing chain had become obsolete in the 1970s but lacked the ability to nd a new customer-oriented road to travel. It became a commercial operation like any other and lost its unique position. Recently, health and environment are eventually beginning to be more seriously considered by business and are seriously considered by growing consumer groups. Konsum could have assumed leadership if it had adapted its mission to the new cause. For instance, it learned nothing from The Body Shop and its ecological strategy 2007 was a breakthrough for green cars. Headed by Toyota, Japanese auto industry is the leader and Swedish car manufacturers are followers. Corporate social responsibility, is part of customer centricity keeping in mind that not only consumers but also corporations are citizens. Sweden has had better conditions than most to show leadership in the green movement but has not managed to do so.

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These cases were about deep-going, strategic and paradigmatic changes where reality left an idea or organization behind. Such changes are especially demanding and incremental improvements are not sufcient. There is need for a total overhaul of corporate culture, organizational structure, systems and metrics. For this to take place a daring and committed enthusiast is required, one who can get a customer-oriented corporate culture grow and get all employees act as part-time marketers. It is not enough to hand over customer centricity to public relations departments or relationship managers who appear in the media, smiling and even looking credible, but who have no direct responsibility for action. Other challenges are part of everyday work and demand continuous improvements: . Management often have doubts about the protability of customer centricity. They are afraid that customer centricity incurs cost but contributes no revenue. And the cry for marketing accountability and marketing metrics is increasingly louder. It is not new; it has come and gone and different techniques and methods have been used for ages. The conviction that everything must be measured in numbers What gets measured gets done! is often driven too the extreme as everything cannot be forecast and measured. Marketing like R&D, leadership and mergers rests on judgement calls and visions only supplemented by certain key indicators. Marketing is complex and the outcome is both dependent on planned action and uncontrollable events such as competitor activity, changed preferences among customers, and political decisions. Short-term cost slashing is cheered by shareholders and it therefore becomes tempting to downsize, outsource and automatise without proper knowledge about the effects on customers. . Customer centric companies are better off. Many efforts have been made to measure customer centricity and there is some evidence that point to a positive effect. Shah et al. (2006) propose that customer centricity can be implemented once it is more consistently managed throughout an organization. But customer centricity is a fuzzy concept. Measurement requires arbitrary denitions and simplications and even if the numbers may appear as precise, validity may be uncertain. If the slogan what gets measured gets done should be true, nancial indicators and proxies such as customer loyalty, customers share, and brand recognition together with unclear incentives can lead to the wrong decisions and activities. . CRM, customer relationship management. CRM is a recent and sophisticated way of handling knowledge about customers. It is the traditional salesmans card index with an address list of customers, notes about previous orders and so on which has been digitalized and can be used in wider applications. CRM rests on the tenet of relationship marketing that long-term customer relationships are antecedents to success. CRM systems are also connected to a companys total business system and therefore the inuence of marketing on prots can be more fully monitored. But everything builds on the relevance of the computer software and how well the users can analyze the data, make decisions and implement activities. The major share of all CRM installations fails totally or in part (Payne, 2006). Companies often seem to believe that CRM and business systems can live their own lives and that close interaction and dialogue with customers is redundant.

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The ability to understand the customers situation and mindset empathy and make use of customer information such as suggestions and complaints has sometimes become better, sometimes worse. Challenges for academe At technical institutes and in the natural sciences researchers develop products and methods which are later used by companies. Do researchers in marketing develop something similar which business can take over? Or are we rst and foremost reporters who try to uncover patterns in ongoing events? Research and education must be experienced as meaningful by business. Practicing managers do not have time or cannot read PhD theses which are primarily written to comply with academic requirements. But it does not only rest on the shoulders of professors to make research credible. It is also a task for business to constructively learn how to use research. Here are some challenges for scholars: . Marketing is an important discipline. Marketing is one of the biggest subjects in business schools. But do we teach the right things and research the right issues? We probably do so to a certain extent but a lot is doubtful, based on defunct theories and rigid methods that were actually never up to par. Many grand efforts to make marketing scientic have opped. One was prot impact of market strategy, which started around 1960; another was operations analysis, management science and marketing information systems from the beginning of the 1970s. None of these have contributed with any substantial results relevant for customer orientation. . Internationally noted Nordic research. The conventional wisdom in marketing says that the developments come from the USA. In Northern Europe, there were and are also prominent researchers in marketing. Two areas in particular are pertinent to the current developments. In the 1970s researchers in Sweden and Finland began to get interested in services, which were blank spots on the marketing map. Service research has had a remarkable growth and the Nordic School, which has broadened itself to quality, relationships and networks, is one of its strongholds (Gronroos, 2007). About the same time researchers at Uppsala University, Sweden, gave birth to an informal group around a relationship and network-based way of looking at B2B. This research goes under the label, International Marketing and Purchasing Group IMP. Recently, IMP includes a large number of researchers globally with its centre in Northern Europe and the UK. . The basic idea of research is being degraded. Research in marketing has gone global but it has imposed restrictions on itself. There certainly are discoveries which I will return to later in this paper. But the mass of students and researchers in the world are taught that science in marketing is sending out questionnaires to a statistical sample of customers. More often than not based on miserably low-response rates, they draw far-reaching statistical conclusions about how customers think, feel and act. The situation is better in Northern Europe, at least for now, but increasingly research is ordered to become more efcient and allegedly more scientic. It must not be controlled by daydreaming professors but by people who know what is relevant to society, that is politicians,

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bureaucrats, and European Union lawyers. Financial aspects increasingly outrank educational and scientic dimensions. We are supposed to follow international standard, that is, clone ourselves on the American system, a system which is heavily criticized by business in the USA. There is not a single journal for researchers in marketing to publish scientic articles in Swedish. Everything happens in international journals and at international conferences. The requirement on researchers is to publish two articles a year in international top journals that is how they get promoted. Politicians, bureaucrats and lawyers should not be able to enforce these ideas if there was a counterpart, primarily professors and deans of universities. But they yield, frightened of not getting promoted or not getting grants. Researchers do not search for the truth; they search for money, as a Swedish newspaper headline ran some years ago. Marketing in the public debate. To follow developments and contribute is good but not enough. Marketing must also make its voice heard in society and in the media to inuence the power elite and its decisions in various boards. Researchers in marketing are not particularly prominent; economists exert much more inuence. For example, how many researchers in marketing from the university world have any inuence over the decisions in the European Union and their potential impact on customer orientation?

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Whats cooking in marketing? With a focus on customer centricity, the following sections account for efforts to re-think marketing. My journey begins in the USA and its traditional marketing management, marketing mix and 4Ps. It goes on with a transfer from exchange transactions to relationships and interaction through the concepts of relationship marketing, CRM and one-to-one marketing. In its extension networks as the foundation for new marketing theory attracts growing attention. In my interpretation this is referred to as many-to-many marketing. The journey proceeds to the contributions from service marketing and management, the growing understanding of a service logic in manufacturing as well as IBMs education and research project Service Science. All this is treated together with a new logic for marketing, service-dominant logic, the latter being a hot topic among researchers. Another contribution comes from quality management and lean production which has expanded into lean consumption and nally the two are joined in a lean solution. In this context, the role of the value chain and the value network is also treated. This represents my personal interpretation of the current evolution of marketing. There are also other approaches; the more radical being based on critical theory and postmodernism (Saren et al., 2007). Marketing management, marketing mix and the 4Ps All of us who have studied marketing have been exposed to American marketing management in which we have met the marketing mix, usually reduced to 4Ps: product, price, promotion and place. The supplier needs a product (goods or services), must set a price, promote the product to make buyers choose the suppliers brand, and distribute the product to the place where the customer can easily get it. There is a lot of wisdom in the 4Ps and it can be a good beginning. But it is more of an appealing one-liner and sound bite than a dive into the sea of complexity, long-term

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considerations, sustainable research and analysis. The 4Ps are neither 4 nor Ps any more. Figure 1 shows this. In its nucleus are the customer and supplier and the value proposition and the value actualization (explained in later sections). Marketing strategies are listed against a network background to show that marketing is created in relationships between numerous people, organizations and strategies. The gure conveys that marketing realities are complex and that every marketing situation requires its specic combination of strategies. It would lead too far to comment on the strategies here. See also Constantinides (2006) for an overview of different constellations of strategies. The reigning strategy in marketing management is mass marketing. Customers are treated as statistics, decimals and averages of gray masses, no matter if they constitute a big general mass or smaller, specic segments or niches. It is part of the myth that mass promotion and mass distribution are cost effective and that it is too expensive to treat customers as individuals, especially if they are consumers. However, the inuence of mass marketing on protability, especially advertising, is usually difcult to measure. In B2B individual treatment is common especially when customers purchase large quantities or deals are complex, and when the supplier is dependent on a few key customers (key account management). The criticism against marketing management is above all that it is manipulative and sees marketing from the suppliers point of view where the customer is someone who should be controlled and managed. This leads to half-hearted customer centricity,

product: goods and services price promotion: personal selling, advertising, SP place: distribution experiences lifestyles dreams events storytelling information scientifc research education
VALUE PROPOSITION Supplier Customer VALUE ACTUALIZATION

public relations, PR branding sponsoring

call centers telemarketing email Internet mobile phones text messaging

political influence public opinion lobbying

Figure 1. Todays Ps in a network context

but no more. Another criticism is that marketing management offers an oversimplied, ill-founded and incomplete map. Relationship marketing, CRM and one-to-one There is growing awareness of the importance of relationships and interaction to marketing. Relationship marketing, CRM and one-to-one marketing all with roughly the same meaning but with partially different origin and emphasis are established concepts today. Most commonly relationship marketing is dened as a variant on the theme to create long-term relationships with loyal customers. My denition is broader and more general with the purpose to catch the core of marketing, its DNA (Gummesson, 2008a):
Relationship marketing is interaction in networks of relationships.

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Relationships bring people and organizations together, temporarily or long term. We all have an intuitive idea of what relationships are from our own experience. In a commercial environment there are many types of relationships and properties of these, which are only partially explored. When the relationships include more than two people or companies complex patterns networks quickly appear. We therefore talk about networks of relationships. What goes on in the relationships is called interaction consisting of cooperation, communication and dialogue, as well as competition and the positioning a power. The expression one-to-one marketing puts emphasis on something very important, namely that customers are individuals; they are people with special qualities, needs and wants. CRM is currently the most used concept and it has already been discussed above. How then is customer centricity shown in these relationship-based theories? Relationship marketing builds on the notion that long-term, win-win relationships between suppliers and customers and other stakeholders are established. If all parties are satised the relationship will sustain, otherwise it is broken. The idea resonates the marketing concept and basically it is not manipulative. Unfortunately relationship thinking is misused and squeezed into the marketing mix as yet another way of managing customers rather than cooperating with them. This is mirrored in the latest denition of marketing suggested by the American Marketing Association where marketing is said to manage customer relationships. But suppliers should not manage customer relationships; they should interact with customers in relationships. Service-dominant logic and Service Science Figure 1 showed that we do not just buy goods and services but relationships, brands, experiences, dreams and many other interacting phenomena. Drawing on international research during the past decades American Professors Bob Lusch and Steve Vargo (Lusch and Vargo, 2006; Vargo and Lusch, 2008) successfully managed to convey that marketing is a process to offer service or create value independent of whether this is through goods, services or whatever. The idea is not new; many, including Nordic School representatives, have pointed in this direction. What is new is that Lusch and Vargo have managed to incorporate many loose ends and conceptualize and communicate a new logic of marketing, service-dominant logic or S-D logic. The word service should not

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be mixed up with the traditional denition of services as something different from goods. If the customer gets service that is, gets value from goods or services or whatever is immaterial; it is the outcome and not the input that counts. Ofcial statistics are stuck on suppliers and production. A micro oven belongs to the manufacturing sector, potato chips to the agricultural sector and restaurants to the service sector. But the value that the customer is seeking is nourishment, satisfying hunger, tasty food, comfort and social companionship. Customers could not care less from which statistical sector the value is derived. Ofcial statistics are totally deprived of customer centricity and as such obsolete and misleading. According to S-D logic, value is not just created in production but also, even primarily, in the consumption process. It is a matter of co-creation of value. The supplier presents a value proposition which consists of something that customers might want at a certain price. The customer is responsible for the value actualization through consumption and use. The new logic requires co-creation between customers and suppliers and within this genuine customer orientation. Despite this knowledge, American Marketing Associations latest denition of marketing again falls back into traditional marketing management, saying that marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers, it should be together with customers. In a respectless and creative mode, Engeseth (2006) goes a step further and suggests a mental merger of supplier and customer into one single unit. For the customers role in service development see Edvardsson et al. (2006). Furthermore, traditional manufacturing companies are realizing that service is not just an add-on to manufacturing; all they offer is service. When, for example, Volvo sells buses to a city in India it is not just buses that are delivered. In terms of S-D logic it is a value proposition that includes studies of transportation needs, proposals about bus routes and timetables, consideration of the service level for passengers, consequences for the environment and other trafc, maintenance of buses and the gradual replacement of the buses for new and more functional models. The price is composed of many parts and includes nancial solutions. Together, Volvo, the city and the users create value, the supplier through its value proposition, the others through value actualization. Since 2004, IBM runs a global development project with the ofcial title Service Science, Management, and Engineering, usually just called Service Science (Maglio and Spohrer, 2008). It has a direct connection to the service of manufacturing companies and S-D logic. IBM used to be one of the worlds largest manufacturing companies. After a crisis it was transformed into a service company in the traditional sense. Apart from a certain amount of hardware the emphasis is on software and IT related consulting service. The new IBM is still one of the largest companies with annual sales of US$100 billion and with more than 350,000 employees. The Service Science project has taken a grand grip on service by inventorying what is done in universities, engaging not only business school but also schools of technology and by starting new training programs. In its beginning Service Science was technologically biased and was rst called Services Science based on the belief that there is an identiable service sector which grows. After contact with S-D logic the s in services was dropped. This is one of several tokens of IBMs sensitivity to new knowledge. There is a desire to innovate efcient service systems and to reduce the gap between theory and practice

through multidisciplinary cooperation engaging both academe and business. The project has been in a state of search but a strategy can now be discerned (IfM and IBM, 2008). So far, Service Science has been an enabler for the production of future results. The project holds promises and may induce a pivotal contribution to marketing and the adaptation of the customers role to current and future economic realities. About the new perception of service, see further Ballantyne and Varey (2006), Gronroos (2006) and Gummesson (2007a, 2008b). Lean solution: from value chain to value network Another development leading up to customer centricity starts with lean production. The most famous application is Toyota and in its wake the whole worlds car industry. Lean production has a deep aversion toward waste of resources irrespective of whether these consist of people, raw material, money or time, and it has a passion for continuing improvements. It is one of the foremost sources to the quality interest that grew during the 1980s and gradually became a system for excellence with quality and productivity in its core. Today business and government pass on work to customers and citizens in the spirit that these are free labour which they are in a narrow production-oriented perspective. Lean production has now been widened to embrace the customers value creating process lean consumption and how it can be better coordinated with the suppliers contribution into a joint lean solution. The traditional value chain is a supplier chain which ends when the customer enters but now a customer chain hooks on. Chain brings the thought to a linear process; value network on the other hand opens up for the non-linear and iterative. From these experiences the following customer-oriented principles have been designed by professors Womack and Daniel (2005, p. 61):
1. Solve the customers problem completely by ensuring that all the goods and services work, and work together. 2. Dont waste the customers time. 3. Provide exactly what the customer wants. 4. Provide whats wanted exactly where its wanted. 5. Provide whats wanted where its wanted exactly when its wanted. 6. Continually aggregate solutions to reduce the customers time and hassle.

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It sounds like common sense, simple and hands-on. But often the obvious is the most difcult to implement in complex organizations and markets. My spontaneous reaction is that these six points capture the core of true customer centricity. Marketing as networks: many-to-many marketing Research on marketing as networks has primarily occurred within B2B. The concept many-to-many marketing chosen to contrast one-to-one is general to all marketing. My denition is (Gummesson, 2007a):
Many-to-many marketing describes, analyses, and exploits the network properties of marketing.

It is based on the claim that life is a network in relationships in which we interact. This claim is also found in modern physics (Capra, 2002; Barabasi, 2002). Many-to-many seeks

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inspiration in network theory as presented in both social sciences and natural sciences. Prominent leaders and marketers have always thrived on networks. However, network theory does not constitute the vantage point for international research and education in marketing but I hope it will in the future. In a network there are not only customers and suppliers but also competitors, intermediaries, governments, the media, and customer networks of family, friends, colleagues at work and others. Especially, relationships between customers, customer-to-customer, C2C, are increasingly being noted (Nicholls, 2005). C2C-interaction has always been around, but today new channels of communication are opened on the internet, among them interactive games, chat groups, blogs and fan clubs. Network theory says that existence consists of nodes, links and interaction between these. By applying network theory in many-to-many marketing, more aspects can be addressed then through other methods and theories. Above all realism is king and hence theoretical validity and relevance open up for useful applications in marketing practice. Complexity theory is a family of contributions from modern natural sciences. The major strength of network theory is its capacity to address complexity and avoid the oversimplications that statistical research techniques in social sciences force on us. It also encompasses consideration of context (nothing happens in isolation); dynamics (change and not equilibrium is the normal state in companies and markets); both structure and process, and the whole and parts can be considered; and the fact that events unfold as iterative and non-linear and not as linear equations with clear independent and dependent variables and uni-directional causality (Gummesson, 2007b). We live in a network society. We buy and consume in networks of relationships and in our private lives we interact in networks. An organization is a network of people, departments, divisions and subsidiaries. Companies establish networks of alliances which is a way of accessing resources without building and owning them, and they are part of distribution networks. Many-to-many puts emphasis on the many parties. It is not enough to focus on just one party, the customer as in marketing management, or two parties, the dyad customer-supplier as in relationship-based approaches. In the spirit of S-D logic it is only natural that value creation is oriented toward many stakeholders. If we merge relationship thinking, S-D logic, and lean consumption with manyto-many and thereby widen the circle to more stakeholders than suppliers and customers, marketing becomes co-creation of value. Within this spirit I want to characterize our economy as a value creating network economy. Two points to ponder My travel report from the marketing landscape is coming to an end. Not that the journey is over; it is just a stopover. It is time that we ask ourselves if all this new theory will lead to increased customer centricity in practice. Must not the problem-solving begin by addressing more fundamental, paradigmatic vantage points? Two points will be discussed below. The rst concerns whether marketing primarily applies old and well tried tricks, upgraded by sophisticated scientic manipulation. The second concerns the realism of customer centricity. Neither is central in marketing education and research but is part of marketing practice. Both points question the marketing concept: isnt it too innocent and benign and are the theory contributions implementable in tough, competitive markets.

After all: is marketing just a bag of tricks? Once the horse dealer was a symbol of the shrewd and unreliable salesman. Then he became a used car dealer. When I asked a very successful dealer how he set the price of a used car he said: I look at the customer and size him up. If he wears a suit and a tie or is simply dressed, how his hands look and so on. He did not set a price on the car but on the customer, perhaps one type of customer centricity. He was street-smart. His older colleague Phineas Barnum (1810-1891) who turned Barnum and Bailey into the worlds largest circus also had clear idea about customers: I got the pulse of the public right in my pants pocket. They love to be fooled. Theres a sucker born every minute. Even if there is talk about increasingly knowledgeable customers and increased customer power, we cannot look away from the old cynicism The customer is not as stupid as you think. The customer is much more stupid. The successful music promoter Stikkan Andersson, best known for launching the song group ABBA, is reputed to have quoted this wisdom. According to Brown (2007) Joseph Duveen in England, later honoured with a knighthood by the Queen, became the leading art dealer in the early 1900s. He played on human frailties. He made his art desirable by holding back supply. He made it difcult to buy and buying stood out as a privilege. And he was a God-inspired speaker, in todays terminology a storyteller and a spin doctor. Brown proceeds to compare Duveen with some of todays market leaders. When Apples charismatic Steve Jobs launched the iPod, the countdown and secrecy surrounding the last Harry Potter, and the hysteria which H&M created around its limited series of fashion clothes designed by Karl Lagerfeld and worn by Madonna and other celebs, we sense the presence of Barnum and Duveen. Moreover, bribes (international B2B markets), unethical lobbying (to disarm the democratic system by controlling politicians), promising and lying by omission (nancial counselling, food products), and bewildering customers by the price options (mobile telephone operators) are part of todays marketing. There is also an increase in organized crime, which for example, offers disposal of dangerous waste at low cost and then dump it in Africa, or sell stolen or smuggled goods at attractive prices. And is it true as New York sociologist Blumberg (1989) claims that a market economy cannot work without suppliers cheating? All of this is embarrassing both for practice and academia and is largely swept under the carpet. But as it stays put, it may be part of the human genome or at least supported by the current level of collective consciousness. The task of the marketer is not to reform humankind and society but to do business on prevalent conditions. Recently, it is not enough to be street-smart; you also need to be book-smart and build on scientic research. There are market researchers specializing in making kids early consumers by teaching them to nag their parents to buy expensive brands of clothes, and let them eat sugar-loaded junk food. Substances are added to food to create addiction, rened psychological research instruments are developed, tracking chips are placed in clothes and other products to trace customers, and the behaviour of customers is being lmed. If you want to be cynical yet realistic the denition of marketing could be:
Marketing is a set of tricks to squeeze maximum short-term prots out of consumers, citizens, companies, and government organizations, to the joy of management and shareholders.

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I believe many experience marketing just like that and there is no doubt that it is frequently true. But morals and ethics involve a balancing act and the supplier is not the only crook. The customer is often ignorant and unwilling to learn and wants everything cheap. Marketing will probably always include manipulation. The question is how far it may be acceptable and where society should enforce limits. From one-party centricity to balanced centricity Improved customer centricity may spontaneously sound like a step in the right direction. But is it reasonable that one single party the customer is allowed to be in the centre for the whole of a companys activities? My conclusion is that the notion of customer in focus is not sustainable as a foundation for marketing. Even if customer orientation engages many companies it is seldom whole-hearted. This can only be achieved through close cooperation with customers and by treating customers as co-creators. Satised customers are not the only drivers of a business. There is currently a one-sided focus on shareholder value, the demands from corporate boards and management for unlimited (and often not achievement-driven) compensation, and a simplistic belief that free market forces will create the best of all worlds. According to Business Week (Kiley and Helm, 2007) the American CEO is progressively forced to announce rising prots and rising share price every quarter or month. If not, investors cry for the dismissal of the CEO. Although with some delay, European countries are taking over this absurdity: it comes from the USA! It has consequences for the job of the chief marketing ofcer, CMO. He or she is expected to show evidence of the positive effect on short-term protability of every single dollar invested in marketing. This is so even if an activity aims to improving over the long-term customer orientation, customer relationships, or brand equity. The CMO is confronted with incompatible demands. Not surprisingly, CMOs in the USA have short lives; on an average they stay 24 months on this same job. What long-term results can be achieved during such a brief sojourn? It has been said above that rethinking marketing among other things has led to a transfer from one-party centricity to two-party centricity with the dyad customer-supplier in focus. But not even this is radical enough. My contribution to the discussion is a multi-party focus, balanced centricity. It means that long-term relationships and well-functioning markets should build on the needs and wants of many stakeholders: customers, employees, suppliers, intermediaries, the media, governments, and more. The stakeholder focus is not new. I met it the rst time in the 1960s but whatever happened to it? Perhaps, both the practical and theoretical conditions for handling the complexity of a stakeholder focus were lacking. If todays theories of complexity and especially general network theory is increasingly applied to marketing, new windows of opportunity are opened. It will, however, set pressure on academic researchers who have had the (unfortunate) privilege of being allowed to exclude major chunks of reality in order to produce streamlined equations and models. Researchers hide behind methods rituals and refer to their adherence to approved scientic procedure. The outcome is a distorted map of the terrain. Practitioners do not have the same privilege if they want to survive. They meet a tsunami of impressions, views, advice and demands in which they must handle

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unexpected situations. The practitioner only has limited time for proper analyses and lacks heaps of data, but time runs out and something must be done. Therefore, practitioners are inuenced by experience, tacit knowledge, common sense, discussions, rhetoric and social pressure. The outcome is an intuitive trade-off; complexity must be dealt with. To be realistic, we must focus on a few parts at that time; our brains cannot handle more. In certain situations customer-centricity may be decisive for company success; in others operations management, cost slashing or something else must be given priority. But even if this is so, we should have a clear picture of where in the whole the parts belong which network theory can help us with. My conclusion is that the balance between stakeholders above all is inuenced by power, a phenomenon which marketing literature dodges but practitioners encounter daily. Those who have power can inuence a situation to their advantage as long as the power remains. A corollary to my studies on networks is that marketing rst and foremost is about two things: to act in networks and to have power. Managing in networks requires its own marketing and management theory. Is then balanced centricity just another whim from the professors desk? I do not know, but I do not want us to continue to fragment research and theory in marketing and duck complexity. If we want to be applauded by the business world the dream of most researchers in marketing we have to supply practicing marketers with better maps. I still want to believe in the good market as a co-creator of the good society.

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Gummesson, E. (2008b), Extending the service-dominant logic: from customer centricity to balanced centricity, Journal of the Academy of Marketing Science, Vol. 36 No. 1, pp. 15-17. IfM and IBM (2008), Succeeding through Service Innovation: A Service Perspective for Education, Research, Business and Government, University of Cambridge Institute for Manufacturing (IfM), Cambridge, available at: www.ifm.eng.cam.ac.uk/ssme Kiley, D. and Helm, B. (2007), The short life of the chief marketing ofcer, Business Week, December 10, pp. 63-5. Lusch, R.L. and Vargo, S.L. (2006), Service-dominant logic: reactions, reections and renement, Marketing Theory, Vol. 6 No. 4, pp. 324-35. Maglio, P.P. and Spohrer, J. (2008), Fundamentals of service science, Journal of the Academy of Marketing Science, Vol. 36 No. 1, pp. 18-20. Mattsson, L-G. (Ed.) (2008), Marknadsorientering myter och mojligheter, Liber, Malmo. Nicholls, R. (2005), Interactions between Service Customers, The Poznan University of Economics, Poznan. Payne, A. (2006), Handbook of CRM, Butterwoth-Heinemann, Oxford. Saren, M., Maclaran, P., Goulding, C., Elliott, R., Shankar, A. and Catterall, M. (Eds) (2007), Critical Marketing, Butterworth-Heinemann, Oxford. Shah, D., Rust, R.T., Parasuraman, A., Staelin, R. and Day, G.S. (2006), The path to customer centricity, Journal of Service Research, Vol. 9 No. 2, pp. 113-24. Vargo, S.L. and Lusch, R.F. (2008), Why service?, Journal of the Academy of Marketing Science, Vol. 36 No. 1, pp. 25-38. Womack, J.P. and Daniel, T.J. (2005), Lean consumption, Harvard Business Review, March, pp. 58-68. About the author Evert Gummesson is a Professor of Marketing and Management at the Stockholm University School of Business, Sweden. His research includes service, relationships, networks and qualitative methodology. He takes a special interest in the generation of more realistic marketing theory where complexity is properly addressed. His new book Marketing as Networks: The Birth of Many-to-Many Marketing will be released in 2008. He has 25 years of experience from business as Product and Marketing Manager and Management Consultant. Evert Gummesson can be contacted at: eg@fek.su.se

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