LET ME OPEN WITH A NOTE ON MY PERSONAL JOURNEY FROM THE PAST TO THE PRESENT: 1960s-present Marketing management of consumer goods plus 1970s-present Services marketing and management plus 1980s-present Quality management, excellence, value, satisfaction plus 1990s-present Relationship marketing, CRM, one-to-one adding up in the

2000s S-D logic, service science, many-to many networks

1 E. Gummesson 2009

It’s simply

U N I Q U E

!

E. Gummesson 2009 2

E. Gummesson 2009 3

Complexity, network theory & many-to-many marketing

Professor Evert Gummesson

Stockholm University School of Business Sweden [email protected]

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ON MY TERMINOLOGY:

The noun “complexity” stems from the Latin

complexus

meaning “network” accompanied by the verb

complecti

meaning ”to twine together”. The word “system” is derived from the Greek

systema

, meaning “a whole composed of many parts”.

“Context” comes from Latin

contexere

, “to join together”.

These words and several others, like ”ecology” and ”holism”, obviously belong to the same family. I use the word system in its generic and general sense, for example “service system”, but let networks through network theory (and case study research ) be the basis for analysis and discussion. E. Gummesson 2009 5

Throughout my research the overriding key variables are relational in three ways:

relationships, networks

&

interaction

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DEVELOPMENT OF THE RELATIONAL APPROACH TO MARKETING 1960s-present 1990s-present 2000s-

Traditional American marketing management and marketing mix Relationship marketing CRM One-to-one marketing Many-to-many marketing

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Customer centric

Centered on

one

party

Relationship centric

Centered on

two

parties

Network centric

Centered on

many parties Customer

E. Gummesson 2009

Customer Supplier

Definition: “

Many-to-many marketing

describes, analyzes and utilizes the network properties of marketing.”

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Marketing as Complex Networks: Many-to-Many Marketing

From one-to-one to many-to-many in the marketing of the value creating network economy

PRELIMINARY CHAPTERS: 1 From One-to-One to Many-to-Many 2 B2B: Networks in Business-to-Business 3 B2C/C2B: Networks in Business-to-Consumer and Consumer-to Business 4 C2C: Customer-to-Customer Networks 5 B2B2C2C2B2B... Everything Is Linked to Market, Mega and Nano Networks 6 Infrastructure and Mega Networks 7 High Tech/High Touch: Human Beings Are Not Obsolete! 8 Many-to-Many Management: From CEO to NEO, from CMO to NMO, from ROI to RON 9 Traveling the Land of Theory and Research 10 Many-to-Many: Science, Internet – or Innernet?

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Network theory:

both

methodology

and

a theory of life

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The topology of Capri – going from a photo to a network and fractals model E. Gummesson 2009 12

Air Canada Air China Air New Zealand ANA All Nippon Airways

19 FULL PARTNERS

Asiana Airlines Austrian bmi british midland LOT Polish Airlines Lufthansa

Star Alliance

SAS Scandianvian Airlines Shanghai Airlines Singapore Airlines South African Airways

THE STAR ALLIANCE, FEBRUARY 2008

E. Gummesson 2009 Spanair SWISS TAP Portugal Thai United Adria US Airways Blue 1

3 REGIONAL PARTNERS

Croatia Airlines

11 SPECIAL SAS PARTNERS

air Baltic Air China air greenland Air One Atlantic Airways Cimber Air City Airline Estonian Air Qantas Skyways Wideroe 13

WHAT IS NETWORK THEORY?

DECENTRALIZED NETWORK CENTRALIZED NETWORK

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HUB LINK NODE DISTRIBUTED NETWORK

E. Gummesson 2009

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Neural networks:

Bundles of nerve fibers running to various organs and tissues of the body.

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Computer representation of the human brain that tries to simulate its processes.

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5 doctors prescribing 9+2 pills 55 specialists 23 diagnosed disorders 11 therapies comprising 41 components an endless amount of capital goods and disposables

Patient ANNA, 82 Network & systems manager

ambulance and taxi drivers nurses masseurs social insurance people social assistants E. Gummesson 2009 Based on Akner, G. (2004).

Multisjuklighet hos äldre.

Malmö, Sweden: Liber.

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5 doctors prescribing 9+2 pills 55 specialists nurses masseurs 23 diagnosed disorders 11 therapies comprising 41 components an endless amount of capital goods and disposables

Patient ANNA, 82 Network & systems manager

ambulance and taxi drivers social insurance people social assistants E. Gummesson 2009 20

E. Gummesson 2009

This is not a customer-oriented service system! It is too complex to work.

How do we find the necessary simplicity to make it work?

We are facing a huge challenge!

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THIS IS ABOUT MARKETING, SO WHERE DOES MANY-TO-MANY MARKETING AND NETWORKS COME IN?

WE HAVE TO ANSWER SEVERAL FUNDAMENTAL QUESTIONS:

Who are the customers and who are the suppliers?

What do suppliers do best?

What do customers do best?

What do third parties do best?

What should be one-party (individual) action?

What should be two-party (dyadic) interaction?

What should be multiparty (network) interaction? What should be C2C interaction?

What should be face-to-face interaction, ear-to-ear interaction, email interaction, Internet interaction, text messaging, and interaction with automatic machines? What do human beings do best?

What does technology do best?

Is there a no man’s land where service is neglected?

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E. Gummesson 2009 In the new service logic the customer and supplier roles have merged, although they perform different tasks in differnet context (“value-in-context”). The following categories of suppliers are found in the market: business enterprises governments on a national, regional and local level and increasingly on a mega, supra-national level, such as the EU NGOs and voluntary organizations which arise where the first two have failed, or act as supplementary to them In B2B, the suppliers are also customers. In B2C/C2B we find consumers citizens who are also co-creators, that is suppliers.

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Properties of case study research and network theory.

They can accomodate:

Complexity Context Change Non-linearity Both parts & the whole Both structure, hierarchy & process Both tech & human aspects

E. Gummesson 2009

No other research methods in social sciences can do that!

T H E O R Y C O M P L E X I T Y

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STATISTICAL SURVEYS

Usually low quality data Superficial Cannot handle complexity Pseudo-preciseness Low validity, high reliability Non-interactive

CLAIMED TO BE SCIENTIFIC: ”SURVEY DOMINANT LOGIC” CASE STUDY RESEARCH

Verbal narratives High validity, low reliability Interactive

NETWORK THEORY

Verbal Graphical Mathematical Interactive

ONLY SPECIAL APPLICATIONS AT BUSINESS SCHOOLS CLAIMED TO BE ONLY ANECDOTAL AT SOME BUSINESS SCHOOLS, HIGH ACCEPTANCE AT OTHERS

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But this is not enough. Scientific methodology is not a technique; it is techniques in the context of a philosophy and worldview.

Researchers who just become technicians are not scholars. To be a scholar and true scientist you have to consider other dimensions as well: common sense intuition sound judgment wisdom insights hunches experience instincts visions...

Without these additional aspects, scientific method is empty!

E. Gummesson 2009 26

“Networks are the fundamental stuff of which new organizations are and will be made.”

E. Gummesson 2009

Source: Manuel Castells, Professor of Sociology, in The Rise of the Network Society. Oxford, UK: Blackwells, 1996. Quotation from p. 168

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“Physicists have entered into a new stage of their science and have come to realize that physics is not only about physics anymore, about liquids, gases, electromagnetic fields, and physical stuff in all its forms.”

“At a deeper level, physics is really about organization – it is an exploration of the laws of pure form .

” Source: Mark Buchanan, physicist and former Editor of Nature and New Scientist, in Small World, Phoenix, London, 2003.

Quotations from p.165

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“…understanding network effects becomes the key to survival in a rapidly evolving new economy.” “In reality, a market is nothing but a directed network.” (as opposed to a random, scale-free network) 29 E. Gummesson 2009

Source: Albert László Barabási, Professor of Physics, in Linked: The New Science of Networks, Perseus, Cambridge, MA, 2002.

Quotations from pp. 200 and 208

A SAMPLE OF CONCEPTS AND ISSUES FROM NETWORK THEORY: * Nodes and links * Hubs * Random networks * Planned networks * Clusters * Connectors * Preferential attachment * Rich gets richer * Fitness * Fit-get-rich * Winner-takes-all * Scale-free networks * Power laws * Phase transition * Robustness, error tolerance * Cascading failure * Tipping points * Thresholds * Spreading rates * Self-organizing * Six degrees of separation * What is the Internet, really?

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A SAMPLE OF CONCEPTS AND ISSUES FROM NETWORK THEORY: * Nodes and links * Hubs * Random networks * Planned networks * Clusters * Connectors * Preferential attachment * Rich gets richer * Fitness * Fit-get-rich * Winner-takes-all * Scale-free networks * Power laws * Phase transition * Robustness, error tolerance * Cascading failure * Tipping points * Thresholds * Spreading rates * Self-organizing * Six degrees of separation * What is the Internet, really?

E. Gummesson 2009 31

E. Gummesson 2009 CEO

Chief Executive Offcier

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or...

E. Gummesson 2009 NEO

Network Executive Officer

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E. Gummesson 2009 CMO

Chief Marketing Officer

34

or...

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Traditional indicator: Return on Investment (ROI)

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New indicator: Return on Networks (RON) is a measure of the profitability of a company’s networks

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BIBLIOGRAPHY ON RELATIONAL APPROACHES (SELECTED)

Articles:

Gummesson, E. (1987), "The New Marketing – Developing Long Term Interactive Relationships". Long Range Planning, Vol. 20/4, No. 104, August.

Lovelock, C. and Gummesson, E. (2004), ”Whither Services Marketing? In Search of a Paradigm and Fresh Perspectives,”

Journal of Service Research

, vol. 7, no.1, pp. 20-41. Winner of the 2005 American Marketing Association Best Services Article Award.

Gummesson, E. (2006), “After Relationship Marketing, CRM and One-to-One: Many-to-Many Networks,”

Finanza Marketing e Produzione

, no.1, pp. 138-144.

Gummesson, E. (2007), “Exit Services Marketing – Enter Service Marketing”.

Journal of Customer Behaviour

, Vol. 6, No. 2, pp. 113-141.

Gummesson, E. (2007), “Case study research and network theory: Birds of a feather”,

Qualitative Research in Organizations and Management,

Vol. 2, No. 3, pp.226-248.

Gummesson, E. (2008),

“

Extending the New Dominant Logic: From Customer Centricity to Balanced Centricity.” Commentary for Special Issue of

The Journal of the Academy of Marketing Science (JAMS)

on the New Dominant Logic, 36 (1), pp.15-17.

Gummesson, E. (2008), “Quality, service-dominant logic and many-to-many marketing.”

The TQM Journal,

20 (2), pp.143-153.

Gummesson, E. and Polese, F. (2009), “B2B is not an island”,

The Journal of Business & Industrial Marketing

24 (5-6). Gummesson, E. (2009), “The future of service is long overdue”, in Maglio, P. P., Kieliszewski, C. A., and Spohrer, J., Eds..

Handbook of Service Science.

New York: Springer.

Book:

Gummesson, E. (2008),

Total Relationship Marketing,

Oxford, UK: Elsevier/ Butterworth-Heinemann (3rd ed.).

37 E. Gummesson 2009

E. Gummesson 2009

OVERLOAD?

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