Analysis of the Contextualization and Value-in-Context by Chandler and Vargo - Article Example

Name: Course:’ Tutor: Institution: Date: Маrkеting Рrоduсts and Sеrviсеs in А Dynamic Еnvirоnmеnt Abstract The marketing concept is among the highly and fast evolving organizational concepts. This is often necessitated by the need to adjust to changing marketing environments. In this case, different marketing environments, such as static and dynamic environments demand varied marketing strategies. Such a strategy for dynamic markets is context marketing for both serves and goods. The report analyses the article “Contextualization and value-in-context: How context frames exchange” by Chandler and Vargo, to establish the role of context in marketing in the dynamic global market. In this case, it establishes that marketing contexts are majorly categorised into micro, meso and macro markets. In support of this article analysis, the report uses the works of Wilson, Daniel and McDonald, as well as Kanagal. Table of Contents Abstract 1 Table of Contents 2 1.0 Introduction 3 2.0 Discussion 3 2.1 Micro Environment 4 2.2 Meso Environment Context 5 2.3 Macro Environment Context 7 3.0 Recommendations 8 3.1 Appropriate Budgeting 8 3.2 Strategies Diversification 9 4.0 Conclusion 10 Works Cited 13 1.0 Introduction Globalization and increased marketing conditions led to increased competition in foreign markets. In this case, traditional marketing approaches are no longer profitable, as they do not result into increased organizational market competitiveness. Thus, in a bid to establish market competitiveness for products and services in the dynamic global market, corporations have adopted competitive marketing strategies. In support of this concept, scholars have developed a range of empirical studies to examine the guiding principles as well as any other relevant aspects such as role and challenges in its application (Buhler and Chadwick, and Nufer 189). This report seeks to review the concept of marketing context influence on service and product provision and marketing strategies used through an article analysis. The report reviews the article “Contextualization and value-in-context: How context frames exchange” by Chandler and Vargo published in the marketing Theory journal Volume 11, Issue 1. The article conducted a research on the application of marketing context in the development of marketing strategies for services. It established that there are three levels of market contexts the micro, macro, and the Meso environment, and that each uniquely influences the strategies used. 2.0 Discussion The article based its analysis on the nature and argument that marketing strategies are hedged on various contexts. In its argument, it sought to establish that organisations, products and service providers ought to develop diverse marketing strategies based on the customer base environment. Consequently, it developed the argument that no single marketing strategy was sufficient for the three marketing contexts. This report evaluates each of the enumerated contexts as compared to the above-discussed supporting argument articles. 2.1 Micro Environment The articles discuss the micro marketing environment as one that has a direct relationship between trading partners. In this regard, the article argued that in a microenvironment context individuals exchange market goods and services on a one on one basis. As such, each party dedicates its resources and funds into the provision of these services. Consequently, there is active participation of both partners in the marketing process. Consequently, in this type of a marketing context, the article advocates for a direct service- service approach in marketing. In its analysis, it argues that direct marketing in such a context enhances increased contact and relationship for increased system efficiency, loyalty and increased sales. This approach was further supported by a study conducted by Kanagal (5). In the study, the authors’ sought to establish the merits of trading and marketing in a microenvironment context through the use of a relationship marketing approach. In this case, the study revealed that, a microenvironment context presented opportunities for reduced cost of exchange. In this regard, the study argued that through a direct marketing and product exchange approach, organisations significantly reduced the cost of production and distribution costs associated with long marketing and distribution chains. Thus, the study concluded that adoption of a direct exchange approach was an ideal approach in this case, saving on marketing costs such as advertising, promotion, and free samples. Further, the study established that this was an ideal platform for service delivery and marketing. This observation supported Chandler and Vargos’ argument that microenvironment enhance the delivery of professional and technical services that required trust and confidentiality prior to exchange. Thus, authors argued that through the adoption of a microenvironment approach, organisations could actively relate with the market thus establishing the required attributes for successful service provision In the marketing in the electronic industry, organisations can contextualize their markets and adopt microenvironment approaches, where they relate directly with their customers without any other external agents and stakeholders influence. In particular, organisations marketing digital cameras, can adopt this marketing context in relating with corporate customers. Such includes the wholesalers of such products. Establishing direct contact and relationships with corporate customers, organisations marketing digital cameras would be able to enhance increased sales through on time deliveries, after sales services such as replacements and technical support to such partners. Consequently, as already discussed in the report, the adoption of these strategies in dealing with corporate customers would enhance reduced marketing costs as well as increased operational efficiencies through instant feedbacks on improvement areas and needs. 2.2 Meso Environment Context In analyzing the various marketing and exchange contexts available, the study established that the various contexts are co joined and relate to one another. In this case, the study revealed that the development and expansion of one environmental marketing context, led to the eventual realization of the next marketing context. In this regard, it established the developmental relationship between the microenvironment context and the meso-environment context. As such, the study argued that in a microenvironment context, market relationships were classified as Dyads. To this effect, the meso-environment context is made up of two dyads referred to as Triads. Therefore, the study revealed that it is a series of dyad relationships forming the meso-marketing environment context. In this regard, the meso-marketing environmental context can be classified as an intermediary between the micro and macro contexts. In its argument, the study article argued that in this kind of environment, a third party in the market served as a link node between trading partners. As such, there lacks a direct contact between trading partners in the market. In its recommendation, the article advocated for the adoption of indirect marketing strategies to facilitate increased efficiency and cost effectiveness. The study argued that marketing in such a context is advantageous as the link nodes share in the market associated risks such as currency fluctuations thus spreading the loss risk. The argument was further supported by the argument supported by Wilson, Daniel, and McDonald (21). In this case, the authors conducted a study to evaluate on the extent to which organizational marketing environments were intertwined and relied on Consumer relationship management systems for enhanced success. In this regard, the study has sought to establish if there existed an interrelationship between diverse marketing contexts. As such, the study evaluated the market characteristics of each of the contexts and conducted a comparison and contrast analysis based on the application of information technology impacts and rationale. In its analysis, the study established that there existed relationships across the context and that each was as a result of the expansion of the preceding context. Further, the article supported the ideology of using the direct marketing strategic approach for contexts beside microenvironment context. The meso marketing environmental context can be applied in the electronics industry. In this case, the context is applicable in a situation where the market at hand is huge and large enough to a situation that it cannot accommodate direct relationships. In the case of marketing a digital camera, the target markets in a specific market segment may include the use of indirect marketing approach as recommended. In this case, instead of dealing with each of the target markets in a segment directly, an organization can establish links with one overall stakeholder in charge of the market. This reduces cost of dealing with the respective numerous segment stakeholders as well as time utilized in developing such relationships. 2.3 Macro Environment Context The study article identifies the third marketing environment context as the microenvironment. This is a development and expansion result of the meso marketing environment context. As such, the market is composed of a range of dyads and triad relationships that are networked across an organisations marketing function. In a macro environment, the study established that such a context incorporates both a product-marketing context as well as that of the overall organisational marketing context. Under product marketing macro-environment context, the study evaluated the extent to which the marketing on the extent influences applied strategies. In this case, the study argued that a macro environment context comprises of strategic relationships between an organisation and a diversified suppliers and distributors base. As such, the organisation has to retain and maintain a diversified marketing approach to fit into the various marketing relationships. In this case, no single organisational marketing approach would satisfy such a market. Consequently, under this concept, the study advocates for the adoption of both direct and indirect relationships. A study by Kanagal (6) affirmed on the theoretical perspectives developed by the study article. In this case, the authors argued on the market diversity evident in macro environments. In this case, the study established that a wide range of factors such as economic situation, customer base diversity, influences a macro environment-marketing context as well as increased partners marketing strategies. Consequently, the study recommended the adoption of both the direct and indirect relationships in the management of such marketing strategies and activities. On one hand, direct relationships were recommended for corporate customers with whom it is economically viable to establish and retain relationships with, in the long-run. In this case, a cost benefit analysis on the expenses and revenues earned from such direct relationships is imperative. On the other hand, the study recommended the implementation of indirect marketing strategies and relationships in which the organisations would involve the services of third parties. The electronics industry is a diverse global industry. Consequently, organisations and products marketing in this environment face and operate in a microenvironment-marketing context. As such, it is imperative for such product marketing to employ both direct and indirect marketing approaches appropriately. In this case, in marketing digital cameras, a direct approach can be adopted in marketing for the distributors where product representatives directly engage with the clients. On the other hand, indirect relationships and marketing approaches such as print media marketing as well as internet marketing can be applied. 3.0 Recommendations 3.1 Appropriate Budgeting As already analysed, direct relations and marketing in both micro and macro marketing context plays a major role in enhancing product and serve sales success. However, the challenge of increased inappropriate expenses in the relationships management and overall production costs poses a challenge in the execution of this strategy. Consequently, it is imperative for organizations to develop appropriate cost allocation structures for this strategy. On one hand, Macintosh (5) argued that organizations should establish a cost benefit analysis for their operations. A cost benefit analysis establishes a relationship between organizations expenditure against the earned revenue. In this case, expenses are justified through the realization of increased revenues that surpass the expenses (Nejatian 183). The cost benefit analysis approach adopts the matching accounting principle. The principle seeks to match and rate costs against revenues they help raise. The principle can be applied in relationship marketing to increase its efficiency and enhance proactive measures adoption. As such, Boyce (93) states that the relationship expenses such as human resource and time utilized should be quantified financially to establish their financial worth to the corporation. Such quantified values should be evaluated against gained market merits and sales to establish worth. If the expenses exceed the earned benefits, proactive measures such as relationships change and removal of uneconomical expenditures in the relationships should be chucked off. Consequently, through appropriate cost management structures in both direct and indirect marketing across the environments, the merits of the under listed marketing context related strategies would be realized. 3.2 Strategies Diversification Holzmann, Palmer and Robalino (326) argued that, marketing success is not only hedged on sales quantity established, but also on the long-term non-financial benefits accrued. In this case, the authors advocated for the establishment of customer and market management and monitoring systems. Among the challenges identified in the implementation, appropriate marketing strategies is relationships and marketing strategies management systems that reduces efficiency and process profitability (Payne and Frow 168). In order to remedy this, Bock (5) recommends the adoption of information technology and management systems in order to overcome the challenge. In this case, the authors argued that organizations using relationship-based marketing should develop customer management systems. Such systems collect customer related information and profile it in the organizations database. Consequently, this information is linked with the organizations decision-making structures. Through the adoption of such an approach, John (83) argues that organizations would establish and retain market competitiveness through innovation and enhanced relationships. For instance, the author argued that in order to increase efficiency, organisations marketing across the three marketing contexts should adopt relationship-marketing approach in order to enhance creativity, feedback, as well as efficiency. 4.0 Conclusion In summary, the report explores the concepts of marketing context and its implications on marketing strategies adopted. In this case, the report categorises marketing contexts into three broad categories namely, micro, meso and macro marketing environment contexts. On one hand, the micro environment marketing context is concerned with the marketing and exchange between two parties. In this regard, marketing is conducted on a direct basis. In a micro marketing environment context, there is direct relationship and contact between marketing organisations and customers. As such, organisations often use relationship management. In this case, relationships between the involved parties are established. These relationships boost confidence, trust, satisfaction as well as loyalty. The report establishes that micro marketing environment context boost and enhances increased marketing competencies through reduced marketing expenses and overall production costs. On the other hand, the report establishes that a meso environment is ideally the transition environment between a micro and macro marketing context. In this case, the report establishes that, under a meso environment there is more than one partner to deal with in each market segment. Consequently, the report establishes that maintaining direct relationships with all the market partners would be an expensive venture that would also curtail efficiency. As such, in order for organisations to facilitate increased marketing efficiency, they establish indirect relationships. In this form of marketing, organisations retain relationships with the key market players. In turn the market players maintain relationships with the stakeholders facilitating increased management in the supply chain. This approach enhances reduced marketing costs in both services and products marketing. In addition, the report establishes the existence of a macro marketing environmental context. In this case, the environment is comprised of numerous stakeholders both corporate and individual customers. In this regard, the study establishes that for efficient management of this context, organisations adopt a mixture of both direct and indirect markets. To this effect, organisations facilitate increased supply chain management for increased efficiency. In order to enhance market efficiency in the proposed approaches, the study formulates two major recommendations. One the report advocates for increased financial control structures. It argues that through appropriate cost structures establishment, organisations stand to benefit based on these strategies. Moreover, the report advocates for increased market information control. As such, it recommends the adoption of modern technology information monitoring systems Works Cited Bock, Michael. The Advantages and Disadvantages of Relationship Management: How Can a Company Integrate Recent Research Findings in Order to Make Its CRM System More Efficient?München: GRIN Verlag GmbH, 2010. Print Boyce, Gordon. Co-operative Structures in Global Business: Communicating, Transferring Knowledge and Learning across the Corporate Frontier. London: Routledge, 2002. Print. Buhler, Andre, Simon Chadwick, and Gerd Nufer. Relationship Marketing in Sports. Oxford: Butterworth-Heinemann, 2009. Print. Chandler, Jeniffer, and Stephen, Vargo. “Contextualization and value-in-context: How context frames exchange”. Marketing Theory Journal (2011): 11(1): 35-49 Holzmann, Robert, Edward E. Palmer, and David A. Robalino. Nonfinancial Defined Contribution Pension Schemes in a Changing Pension World. Washington D.C: World Bank, 2012. Print. John, Joby. Fundamentals of Customer-Focused Management: Competing Through Service. Westport, Conn: Praeger, 2003. Print. Kanagal, Nagasimha. "Role of Relationship Marketing in Competitive Marketing Strategy." Journal of marketing and management Research.  (2006): 1-7 Macintosh, Emma. Applied Methods of Cost-Benefit Analysis in Health Care. Oxford: Oxford University Press, 2009. Print. Nejatian, Hadi, et al. "The Influence of Customer Knowledge on CRM Performance of Malaysian ICT Companies: A Structural Equation Modeling Approach." International Journal of Business and Management 6.7 (2011): 181-98 Payne, Adrian, and Pennie Frow. "A Strategic Framework for Customer Relationship Management." Journal of Marketing (2005): 69(1): 167-176 Wilson, Hugh, Elizabeth Daniel, and Malcolm McDonald. "Factors for Success in Customer Relationship Management (CRM) Systems." Journal of Marketing Management (2002): 17(1): 1-28 Read More