Marketing Strategy: Chapter 2 - Evolution

• Chapter 2 explores the evolution of marketing strategy
• The chapter focuses on the interaction between managers and customers
• The evolution is separated into several schools of thought
• The schools of thought show the progression from non-interactive to interactive relationships
• These schools also show the progression from economic to non-economic focuses.

Evolution of Marketing Strategy

• Four Quadrants
• Top left: Interaction and Economic focus – Marketing customer relationship as a source of profit
• Top right: Interaction and Non-Economic – Integrated relationships between marketing and customers
• Bottom Left: Non-Interaction and Economic – Marketing is based on simple economic grounds
• Bottom Right: Non-Interaction and Non-Economic – Holistic customer perspective

Non-Interactive/Economic Schools

• This includes Commodity, Functional, and Regional Schools
• Decisions are made based on a superior product
• The focus on the producer with minimal customer interaction

Interactive/Economic Schools

• This emphasizes the 4 P’s of marketing: product, place, price, and promotion
• Includes Institutional, Functionalist, and Managerial Schools
• There is interaction between organizations and consumers
• Economic goals still primarily dominate

Interactive/Non-Economic Schools

• Includes Organizational Dynamics, Systems, and Social Exchange Schools
• Social interactions become the dominant factor, with less focus on economic factors Managers and customers function as equal partners in the relationship

Non-Interactive/Non-Economic Schools

• Includes Buyer Behavior, Activist, and Macro-Marketing Schools
• Focus on the psychological and social aspects of consumer behavior
• Managers analyze consumer behavior, but do not directly interact with consumers

Relational School

• Falls in the center of the four quadrants
• There are long-term, continuous relationships between companies and consumers
• Customer plays an active role in company decisions
• This goes beyond simple transactions, focusing on strategic collaboration

Common Denominators of Marketing Theory Evolution

• There is a shift from manager-led to collaborative approaches
• An emphasis is placed on social and economic goals
• Innovation is driven by both internal and external sources, especially customers

Agency Theory in Marketing

• Managers and customers act as principals or agents in marketing relationships
• Information asymmetry and conflicting goals create agency problems
• Solutions include monitoring costs, incentives, and risk-sharing mechanisms
• Agency theory provides a framework to understand the evolving relationship between managers and customers
• Marketing strategies must balance control and interaction, while acknowledging the customer's increasing role in decision-making

This chapter explores the evolution of marketing strategy, focusing on the interaction between managers and customers. The evolution is separated into several schools of thought that show the progression from non-interactive to interactive relationships. These schools also show the progression from economic to non-economic focuses.