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...nizational orientation: Decisions start with the market and anticipated opportunities for advantage. 2. General management responsibility: Choice of market segment, value proposition, competitive positioning and consumer fulfillment. 3. Functional activity: implementation of pricing, promotion, product management and distribution decisions. 4. Societal role: Communicate responsibility to shareholders / stakeholders 2.5 Influences on the direction of Marketing Marketing theory is under influence of several (market) developments. These developments can force adjustment or even irrelevance of traditional theory. 2.5.1 Connected knowledge economy Emerging industries, like for example the software or telecom industry, have shown to be increasing returns industries. Increasing return industries are usually knowledge-based industries and are characterized by a high initial investment and increasing profits per item, product or service sold. More traditional industries are usually decreasing returns industries, which are defined to be industries with a limit to gains that can be achieved by scale advantages. In these industries there is a limit to the amount of products that can be efficiently and profitably produced. Another important factor is the emergence of computer networks. Due to these networks the traditional trade off between reach and richness of (market) communications is being transformed. In the near future most industries will be a mixture of increasing and diminishing return activities. However most industries will definitely be influenced by the interconnectivity of the exchange processes, market structures, competitive processes and organizational activities. 2.5.2 Globalizing, Converging and Consolidating Industries 1. Globalization of markets: Shift from local to worldwide markets 2. Converging competition: Unclear market boundaries, unknown competitors 3. Consolidating industries: Less competitors, stronger competitors Globalization has been steadily increasing in strength, as has worldwide homogenization of customers needs. Due to the increased popularity of e-commerce markets have been expanded worldwide. Companies are now able to provide 24-hour service, while expanding the customer base. Another related topic concerns the convergence of different devices, services and products. This makes it unclear for companies in which market they will be competing and who will be their competitors. Competition can be stabilized and be made predictable by enforcing certain isolating mechanisms (e.g. import barriers, regulation, etc). If liberalization of these measures is implemented consolidation usually follows. Drivers of consolidation: 1. Industry convergence 2. Globalization 3. Deregulation à removes artificial barriers 4. Technological discontinuity 2.5.3 Fragmenting and frictionless markets 1. Forces of homogenization à globalization / frictionless markets (brand less) 2. Forces of proliferation and fragmentation à Smaller markets / Molecular markets There are two factors that have a strong impact on homogenization. The first is the aforementioned globalization, the second the proliferation of the Internet. The Internet enables consumers to have access to more information, which results in more comparative buying decisions instead of emotional or other kind of buying decisions. Another trend is the emergence of smaller segments instead of a mass-market segment. This is being enabled by mass customization in combination with the large number of product, media and channel options. 2.5.4 Demanding Customers and Consumers and their Empowered behavior Consumer behavior is subject to change, due to: 1. More choices, more information, more purchasing channels à Consumers expect diversity. 2. Time is scarce à Pay premium for quick delivery and quality of service. 3. Demographic shifts à Population is aging (western countries) All the above-mentioned factors enable a shift of power from producers to buyers or intermediaries 2.5.5 Adaptive organizations Firms have to keep up with all the changes in the market. They should be able to quickly transform the company and adapt to the changing environment. The following are all important factors that have to be taken into consideration: 1. Less broadcast, more interactive strategiesà From mass market to individual 2. More competition, more collaboration 3. More facts, less conjecture: Decisions based on databases with: a. Market structure / b. Market response / c. Market Economics 2.6 Challenges for Academic Marketing The factors influencing the direction of marketing also provide the marketing field with new challenges. Challenge 1: Provide meaningful measures (metric), inferences (actionable data) and calibration (relevant data) Challenge 2: Cross boundaries and understand functional interfaces Challenge 3: Rethink the role of theory Though the challenges mentioned by the authors are somewhat vaguely extracted out of the fundamental issues and recent trends, they can be seen as major challenges for academics within the field of marketing. 3. Examination of Marketing Challenges The first challenge proposed by Day and Montgomery is related to “Providing meaningful measures (metric), inferences (actionable data) and calibration (relevant data)”. To summarize the hypotheses as stated by Day and Montgomery: · Provide meaningful measures, so metrics could be used to judge the performance of marketing against absolute and relative standards. · Then provide meaningful inferences, so practitioners can be helped analyzing the overload of information extracted from for example scanner panel data. · And furthermore implement more calibration, which implies finding away to combine the statistical and the estimated approach in research. This challenge has already been studied by several academics. There is an increasing interest noticeable on the subject of marketing performance measurement. An example could be the appearance of the Marketing Balanced ScoreCard (MSBC), as shown in this figure. The MBSC is a model that visualizes all the relevant aspects of the marketing performance. The marketing strategy and four created perspectives will measure the marketing performance. Furthermore there are also studies on E-commerce performance going on. It is nice to see a linkage between the provided challenges by Day and Montgomery and the same explicit research with the area. It makes it more obvious that the mentioned challenges really play an important role within the future of academic research. Still the major challenge in this area remains “the search for (quantitative) performance measure standards”. The second challenge Day and Montgomery formulate is “Cross boundaries and understand functional interfaces” and is about the interaction and interface between the marketing department and other departments within the company. Day and Montgomery characterized the challenge as incorporating the following aspects: 1. Inter-functional 2. Cross-disciplinary 3. Cross-cultural 4. Interface of academics and management (theory ßà practice) The main factors driving this challenge are the trend of globalization (see 2.5.2) and the increasingly critical and demanding customers (see 2.5.4). Due to globalization companies have become more culturally and country diverse. This enables cultural misunderstandings to flourish if the company does not properly address them. The emergence of more demanding and more critical customers force companies to shift the company’s focus to a more customer oriented product development process. In this process a certain integration of different departments, functions and expertise is needed to achieve success in the fulfillment of customer needs, technological and manufacturing efficiencies and business strategy. Figure 2 Company Interfaces, Urban and Hauser Previous research by Griffin and Hauser has indicated that problems can arise during this product development process due to communication problems. These communication problems are caused by different locations of employees, functional bias and other complicating factors. The solution Griffin and Hauser suggest is the deployment of Quality Function Deployment (QFD). The third challenge mentioned by the authors is “Rethink the role of theory.” Academics in marketing assess themselves at the progress of testing and refining the market-behaviour theories. Progress has been made in advancing the ability to predict and understand market phenomena. This challenge is divided into two parts. First, there is not enough testing of theory and development about diverse approaches and points of view. Second, the difficulty of theoretical models used by academics makes them less useful to managers. The abstractions in the theories are far removed from the context of managers. More valuable for managers are for example conceptual frameworks and theoretical models that can be used in practice (See case study). 3.1 Case study Now we will discuss a case study related to this paper. The case study is about the marketing changes in the travel industry, like hospitality firms. We will look at the interfaces between the challenges mentioned in the paper and practical implementation. The three challenges in the paper point to ways that academic can enhance their dialogue with practitioners, the main research question therefore is: Will the challenges in practice connect with the challenges in theory? Changes in the market are affecting the travel industry. The industry faces for example broad based globalization of its business and revolutionary technological advances. If business operators are to succeed in this market, they need to anticipate and manage those changes. In light of these changes this people started a gathering about the changes in the market, sponsored by some travel industry companies. The result of this meeting was six challen...