Write about the Essay for Shift in Marketing Definition.
There has been a shift in the definition of marketing in American Management Association. The paper describes the shift in the definition of marketing between the periods of 1985 to 2004, where it shifted from exchange perspective to value creation (Sheth & Uslay, 2007). This assignment will be focusing on the concepts through application to the specific marketing problem with references of real world examples. A detailed understanding of the marketing concepts is provided and an in-depth explanation is given through its application to the specific marketing problems related to it. This information is utilized in the later part for analyzing and evaluating a marketing context. A brief recommendation is provided in the final part of the essay.
The concept of exchange had been the fundamental for many decades. It was defined as a way of meeting the society’s problem. This exchange framework is a concept that relates the number of exchange with the number of outcomes. Marketing according to this definition is to create exchanges to satisfy individual and organizational goals (Sheth & Uslay, 2007). Three types of exchange can be identified broadly by different scholar that are generalized, restricted and complex. The first type of exchange that is generalized exchange denotes the reciprocal relationship among a minimum of three actors in exchange. These actors are related indirectly to each other. Whereas, restricted exchange is the type of exchange that involves only two parties and it represents the reciprocal relationship in-between the parties (Hill & Martin, 2014). Last but not the least, the complex type of exchange refers to a system of mutual relationship between at least three parties. It can also be referred as the channel distribution. Generalized and complex exchanges are mostly visible in present day marketing scenario (Achroll & Kotler, 2014).
Whereas, value creation concept reaches out the aspects of value other than exchange. These other types of values are taken into consideration for value creation for the growth in the business. It also gives a proper explanation for the development and growth of intra and extra-networks (Sheth & Uslay, 2007). These non-financial factors that are considered into value creation help the organization to create long-term value. There are certain themes of value creation that supports its definition (Lusch, 2007). Value creation takes place within a context out of which it is meaningless. The financial value of a company is obviously important for a company, but it is insufficient for assessing value creation. The value of an organization is created from both tangible and intangible assets. Value is created utilizing both public and private resources. Purpose off the value creation is to satisfy the needs of the organization and others. Connectivity between wide ranges of factors facilitates the creation of the value.
Various assumptions have been made in due time regarding the shift of marketing paradigm from exchange to value creation. The traditional exchange paradigm of marketing conveyed the message to the customers about the benefits of the products and services in solving problems or to enhance a situation. On the other hand, value creation which introduced the relationship marketing. In this, the organization focuses on the need of the consumer, and provides the product and services to meet that need, which helps them to build up a long term relationship with their customer. This minute detail explains various reasons behind the change that occurred. The market pressure can be identified as the first factor that play crucial role in the change. The Corporate Social Responsibility is the second reason for that is involved in the change of marketing paradigm that can be identified. Present market situation demands the business organizations to look after the societal sustainability and also the sustainability of the company. It also helps the company to differentiate themselves from other similar companies (Suliman, Al-Khatib & Thomas, 2016).
Pressure or the competition that prevails on the present market scenario led the organizations to think of satisfying the customers and acquire the brand loyalty to survive in the market. It differs from the traditional market as the marchent company had the dominating power in the market. At present time, the customers are the dominating factors as they have plenty of options in hand to meet their satisfaction. For example, Amazon is a big name in the e-commerce industry around the globe. On the other hand, Netflix, Google, eBay and are present in the international market challenging Amazon in their business process (Grönroos & Voima, 2013). Hence, to maintain the customer base and loyalty, the marketing team of the company has to focus on the value creation by different means. The business strategy of the present day needs to incorporate themselves into the lives of the customers and seek out the requirements of the customers. Moreover, one time exchange is no more the focus of the organizations. As the dominating power is shifted from the merchant organizations to the customer due to the abundance of available companies, the marketing team of the organization is in tension of increasing the brand value of the customers by several means. One of the important ways of creating value is to provide the customers the opportunity to provide feedback. It helps the company to deal with the issue faced by the customer and provide the best possible value for their product (Tantalo & Priem, 2016).
The CSR policies that are implemented in different companies are to supplement the value creation of the company. The degradation of the society is the prime reason for the companies to adopt a proper CSR policy to maintain the sustainability of both the company and the society in order to continue their business in the target market (Tai & Chuang, 2014). For instance, if the resources used by the company to manufacture their product are in danger, it will be a problem for them to maintain their business. On the other hand, the company requires new and innovative way to manufacture and deliver their products to the customer in a more efficient and cost effective way. For instance, Unilever invented the drier that consumes less water in operation which supplements the sustainability of the company. It differentiates the company from other companies selling similar products that is the value creation of the company. It helps them to increase their sells in respect to other competitors in the market.
In conclusion, we can state that the shift of the paradigm from the exchange to the value creation was absolute necessary for the marketing. The traditional way of marketing seemed to have limitations that required change in earliest attention. The market competition can be considered as the primary factor that facilitated the change. The value creation helps an organization to attend more exchange than just the economic one. Moreover, the use of CSR policy as an integrated part of an organization has direct impact on value creation. It facilitates the cause of the change in the paradigm.
Achroll, R. S., & Kotler, P. (2014). The service-dominant logic for marketing. The service-dominant logic of marketing: Dialog, debate, and directions, 320.
Grönroos, C., & Voima, P. (2013). Critical service logic: making sense of value creation and co-creation. Journal of the academy of marketing science, 41(2), 133-150.
Hill, R. P., & Martin, K. D. (2014). Broadening the paradigm of marketing as exchange: a public policy and marketing perspective. Journal of Public Policy & Marketing, 33(1), 17-33.
Lusch, R. F. (2007). Marketing's evolving identity: defining our future. Journal of Public Policy & Marketing, 26(2), 261-268.
Sheth, J. N., & Uslay, C. (2007). Implications of the revised definition of marketing: from exchange to value creation. Journal of Public Policy & Marketing, 26(2), 302-307.
Suliman, A. M., Al-Khatib, H. T., & Thomas, S. E. (2016). Corporate Social Responsibility. Corporate Social Performance: Reflecting on the Past and Investing in the Future, 15.
Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.
Tantalo, C., & Priem, R. L. (2016). Value creation through stakeholder synergy. Strategic Management Journal, 37(2), 314-329.