Dacko S.G. The Advanced Dictionary of Marketing Putting Theory to Use
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customer-oriented marketing 140
APPLICATION AREAS AND FURTHER READINGS
Marketing Management
Blattberg, R. C., and Deighton, J. (1996). ‘Manage Marketing by the Customer Equity
Test,’ Harvard Business Review, 74(4), July–August, 136–144.
Dwyer, F. Robert (1997). ‘Customer Lifetime Valuation to Support Marketing Deci-
sion Making,’ Journal of Direct Marketing, 11(4), 6–13.
Marketing Strategy
Rust, Roland T., Lemon, Katherine N., and Zeithaml, Valarie A. (2004). ‘Return
on Marketing: Using Customer Equity to Focus Marketing Strategy,’ Journal of
Marketing, 68(1), January, 109–127.
Bayon, T., Gutsche, J., and Bauer, H. (2002). ‘Customer Equity Marketing: Touching
the Intangible,’ European Management Journal, 20(3), June, 213–222.
Ulaga, W. (2001). ‘Customer Value in Business Markets: An Agenda for Inquiry,’
Industrial Marketing Management, 30(4), May, 315–319.
Berger, Paul D., and Nasr, Nada I. (1999). ‘Customer Lifetime Value: Marketing
Models and Applications,’ Journal of Interactive Marketing, 12(1), March, 17–30.
Marketing Research
Jain, Dipak, and Singh, Siddhartha S. (2002). ‘Customer Lifetime Value Research in
Marketing: A Review and Future Directions,’ Journal of Interactive Marketing, 16(2),
March, 34–46.
BIBLIOGRAPHY
Reinartz, Werner, and Kumar, J. V. (2003). ‘The Impact of Customer Relationship
Characteristics on Profitable Lifetime Duration,’ Journal of Marketing, 67(1), Janu-
ary, 77–99.
Hoekstra, Janny C., and Huizingh, Eelko K. R. E. (1999). ‘The Lifetime Value Con-
cept in Customer-Based Marketing,’ Journal of Market-Focused Management, 3(3–4),
September, 257–274.
customer experience marketing see experiential marketing
customer lifetime value see customer equity
customer-oriented marketing
(also called customer-centric marketing)
DESCRIPTION
Marketing based on a major organizational mission of developing and deliv-
ering offerings and associated marketing approaches that provide customers
with unrivaled value and satisfaction.
KEY INSIGHTS
A customer-oriented marketing approach, where the customer is at the
center of a firm’s marketing efforts, ultimately requires the firm to be
highly adept at understanding, anticipating, and responding to its cus-
tomer’s needs and wants on an ongoing basis. In many ways, customer-
oriented marketing is the most common form of marketing pursued by
organizations today. Even with the high commonality among firms in
adopting such an emphasis, however, there remains, of course, consider-
able variation in firms’ actual abilities in terms of identifying, predicting,
and meeting customer needs and wants both effectively and efficiently.
141 customer relationship management
KEY WORDS Customer focus
IMPLICATIONS
While customer-oriented marketing may seem to be an obvious emphasis
in marketing practice, the extent of its achievement is another matter.
Marketers may aim to keep the customer central in the firm’s efforts
but responding to customer wants and needs, even if they are well
understood, usually involves tradeoffs and scarce resources. Anticipating
changes in customer needs over the longer term also poses marketers
with the challenge of both their timely understanding and profitable or
otherwise effective accommodation.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Gatignon, Hubert, and Xuereb, Jean-Marc (1997). ‘Strategic Orientation of the Firm
and New Product Performance,’ Journal of Marketing Research, 34, February, 77–
90.
Sheth, J. N., Sisodia, R. S., and Sharma, A. (2000). ‘The Antecedents and Con-
sequences of Customer-Centric Marketing,’ Journal of the Academy of Marketing
Science, 28(1), 55–66.
Services Marketing
Graham, P. (1995). ‘Are Public Sector Organizations Becoming Customer Oriented?’
Marketing Intelligence and Planning, 13(1), 35–47.
Marketing Management
Idassi, J. O., Young, T. M., Winistorfer, P. M., Ostermier, D. M., and Woodruff,
R. B. (1994). ‘A Customer-Oriented Marketing Method for Hardwood Lumber
Companies,’ Forest Products Journal, 44, July–August, 67–73.
BIBLIOGRAPHY
Votland, R. (1998). ‘Customer-Oriented Marketing: Yesterday–Today–Tomorrow,’
POLIMERI–ZAGREB, 19(6–7), 140–145.
customer relationship management
DESCRIPTION
Emphasis within a firm on developing, enhancing, and maintaining effective
customer relationships.
KEY INSIGHTS
Customer relationship management (CRM) involves an emphasis on mul-
tiple, interdependent processes within the firm which support mutu-
ally beneficial relationships between firms and customers. Whether the
processes are pre-sales, sales, service, or other processes directly or indir-
ectly supporting marketing, CRM seeks to deepen and extend customer
relationships with the firm through the development of processes which
facilitate customer satisfaction and loyalty. By integrating customer-
specific information into many of the firm’s marketing processes, as
opposed to making fragmented use of such information, the firm may
not only increase its marketing effectiveness and efficiency but also
enhance substantially the customer’s experience with the firm. When
the focus of the firm’s marketing is based on CRM, the firm’s approach
customer satisfaction 142
to marketing may be referred to as customer relationship marketing or
simply relationship marketing. (See relationship marketing.)
KEY WORDS Relationships, customer integration
IMPLICATIONS
A firm’s relationship with its customers may be short or long or close
or distant. To the extent the firm sees a benefit in strengthening cus-
tomer relationships by extending them and making them closer through
integrating information on customer needs and wants into its processes,
CRM can increasingly become a strategic focus of the firm. A greater
knowledge of the many multidisciplinary processes supporting CRM
can assist marketers in evaluating the benefits and costs associated
with extensive or limited CRM adoption among current and future
customers.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Stone, M., Woodcock, N., and Wilson, M. (1996). ‘Managing the Change from
Marketing Planning to Customer Relationship Management,’ Long Range Planning,
29(5), October, 675–683.
Marketing Management
Ryals, L., and Knox, S. (2001). ‘Cross-Functional Issues in the Implementation of
Relationship Marketing through Customer Relationship Management,’ European
Management Journal, 19(5), October, 534–542.
Goldsmith, Ronald E. (1997). ‘Customer Relationship Management: Making Hard
Decisions with Soft Numbers,’ Journal of Leisure Research, 29, 355–357.
Wilson, Hugh, Daniel, Elizabeth, and McDonald, Malcolm (2002). ‘Factors for Suc-
cess in Customer Relationship Management (CRM) Systems,’ Journal of Marketing
Management, 18(1–2), February, 193–219.
Lemon, Katherine N., White, Tiffany Barnett, and Winer, Russell S. (2002).
‘Dynamic Customer Relationship Management: Incorporating Future Consider-
ations into the Service Retention Decision,’ Journal of Marketing, 66(1), January,
1–14.
Online Marketing
Brown, S. A. (2000). Customer Relationship Management: A Strategic Imperative in the
World of E-business. Toronto: Wiley.
BIBLIOGRAPHY
Winer, Russell (2001). ‘A Framework for Customer Relationship Management,’
California Management Review, 43, Summer, 89–105.
customer relationship marketing see relationship marketing
customer satisfaction
DESCRIPTION
The extent to which a customer’s perceived performance of an organization’s
offering matches the customer’s expectations.
143 customer satisfaction
KEY INSIGHTS
Satisfying consumers by meeting their expectations is a key aspect of
much of marketing practice. As such, there is considerable theoretical,
conceptual, and empirical research aimed at understanding, explaining,
and predicting the satisfaction of consumers generally (see consumer
satisfaction theory) as well as an organization’s existing customers
more specifically. Satisfied customers can benefit a firm in many ways
including higher levels of repeat buying by such customers as well as
increased positive word-of-mouth communication regarding the firm’s
offerings.
KEY WORDS Expectations, performance
IMPLICATIONS
An imperative for marketers is satisfying customers. However, how
and to what extent is a matter of debate among marketers. Some
firms may adopt the view that customers should be ‘barely satis-
fied’ while others advocate efforts aimed at meeting or exceeding cus-
tomer expectations. Either way, marketers also have an opportunity to
influence customer expectations themselves, which may involve low-
ering expectations so that they are met more easily. Marketers should
therefore seek to understand and appreciate the broad scope of cus-
tomer satisfaction research to enable the identification and evalua-
tion of multiple marketing strategies and tactics aimed at satisfying
customers.
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Churchill, Gilbert A., Jr., and Surprenant, Carol (1982). ‘An Investigation into
the Determinants of Customer Satisfaction,’ Journal of Marketing Research, 19(4),
Special Issue on Causal Modeling, November, 491–504.
Fornell, Claes (1992). ‘A National Customer Satisfaction Barometer: The Swedish
Experience,’ Journal of Marketing, 56(1), January, 6–21.
Anderson, Eugene W., Fornell, Claes, and Lehmann, Donald R. (1994). ‘Customer
Satisfaction, Market Share, and Profitability: Findings from Sweden,’ Journal of
Marketing, 58(3), July, 53–66.
Marketing Strategy
Anderson, Eugene W., and Sullivan, Mary W. (1993). ‘The Antecedents and Con-
sequences of Customer Satisfaction for Firms,’ Marketing Science, 12(2), Spring,
125–143.
Anderson, Eugene W., Fornell, Claes, and Rust, Roland T. (1997). ‘Customer Satis-
faction, Productivity, and Profitability: Differences between Goods and Services,’
Marketing Science, 16(2), 129–145.
Garbarino, Ellen, and Johnson, Mark S. (1999). ‘The Different Roles of Satisfaction,
Trust, and Commitment in Customer Relationships,’ Journal of Marketing, 63(2),
April, 70–87.
Crosby, Lawrence A., and Stephens, Nancy (1987). ‘Effects of Relationship Market-
ing on Satisfaction, Retention, and Prices in the Life Insurance Industry,’ Journal
of Marketing Research, 24(4), November, 404–411.
customer satisfaction 144
Marketing Modeling
Smith, Amy K., Bolton, Ruth N., and Wagner, Janet (1999). ‘A Model of Customer
Satisfaction with Service Encounters Involving Failure and Recovery,’ Journal of
Marketing Research, 36(3), August, 356–372.
BIBLIOGRAPHY
Peterson, Robert A., and Wilson, William R. (1992). ‘Measuring Customer Satis-
faction: Fact and Artifact,’ Journal of the Academy of Marketing Science, 20, Winter,
61–71.
customer value marketing see value-based marketing
customer volume effect see loyalty effect
customized marketing see one-to-one marketing
cybermarketing see online marketing
cyberspace marketing see online marketing
D
Darwinian evolution theory
(also called natural selection theory)
DESCRIPTION
The theory that species evolve through a process of natural selection.
KEY INSIGHTS
Evolution commonly refers to the change in the traits of living organisms
over generations as well as the emergence of new species. Darwinian
evolution, as pioneered by Charles Darwin (1859), essentially adopts a
‘survival of the fittest’ perspective. The theory and the application of its
insights have since extended well beyond the purely biological domain to
that of organizations as living organisms as well as other areas including
new products.
KEY WORDS Evolution, adaptation, change
IMPLICATIONS
In the context of organizations and products, the approach pro-
vides a basis for modeling how such entities may evolve over time,
where, beyond the influence of natural forces (e.g. climate and natural
resources), market forces provide a further or analogous basis for natural
selection. Concepts drawing upon Darwinian evolution theory may there-
fore assist marketers in understanding and managing such dynamics in
helping to ensure long-term success of the organization and its products.
APPLICATION AREAS AND FURTHER READINGS
Marketing Planning
Cooper, Lee G. (2000). ‘Strategic Marketing Planning for Radically New Products,’
Journal of Marketing, 64(1), January, 1–16.
Organizational Change
Jones, Colin (2004). ‘An Alternative View of Small Firm Adaptation,’ Journal of Small
Business and Enterprise Development, 1(3), September, 362–370.
Consumer Behavior
Saad, Gad (2006). ‘Applying Evolutionary Psychology in Understanding the
Darwinian Roots of Consumption Phenomena,’ Managerial and Decision Economics,
27(2–3), 189–201.
BIBLIOGRAPHY
Ziman, John (2000). Technological Innovation as an Evolutionary Process. Cambridge:
Cambridge University Press.
Anderson, Paul F. (1983). ‘Marketing, Scientific Progress, and Scientific Method,’
Journal of Marketing, 47(4), Autumn, 18–31.
data types 146
data types
DESCRIPTION
Particular categories of factual information.
KEY INSIGHTS
Factual information collected and used in marketing is frequently
characterized as one of two types: primary data or secondary data. Pri-
mary data are those which are non-existent prior to the conduct of
research and are collected specifically for the purpose of a particu-
lar research effort. Examples of primary data include those obtained
in response to an interviewer’s questioning of subjects in a research
study and observations of subject’s behaviors in an experiment. Sec-
ondary data are those which already exist and are in essence, second-
hand in that they have already been collected or have become avail-
able as a result of a different purpose. Examples of secondary data
include census data and company sales data collected or compiled prior
to and independent from a research study in which they are put to
use.
KEY WORD Information
IMPLICATIONS
Marketers conducting marketing research face tradeoffs in the collec-
tion and use of factual information. While secondary data is often
inexpensive to obtain and readily available, it may not always pro-
vide the marketer with the insights desired. On the other hand, pri-
mary data can provide rich insight but often at a greater cost and/or
effort relative to that for secondary data. Robust marketing research
may involve a combination of both data types, where the research
objectives and researcher’s resources dictate the relative emphasis on
each.
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Bonoma, Thomas V. (1985). ‘Case Research in Marketing: Opportunities,
Problems, and a Process,’ Journal of Marketing Research, 22(2), May,
199–208.
Savitt, R. (1980). ‘Historical Research in Marketing,’ Journal of Marketing, 44, Fall,
52–58.
Wedel, M., Kamakura, W. A., and Böckenholt, U. (2000). ‘Marketing Data, Mod-
els and Decisions,’ International Journal of Research in Marketing, 17(2–3), 203–
208.
Houston, Mark B. (2004). ‘Assessing the Validity of Secondary Data Proxies for
Marketing Constructs,’ Journal of Business Research, 57, 154–161.
Crouch, S., and Housden, M. (1998). Marketing Research for Managers. Oxford:
Butlernorth-Heinemann.
BIBLIOGRAPHY
Aaker, D. A., Kumar, V., and Day, G. S. (1998). Marketing Research, 6th edn. New York:
Wiley.
147 database marketing
database marketing
DESCRIPTION
A particular form of direct marketing where databases of customers and their
profiles are used to generate tailored or personalized offerings as a central part
of a firm’s marketing efforts.
KEY INSIGHTS
Database marketing often takes advantage of flexible and efficient
information technologies and its use for personalization may enable
marketers to target customers with greater effectiveness relative to
more traditional marketing approaches. An essential element of data-
base marketing is the analysis of customer data to obtain insights
useful to the marketer, which may include segmenting customers
based on purchase behaviors such as purchase frequency, recency,
or amount, thereby enabling the marketer to develop and imple-
ment marketing approaches that are more closely aligned with such
behaviors.
KEY WORDS Information technologies
IMPLICATIONS
Advances in various information technologies make database marketing
an increasingly attractive approach to marketers. Still, the effort can
only be effective to the extent that analyses of customer data influ-
ence the development and implementation of personalized or other (e.g.
direct) marketing practice. While much can potentially be gained from
such an approach, database marketers must also ensure company prac-
tices conform to restrictions imposed by the firm’s legal and regulatory
environments regarding the appropriate use and retention of customer
data.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Cespedes, Frank V., and Smith, H. Jeff (1993). ‘Database Marketing: New Rules for
Policy and Practice,’ Sloan Management Review, 34, Summer, 7–22.
Petrison, L. A., Blattberg, R. C., and Wang, P. (1997). ‘Database Marketing: Past
Present, and Future,’ Journal of Direct Marketing, 11(4), 109–125.
Fletcher, K., Wheeler, C., and Wright, J. (1992). ‘Success in Database Mar-
keting: Some Critical Factors,’ Marketing Intelligence and Planning, 10(6), 18–
23.
Marketing Management
Kahan, H. (1998). ‘Using Database Marketing Techniques to Enhance your
One-to-One Marketing Initiatives,’ Journal of Consumer Marketing, 15(5), 491–
493.
BIBLIOGRAPHY
Hughes, Arthur M. (2000). Strategic Database Marketing: The Masterplan for Starting
and Managing a Profitable Customer-Based Marketing Program, 2nd edn. New York:
McGraw-Hill.
deciders see industrial buyer behavior
decision theory 148
decision theory
DESCRIPTION
Theory or theories concerned with understanding and explaining how decision
makers make real decisions and with how optimal decisions can be reached.
KEY INSIGHTS
Choices under uncertainty, social decisions, choices where payoffs occur
at different points in time, and complex decisions are just some areas
where decision theories have been developed and applied to either pre-
scribe approaches for identifying the best decision to take or to describe
how such decisions are typically made. Much of decision theory makes
the assumption that the decision taker is fully informed and fully ra-
tional.
KEY WORDS Decision making, optimal decisions
IMPLICATIONS
Decision theory is interdisciplinary and therefore has implications for
marketing that draw upon economics, psychology, mathematics, statis-
tics, and management. Knowledge of numerous decision theory-based
models can be drawn upon to describe or explain how marketing deci-
sions of various types are or should be made.
APPLICATION AREAS AND FURTHER READINGS
Managerial Decision Making
Curren, Mary T., Folkes, Valerie S., and Steckel, Joel H. (1992). ‘Explanations for
Successful and Unsuccessful Marketing Decisions: The Decision Maker’s Perspec-
tive,’ Journal of Marketing, 56(2), April, 18–31.
Gilboa, Itzhak, and Schmeidler, David (1995). ‘Case-Based Decision Theory,’ Quar-
terly Journal of Economics, 110(3), August, 605–639.
Hutchinson, J. Wesley, and Meyer, Robert J. (1994). ‘Dynamic Decision Making:
Optimal Policies and Actual Behavior in Sequential Choice Problems,’ Marketing
Letters, 5(4), October, 369–382.
BIBLIOGRAPHY
Resnik, Michael D. (1987). Choices: An Introduction to Decision Theory. Minneapolis:
University of Minnesota Press.
decline stage see product life cycle
decline strategies
DESCRIPTION
Organizational strategies for competing in a declining market.
KEY INSIGHTS
When there is a fall in demand in a market, perhaps as a result of a
change in some technology, consumer preferences, or government pol-
icy, a firm competing in such a market must select a strategy that makes
the best of the situation. Strategies that a firm may wish to consider in
facing a declining market include a leadership strategy, where the firm
pursues initiatives aimed at achieving or maintaining leadership in the
149 defensive marketing
market (e.g. by buying competitors) while the market is still profitable,
even though it is in decline; a niche strategy, where the firm identifies and
pursues the segment of the market that demonstrates the most favorable
conditions for the firm (e.g. highest return, slowest rate of decline); a
harvest strategy or milking strategy, where the firm cuts back on its costs and
investments in the market, where the aim is to generate cash flow, even
if a reduction in sales and market share results, since the cash generated
could then be put to better use elsewhere; and a divestment strategy, where
the firm opts to liquidate its position in the market, as a result of factors
including expected extreme price pressure, rapid market decline, and
dominant competitors with an irreversible advantage.
KEY WORDS Market decline, competitive strategy
IMPLICATIONS
Clearly, a firm has several strategies from which to choose when fac-
ing a declining market. Ultimately, in determining the most desirable
(or least undesirable) strategy or strategies, marketing managers in a
firm will need to assess carefully the strategic uncertainties facing the
firm, including uncertainties associated with: the market, competitive
intensity, firm performance and strengths, firm relationships with other
businesses, and barriers to implementation including exit barriers and
the firm’s management ability.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Anderson, Carl R., and Zeithaml, Carl P. (1984). ‘Stage of the Product Life Cycle,
Business Strategy, and Business Performance,’ Academy of Management Journal,
27(1), March, 5–24.
Thietart, R. A., and Vivas, R. (1984). ‘An Empirical Investigation of Success Strat-
egies for Businesses along the Product Life Cycle,’ Management Science, 30(12),
December, 1405–1423.
McKee, P. R., and Varadarajan, W. M. (1989). ‘Pride, Strategic Adaptability and Firm
Performance: A Market-Conti,’ Journal of Marketing, 53(3), 21–35.
BIBLIOGRAPHY
Aaker, David A. (2005). Strategic Market Management. New York: John Wiley & Sons,
Inc.
Porter, Michael (1980). Competitive Strategy. New York: The Free Press.
defensive marketing
(also called status quo marketing)
DESCRIPTION
Marketing strategies aimed at protecting a company’s status quo situation
from change by competitors or other market forces.
KEY INSIGHTS
Companies may use any of an array of defensive marketing strategies,
ranging from pre-emptive moves for keeping competitors out of its
product-market segment to contraction moves for consolidating market