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Do we really understand business marketing? Getting beyond the RM and BM matrimony Jaqueline Pels Universidad Torcuato Di Tella, Buenos Aires, Argentina Kristian Möller Helsinki School of Economics, Helsinki, Finland, and Michael Saren Leicester University, Leicester, UK Abstract Purpose – A large number of researchers and marketing textbooks see business marketing dominantly from the relationship marketing perspective. One can even talk about a “matrimony” of these domains; “RM ¼ BM”. The Contemporary Marketing Practices studies, however, provide clear evidence of the coexistence of various marketing practices but offer no supporting theoretical rationale for these findings. The purpose of this paper is to answer the question whether business marketing and relationship marketing, when broadly defined to include all relational-interactional perspectives, are necessarily wedded to each other. Design/methodology/approach – A metatheoretical analysis was conducted to identify the contributions and limitations of the current research approaches to business marketing and a configurational approach for marketing (CAM) was developed, providing theoretical explanation for the empirical findings versus relationship dominance dilemma. Findings – The metatheoretical analysis showed that research into business marketing relationships is not monolithic; that each tradition is useful for specific purposes, domains and activities; and that none helps understand why there are multiple ways in which firms relate to their markets. A conceptual CAM framework was developed that allows one to identify possible configurational marketing profiles (i.e. identifying different equivalently valid ways of relating to a business environment). Research limitations/implications – It is contended that the configuration approach for marketing permits other configurations to co-exist beyond the RM-BM matrimony. CAM provides a conceptual framework that can host the “puzzling” empirical results of the contemporary marketing practices studies. Practical implications – The CAM frame suggests that managers should carefully examine the internal logic of their marketing-related configuration. Performance should be enhanced if the three elements – managerial frame of reference, organization/environment relationship, marketing mode – are coherent. Originality/value – The configurational approach for marketing helps one to understand why firms relate to the business marketing environment with a multiplicity of marketing modes, showing that the BM-RM matrimony is but one possible configuration. Keywords Configuration management, Business-to-business marketing, Relationship marketing Paper type Conceptual paper the relationship between a firm and its environment. The key question is whether business marketing (BM) and relationship marketing (RM), when broadly-defined to include all relational-interaction perspectives, are necessarily wedded to each other: i.e. does BM ¼ RM? We argue that different research schools have diverse readings of the business marketing environment, and that each definition of the environment leads to a specific suggestion in terms of marketing practice and that the relationship marketing approach is only one possibility. By focusing business marketing predominantly on the relationship marketing option we have voluntarily put blinkers on our theory development. Going all the way back Wroe Alderson’s (1957) seminal work, which led to the so-called “marketing management” school, marketing organisations were conceptualised as “the entities which operate in the marketing environment”. Although the various authors in the managerial school of marketing recognised the presence of exogenous variables – typically as macro or micro environmental factors – they treated them as uncontrollable factors, within which Introduction Marketing scholars have used many theoretical approaches to examine business marketing which, despite its maturity, remains a diverse and complex domain. In order to identify the contributions and limitations of the current research approaches to business marketing what is needed is a metatheoretical analysis which, as yet, does not exist. It is within this gap that our paper is positioned. We aim to evaluate the insights and tools that the various research traditions contribute to business marketing and, specifically, to focus on how they address the context or environment where firms operate and what they present and assume about The current issue and full text archive of this journal is available at www.emeraldinsight.com/0885-8624.htm Journal of Business & Industrial Marketing 24/5/6 (2009) 322–336 q Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10.1108/08858620910966219] 322 Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 marketing functions and practices must operate. This view is not restricted to the marketing management school, in their Journal of the Academy of Marketing Science article “Revisiting marketing’s lawlike generalizations”, Sheth and Sisodia (1999, p. 72) state, “. . .more than most other fields of scientific inquiry, marketing is context dependant.” A brief historical review shows a clear trend of addressing business marketing from a relationship perspective. During the late 1980’s and early 1990’s the marketing management school dominant position in business marketing was challenged by the relationship marketing approach, which drew heavily from services marketing research and the Industrial Marketing and Purchasing (IMP) Group (Anderson et al., 1994; Håkansson, 1982). They all suggested that the relationship between an active buyer and an active seller should form the key focus of analysis. Understanding the dynamics of relationships and advocating mutually rewarding relationships, often invoking a marriage metaphor, became the core of the normative programme of the Relationship School (Grönroos, 1997; Gummesson, 1997; Christopher et al., 1991, 2002). This is confirmed by recent content analysis of the major business marketing journals (Dant and Lapuka, 2008; LaPlaca, 2008) shows that the share of articles dealing with relationships (and to a considerably lesser degree of networks) has increased consistently since 2000 whereas the relative number of articles on buying behavior, selling and sales management, and segmentation declined since the early 1990s. On the other hand, the contemporary marketing practices (CMP)[1] studies provide clear evidence that over 30 per cent of companies operating in business markets are practicing “transactional marketing” and another 30 per cent a combination of “transactional” and some form of “relational marketing” (Coviello et al., 2002; Pels et al., 2004). Additionally, a series of independent studies (i.e. Pels and Snehota, 1995; Binks and Ennew, 1996; Benson-Rea, 2005; Lefaix-Durand, 2008) also show that, in many industries, the process that actually takes place is one of coexistence of various marketing practices. In the remainder of this paper we interrogate and critique the assumptions behind the BM ¼ RM matrimony from both empirical and theoretical perspectives. We offer an alternative: the configurational approach, which we argue is robust in theory and more consistent with the empirical evidence of firms’ practice. Because of the many implications related to this alternative conceptualization, two are of interest to this paper. First, it recognizes that managers might not “just adapt to” but might enact their environments. This opens the way to understanding why the empirical studies find a plurality of marketing practices (for example, Coviello et al., 2002). Second, it also helps understand why academics belonging to diverse research traditions describe the environment differently. The remainder of this paper is structured as follows. First, we carry out a comparison of the major research traditions in business marketing which shows that that there are multiple interpretations of how these environments operate. This is summarized in Table I. Next we introduce the configurational approach which is based organization and strategy literature. We explain how this approach helps us understand that the relational-interactive perspective is not a response to the business marketing environment but, rather, one of several possible strategic types or configurations. Finally we briefly explore the implications of this beyond the BM ¼ RM matrimony debate. Primary research approaches to business marketing How to carry out a comparison of research traditions? In order to expose the contributions and limitations of the current research approaches to business marketing we need a so-called metatheoretical analysis[2]. How to carry out a comparison of different research traditions? We first define a set of descriptive criteria and then use these to evaluate existing approaches thus creating a profile of the prototypical characteristics of different approaches. On the basis of our investigation of several theoretical comparisons of research traditions within marketing and management (see Anderson, 1986; Arndt, 1985; Brodie et al., 1997; Burrell and Morgan, 1979; Burton, 2005; Coviello et al., 1997, 2002; Egan, 2008; Gioia and Pitre, 1990; Mattsson, 1997; Möller, 1992, 1994; Möller and Halinen, 2000; Möller, 2007; Tikkanen, 1996; Vargo and Lusch, 2004; Walker and Ruekert, 1987; Wilkie and Moore, 2003) we suggest that attention should be paid to the following issues when research traditions are compared: . Basic goals of the tradition, i.e. what it tries to achieve. . View of exchange relationships. . Questions asked, i.e. through what kind of questions does the approach frame its focal phenomena? . Disciplinary background, i.e. is the tradition primarily linked to some cognate disciplines which provide its focus, or is its momentum driven by social/managerial questions? . Key topics/concepts the tradition offers to business marketing. . Level/unit of analysis and contextuality, i.e. how the tradition addresses the focal phenomenon in terms of its context/environment. . Limitations and “blind spots”. These dimensions are used in the next section to compare the key research traditions within business marketing. We do not intend to judge which research approach is better but to evaluate the insights and tools they contribute to business marketing as well as to pinpoint their blind spots. Nor do we intend to integrate the different theoretical approaches but to sensitize the research community to the representations these approaches provide to business marketing, and especially to how they address the context or environment where the firms operate, and what they have to say about the relationship between a firm and its environment. Selection of the research traditions to be examined Marketing scholars have used many theoretical approaches to examine business marketing. There does not exist, however, any in-depth meta-analysis of the research approaches covering the complete domain. This sets hurdles for the selection of the research approaches. There are, nevertheless, a number of studies into different aspects of business marketing to facilitate our choice. The most notable ones are Sheth et al. (1988), Dwyer et al. (1995), Möller (1994) and Möller and Wilson (1995a, b), Möller and Halinen (2000), and Ward and Webster (1991). In addition to these the Journal of Business Research special issue: Contribution of 323 Singular customer relationships attended by relationship management personnel and influenced through other marketing activities. Dualistic focus: (i) encounter and event management, and (ii) life-cycle management Relationhip behaviour takes place in working markets; a “market for customer relationships” is implicitly assumed. Relationhips do not influence markets How to provide value and perceived quality for the customer, how to manage customer encounters, how to create and manage customer relationships, how to co-create value with customers? Inter-organizational business relationships characterized by economical exchange and use of power. Actors are dependent on one another and behave reciprocally; this is partly based on trust and creates trust. Trust is essential for relational commitment Actors’ behaviour is embedded in the channel environment, which is seen from a systemic, institutional perspective. The influence is reciprocal: the political-economy of a channel influences the actors and their relationships and actors’ behaviour influences and constitutes the channel context What forms of governance are efficient for what types of channel relationships? How is use of power related to the relationship efficiency? How does trust evolve and facilitate relationship development and commitment? Primarily organization-toorganization customer relationships; focus on winning customer order, i.e. supplier selection from a customer’s perspective Exchange takes place in the context of independent sellers and customers and working markets How to develop an optimal marketing program based on customer segmentation and the understanding of customers’ different buying situations and decision-making unit? This is the classical “marketing mix” dilemma applied to the business marketing context View of relationships and environment Questions asked Three interrelated sets of goals: (i) Understand and explain interorganizational exchange behavior and relationship development at a dyadic level in a network context; (ii) understand how nets of relationships between actors evolve, and (iii) understand how markets function and evolve from a network perspective. Managerial goal: gain a more valid view of reality through network theory Relationships exist between different types of actors: firms, government and research agencies, individual actors; not only goods but all kinds of resources are exchanged through relationships. Relationships are seen as vehicles to access and control resources and to create new resources Environment is seen as networks of actor relationships. Actor behaviour is highly embedded, i.e. specific actions cannot be understood out of their historical context. Firms learn and construct their environment through enactment; the actorenvironment relationship is reciprocal How are relationships created and managed; how do nets of relationships evolve, how can an actor manage these relationships and create a position in a net? Explain and understand relationships and their management. Managerial goal: provide tools for managing customer relationships recognizing the economic and relationship quality aspects and the life-time value of a relationship Theoretical goal: explain governance structures and dyadic behavior in channel context Normative goal: determine efficient relational forms between channel members Interaction and networks (and NRMb) Relationship marketing in BM (MRMa) Promote the efficiency of marketing activities through better buyer behavior-based segmentation and targeting. Special emphasis on nested customer segmentation, offering and sales targeting. Strong managerial emphasis Channel relationships Basic goals Research traditions characteristics Marketing management in BM Table I Profiles of the business marketing research traditions Service dominant logic 324 (continued) How is customer value (co)created; the role of knowledge and capabilities (“operant resources”) in value creation? Interactive customer-supplier relationships; both parties can be active. Exchange can take place in market or network context Provide a new perspective on understanding value creation. Provide a resource- and value-based foundation for a unified theory in marketing. Managerial goal: provide insights for the role of customers and distinctive types of resources (operant/operand) on value creation Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 325 Most research schools have fundamental questions; SDL is actually not an “asking approach” but a “proposing approach”. Does not provide a theory of marketing but a normative perspective how certain existing schools of thought should be utilized in value creation. Silent about the possible incongruity between value creation in market context vs network context Marketer-customer relationship provides the key focus. Relatively little emphasis on contextuality; recently network context is priorisized. Process perspective Journal of Business & Industrial Marketing Volume 24 · Number 5/6 · 2009 · 322 –336 Notes: a MRM ¼ market-based relationship marketing; b NRM ¼ network-based relationship marketing Limitations and “blind spots” Level/unit of analysis and contextuality Customer life-time value, customer encounters, relationship quality, internal marketing, empowerment of personnel, value-co-creation, key account management. In addition, to these RM have imported concepts from the social-exchange theory: trust, commitment, cooperation Goods are distribution mechanisms for service provision; customer is always a co-producer of value, company can only make value propositions through its offering. Capabilities/competencies are the key resources (operant resources) for both creating value propositions and rendering value out of them; thus knowledge and capabilities are the core source of advantage Buy-classes, buying center, buying phases and criteria; nested segmentation, marketing program, selling center Interaction processes, adaptation and investments into relationships, actor bonds, resource ties, and activity chains (ARA framework), relationship outcomes: efficiency and effectiveness, sociopsychological outcomes (expectations, mutuality, attractiveness, trust, commitment, satisfaction); nets and networks of relationships, network positions and roles; network capabilities Actor (organization, person), dyadic Firm, dyadic relationship in channel Individual customer, group or Primarily seller and buyer relationship, a net or network). organizations; in sales management context. Structurization perspective: segment, marketer-client Transactions are episodes in the relationship. Little emphasis on studies also individual sales agents the dyadic behavior and efficient and in the OBB studies members of forms of governance are influenced contextuality, sometimes the history long-term relationship. Emphasis on the embeddedness of relationships by the channel context and dyadic of a relationship is emphasized the buying center. Competitive in nets and networks, and their generally handled through behavior influences the channel markets assumption; in the OBB history - no understanding of context. Well developed theory on “experience”; generally implicit conscious assumptions about the present situation without history assumption about market as the “environment” in the politicalcontextuality of buying behavior dominant environmental form economy approach (organization, buying criteria and decision making); clear contingency perspective. Network level analysis evidently Silent about the context of Silent about customer relationships; Limited studies of the interaction relationships; implicit assumption of leaves out much of individual level static between channel context and actions. The IMP emphasis on the dyadic behavior; losing the political- markets. Some “evangelism” in historic understanding has provided form of belief & preaching the economy perspective strong descriptive tools; this has, virtuousness of relationship view however, deterred the development of more normative network management theory Service dominant logic Key topics/ concepts for business marketing No clear disciplinary background: early phase a response to “traditional marketing management”; later drawing on consumer behavior applications, social-exchange theory, and the interaction approach related to industrial network approach. Strong managerial and empirical emphasis Theoretically a synthetic approach combining from services & relationship marketing (themselves as pot-pourris) and the RBV and its capabilities (competencies) & knowledge-based extensions. Also network theory is mentioned, but not really utilized Primarily theory driven, tries to combine the economic and political aspects (power, dependency) of channel relationships. The tradition relies on (1) transaction cost theory, (2) social exchange theory, political economy, power and conflict in organizational sociology. The TCA provides the economic-perspective and the S-E the behavioral perspective Bases of power, uses of power and conflict behavior, interdependence, goal congruity, decision domains, environmental influence on dyadic behavior, transaction-specific investments, switching costs; trust and commitment; dyadic governance, dyad outcomes: efficiency, satisfaction, relational norms Both empirically and theory-driven; earlier influenced by channels research, organizational buying behavior, resource dependency theory, social exchange theory, and institutional economics; later by institutional theory, dynamic industrial economics, organizational sociology, and resource-based theory Interaction and networks (and NRMb) Relationship marketing in BM (MRMa) Dualistic background: (1) theory of monopolistic competition and the marginal utility principle (2) organizational buyer behavior utilizing social psychology and small group studies, and management decision-making approach Channel relationships Disciplinary background Table I Research traditions characteristics Marketing management in BM Do we really understand business marketing? Jaqueline Pels, Kristian Möller and Michael Saren Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 business-to-business-journals (JBR, 1997) covering the research published by that date in the IMM (LaPlaca, 1997); JBIM (Johnston and Lewin, 1997); JBIM (Lichtenthal et al. 1997); and Advances in Business Marketing and Purchasing (Plank, 1997) and the recent article “The essence of business marketing theory, research and tactics: contribution from the Journal of Business-to-Business Marketing” by Lichtenthal et al. (2008) and commentaries to this in the same issue by LaPlaca (2008), Dant and Lapuka (2008), Honeycutt and Thelen (2008), and Malhotra et al. (2008) are very useful. Based on this material we selected the following research traditions for our analysis: Marketing Management School (MMS); Channels Research Tradition (CRT), Relationship Marketing (RM – here narrowly defined), the Interaction and Network Approach (INA) to business marketing, and the Service Dominant Logic (SDL). This selection is partly subjective; one could, for example, have included transaction cost analysis separately, but we have addressed it under the broader umbrella of the Channels Research. One may also ask if we are missing the organizational buying behavior and segmentation studies; for the sake of conciseness these are included in the Marketing Management School. Although none of these research approaches is a theoretical monolith, (they actually overlap quite a bit), they do have important differences in their basic assumptions, intellectual goals, and how they frame the exchange relationships and their environment; in essence in the understanding they provide of business marketing. Ginter, 1987; Kotler, 1967, 1971). A key assumption is that there exist working markets with primarily independent actors. Within business marketing the MMS covers several important themes, especially organizational buyer behavior, segmentation, product management, especially NPD, and sales management (LaPlaca, 1997, 2008; Lichtenthal et al., 1997). The core aspect is the nested character of organizational buying, involving issues like the structure and roles in a buying center, the decision making unit in charge of organizational buying, and research on the types of buying situations and the choice criteria used in these, and the processual character of supplier selection. These provided the foundation for the early business marketing management (Möller, 1985). Organizational buying behavior informs customer segmentation, and product and sales management. In a nutshell, understanding of the organizational buying behavior was seen to provide the basis for offering planning involving targeting (developed through segmentation and product development) and the planning of sales and other marketing communications activities. The Market Planning for New Industrial Products book by Choffray and Lilien (1980) is an excellent example of the combination of organizational buying insights and segmentation principles for deriving optimized customer offering solutions. In spite of its success the marketing management approach contains notable limitations. By assuming primarily independent exchanges between marketers and their customers, the MMS is silent about the buyer-seller interaction and relationships. This is clearly a major limitation. Moreover, it does not provide any new ideas about the environment of business marketing activities but assumes a working market. Comparison of the major research traditions of business marketing The selected research traditions are analyzed by using the criteria discussed in the previous section. Some problems in comparing the approaches can arise from the relatively heterogeneous foundation of both the Channels Research Tradition and the Relationship Marketing School. An alternative would have been to divide these into more homogeneous sub-schools. We wanted, however, to emphasize parsimony in the investigation of research traditions. The profiles of the traditions are summarized in Table I. Channels research tradition in business marketing Since late 1970s, researchers interested in industrial marketing and marketing channels started to develop frameworks and theories focusing on dyadic relationships between business marketers and channel members. Research in the channels research tradition (CRT) involves examining how actors in a marketing channel behave, and how and why various forms of channels evolve. The basic normative goal is defining efficient relational forms between channel members. Relationships are viewed as interdependent and reciprocal. CRT tradition is primarily theory-driven and attempts to combine the economic, political (power, dependency) and social aspects (cooperation, trust, commitment, communication, and conflict behavior) of channels. The tradition relies on transaction cost theory, social exchange theory, political economy and power and conflict in organizational sociology (Stern and Reve, 1980; Heide and John, 1990, 1992; Anderson and Narus, 1990; Wathne and Heide, 2004). Three essential points are offered: 1 both economic and political aspects and their interactions must be considered in examining channel behavior; 2 a focal channel/dyad is the recommended unit of analysis; and 3 complex relationships can-not be understood outside of their context or environment, as the “dyadic behavior” and “channel” are reciprocally interrelated (Heide, 1994; Möller, 1994; Möller and Halinen, 2000; Rindfleisch and Heide, 1997; Wathne and Heide, 2004). Marketing management school in business marketing The Marketing Management School (MMS) evolved among marketing researchers from late 1950’s onwards. It forms a marriage between the “marketing concept” (firms exists to satisfy customer wants at a profit) and the perspective of achieving this goal through management of the “mix” of competitive marketing parameters, originally the “4 Ps”. The tradition crystallized into a paradigmatic research approach which has between the 1960’s and 1990’s seen to be dominating the majority of research into marketing (Constantinides, 2006; Sheth et al., 1988; Vargo and Lusch, 2004). The MMS is essentially a normative theory of the development of optimal marketing management solutions. In solving the key questions (optimal marketing mix, segmentation solution, and offering positioning), the school relies on the monopolistic theory of competition and marginal utility theory, and on being informed about customer preferences and responses (Chamberlin, 1965, first published 1933, Dorfman and Steiner, 1954; Dickson and 326 Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 Key results of the CRT cluster around opportunism, trust, commitment and relationship continuity and linkages between the context of the dyad and the relational behaviour in the dyad. The channel environment is described through the political-economy framework (Stern and Reve, 1980), which provides useful notions of the characteristics of this environment. One should note, however, that the channel context/environment-dyadic behavior linkage, modelled through the political-economy framework, have received relatively little empirical attention (see, however, Wathne and Heide, 2004). managerial goal is to sensitize managers to the embeddedness and dynamics of management in a network context. Both exchange relationships and networks form the unit of analysis. Relationships exist between different types of actors, and are seen as vehicles for accessing and controlling resources, and creating new resources in the relationships. The key questions include: “How are relationships created and managed?”, “How do networks of relationships evolve?”, “How can an actor influence these relationships and create a position in a network?”, and “How do networks function and evolve?” (see, Ford, 1990, 1997, 2002 for compilations of INA research). The approach is influenced by channels research, resource dependency theory, social exchange theory, evolutionary economics and sociology, and resource-based theory (Axelsson and Easton, 1992; Möller and Halinen, 2000). Interaction processes, adaptation and investments in relationships, actor bonds, resource ties, activity chains, relationship outcomes, networks of relationships, network dynamics, and embeddedness represent key constructs. More recently, the management perspective in the network context has gained focus (Möller et al., 2005; Möller and Svahn, 2006; Möller and Rajala, 2007; Ritter et al., 2004). The approach emphasizes contextuality and time, where singular events or relationships cannot be understood without knowledge of their environmental context and evolution. The environment is not transparent, and actors perceive its structure and meanings and learn about them through enactment (Weick, 1969, 1977, 1995). On a macro level network theory provides a competing description for the market view-based theory of industrial organization (Porter, 1980). This IMP-research emphasis on historic understanding, while being strong on descriptive analysis, has stalled the study of network management. The approach is still relatively silent about the management in business networks. The notable exception is the work by Möller and his group and Ritter and colleagues. Relationship marketing The key aspect of relationship marketing (RM) in the narrow sense is the focus on marketer-supplier relationships and the dynamics of these relationships. Both the seller and customer can be active, which is the key to understanding their behaviors and relationship dynamics. The approach is influenced by services marketing, the interaction approach in business marketing, channels research, and the ideas of database and direct marketing (Möller and Halinen, 2000; Sheth and Parvatiyar, 2000). In addition, Sheth and Parvatiyar (1995) included aspects of consumer behavior research as the roots of RM. This variety of roots has consequences for the consistency of the developing RM theory. Möller and Halinen (2000) contend that RM actually consists of two theoretically different and distinctive approaches: market-based RM (MRM) and network-based RM (NRM). Marked-based RM assumes a market of potential customer relationships with relatively low actor interdependence and interaction intensity, and consequently, relatively low switching costs. In business marketing applications this approach is related to the use of CRM tools for targeting marketing activities, managing the buyer- seller encounters, and the customer life-cycle value (Ehret, 2004; Gummesson, 2004). Another important theme is the analysis of the relationship value and its antecedents (Ulaga, 2003; Ulaga and Eggert, 2006). Network-based RM assumes a network of interdependent, often reciprocal relationships involving relatively complex buyer-seller interactions leading to mutual dependence and higher switching costs. This perspective is discussed under the interaction and networks approach. The market-based relationship marketing does not address the context or environment of the buyer-seller exchange and its influence on the relationship. Competitive markets with several independent buyers and sellers are assumed. Although emphasizing collaboration in value creation and dialogue as a means of achieving this (Grönroos, 2004; Gummesson, 1997); there is relatively little empirical evidence on the dialogical practices in the business marketing context. The tradition examines increasing commitment levels of customer roles (e.g. the “ladder of loyalty” by Christopher et al. 2002) but the perspective is primarily on marketer’s activities. Service dominant logic The evaluation of service dominant logic (SDL) approach (Vargo and Lusch, 2004, 2006, 2008) is difficult for a number of reasons. As the newest contender among the research traditions in marketing SDL has not had the time to produce much empirical research, and seems to form an orientation or programme which has not had sufficient time to become a “tradition”. On the other hand, the SDL has raised strong interest and discussion about the theory development in marketing and merits our attention in this paper. The focus of SDL is on gaining greater understanding of marketing as a value co-creation process. The approach suggests that all value creation is service-based and grounded on the co-creation of value between the marketer and the customer. Marketers can only provide value propositions, embedded in offerings, and it depends on the motivation and capability of customers to render benefits, i.e. value out of offerings. As such the approach shares the interaction perspective of customers and suppliers with the interaction and network tradition. Another key aspect is the role of capabilities / competencies, these are the key resources (“operant resources”) for both creating value propositions and rendering value out of them; thus knowledge and capabilities are the core source of competitive advantage. In Interaction and networks approach The interaction and network (INA) is mainly associated with the work centered on the IMP Group (Anderson et al., 1994; Axelsson and Easton, 1992; Ford, 1990; Håkansson and Snehota, 1995). The goals are to understand and explain the functioning of business markets from the perspective of the interactive buyer-seller and other actor relationships, as well as the networks these relationships constitute. The broad 327 Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 other words, the resource-based view of the firm and its marketing related application, resource advantage theory, provides a strong foundation for the SDL. While emphasizing marketing as a social and economic process as a context of the dyadic level value creation, SDL does not yet articulate this process and its interaction with the dyadic exchange which is one of the strengths of the channels tradition. Vargo and Lusch advocate that the SDL should form the basis of a unified theory of marketing. It can be seen more in terms of an orientation, however, a perspective providing guidelines how certain existing schools of marketing should be utilized in normative fashion in value creation. Similarly to INA, SDL adopts a network approach to conceptualizing the environment. opportunities. These studies reflect the constructive view of environment adopted by the network approach. It should also be pointed out that within both the CRT and network approach the organizational behaviour and managerial action is understood to be constrained by the links that the firms have in the channel and network environment. Within the service dominant logic approach the view on management and decision-making concentrates on the service providercustomer value co-creation process, but the management does not receive any elaboration or theorization us such. The relationship marketing focuses primarily on the dyadic buyer-seller relationships and assumes, often implicitly, a market context. As such the RM is, somewhat paradoxically, close to the traditional Marketing Management School. It assumes a given market environment with numerous customers, having heterogeneous preferences. Theoretically each customer can be handled in a unique manner; this is an optimization issue between personalization benefits and costs. The key difference between the RM and MMS is that the former conceptualizes and examines also the relationships, the factors influencing them as well as relationship dynamics. Both adopt, however, a normative perspective on management. Management is not examined or theorized as such, it is assumed to carry out the suggestions of either the MMS or RM suggestions. Under working market conditions these can, theoretically, be conceived as optimizing decisions (Möller, 2006). Implications of research traditions for business marketing We can draw several significant conclusions from the research tradition analysis. It is evident that each tradition provides a particular and partial view of its focal phenomena, dependent both on its ontological and epistemological assumptions and the issues researchers have chosen to take to the foreground. This suggests that managers should pay attention to the underlying assumptions and limitations of each research tradition imbedded in the marketing modes they adopt. The results also challenge the rather all-encompassing view many authors are granting to the Relationship Marketing School. It is evident that the way business marketing relationships are understood and examined varies between the relationship marketing, channels research tradition, interaction and network approach, and service dominant logic which all examine customer-supplier relationships. Risking broad generalizations, the CRT and INA view exchange relationships in their institutional and networks environment and pay attention to the interaction between these layers. That is, how the channel environment influences dyadic business relationships or how the network positions and roles of actors influence their dyadic relationships. As such these approaches adopt the Giddensian structurization view (Giddens, 1984). Where the environment is not an external, “given” entity but constructed by the actors which populate it. This view seems to be shared by the service dominant logic, as it sees marketing as a “social and economic process” and resources as “becoming, not being”. The SDL does not, however, develop this view further, but focuses on the value co-creation process between customers and service providers. The CRT is relatively silent about management and decision-making. By emphasizing both the economic and political aspects in explaining channels behaviour the tradition presumes a “politico-economic” type of manager who considers these aspects when making sense of their environment (the political-economy of the channel) and in making decisions about supplier / customer choice and relational contracts and behaviour. As such the view is not only about “win-win”, trust and commitment but, also, involves the use of power and conflicts in business relationships. Recent work within the network approach goes deeper in understanding managerial behaviour. Henneberg et al. (2006) have examined managerial cognition, that is, managers’ “network pictures and network theories”, and their sense making processes in a network context; and Möller (2009) suggests how actors’ network positions and roles are related to their environmental learning A configurational approach From the previous section’s comparative analysis, of the diverse research approaches to the understanding of business marketing, it is clear that there are multiple interpretations of how business marketing environments operate. For example, the Marketing Management School views business marketing environments as markets in which transactions occur, whereas the relationship marketing scholars see markets as the environment for relationships. The Channel Research and Industrial Network approach both challenge the market notion and develop theories of channel systems and “markets as networks”. It is important to note that the view on environment influences considerably how the schools treat the managerial action and decision making. Another significant point from the previous section is that each research approach shows consistency between its disciplinary background and theoretical emphasis, goals and driving force, view of the nature of the environment, and the level and unit of analysis. That is, they are relatively logical given their goals and premises. As such it is futile to argue which one is more “correct” in its view of the business marketing environment. On the other hand, as discussed in the introduction, even though each research tradition seems a valid alternative, recent content analysis of the major business marketing journals show that there is an increase in relationship related articles (Dant and Lapuka, 2008; LaPlaca, 2008). This notion contains a problem, however. The relationship marketing practices seem to vary from “near transactional”, through the “market-based relationship marketing” to “networks-based relationship marketing”. Last but not least, empirical studies in the business marketing indicate that firms employ a combination of classical transactional marketing and a range of relational practices (Pels and Snehota, 1995; Binks and Ennew, 1996; 328 Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 Coviello et al., 2002; Pels et al., 2004; Benson-Rea, 2005; Lefaix-Durand, 2008). In short, so far we have shown that there is a set of valid alternative research traditions having varied views and understanding of the business marketing environment. Our analysis also revealed that the generic or “received” view of relationship marketing is misleading. The content and meaning of RM varies considerably across the channels research, market-based relationship marketing, and the interaction and network approach. Moreover, empirical studies indicate that companies are using several modes of marketing. We address the puzzle by developing a conceptual framework that helps to understand the diverse ways firms relate to their markets (Day and Montgomery, 1999) and allows for all marketing modes to co-exist. For this we propose the configurational approach for marketing, drawing on the configurational approach from organization theory and the Neo-contingent perspective from the strategy literature. causality between environment and strategy to a holistic multidimensional approach where strategies are the manifestation of a constellations of relationships between keyforces[5] (Meyer et al., 1993). Third, the importance assigned to the role of managerial beliefs in decision making, i.e. managerial assumptions are considered as one of the forces that lead to the structuring of the configurational profiles rather than considering them as filters to the correct understanding of the environment (Miles and Snow, 1978). Furthermore, these authors provide conceptual frameworks to explain the multiplicity of coexisting strategies/structures found in their studies. A gap in the marketing discipline? As we have shown in the previous sections, there is neither a unified research approach nor a unique business marketing practice. Furthermore, no framework has been developed to help understand the reasons for this occurrence. One of our concerns here is that many of these marketing modes assume a “quasi-deterministic underpinning” and part of the problem is that they do not make this explicit. Thus a first point to acknowledge is that business marketing environments are not monolithic or homogeneous. They are complex spaces which some have described as markets, some as channel systems, and others as networks. Furthermore, sustained in the CA, we shall argue that firms do not simply react-to or engage-in a pre-existing environment, but that their actions make or, at least partially, shape it. We contend that the configurational approach will allow us to argue that the relational-interactive perspective is not a response to the business marketing environment but, rather, one of the possible strategic types or configurations. This is significant because “business marketing ¼ relationship marketing” is, to a great extent, taken for granted (Dant and Lapuka, 2008; LaPlaca, 2008). This close “matrimony” restricts researchers and manager attention to other modes of marketing and the benefits they can offer. The emergence of the configurational approach and the Neo-contingency perspective Snow and Miles (1983) suggest a Neo-contingency perspective that recognises that industry, strategy and management philosophy interact as forces[3] that both enable and constrain organizational behaviour. They develop a typology of four strategic types[4]: 1 defenders; 2 prospectors; 3 analyzers; and 4 reactors. Similarly to Miller and Friesen’s (1977, 1978) studies, their research indicates simultaneous presence of strategic types within the same industry (Miller and Friesen, 1978, p. 120). In 1986, Miller seeks to integrate the contrasting claims of the accepted paradigms in the field of management. Miller recognises the contribution of each school of thought arguing that each paradigm suggested the predominance of a given force (which he names imperative), however, he argues that what really occurs is an interplay between all of them. Miller develops the configurational approach as an encompassing, holistic, framework which integrates the tensions of four imperatives: strategy, structure, leadership and environment (Miller, 1986, 1987, 1996). The tensions between these forces restrict organizational variety and give rise to specific configurations. Miller (1986, p. 236) defines configurations as “tight constellations of mutually supportive elements. The presence of certain elements can thus lead to the reliable prediction of the remaining elements” (Miller and Mintzberg, 1984). In short, the configuration approach and the Neo-contingency perspective are equivalent frameworks. Snow and Miles overlays are equivalent to Miller’s imperatives (see first two columns in Table II) while the patterns of behaviour or strategic types are equivalent to the archetypes or configurations. The relevance of Miller and Miles and Snow work is in their fundamental shift to a configurational approach. In this shift of logic they depart from the notion of “one-correct approach” towards accepting multiple valid strategies of interaction. There are three central tenets of the configurational approach. First, the acknowledgment of equifinality, i.e. that there is more than one way to succeed in each type of setting. Second, the adoption of a holistic view, i.e. the shift from the contingent concept of Developing a configurational approach for marketing (CAM) This section will introduce the configurational approach for marketing (CAM). CAM is a conceptual framework that helps identifying possible configurational profiles (i.e. identifying different equivalently valid ways of relating to a business environment). As a consequence, CAM helps understand why firms relate to the business marketing environment with a multiplicity of marketing modes. Furthermore, it will show that the BM-RM matrimony is but one possible configuration. Approaches towards developing configurations: typology versus taxonomy In developing their typology of strategic types, Snow and Miles (1983) identify three key overlays: 1 industry; 2 management philosophy; and 3 strategy. Similarly, Miller (1986, 1987) identifies four imperatives: strategy, structure, leadership and environmental as the sources of his configurations. When both approaches are 329 Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 Table II Imperatives of the marketing configurations Miles and Snow (1978) – overlay Miller (1987) – imperative Current paper (2008) –imperatives Management philosophy Industry Strategy Leadership Environment Structure – strategy Frame of reference Environment-organization relationship Marketing practice organizational theorists (i.e. Bourgeois, 1980; Weick and Daft, 1983) and strategic management scholars (i.e. Smircich and Stubbart, 1985; Mintzberg, 1987) questioned whether an external objective environment existed. Different positions emerged. A first group believed in environment determinism. These scholars argued in favour of attaining an optimal organizational-environmental fit – for instance – through a SWOT analysis (Andrews, 1971). However, they did recognize that bounded rationality (Cyert and March, 1963) hindered the possibilities of achieving this goal. A second group of scholars argued that the environment is a social construction (Berger and Luckmann, 1967) that there is no unequivocal reading; rather there are multiple possible interpretations of events. Interpretation is the process through which information is given meaning and actions are chosen (Daft and Weick, 1984). Along these lines, Smircich and Stubbart (1985, pp. 725-6) argue that there are no threats or opportunities out there in the environment, just material and symbolic records of action. A strategist who is determined to find meaning creates relationships by bringing connections and patterns to action, making imaginary links between events, objects and situations so that they become meaningful for the members of an organization. This view is aligned with Weick’s (1977) concept of enactment. On discussing the environment Miller lists a set of environmental dimensions (e.g. dynamism, uncertainty, concentration, technology). Similarly, Miles and Snow use the industry as the overlay recognizing it as a proxy for a number of important characteristics of an organizational environment. This paper departs from both these choices and, supported by the previous discussion on the subjective nature of the environment, argues that there is no external environment that acts as an objective imperative. Therefore the nature of the environment is not given and the relationship between environment and organization can be manifested in many ways. Therefore EOR is suggested as the appropriate imperative that relates to choice and decision making and that will influence the constitution of the configuration. Daft and Weick (Daft and Weick, 1984; Weick and Daft (1983) develop a model of the organization’s interpretation system. Given that they have developed a clear operationalization of it and that they have tested it, the CAM will be grounded on their work. Daft and Weick’s model is a matrix based on two contrasting assumptions of how the nature of the environment is envisioned and two opposing levels of organizational intrusiveness. Their model suggests four organizational types: the glancing, the enacting, the staring and the discovering (see Figure 1). compared it is clear that the natures of the imperatives/ overlays are equivalent (see rows in Table II). More recently, when advising how to research the property of configurations, Miller (1996) recommends employing a number of indicators of configurations and creativity in deriving new operationalizations. We hope to comply with both of Miller’s challenges and will suggest adopting the following imperatives in developing the marketing typology (see third column in Table II): . frame of reference (instead of management philosophy or leadership); . the environment-organization relationship (rather than industry or the environment); and . marketing practice (instead of strategy or structure). In the next section we develop the rationale behind each choice. The frame of reference (FOR) In both Miller and Miles and Snow’s frameworks it is clear that the leadership imperative and the managerial philosophy overlay are central to the structuring of the configurations (see first row in Table II). However, more current management literature suggests a shift from the CEO to the frame of reference (Krepapa and Berthon, 2003[6]) of the top management team[7] (Jablin, 1997; Child, 1972, 1997; Sutcliffe and Huber, 1998; Prahalad, 2004). Given the clarity with which Shrivastava and Mitroff (1983, 1984) define frame of reference, the fact that they have developed an operationalization of the construct, that they have tested it and that they developed a frame of reference classification the CAM will be grounded on their work. Shrivastava and Mitroff (1983, p. 163) define frame of reference as the assumptions that underlie decision-making in organizations, providing the conceptual schemes, models, or theories and cognitive maps that the inquirer uses to order all information and to make sense of it. They identify six components of a frame of reference which they consider useful to study managerial assumptions: 1 cognitive elements; 2 cognitive operators; 3 set of reality tests; 4 cognitive maps of the domain of inquiry; 5 degree of articulation; and 6 metaphors. From their empirical studies four organizational types are elicited: political, entrepreneurial, bureaucratic and professional (see Figure 1). The environment-organization relationship (EOR) The second imperative relates to the external related factor (see second row in Table II). Dill (1958) was among the first to highlight the importance of environmental factors and their constraints to the structure of organizations and the behaviour of organizational participants. Two decades later Marketing practice (MP) CAM agrees with both Miller and Miles and Snows on the importance of adopting a managerial decision related factor (see third row in Table II) and will adopt a marketing-related 330 Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 Figure 1 The CAM conceptual framework combining both the European and North American schools operationalizing them into a typology of marketing modes (Coviello et al., 1997; Brodie et al., 1997, 2008). More importantly, the CMP group has conducted empirical studies (e.g. Coviello et al., 2002) which have lead to taxonomy of marketing practices and for these reason the CAM will adopt the CMP’s taxonomy. The CMP categorization is based on two constructs[8]: the relational exchange and the managerial activities. Nine underlying dimensions support these two constructs: five related to relational exchanges (purpose of exchange; nature of communication; type of contact; type of exchange; and formality of exchange) and four dimensions associated with managerial activities (managerial intent; managerial focus; managerial investment; and managerial level of implementation). For each underlying dimension the CMP group has developed five indicators related to the five marketing modes: transaction marketing, database marketing, e-marketing, interaction marketing, and network marketing. Though the CMP initial approach was that of a typology their most relevant conclusions initiate when there is a shift, in 2002, towards a taxonomy derived from the empirical data collected. When analysing the data of developed countries (i.e. Coviello et al., 2002) three clusters emerge: the transactional, the relational and the transactional/relational (here after pluralistic) cluster. When the studies are conducted in emerging economies (i.e. Argentina, Russia and Ghana) a fourth (low formal marketing cluster) was identified (Pels et al., 2004; Wagner and Pels, 2004; Dadzie et al., 2008) (see Figure 1). This shift from the five marketing modes (which were typologies derived from the research traditions) to the marketing practices (which are taxonomies derived from the managerial responses) is central to our argument. It highlights decision. There have been several pluralistic classifications of marketing modes/practices (i.e. Arndt, 1979; Webster, 1992; Möller, 1994; Coviello et al., 1997; Day, 2000; Möller and Halinen, 2000; Sheth and Parvatiyar, 2000; Coviello et al., 2002). Some of these scholars differentiate only between transactional and relational marketing (Jackson, 1985; Grönroos, 1991; Webster, 1992; Håkansson and Snehota, 1995) or traditional good-centric and emerging servicecentred (Vargo and Lusch, 2004) while others are more subtle and distinguish between traditional marketing model, dyadic model and domesticated markets model (Arndt, 1979), or transactions, repeated transactions, long-termed relationships, buyer-seller partnerships, strategic alliances, networks and vertical integration (Webster, 1992), or transaction marketing, short-term dyadic relationships, longterm relationships and networks (Möller and Wilson, 1995a, b) or between transaction marketing, relationship marketing and plural marketing (Coviello et al., 2002) or transactional, narrow and broad relationship marketing (Sheth and Parvatiyar, 2000). In order to select which of the above classifications to adopt this paper was informed by Miller’s (1986, p. 237) criteria to select the strategic dimensions “were, of necessity, somewhat arbitrary . . . they had to be sufficiently specific to be both identifiable and controllable by managers, and general enough to apply to most industries. . .dimensions had to exhibit broad coverage in two aspects: they had collectively to exhaust a considerable range of possible strategies and they had to encompass many specific elements that could richly characterize the strategies of most businesses”. The contemporary marketing practice (CMP) builds on a vast literature review which seeks to develop an understanding of how firms relate to their markets in a manner that integrates both traditional and modern views of marketing as well as 331 Do we really understand business marketing? Journal of Business & Industrial Marketing Jaqueline Pels, Kristian Möller and Michael Saren Volume 24 · Number 5/6 · 2009 · 322 –336 the managerial nature of the configurations and the role of managerial choice. examined through three interrelated but distinctive schools: CRT, RM, and Network. Furthermore, although each of the research traditions provides some insight into specific managerial and firm behaviors in relation to their market contexts, none of these approaches help understand why there are multiple ways firms relate to their markets. In order to address the question why particular firms engage in certain marketing modes we have constructed a contingency approach for marketing framework. Sceptics might ask “what is the use of it?” and be answered by Snow and Miles (1983, p. 256), who asked and answered the question: “so what – where will this (configuration) approach lead us?”. In their view, even a rudimentary general framework, employing no more than their three overlays is of great value: for managers it provides a powerful diagnostic tool and for academics it is particularly helpful in theory construction. From a managerial perspective The CAM frame suggests that managers should carefully examine the internal logic of their marketing-related configuration. Performance should be enhanced if the three elements – managerial frame of reference, organization/environment relationship, marketing mode – are coherent. From an academic point of view, we contend that our configuration approach for marketing presents a – holistic framework, which suggests interplay-coherence – between strategic choice, understanding of the organizationenvironment relationship and marketing decisions. It permits other configurations to co-exist beyond the relational-interaction configuration and thus allows for other marketing approaches to the business marketing environment beyond the RM-BM matrimony. CAM provides a conceptual framework that can host the “puzzling” empirical results of the CMP and other studies quoted in the introduction of this paper which all shows that there are multiple ways that firms relate to their business marketing environment. How do imperatives interact to influence configurations? The previous sections have explained the criteria for selecting the three chosen imperatives and listed the related taxonomies and typologies developed by renowned colleagues. These are represented graphically in Figure 1. The CAM framework is a synthesis of the three imperatives and their related typologies and taxonomies. Its function is to help identify viable configurational profiles. The next step is to describe how configurational archetypes are developed. CAM seems to suggest that the combination of the diverse cells in Figure 1 might allow an infinite number of configurations in the business marketing environment. This is not the case. Nickerson and Zenger (2002) introduce the coherency principle[9] which suggests that all elements of the configuration must coherently exist without conflict. Thus, when the configuration is limited by the coherency principle, the prevalence of a limited set of options is not unexpected. This statement is consistent with Desarbo’s (2005) argument that organizational configurations do not result in a continuous set of options but can only be categorized into a small number of types. In other words, each configurational profile must represent a coherent combination between the top management’s frame of reference, the environmentorganization relationship and the marketing practice. This paper does not have the space, or the intention, to fully develop the configurational marketing profiles; however, two examples are provided: 1 An organization with a professional frame of reference would have a discovering organization-environment relationship and a transactional marketing practice. 2 An organization with an entrepreneurial frame of reference would have a enacting environmentorganization relationship and a relational marketing practice. Future research We do argue that the different marketing modes represent possible alternative valid configurationial profiles in the business marketing environment. As a result, from this perspective, the relational-interaction mode, (see previous example #2), is only one of possible marketing configurations. The CAM framework also offers important guidelines for future research. First, we have limited ourselves to identify the FoR, EOR and MP typologies from existing literature and used these to construct the CAM framework. More empirical studies are called for in order to provide stronger grounds for the postulated FoR, EoR and MP typologies. Moreover, we need programmatic research addressing the existence of various marketing practice profiles to understand more fully why these occur and how effective are they in their own contexts. One way to proceed is to expand the contemporary marketing practices research. The CAM configurations, could be sampled, once operationalized the underlying dimensions, and their root conditions could then be examined to explain why specific profiles emerge. By complementing this with the performance measures we could pursue the relative effectiveness of different marketing practices profiles in their context. The briefly sketched approach follows the logic of quantitative analysis and does not capture the dynamics of constructing different marketing practice profiles. This could be addressed with carefully designed longitudinal case-study designs. One should try to identify firms operating in a same field but pursuing different marketing practices and analyze Conclusion From our analysis and typology of the major research traditions we can see that each one is useful for specific purposes, domains and activities and that furthermore the mainstream approaches of marketing management and relationship marketing schools do not have any articulated theories of the context or environment of business marketing activities but assume and rely on the notion of working markets. We have also seen from our review of the major research traditions that this environmental view is challenged by both the channels research and the network approach which offer well-articulated theories of the environment and also address the interactive relationship between actors and “environment” through the structurization concept and the social construction view of networks. 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Corresponding author Jaqueline Pels can be contacted at: [email protected] To purchase reprints of this article please e-mail: [email protected] Or visit our web site for further details: www.emeraldinsight.com/reprints 336