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Transcendental Marketing: A Conceptual Framework and Empirical Examples Fredrik Nordin, Linköping University Abstract This article introduces the concept of transcendental marketing, which is an emerging approach to marketing with the potential of attracting and keeping customers. In an attempt to develop theory around the concept, it is illustrated with empirical examples and propositions are developed regarding antecedents, contents, and outcomes of transcendental marketing. Introduction A number of different approaches to marketing have emerged over the last decades in practice as well as in academic texts. Arguably one of the most noteworthy changes in marketing has been a move away from a transactional approach, where the customer is manipulated and products pushed onto the customer, to a relational approach, where trust, knowledge sharing and mutual gains are emphasized (Grönroos, 1994, O'Malley and Prothero, 2004). The relational approach, it is frequently posited, will result in more loyal customers, decreased price sensitivity, and the creation of opportunities for up-selling and cross-selling. Thus, it is sometimes seen as a more efficient and effective marketing approach than alternative approaches (Boulding, et al., 2005, O'Malley and Prothero, 2004). However, the relationship approach to marketing has also been criticized; e.g., because it is not particularly useful in mass-markets (Tynan, 1997) where a low price is seen as most essential to many customers. Some authors propose that customers increasingly view relationship marketing as yet another superficial marketing tool used by their suppliers (O'Malley and Prothero, 2004) in an attempt to lock them in (Rowe and Barnes, 1998). Contemporary customers, it is argued, are knowledgeable and critical and require that their suppliers are honest and authentic in their behaviour and communication (Bass and Steidlmeier, 1999). Many customers are sceptical when their suppliers attempt to “sell relationships” (O'Malley and Prothero, 2004) and value a low cost higher than most other aspects of products and services they buy (Agndal, et al., 2007). The purpose of this article is to start conceptualising an emerging approach to marketing which is here named transcendental marketing. Transcendental marketing is a logical extension of what has been termed transcendental leadership (see, e.g., Cardona, 2000, Sanders III, et al., 2003) and which has several fundamental differences (as well as similarities) in comparison with transactional and relational marketing approaches. By drawing on this concept and insights from two empirical cases, a number of propositions concerning transcendental marketing are introduced, focusing on its antecedents, contents and consequences. The propositions are intended to serve as a baseline for further investigations into this topic. Transcendental marketing defined Transcendental marketing is fundamentally different from existing approaches to marketing in a number of ways. It builds on the concept of transcendental leadership which according to Cardona (2000) is concerned with the leader’s followers’ personal development and, more specifically, their transcendent motivation; to do something for others. Transcendental leadership is defined as “a contribution-based exchange relationship” where “the leader 1 promotes unity by providing fair extrinsic rewards, appealing to the intrinsic motivation of the collaborators, and developing their transcendent motivation” (Cardona, 2000). Drawing on Cardona’s work, it can be suggested that one of the most fundamental characteristics of transcendental marketing, would be that it puts relatively strong emphasis on transforming or developing customers; i.e. to develop their identity and world-view. Transcendental marketers (as well as transformational and transcendental leaders more generally) seek to develop their customers (or more generally: followers), but only under the condition that this development is aligned with intrinsic motivations of the customers (followers). Transcendental marketing is also about moral uplifting of customers in line with the companies’ values and vision (cf. Cardona, 2000). Central for the transcendental marketing approach put forth here is the aim of inspiring, energizing, and intellectually stimulating customers, while simultaneously making good business, in line with the ideas of transformational leadership (see, e.g., Bass, 1990). In contrast to most marketing approaches, thus, transcendental marketing is an approach which seeks to educate customers, e.g., about the products offered. What is particularly distinct here is that in this education effort, it also envisions some kind of higher-order values related to these products, and seeks to develop the customers’ transcendent motivation: the motivation to do things for others (Cardona, 2000, p. 205). The term transcendental is central for our understanding of the transcendental marketing approach. Drawing on the work of Kant (1997), Sanders III et al., define it as ”whatever an individual’s mental and spiritual nature conceives as above experience or beyond ego” (Sanders III, et al., 2003, p. 22). Spirituality or anything “beyond ego”, thus, are such higher-order values that transcendental marketers focus on, in addition to values more intrinsic to the product offered. In contrast to transformational leadership, transcendental leadership is more concerned with intrinsic motivations of stakeholders, which the stakeholder may or may not be aware of, and avoids manipulation (cf. Cardona, 2000). Transcendental marketers always look after the interest of their customers, based on a genuine interest and a desire to serve. Hence, if a transcendental marketing approach is used there is a lower risk that customers are feeling fooled (see O'Malley and Prothero, 2004, Rowe and Barnes, 1998). The transcendental approach has the potential to create a sense of unity (Cardona, 2000) between the provider and customers, and this may contribute to the provider’s competitive advantage. The higher-order values transcendental marketers focus on - e.g., spiritual values or concern for the environment - may also contribute to a more sustainable competitive advantage. The reason is that such values are normally quite stable and can function as shock absorbers against technological changes and trends in the marketplace. People tend to stay loyal to values they believe in. The strong concern for higher-order values is a distinctive feature of transcendental marketing. Transcendental marketing in comparison with other approaches In comparison with two of the most prominent previous approaches to marketing transactional and relational marketing - there are both similarities and differences. To begin with, just like relationship marketing (see, e.g., Grönroos, 1994), transcendental marketing has a long-term focus, albeit in a slightly different way. For transcendental marketers, the longer perspective is not directly concerning the relationship between buyer and seller but rather between the buyer and the higher-order values promoted by the transcendental marketer. In its operational marketing activities, firms that have adopted a transcendental marketing approach may very well have a short-term orientation, just like those where a transactional marketing approach is practiced; with each customer interaction being short and 2 seldom repeated. However, this interaction is embedded in a longer-term concern for higherorder values; a concern that is shared by the provider and the seller. This shared concern may lead to a kind of unity, or longer-term indirect relationship between them. Developing more direct long-term relationships with buyers as a means of competing is, however, not accentuated here in the same way as it is in relational marketing. Central for the transcendental approach is the connection to the higher-order values; which may function as a foundation for a longer term indirect relationship. Moreover, since transcendental marketing is founded on a belief in certain higher-order values, it is in a sense an “inside-out” approach to marketing. Firms that are working according to transcendental marketing principles often build their existence and strategy around certain company-internal values, such as concern for the environment. Although such values may be shared with their customers, the whole business and its marketing activities are founded in these internal values. These values can be described as standardised as they are not adjusted for individual customers. Transcendental marketing, thus, is ideological and like most ideologists, transcendental marketers work from the inside and outwards. They first create a product based on their own desires and needs and then present this product to customers who choose to either accept or reject it (cf. Becker, 1978). Transcendental marketers seek to spread knowledge about values related to their offerings and seek to adjust their customers view in relation to these values. In a sense, transcendental marketing also resembles transactional marketing, which stresses the individual sale and seeks short-term gains (Brodie, et al., 1997). In contrast, relationship marketing is more customer driven, or “outside-in”, and seeks to solve customers’ individual problems and building functional quality, as opposed to technical quality, by using more interaction with customers (Grönroos, 1991). Through it’s focus on the relationship and functional quality, an often alleged benefit of a relational approach to marketing is that it leads to less price sensitive customers (Grönroos, 1991). This benefit is shared with transcendental marketing, although for transcendental marketing it is essential that customers seek authentic quality connected to higher-order values. There are also a number of other approaches to marketing that deserves mentioning since they are all examples in a general development towards transcendental marketing. For instance, social marketing (Kotler and Zaltman, 1971) and enviropreneurial marketing (Menon and Menon, 1997) both take some sort of higher-order values into account, just like transcendental marketing does. While social marketing is intended to improve the acceptability of a social idea or practice in a target group, e.g., responsible drinking or safe driving, (Kotler, 1975) enviropreneurial marketing is solely oriented towards environmental issues (Menon and Menon, 1997). Transcendental marketing is a broader concept and may include any kind of higher-order value. In addition, it more explicitly puts emphasis on authenticity and that the higher-order values are deeply anchored in the provider’s organization and culture; something which is also emphasized concerning the marketing of aesthetic products and arts (Hirschman, 1983). It seeks to create an internal satisfaction through an adjusted identity among buyers and an increased consciousness regarding various existential issues, which may include environmental and social issues. Cause-related marketing (File and Prince, 1998, Varadarajan, 1988) also have analogous ambitions as it is intended to bring in money from its sales in support of a specific cause. Transcendental marketing is not as focused on short-term gains. Worth noting is that although many of the central tenets of transcendental marketing are humanistic in their nature, the approach does not reject capitalist ideas and the ambition to maximize profitability. Transcendental marketers may very well seek a profitable business and to sell as many products as possible, just like most others marketers do. In contrast to many others, though, 3 they do this only on condition that it does not violate their core values. Most important for transcendental marketers is their inner belief in some higher-order values. To work in line with this belief is more central than earning as much money as possible. Before propositions regarding transcendental marketing are offered, two illustrative examples are provided. Transcendental marketing in practice: two illustrative cases Two examples from different industries are provided here: Norrgavel, a small Swedish furniture manufacturer, and Yogi Tea, an American company focusing on producing and selling organic tea. Both have served as an inspiration for the previous sections and will illustrate some of the ideas of transcendental marketing. They will also serve as input to the subsequent development of propositions. First, Norrgavel is a Swedish furniture manufacturer which has become known in its industry for its environmental concern and for its foundation in values and existentialism. It was founded in 1993 by Nirvan Richter who is managing the firm as a CEO, designer, and spiritual leader. Norrgavel was the first furniture manufacturer in Sweden being approved for the ecolabel “The Swan”. They claim they are not selling furniture but a perspective on interior decoration and, more generally, life. In sum, this perspective contains three tenets: (1) Humanism – simple, practical, and beautiful furniture with the customer as a co-creator. (2) Ecology – durable furniture with the highest environmental standards. (3) Existentialism – functional, timeless, and durable furniture bought to last, not to create a short-term sensation. Through its furniture, Norrgavel spreads a message concerning a perspective on life that goes beyond furniture. Furniture sold can be seen as carriers of this message, but more important than selling furniture (according to Nirvan Richter) is to persist with these values. A minimalistic approach to life and consumption is sought and taught, with limited consumption of furniture and other goods in favour of careful selection of high-quality goods made with love. Second, Yogi Tea Company was founded by Yogi Bhajan while he was teaching Kundalini Yoga in America during the 1960’s, sharing the ancient wisdom of Ayurveda and healthy living that he had learnt in India. The teas he blended and served during his classes were sought after and shortly also sold at a number of vegetarian restaurants in Europe and the U.S. They became a success among customers and in response to the positive demand the restaurants began to package and sell the tea to local natural food stores. Subsequently these endeavours blossomed into the Yogi Tea Company which now creates more than 50 pure organic teas made with organic herbal and green tea blends, with flavours named, e.g., “bright mood” and “bedtime”. They are all grounded in Ayurvedic wisdom and in a simple, natural way of living. The company is committed to providing the highest quality ingredients while also protecting the earth’s natural resources. On each tea box can be found a summary of the ingredients of the specific tea blend but also the story behind the tea, the Ayurvedic philosophy, and a short meditation exercise. Discussion and propositions A feature which both empirical examples provided above have in common is their inside-out approach and their ambition to change their customers’ perspective on certain existential issues; or to adjust their identity. In the case of Norrgavel it is about spreading ideas concerning existential issues to their customers, through channels such as brochures, internet, interviews in newspapers, and personal meetings in furniture stores. In the case of Yogi Tea, messages related to the Ayurvedic philosophy is spread primarily through texts on packages 4 and secondly through their internet site. A first proposition can be stated: P1: As the marketing approach develops towards transcendental, the more it will contain active attempts to influence customers and their identity, instead of just meeting or being influenced by their outspoken needs. It is not a coincidence that both examples provided here are about marketing to consumers. Business marketing is distinctive in several ways when compared with consumer marketing. For instance, the marketing process is normally more complex and involves multiple employees from both sides of the relationship, from different hierarchical levels and different functions in the organisations (Jackson and Cooper, 1988). The business purchasers are trained professionals, sometimes making the purchasing procedure more formalised (Jackson and Cooper, 1988). Moreover, offerings to business customers often need to be customised to the relatively complex organisational needs (Jackson, et al., 1995). Logically, relational marketing is often feasible at business markets since it is a more customer-driven approach than the transcendental approach; which is driven from inside and out. Therefore, a second proposition can be formulated: P2: It is more likely to find transcendental marketing at consumer markets than at business markets. Without any doubt, however, the transcendental approach is practiced also at business markets, at least to a certain degree. An example could be Hanken Corporate Services where the Finnish university seeks to develop the skills of employees within the business community. Another central feature is illustrated by the cases. While both Norrgavel and Yogi Tea are focused on making a profit, they appear to be doing this under the overarching condition that they persist with their values. In the case of Norrgavel, their values and the minimalistic approach to life comes before sales maximization. As the CEO Nirvan Richter expresses it: ”This is an efficient company and we run it like in order to be profitable. But it is also another aspect to it; I usually call it an artistic approach which means not doing anything unless you really want to have an authentic desire to express something. That is the highest goal”. This quote encapsulates a central aspect of transcendental marketing, which is not as accentuated in most other approaches to marketing. Thus: P3: As the marketing approach develops towards transcendental, the more essential is an authentic desire to express something which stands above the direct qualities of the products offered; so called higher-order values. It is likely that such an approach to a business is more common at companies that are not noted on the stock exchange. Elsewhere, it may be more difficult or unacceptable not to focus on sales maximization. Thus, another proposition can be stated: P4: It is more likely that transcendental marketing is found at companies that are not noted on the stock exchange. Another characteristic that the examples have in common is the presence of a spiritual leader for customers as well as for employees. In the case of Norrgavel, the CEO Nirvan Richter obviously takes this role while for Yogi Tea it appears to be Yogi Bhajan. The emphasis on authenticity and higher-order values in transcendental marketing would seem to make the presence of such a leader more vital than it is for transactional marketing in particular. Therefore: P5: As the marketing approach develops towards transcendental, the more likely it is that a spiritual leader will be central to the firm and for its customers. Among the other characteristics of transcendental marketing is the long-term perspective; where fundamental higher-order values such as minimalism in the case of Norrgavel and the Ayurvedic philosophy in the case of Yogi Tea are in focus rather than merely short-term results. Such values have the potential to attract customers over longer time periods, without the drawback sometimes mentioned in conjunction with relational marketing; that customers feel locked-in (Rowe and Barnes, 1998). Thus, a final proposition is stated: P6: Transcendental marketing has a long-term focus on higher-order values, which indirectly has the potential to create long-term customer relationships and more stable revenue-streams. 5 Concluding discussion This paper has attempted to expand the transcendental perspective on leadership (Cardona, 2000, Sanders III, et al., 2003) to marketing; incorporating the focus on higher-order values beyond ego. 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