Cynical Consumers Re-writing Marketer's Frame of Reference

Last week’s Inside Marketing was the first of a series reporting on the speeches given at the Otago Forum held by Otago University’s School of Marketing a fortnight ago.  The key theme of the forum was the marketing paradigm entitled ‘service dominant logic’, which was regarded as revolutionary by the impressive range of international speakers present, but more likely to be regarded as ‘old news’ by those more conversant with the recent advances in marketing within the commercial environment.

Nonetheless, the academic perspective was worthy to learn, if not for anything but for the structure and theory that was provided as a valuable counterbalance to the various case studies beginning to be cited around the world.

The US professors Vargo and Lusch, whose 2004 paper on ‘Service Dominant Logic’ sparked off the academic debate, used provocative titles for the Otago Forum such as ‘The Failure of Marketing’, citing a simplistic ‘Make & Sell Philosophy’ with marketing sharing the same negative connotations of propaganda, pushing aggressive price cutting, a reliance on the faceless mass market and a resulting loss of customer contact.

In Vargo and Lusch’s words, this ‘over-marketing’ developed from the 1950’s to the 1990’s, as technological changes led to an increased reliance on micro specialists and professionals, with a resultant loss of contact with customers - a loss mistakenly regarded as being retrievable through new marketing technologies such as CRM.

As a result, Vargo and Lusch claim that increased marketing resistance in the face of such over-marketing has created alienated customers and societies, resulting in decreasingly effective marketing expenditures. 

To illustrate just how low marketing has fallen in the public’s esteem, Vargo and Lusch cited the results of a Yankelovich, Inc 2004 study, in which US consumers were asked to name what aspects of their lives required more government regulation.  The top five answers were water pollution; toxic wastes; air pollution; nuclear safety, and advertising.  In addition, 61% of consumers felt the amount of marketing and advertising was out of control, and 36% believed shopping experience became s less enjoyable because of all the pressures to buy.

Also cited was a study by Raj Sisodia of Bentley College, who asked consumers to suggest words that reflected their image of marketing – the vast majority were negative: deceitful, manipulative, invasive, and intrusive being amongst the more common.

In conclusion, Vargo and Lusch claim that marketers have to ‘evolve to a new frame of reference’, moving from the pre-1950’s notion of moving goods to market, past the 1950-2005 period of  top-down customer and market management, towards a future of collaboration between marketers, consumers and marketing partners in order to produce and sustain value.

Vargo and Lusch’s calls for marketer-consumer ‘co-creation’ were as follows – trite or obvious they may seem, but after years of consumer research I feel compelled to agree with the sentiments:

• Co-Creating Service Offerings;
• Co-Creating Value Propositions;
• Co-Creating Conversation and Dialogue;
• Co-Creating Value Processes and Networks.

Jonathan Dodd