Reinventing Marketing Strategy by Recasting Supplier/customer Roles
Reinventing Marketing Strategy by Recasting Supplier/customer Roles
Reinventing Marketing Strategy by Recasting Supplier/customer Roles
www.emeraldinsight.com/1757-5818.htm
JOSM
25,2
Reinventing marketing
strategy by recasting
supplier/customer roles
228 Evert Gummesson
School of Business, Stockholm University, Stockholm, Sweden, and
Received 8 January 2013
Revised 20 April 2013 Hannu Kuusela and Elina Närvänen
Accepted 5 February 2014 School of Management, University of Tampere, Tampere, Finland
Abstract
Purpose – The purpose of this paper is to propose that the recasting of supplier and customer roles
reconfigures the role of marketing.
Design/methodology/approach – A conceptual paper that suggests the need to rethink the role of
marketing in the strategic decision making of companies. The study accesses recent theories of
marketing, service and value and provides illustrative case examples.
Findings – Consumers are progressively more active and the traditional supplier role of controlling
consumers is less viable. The case examples show the variety of ways in which companies may adopt a
new role in relation to customers and the market. The paper argues that adapting to this role change
needs to take place at the highest level in the company and is the way to reinvent marketing strategy.
This also necessitates marketing employing unconventional methodologies and relevant theory to
address the complexity and ambiguity of current markets.
Research limitations/implications – The paper is a conceptual paper restricted to supplier and
customer roles, albeit set in a broader context of stakeholders.
Practical implications – The marketing-oriented supplier of the future can design service systems
and exert a certain control at the same time adapting to and supporting consumer initiatives through
interaction in networks of stakeholder relationships.
Originality/value – Stressing the new roles of consumers and suppliers; reinventing the role of
marketing, breaking with conventional marketing research methodology.
Keywords Complexity, Pragmatism, Balanced centricity, Consumer/supplier roles,
Theory generation
Paper type Conceptual paper
Introduction
The purpose of this paper is to propose that the recasting of supplier and customer
roles reconfigures the role of marketing. By role recasting, we mean that suppliers and
customers are assigned, or voluntarily adopt new sets of responsibilities, behaviours,
obligations, beliefs and norms to follow, creating value for themselves and each other
in the process. We show that making marketing a core business strategy also requires
the generation of more relevant marketing theory. If marketing is to be more relevant,
it needs to be defined more broadly than as something that the marketing department
does. We propose that defining marketing as the activities that generate revenue for
the firm is more accurate. Yet, even this definition does not recognize the real world
complexity and context where marketing actually operates. Marketing is intertwined
Journal of Service Management
Vol. 25 No. 2, 2014
with other internal functions and external stakeholders, including customers, each of
pp. 228-240 which influences the outcome. Marketing is thus not a single and separated function
r Emerald Group Publishing Limited
1757-5818
but an integral and essential part of the broader company activity, processes and
DOI 10.1108/JOSM-01-2014-0031 practice. In this paper, we specifically consider the supplier/customer roles, while
recognizing that marketing should be focused on all stakeholders. A broader focus or Reinventing
balanced centricity (Gummesson, 2008) is needed in order to create benefits for all who marketing
contribute to making the company successful.
To achieve our purpose, we ask the following research question: strategy
RQ1. How does the perception of the roles of suppliers and customers affect
marketing and its strategic role within the company? 229
Our theoretical discussion starts by reflecting the role of marketing in the strategic
decision making of companies. Then, we discuss the new paradigm of thinking that
focuses on role recasting for customers and suppliers, at the same time enabling a more
accurate and a more relevant role for marketing on the CEO’s agenda. This also means
that marketing strategy is reinvented. We follow this theoretical discussion with a
section containing four illustrative case examples from different industries. The case
examples concretize our argument and show the diversity of ways in which companies
are recasting the roles of supplier and customers, illustrating the evolved role of
marketing. Finally, we draw conclusions about role recasting in terms of increasing the
relevance of marketing within companies at the highest level of strategic decision
making.
IKEA
The Swedish furniture retailer IKEA is the epitome of a successful business. It has
continued to expand globally for 60 years, recording high profits and no setbacks.
Its business mission is based on the co-creation of value (Edvardsson et al., 2006). The
idea came from the observation that furniture was too expensive for the ordinary
consumer. A quick look at the cost shows that less than half accrues from designing
and manufacturing the furniture and the rest from assembly, making the furniture
available in stores and getting it installed in the buyer’s home. If the supplier packs the
parts comprising the furniture and moves the pack to a huge outlet and lets customers
pick it from the shelves, transport it home, unpack and assemble it themselves, the
majority of the cost is removed. “Then we can share the savings”, said the founder
Ingvar Kamprad who in 2012 – at the age of 86 – remains its leader. Customers liked
the idea and still do.
IKEA took the supermarket idea of selling daily consumables and adapted it to
durable goods. There, the resources of the supplier and the customer are integrated and
both acquire value. By paying attention to details such as the transferability of the
packaging by car and also ensuring assembly instructions are simple, IKEA has gone
beyond meeting customer needs to understanding what really matters to customers.
In terms of role recasting, IKEA has relinquished the traditional activities of
assembling and transporting furniture. It has recast customers in a more active role.
Thus, customers use their own resources, especially time and ability to assemble the
furniture, to save money. For IKEA, it is not the furniture but the value proposition of
better value-in-use that is innovative. While consumers adopt a new more active role in
the assembly and delivery of furniture, IKEA is able to incorporate other things into its
role as a supplier. Besides affordable furniture, IKEA offers a day out with the family,
good value food and a playground for the children among other things. IKEA is an
instance of a well-developed and tightly controlled system that provides a stage for
consumers for action and interaction. It is implemented together with efficient service
systems, long supply chains and adherence to the strategy of continuous improvement. Reinventing
For IKEA, marketing is central to the company’s strategy and that is evident in marketing
everything the company does. It entails for instance emphasizing the customer’s
perception of value creation; offering solutions to customers’ problems and a platform strategy
for co-creation of value-in-use. It is also reflected in the corporate culture and values
(Edvardsson et al., 2006).
233
S-Group
S-Group is a Finnish network of companies in the retail and service sectors that
operates in Finland, Russia, the Baltic States and Sweden. It is a cooperative that is
owned by more than 1.9 million customer cooperative members and has more than
1,600 outlets in Finland. Its retail sales amounted to 12 billion euros in 2011.
The company has also been listed among the best global retail chains for several years,
achieving 85th place in the Deloitte rankings for 2010 (Deloitte, 2012). S-Group’s
retailing areas include groceries, service stations and fuels, tourism and hospitality,
automobiles and accessories and agricultural trade.
S-Group made a strategic turn at the beginning of the twenty-first century,
committing itself to always account for the customer’s perspective first in its strategic
decision making (Neilimo and Kuusela, 2010). The group aims to go beyond
management jargon to reconfigure the role of the customer at the strategic and
practical levels (Saarijärvi et al., 2014). This was strategically implemented through
the “Your Own Store” vision that was based on the idea of considering customers not
as a target of marketing actions, but as partners. The organization recast its customers
as customer-owners, who have the unique opportunity to participate in democratic
decision making at a high level of the company while accruing monetary and other
benefits from their ownership. Besides acting as shareholders, customers also actively
influence the company and develop the company’s service system in cooperation with
the management. S-Group has also realized that in order to keep up with the changes in
its customers’ lives, it has to offer a wide variety of benefits applicable to various life
stages and contexts. S-Group has invested heavily in logistics and information
architecture to ensure that its extensive service network is always able to provide the
right products and services at the right time for the customers. The service network
also includes partner companies that are not owned by S-Group but offer customer-
owners benefits from their purchases in a broad range of sectors including travel and
entertainment, restaurants, electricity, mobile phone services and health and insurance
services. The market position of the organization is thus defined through customer
value. S-Group has utilized not only hard data from the information infrastructure
in its strategic decision making, but also soft data in the form of an understanding of
customers’ everyday lives.
Thus, in terms of role recasting, customers are partners and the company is a
provider of mutual benefits. Customer orientation is something that has been
embedded into the culture of the whole business, where marketing plays a key role.
S-Group’s success has also entailed cooperating within a complex network of actors
including the regional cooperative companies, and the members of its long supply and
value chains including partner companies, regional authorities such as municipalities
and regional governments, the media and so forth. S-Group also promotes balanced
centricity, by paying attention to corporate social responsibility; the local cooperatives
are very much involved in supporting local youth and sports activities and employing
disabled people, for instance. Operating within this complex network with the
JOSM customer as a focal partner has demanded marketing be perceived by the company’s
25,2 executives more broadly than just as a department that implements marketing
activities. It has been a holistic part of all processes.
AS Tallink Group
AS Tallink Group is the leading European ferry operator offering mini-cruises,
234 passenger and cargo ferry services and also hotel accommodation in the Baltic Sea
region. The company has a fleet of 18 vessels, and transported 9.3 million passengers
in 2012. In addition, the company has hotels in the region. Its revenue in 2012 was
943.9 million euros, of which 56.3 million euros was profit. The company is part of the
growing and intensely competitive experience industry that offers services through
which customers can enjoy hedonic, emotional and social experiences in various
settings (Klaus, 2013).
Tallink’s service system has to be dynamic to account for the pace of the industry
that requires constant renewal. The passengers on mini-cruises are mostly returning
customers, so it is even more essential for the company to be able to offer them
something new every time. The requirement to ensure its customers have unique
experiences provides a challenge for this supplier. The customers define what is
meaningful and important for them in their service experience. Realizing that they
cannot build their marketing strategy without close contact with the customers, Tallink
has demonstrated an ongoing interest in learning more about them. As an example,
they have implemented a campaign to recruit customers willing to become service
developers for them. The campaign became a success, recruiting some 60,000 customers
to participate in co-creative activities to propose new ideas, products and services and
ways to create a memorable experience for customers. By engaging a large crowd of
customers, the company could go further than their loyal customer database could ever
have permitted them to do in terms of market sensing and understanding what
customers value. One result of this extensive customer engagement was realizing that
the influence of C2C interaction on service experience is crucial. Who the customer
travels with and what kind of other people they see and interact with on board the
boat are important. Thus, customers should be viewed within their social context rather
than as separate individuals. It is a good example of complexity and many-to-many
thinking in practice. The company has since developed theme cruises for customers with
matching interests in cooperation with appropriate lifestyle media, such as a theme
cruise for single people in cooperation with an internet dating service company.
The results of the customer developers campaign were actually incorporated by
the company at the highest strategic level to improve its services, which meant that it
was not just a marketing communications stunt but a genuine attempt at engaging
customers in the company’s operations. The role of marketing within the company is
also reflected in the fact that the CMO is also the vice CEO of the company. Thus,
the customers’ voice really is heard at the level of executive decision making in the
company, making marketing a strategic issue rather than a functional one.
Discussion
All four cases showcase marketing systems that work. The cases differ in essential
ways but have their success in common. They add to our understanding of the variety
and diversity of markets and of what recasting supplier and customer roles may mean.
Which then are the key competencies needed in marketing? What should the CMO do?
How must the firm redefine its role and behaviour to be able to succeed in the future?
New competences are needed not only in interacting with customers, but also in
interacting with other stakeholders. It is less possible for a single actor, such as the
25,2
236
JOSM
Table I.
four cases
recasting from
Implications of role
Case/implications
from role recasting IKEA S-Group AS Tallink Group Reino & Aino
Supplier role Provider of physical resources Provider of mutual benefits for Provider of unique and Provider of a platform for
(furniture), service facilities and all parties involved memorable experiences that value creation, enabling and
an efficient concept engage customers supporting consumers
Customer role Responsible for physical Committed customer-owner, Provider of ideas, suggestions Integrator of resources,
distribution and assembly participating in decision and experiential knowledge creating social value while
making and service for the company redefining the brand
development
Implications for Streamline your operations by Engage your customers at both Harness the best knowledge Yield control, provide
marketing strategy considering what the customer rational and emotional levels, from customers to service additional resources,
could do, offer a holistic concept bring customer value development and use this appreciate variety and
for customers’ lives orientation to the boardroom knowledge strategically complexity
supplier, to define value unequivocally and then deliver it to selected and passive Reinventing
customers in the market. marketing
Adopting marketing as the core strategy of a company could mean decentralizing
the power from the company to other actors. Marketing then is less about rolling out strategy
planned and extensive campaigns or controlling how the brand appears to customers.
It has more to do with allowing other actors, especially customers, to take the lead
while the company’s resources are used to support and empower them. Accordingly, 237
critical marketing assets are no longer under the control of the supplier alone and nor
can they be exclusively managed by the company. Today’s marketing-orientated
supplier is not one who manages the customer but one who adapts and supports the
market by interacting in a network of relationships. Instead of managing and keeping
control, marketing is innovating, sensing and following; it is not doing things to
customers and others but doing it with them. The supplier becomes a coach whose
behaviour can be characterized as both leading and following.
Marketing helps the company to adopt a new role, and by interacting with the
stakeholders builds competences to successfully maintain that new role. These
competences also require a new kind of resilience and agility of companies, and also an
ability to adapt to changing market forces without controlling them. Many marketing
phenomena are no longer invented by suppliers, as social media has clearly
demonstrated. Information of both hard and soft forms must be constantly generated
to achieve an in-depth understanding of the markets in order to make strategic
decisions that are in tune with customers and other stakeholders’ interests.
Furthermore, marketing metrics must reflect a more holistic and inclusive
perspective. These metrics should be oriented towards the future and be based on
customers perceptions of the value created together in the network rather than static,
simplistic and disconnected metrics focused on the past. Data do not speak for
themselves, but have to be interpreted, which means that developing even more
sophisticated metrics is not recommended. Instead, metrics have to be adjusted to a
pragmatic level, be easy to apply in everyday operations, direct practitioners towards
desired results and not consume too many resources.
In terms of the organizational structure, the new role of the customer must be taken
into account. This might mean that customer insights are continuously taken to the
boardroom or that customers are involved as part of the strategic decision-making
process. While enthusiastic customers are the best available asset in terms of
marketing communications, engaging customers must be viewed more broadly. It is
also a genuine way to improve the suppliers’ operations. Role recasting means a
cultural change in the company, allowing customers to really experience a sense of
ownership and community. Yet, even involving customers is not enough. For a network
to be productive, all stakeholders need to feel that they get value-in exchange or
value-in use. The current focus on shareholder value or customer orientation is too
limited. Balanced centricity should be an integral part of business and marketing.
As long as short-term shareholder value and finance is allowed to remain the priority,
marketing cannot become the core strategy of a firm.
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