Customer centricity: realityor a wild goose chase?

Evert GummessonStockholm University School of Business, Stockholm, Sweden

Abstract

Purpose With Sweden and Europe and the present and the future as vantage points, the purpose ofthis paper is to challenge the viability of customer centricity (or customer orientation) and its axiom,the marketing concept, as the basis for marketing and profitability.

Design/methodology/approach The paper is part of a project in Sweden to stimulate a dialogueon the importance and role of marketing. As such the paper draws on the authors experience asprofessor, practicing marketer, consumer and citizen and expresses a personal and unorthodoxsynthesis of ongoing developments in marketing.

Findings Although customer orientation has been on the agenda for at least half a century it is notwhole-heartedly implemented. The reason may be that it is unrealistic as a general guideline formarketing. First, a single stakeholder can only in special instances be treated as the nucleus ofmarketing and business; a tradeoff between several stakeholders balanced centricity stands outas more realistic. Second, the gullibility of human nature and the customers limited knowledge andtime open up for the deployment of diverse tricks in marketing practice. The current evolution ofmarketing theory and the advent of better methodology to handle complexity could be a step forwardonce the marketing discipline embraces it fully. Gaps between what marketing textbooks prescribeand the real world confronting marketers need to be narrowed.

Practical implications Just focusing on the customer and customer satisfaction is not possible inpractice; businesses have to balance the interests of many stakeholders, thus balanced centricity.

Originality/value Customer centricity is hardly ever challenged in the research literature andtextbooks and its strategic value is often not understood and accepted in practice.

Keywords Customer orientation, Marketing strategy, Networking, Service levels

Paper type Viewpoint

IntroductionA project with the purpose to increase the awareness of marketing among businessmanagers, 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 marketsand marketing in todays economies. This paper is an adapted version of a chapterfrom a book where researchers express their views on different aspects of marketingand how marketing can be improved (Mattsson, 2008). My contribution is to positioncustomer centricity (or customer orientation) in a theoretical and practical context. Thepaper looks ahead, assisted by current marketing theory developments, and does notreview past literature on customer orientation.

There are problems and possibilities with customer centricity which invite bothbusiness managers and professors to reconsider their stance. The paper discusseswhether customer centricity with its message of benign and harmonic balance inrelationships between suppliers and customers is just a desk ideology, a hopelessquest. It ends with the idea of balanced centricity in which stakeholder interests areconsidered within a network frame. It reflects what I find important and connects to anongoing international discussion.

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European Business ReviewVol. 20 No. 4, 2008

pp. 315-330q Emerald Group Publishing Limited

0955-534XDOI 10.1108/09555340810886594

The paper speaks out and takes positions, for or against. It is based on myexperience as professor, marketer, consumer and citizen. I interpret customer centricityin my way which of course, does not give me amnesty against objections. But that isunimportant; the important thing is to prompt constructive rethinking of marketing tothe benefit 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 tothe 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, perhapslonger. The AGA corporation once became a world celebrity through its manyinnovations, among them the AGA lighthouse and cooker. It was a product-orientedcompany that first developed products, then sought customers. AGAs current strategyis customer centric within gas applications which are developed with consideration ofcustomer 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 thecustomers problem. Give them possibilities to increase profitability, security andquality in their operations. Help them introduce new and better technology. In the1950s Peter Drucker until his death in 2005, almost 96 years old, listed as number oneamong management thinkers in America wrote that marketing is seeing yourbusiness 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 administrationof aircraft, pilots and flight attendants. His battle cry Customer in Focus! circled theglobe and affected both business and governments.

So customer centricity is not new, but how well do we handle it today? In accordancewith the American marketing concept companies should learn about customer needsand wants and satisfy these; this is a prerequisite for survival and profitability.Its opposite is production or product orientation where technology, resources,product knowledge, systems and organization structure control the behaviour ofcompanies.

Both in literature and practice the concepts of customer and marketing orientationsare mixed up. Marketing orientation is broader, not only including customers but alsocompetitors and how markets function. This paper is focused on the customer, but atthe same time wants to consider the customer as part of a larger context, a network ofrelationships.

The border between customer and citizen is fuzzy. Since customer centricity reachedthe public sector in the 1980s it is claimed that patients are customers, students andparents 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 besatisfied commercially. Citizens have obligations and rights, pay for societal serviceprimarily through taxes and do it in relation to ability, not in relation to individualneeds. When there is talk about competition and that we live in an affluent society, themost basic service such as humane elder care, efficient emergency service, legalsecurity, and good schools and housing are left out. This should not stop a doctor frombeing partially customer centric, for example in communicating with patients.

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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, theemphasis is usually on consumer marketing, business-to-consumer or B2C. Thishowever is only part of all marketing, even the smaller part. Marketing to companiesand governments, business-to-business or B2B, is both different from and similar toB2C. The two are also connected as everything that is B2B sooner or later must reachcustomers and citizens, that is transcend into B2C. In this paper both B2C and B2B andthe roles as customer and citizen are considered. What is said sometimes concerns all ofthis, sometimes only some part.

There are contradictory perceptions about the value of customer centricity as aguiding star for business:

. Customer orientation has become a commodity. If every supplier invests incustomers 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 ofrhetoric but little practice, more talk than walk. Perhaps, customer centricitycannot even be implemented? Can we indeed give one of many stakeholderspriority? In periods there has been a lot of talk about the needs of employees asthe nucleus of a companys operations. Now most of the talk is about owners shareholder value and corporate governance and the only thing that counts isthe share price. Finance, accounting, mergers and acquisitions, bonuses and feesto management and the board are topping the agenda rather than marketing andcustomer centricity. And looking at the issue with customers eyes: how intimatedo they really want to get with suppliers?

. Price, quality and value are hard-to-catch concepts. Customer centricity shouldmean that companies strive to give the customer value for money. Therefore,price, quality and value are constantly present in marketing. They are not onlyhard to catch but also must be traded off and they are influenced by a customersindividual personality, lifestyle and group belonging. There are no theories thatmore than partially explain their connections. For lack of theory, an example willhave to do. During the 1990s, a new type of competition emerged in the airlineindustry. Low price no frills airlines challenged the traditional full serviceairlines. How do customers evaluate a low price and low service compared to ahigher price, more departures, more comfort, and so on? That price is importantfor consumers who pay out of their own pocket is no news but business travellersalso use the low-price alternatives. The price differences are so big; Ryanair evengives away tickets or just charges nominal fares. Companies find that their travelbudget can be drastically cut. Paradoxically, low-price airlines sometimes offerbetter service. For example, they use smaller airports where it is easier for thetraveller to find the way and they have non-stop flights to popular destinations.But members of the full service airlines frequent flier programs can, even whentravelling on a budget ticket, count on access to lounges, priority when problemsarise, and upgrades.

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What conclusions should be drawn from this? We can only establish that reality iscomplex and that a lot in marketing is built on beliefs and assumptions both inbusiness and academe. This creates challenges, and some of these will be addressedbelow.

ChallengesProper understanding of customer centricity is a challenge to academe and businessesalike. It is unlikely that we will get a definitive and general answer to the secrets ofcustomer centricity. However, in specific situations companies can find answers that fittheir situation.

Challenges for businessEnterprises are both quick-sighted and sluggish. Some are continuously successful likeIKEA and H&M. But for most companies there are peaks and valleys; Ericsson andABB are such examples. Many handle change well and come out as winners whereasothers get stuck in their historical success. It becomes particularly critical whenthorough change is necessary. Here, are two cases for consideration:

(1) After World War II, Swedish quality became a trademark. Having stayed out ofthe war with its factories intact, Sweden had an advantage over the rest ofEurope. Swedish quality was customer-oriented in the sense that customerstrusted Swedish products; they were strong, functional and lasting. Whenquality management in its Japanese and American new version made its entryin the 1980s, Swedish quality had faded as a competitive edge. Business wasdefensive and kept chanting the mantra: With higher quality it will be moreexpensive! Finally, it became obvious that this was counterproductive. Betterquality sometimes costs more, sometimes the same, sometimes less and it issometimes profitable, sometimes not. There are no general answers, justspecific applications. That is how simple it is.

(2) The consumer cooperative movement has been of critical importance bychallenging among others the retailing and housing markets. These marketsdid not operate well and the customer was the underdog. Customers formedco-ops owned by themselves and the needs and wants of customers andowners could be synchronized. In Sweden the original business missionand ideology of the Konsum retailing chain had become obsolete in the 1970sbut lacked the ability to find 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 moreseriously considered by business and are seriously considered by growingconsumer groups. Konsum could have assumed leadership if it had adaptedits mission to the new cause. For instance, it learned nothing from The BodyShop and its ecological strategy 2007 was a breakthrough for green cars.Headed by Toyota, Japanese auto industry is the leader and Swedish carmanufacturers are followers. Corporate social responsibility, is part ofcustomer centricity keeping in mind that not only consumers but alsocorporations are citizens. Sweden has had better conditions than most toshow 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 realityleft an idea or organization behind. Such changes are especially demanding andincremental improvements are not sufficient. There is need for a total overhaul ofcorporate culture, organizational structure, systems and metrics. For this to take placea daring and committed enthusiast is required, one who can get a customer-orientedcorporate culture grow and get all employees act as part-time marketers. It is notenough to hand over customer centricity to public relations departments orrelationship managers who appear in the media, smiling and even looking credible, butwho have no direct responsibility for action.

Other challenges are part of everyday work and demand continuous improvements:. Management often have doubts about the profitability of customer centricity. They

are afraid that customer centricity incurs cost but contributes no revenue. Andthe cry for marketing accountability and marketing metrics is increasinglylouder. It is not new; it has come and gone and different techniques and methodshave been used for ages. The conviction that everything must be measured innumbers What gets measured gets done! is often driven too the extreme aseverything cannot be forecast and measured. Marketing like R&D, leadershipand mergers rests on judgement calls and visions only supplemented bycertain key indicators. Marketing is complex and the outcome is both dependenton planned action and uncontrollable events such as competitor activity,changed preferences among customers, and political decisions. Short-term costslashing is cheered by shareholders and it therefore becomes tempting todownsize, outsource and automatise without proper knowledge about the effectson customers.

. Customer centric companies are better off. Many efforts have been made tomeasure customer centricity and there is some evidence that point to a positiveeffect. Shah et al. (2006) propose that customer centricity can be implementedonce it is more consistently managed throughout an organization. But customercentricity is a fuzzy concept. Measurement requires arbitrary definitions andsimplifications and even if the numbers may appear as precise, validity may beuncertain. If the slogan what gets measured gets done should be true, financialindicators and proxies such as customer loyalty, customers share, and brandrecognition together with unclear incentives can lead to the wrong decisions andactivities.

. CRM, customer relationship management. CRM is a recent and sophisticated wayof handling knowledge about customers. It is the traditional salesmans card indexwith an address list of customers, notes about previous orders and so on which hasbeen digitalized and can be used in wider applications. CRM rests on the tenet ofrelationship marketing that long-term customer relationships are antecedents tosuccess. CRM systems are also connected to a companys total business systemand therefore the influence of marketing on profits can be more fully monitored.But everything builds on the relevance of the computer software and how well theusers 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 theirown 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 andmake use of customer information such as suggestions and complaints hassometimes become better, sometimes worse.

Challenges for academeAt technical institutes and in the natural sciences researchers develop products andmethods which are later used by companies. Do researchers in marketing developsomething similar which business can take over? Or are we first and foremost reporterswho try to uncover patterns in ongoing events? Research and education must beexperienced as meaningful by business. Practicing managers do not have time orcannot read PhD theses which are primarily written to comply with academicrequirements. But it does not only rest on the shoulders of professors to make researchcredible. 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 defuncttheories and rigid methods that were actually never up to par. Many grandefforts to make marketing scientific have flopped. One was profit impact ofmarket strategy, which started around 1960; another was operations analysis,management science and marketing information systems from the beginning ofthe 1970s. None of these have contributed with any substantial results relevantfor customer orientation.

. Internationally noted Nordic research. The conventional wisdom in marketingsays that the developments come from the USA. In Northern Europe, there wereand are also prominent researchers in marketing. Two areas in particular arepertinent to the current developments. In the 1970s researchers in Sweden andFinland began to get interested in services, which were blank spots on themarketing map. Service research has had a remarkable growth and the NordicSchool, which has broadened itself to quality, relationships and networks, is oneof its strongholds (Gronroos, 2007). About the same time researchers at UppsalaUniversity, Sweden, gave birth to an informal group around a relationship andnetwork-based way of looking at B2B. This research goes under the label,International Marketing and Purchasing Group IMP. Recently, IMP includesa large number of researchers globally with its centre in Northern Europe andthe UK.

. The basic idea of research is being degraded. Research in marketing has goneglobal but it has imposed restrictions on itself. There certainly are discoverieswhich I will return to later in this paper. But the mass of students and researchersin the world are taught that science in marketing is sending out questionnaires toa statistical sample of customers. More often than not based on miserablylow-response rates, they draw far-reaching statistical conclusions about howcustomers think, feel and act. The situation is better in Northern Europe, at leastfor now, but increasingly research is ordered to become more efficient andallegedly more scientific. It must not be controlled by daydreaming professorsbut by people who know what is relevant to society, that is politicians,

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bureaucrats, and European Union lawyers. Financial aspects increasinglyoutrank educational and scientific dimensions. We are supposed to followinternational standard, that is, clone ourselves on the American system, asystem which is heavily criticized by business in the USA. There is not a singlejournal for researchers in marketing to publish scientific articles in Swedish.Everything happens in international journals and at international conferences.The requirement on researchers is to publish two articles a year in internationaltop journals that is how they get promoted. Politicians, bureaucrats andlawyers should not be able to enforce these ideas if there was a counterpart,primarily professors and deans of universities. But they yield, frightened of notgetting 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 goodbut not enough. Marketing must also make its voice heard in society and in themedia to influence the power elite and its decisions in various boards.Researchers in marketing are not particularly prominent; economists exert muchmore influence. For example, how many researchers in marketing from theuniversity world have any influence over the decisions in the European Unionand their potential impact on customer orientation?

Whats cooking in marketing?With a focus on customer centricity, the following sections account for efforts tore-think marketing. My journey begins in the USA and its traditional marketingmanagement, marketing mix and 4Ps. It goes on with a transfer from exchangetransactions to relationships and interaction through the concepts of relationshipmarketing, CRM and one-to-one marketing. In its extension networks as the foundationfor new marketing theory attracts growing attention. In my interpretation this isreferred to as many-to-many marketing. The journey proceeds to the contributionsfrom service marketing and management, the growing understanding of a service logicin 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, thelatter being a hot topic among researchers. Another contribution comes from qualitymanagement and lean production which has expanded into lean consumption andfinally the two are joined in a lean solution. In this context, the role of the value chainand 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 andpostmodernism (Saren et al., 2007).

Marketing management, marketing mix and the 4PsAll of us who have studied marketing have been exposed to American marketingmanagement 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, anddistribute 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 ofan 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 anymore. Figure 1 shows this. In its nucleus are the customer and supplier and the valueproposition and the value actualization (explained in later sections). Marketingstrategies are listed against a network background to show that marketing is created inrelationships between numerous people, organizations and strategies. The figureconveys that marketing realities are complex and that every marketing situationrequires its specific combination of strategies. It would lead too far to comment on thestrategies here. See also Constantinides (2006) for an overview of differentconstellations of strategies.

The reigning strategy in marketing management is mass marketing. Customers aretreated as statistics, decimals and averages of gray masses, no matter if they constitutea big general mass or smaller, specific segments or niches. It is part of the myth thatmass promotion and mass distribution are cost effective and that it is too expensive totreat customers as individuals, especially if they are consumers. However, the influenceof mass marketing on profitability, especially advertising, is usually difficult tomeasure. In B2B individual treatment is common especially when customers purchaselarge quantities or deals are complex, and when the supplier is dependent on a few keycustomers (key account management).

The criticism against marketing management is above all that it is manipulativeand sees marketing from the suppliers point of view where the customer is someonewho should be controlled and managed. This leads to half-hearted customer centricity,

Figure 1.Todays Ps in a networkcontext

product: goods and servicespricepromotion: personal selling, advertising, SPplace: distribution

experienceslifestylesdreamseventsstorytellinginformation

public relations, PRbrandingsponsoring

political influencepublic opinionlobbying

scientifc researcheducation

call centerstelemarketingemailInternetmobile phonestext messaging

VALUE PROPOSITIONSupplier

CustomerVALUE ACTUALIZATION

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but no more. Another criticism is that marketing management offers an oversimplified,ill-founded and incomplete map.

Relationship marketing, CRM and one-to-oneThere is growing awareness of the importance of relationships and interaction tomarketing. Relationship marketing, CRM and one-to-one marketing all with roughlythe same meaning but with partially different origin and emphasis are establishedconcepts today. Most commonly relationship marketing is defined as a variant on thetheme to create long-term relationships with loyal customers. My definition isbroader and more general with the purpose to catch the core of marketing, its DNA(Gummesson, 2008a):

Relationship marketing is interaction in networks of relationships.

Relationships bring people and organizations together, temporarily or long term. Weall have an intuitive idea of what relationships are from our own experience. In acommercial environment there are many types of relationships and properties of these,which are only partially explored. When the relationships include more than twopeople or companies complex patterns networks quickly appear. We therefore talkabout networks of relationships. What goes on in the relationships is called interactionconsisting of cooperation, communication and dialogue, as well as competition and thepositioning 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, needsand wants. CRM is currently the most used concept and it has already been discussedabove.

How then is customer centricity shown in these relationship-based theories?Relationship marketing builds on the notion that long-term, win-win relationshipsbetween suppliers and customers and other stakeholders are established. If all partiesare satisfied the relationship will sustain, otherwise it is broken. The idea resonates themarketing concept and basically it is not manipulative.

Unfortunately relationship thinking is misused and squeezed into the marketingmix as yet another way of managing customers rather than cooperating with them.This is mirrored in the latest definition of marketing suggested by the AmericanMarketing Association where marketing is said to manage customer relationships. Butsuppliers should not manage customer relationships; they should interact withcustomers in relationships.

Service-dominant logic and Service ScienceFigure 1 showed that we do not just buy goods and services but relationships, brands,experiences, dreams and many other interacting phenomena. Drawing on internationalresearch during the past decades American Professors Bob Lusch and Steve Vargo(Lusch and Vargo, 2006; Vargo and Lusch, 2008) successfully managed to convey thatmarketing is a process to offer service or create value independent of whether this isthrough goods, services or whatever. The idea is not new; many, including Nordic Schoolrepresentatives, have pointed in this direction. What is new is that Lusch and Vargohave managed to incorporate many loose ends and conceptualize and communicate anew 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 definition of services as something different fromgoods. If the customer gets service that is, gets value from goods or services orwhatever is immaterial; it is the outcome and not the input that counts.

Official statistics are stuck on suppliers and production. A micro oven belongs tothe manufacturing sector, potato chips to the agricultural sector and restaurants to theservice sector. But the value that the customer is seeking is nourishment, satisfyinghunger, tasty food, comfort and social companionship. Customers could not care lessfrom which statistical sector the value is derived. Official statistics are totally deprivedof customer centricity and as such obsolete and misleading.

According to S-D logic, value is not just created in production but also, evenprimarily, in the consumption process. It is a matter of co-creation of value. Thesupplier presents a value proposition which consists of something that customersmight want at a certain price. The customer is responsible for the value actualizationthrough consumption and use. The new logic requires co-creation between customersand suppliers and within this genuine customer orientation. Despite this knowledge,American Marketing Associations latest definition of marketing again falls back intotraditional marketing management, saying that marketing is an organizationalfunction and a set of processes for creating, communicating and delivering value tocustomers, it should be together with customers.

In a respectless and creative mode, Engeseth (2006) goes a step further and suggestsa mental merger of supplier and customer into one single unit. For the customers rolein service development see Edvardsson et al. (2006).

Furthermore, traditional manufacturing companies are realizing that service is notjust an add-on to manufacturing; all they offer is service. When, for example, Volvosells buses to a city in India it is not just buses that are delivered. In terms of S-D logicit is a value proposition that includes studies of transportation needs, proposals aboutbus routes and timetables, consideration of the service level for passengers,consequences for the environment and other traffic, maintenance of buses and thegradual replacement of the buses for new and more functional models. The price iscomposed of many parts and includes financial solutions. Together, Volvo, the city andthe users create value, the supplier through its value proposition, the others throughvalue actualization.

Since 2004, IBM runs a global development project with the official title ServiceScience, Management, and Engineering, usually just called Service Science (Maglio andSpohrer, 2008). It has a direct connection to the service of manufacturing companiesand 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. Apartfrom a certain amount of hardware the emphasis is on software and IT relatedconsulting service. The new IBM is still one of the largest companies with annual salesof US$100 billion and with more than 350,000 employees. The Service Science projecthas 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 newtraining programs. In its beginning Service Science was technologically biased andwas first called Services Science based on the belief that there is an identifiable servicesector which grows. After contact with S-D logic the s in services was dropped. This isone of several tokens of IBMs sensitivity to new knowledge. There is a desire toinnovate efficient service systems and to reduce the gap between theory and practice

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through multidisciplinary cooperation engaging both academe and business. Theproject 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 andthe 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 networkAnother 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 whetherthese consist of people, raw material, money or time, and it has a passion for continuingimprovements. It is one of the foremost sources to the quality interest that grew duringthe 1980s and gradually became a system for excellence with quality and productivityin its core.

Today business and government pass on work to customers and citizens in thespirit that these are free labour which they are in a narrow production-orientedperspective. Lean production has now been widened to embrace the customers valuecreating process lean consumption and how it can be better coordinated with thesuppliers contribution into a joint lean solution. The traditional value chain is asupplier chain which ends when the customer enters but now a customer chain hookson. Chain brings the thought to a linear process; value network on the other hand opensup for the non-linear and iterative.

From these experiences the following customer-oriented principles have beendesigned 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.

It sounds like common sense, simple and hands-on. But often the obvious is the mostdifficult to implement in complex organizations and markets. My spontaneous reactionis that these six points capture the core of true customer centricity.

Marketing as networks: many-to-many marketingResearch on marketing as networks has primarily occurred within B2B. The conceptmany-to-many marketing chosen to contrast one-to-one is general to all marketing.My definition is (Gummesson, 2007a):

Many-to-many marketing describes, analyses, and exploits the network properties ofmarketing.

It is based on the claim that life is a network in relationships in which we interact. Thisclaim 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, networktheory does not constitute the vantage point for international research and education inmarketing but I hope it will in the future. In a network there are not only customers andsuppliers but also competitors, intermediaries, governments, the media, and customernetworks of family, friends, colleagues at work and others. Especially, relationshipsbetween customers, customer-to-customer, C2C, are increasingly being noted(Nicholls, 2005). C2C-interaction has always been around, but today new channels ofcommunication 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 betweenthese. By applying network theory in many-to-many marketing, more aspects can beaddressed then through other methods and theories. Above all realism is king and hencetheoretical validity and relevance open up for useful applications in marketing practice.Complexity theory is a family of contributions from modern natural sciences. The majorstrength of network theory is its capacity to address complexity and avoid theoversimplifications that statistical research techniques in social sciences force on us. It alsoencompasses consideration of context (nothing happens in isolation); dynamics (changeand not equilibrium is the normal state in companies and markets); both structure andprocess, and the whole and parts can be considered; and the fact that events unfold asiterative and non-linear and not as linear equations with clear independent and dependentvariables and uni-directional causality (Gummesson, 2007b).

We live in a network society. We buy and consume in networks of relationships andin our private lives we interact in networks. An organization is a network of people,departments, divisions and subsidiaries. Companies establish networks of allianceswhich is a way of accessing resources without building and owning them, and they arepart of distribution networks. Many-to-many puts emphasis on the many parties. It isnot enough to focus on just one party, the customer as in marketing management, ortwo parties, the dyad customer-supplier as in relationship-based approaches. In thespirit of S-D logic it is only natural that value creation is oriented toward manystakeholders.

If we merge relationship thinking, S-D logic, and lean consumption with many-to-many and thereby widen the circle to more stakeholders than suppliers andcustomers, marketing becomes co-creation of value. Within this spirit I want tocharacterize our economy as a value creating network economy.

Two points to ponderMy travel report from the marketing landscape is coming to an end. Not that the journeyis over; it is just a stopover. It is time that we ask ourselves if all this new theory will leadto increased customer centricity in practice. Must not the problem-solving begin byaddressing more fundamental, paradigmatic vantage points?

Two points will be discussed below. The first concerns whether marketing primarilyapplies old and well tried tricks, upgraded by sophisticated scientific manipulation. Thesecond concerns the realism of customer centricity. Neither is central in marketingeducation and research but is part of marketing practice. Both points question themarketing concept: isnt it too innocent and benign and are the theory contributionsimplementable in tough, competitive markets.

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After all: is marketing just a bag of tricks?Once the horse dealer was a symbol of the shrewd and unreliable salesman. Then hebecame a used car dealer. When I asked a very successful dealer how he set the price ofa used car he said: I look at the customer and size him up. If he wears a suit and a tie oris simply dressed, how his hands look and so on. He did not set a price on the car buton the customer, perhaps one type of customer centricity. He was street-smart. Hisolder colleague Phineas Barnum (1810-1891) who turned Barnum and Bailey into theworlds largest circus also had clear idea about customers: I got the pulse of the publicright 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 increasedcustomer power, we cannot look away from the old cynicism The customer is not asstupid as you think. The customer is much more stupid. The successful musicpromoter Stikkan Andersson, best known for launching the song group ABBA, isreputed to have quoted this wisdom.

According to Brown (2007) Joseph Duveen in England, later honoured with aknighthood by the Queen, became the leading art dealer in the early 1900s. He playedon human frailties. He made his art desirable by holding back supply. He made itdifficult to buy and buying stood out as a privilege. And he was a God-inspiredspeaker, in todays terminology a storyteller and a spin doctor.

Brown proceeds to compare Duveen with some of todays market leaders. WhenApples charismatic Steve Jobs launched the iPod, the countdown and secrecysurrounding the last Harry Potter, and the hysteria which H&M created around itslimited series of fashion clothes designed by Karl Lagerfeld and worn by Madonna andother celebs, we sense the presence of Barnum and Duveen. Moreover, bribes(international B2B markets), unethical lobbying (to disarm the democratic system bycontrolling politicians), promising and lying by omission (financial counselling, foodproducts), and bewildering customers by the price options (mobile telephone operators)are part of todays marketing. There is also an increase in organized crime, which forexample, offers disposal of dangerous waste at low cost and then dump it in Africa, orsell stolen or smuggled goods at attractive prices. And is it true as New Yorksociologist Blumberg (1989) claims that a market economy cannot work withoutsuppliers cheating?

All of this is embarrassing both for practice and academia and is largely sweptunder the carpet. But as it stays put, it may be part of the human genome or at leastsupported by the current level of collective consciousness. The task of the marketer isnot 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 buildon scientific research. There are market researchers specializing in making kids earlyconsumers 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 createaddiction, refined psychological research instruments are developed, tracking chips areplaced in clothes and other products to trace customers, and the behaviour ofcustomers is being filmed.

If you want to be cynical yet realistic the definition of marketing could be:

Marketing is a set of tricks to squeeze maximum short-term profits 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 isfrequently true. But morals and ethics involve a balancing act and the supplier is notthe only crook. The customer is often ignorant and unwilling to learn and wantseverything cheap. Marketing will probably always include manipulation. The questionis how far it may be acceptable and where society should enforce limits.

From one-party centricity to balanced centricityImproved customer centricity may spontaneously sound like a step in the rightdirection. But is it reasonable that one single party the customer is allowed to be inthe centre for the whole of a companys activities? My conclusion is that the notion ofcustomer in focus is not sustainable as a foundation for marketing. Even if customerorientation engages many companies it is seldom whole-hearted. This can only beachieved through close cooperation with customers and by treating customers asco-creators.

Satisfied customers are not the only drivers of a business. There is currently aone-sided focus on shareholder value, the demands from corporate boards andmanagement for unlimited (and often not achievement-driven) compensation, and asimplistic belief that free market forces will create the best of all worlds. Accordingto Business Week (Kiley and Helm, 2007) the American CEO is progressively forced toannounce rising profits and rising share price every quarter or month. If not, investorscry for the dismissal of the CEO. Although with some delay, European countries aretaking over this absurdity: it comes from the USA! It has consequences for the job ofthe chief marketing officer, CMO. He or she is expected to show evidence of the positiveeffect on short-term profitability of every single dollar invested in marketing. This is soeven if an activity aims to improving over the long-term customer orientation,customer relationships, or brand equity. The CMO is confronted with incompatibledemands. Not surprisingly, CMOs in the USA have short lives; on an average they stay24 months on this same job. What long-term results can be achieved during such abrief sojourn?

It has been said above that rethinking marketing among other things has led to atransfer from one-party centricity to two-party centricity with the dyadcustomer-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 theneeds and wants of many stakeholders: customers, employees, suppliers,intermediaries, the media, governments, and more. The stakeholder focus is notnew. I met it the first time in the 1960s but whatever happened to it?

Perhaps, both the practical and theoretical conditions for handling the complexity ofa stakeholder focus were lacking. If todays theories of complexity and especiallygeneral network theory is increasingly applied to marketing, new windows ofopportunity are opened. It will, however, set pressure on academic researchers whohave had the (unfortunate) privilege of being allowed to exclude major chunks ofreality in order to produce streamlined equations and models. Researchers hide behindmethods rituals and refer to their adherence to approved scientific procedure.The outcome is a distorted map of the terrain.

Practitioners do not have the same privilege if they want to survive. They meet atsunami 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 andlacks heaps of data, but time runs out and something must be done. Therefore,practitioners are influenced 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 handlemore. In certain situations customer-centricity may be decisive for company success; inothers 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 partsbelong which network theory can help us with.

My conclusion is that the balance between stakeholders above all is influenced bypower, a phenomenon which marketing literature dodges but practitioners encounterdaily. Those who have power can influence a situation to their advantage as long asthe power remains. A corollary to my studies on networks is that marketing first andforemost is about two things: to act in networks and to have power. Managing innetworks requires its own marketing and management theory.

Is then balanced centricity just another whim from the professors desk? I do notknow, but I do not want us to continue to fragment research and theory in marketingand duck complexity. If we want to be applauded by the business world the dream ofmost researchers in marketing we have to supply practicing marketers with bettermaps. I still want to believe in the good market as a co-creator of the good society.

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About the authorEvert Gummesson is a Professor of Marketing and Management at the Stockholm UniversitySchool of Business, Sweden. His research includes service, relationships, networks andqualitative methodology. He takes a special interest in the generation of more realistic marketingtheory where complexity is properly addressed. His new book Marketing as Networks: The Birthof Many-to-ManyMarketing will be released in 2008. He has 25 years of experience from businessas Product and Marketing Manager and Management Consultant. Evert Gummesson can becontacted at: eg@fek.su.se

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