Correspondence: Nicholas Ind, Equilibrium Consulting Box 5822 Majorstuen Oslo 0308, Norway. E-mail: nind@equilibriumconsulting.com
1is
a partner in Equilibrium Consulting. He is the author of a number of
articles and papers and eight books including The Corporate Image. The
Corporate Brand, Living the Brand and Branding Goverance (with Rune
Bjerke). He is also the editor of Beyond Branding.
2is
an Associate Professor at Oslo School of Management. Previously, he
taught at BI Norwegian School of Management. He holds a PhD from the
University of Otago in New Zealand. He is the co-author of Branding
Governance.
Received 22 August 2007; Revised 22 August 2007; Published online 9 October 2007.
Abstract
While
much marketing literature sees delivering customer experience as the
role of the marketer, we argue that this is an organisation-wide
responsibility. The organisation-wide approach is based on the premise
that the brand-building capability of the organisation is determined by
the combination of marketing, human resources, organisational culture,
leadership and evaluation. It is our contention that the role of
marketing should be concerned with connecting these elements to optimise
brand equity (eg awareness, perceived quality, associations, loyalty).
In this paper, we suggest a participative model for an organisation-wide
approach where the role of the marketer is Janus-like in that he/she
must face both outwards to connect with customers and other stakeholders
and inwards to build coalitions inside the organisation to deliver a
clear and consistent customer experience.
Keywords:
participation, marked orientation, brand elements, brand equity
INTRODUCTION
Much
traditional marketing literature has a product and marketing
communications-led approach to the idea of creating customer experience.
Yet in most Western economies, it is services that predominate and
consequently it is the other elements of customer–organisation
interaction that are dominant in the formation of brand image.1 It is employees and their ability to build relationships with customers that determine value.2
The outside-in, inside-out approach to brand building suggests the
importance of aligning employees with the brand and in uncovering the
meaning of the brand through participation.3
This shows the value of customer-facing employees in particular, but it
is the collective effort of the organisation that is important, for as
Chenet et al.4
suggest service delivery is a combination of culture, leadership,
commitment, systems, tools and technology. It also indicates the value
of entrainment5—where
the organisation is focused on enhancing customer experience not via
abstracted thinking, but through a union of interest based on a dynamic
relationship.6
This thinking extends the role of marketing by suggesting that its role
should be not only to sense movement in the environment but also to
shape the organisational response by connecting with other business
functions and departments. One of the strands within marketing thinking
that has tried to deal with the problem of marketing's overtly external
emphasis is the concept of 'market orientation'.
MARKET ORIENTATION
The
idea of market orientation is that organisations should focus on the
interaction with customers and then look inward to explore how that
customer knowledge can be used to build organisation-wide responses.
Kohli and Jaworski7
saw the concept as referring to 'the organisation-wide generation of
market intelligence, dissemination of the intelligence across
departments, and organisation-wide responsiveness to it'. Narver and
Slater8
featured some similar elements, seeing market orientation as (1)
customer orientation; (2) competitor orientation, and (3)
interfunctional coordination. Narver and Slater's emphasis is, however,
on market orientation as organisational culture, which they argue drives
behaviour. This means that market orientation can only exist if there
is a culture that is oriented towards customers. We should, however,
remember that while culture drives behaviour, behaviour also drives
culture.9
If we see culture as static we might come to the view that in a
noncustomer-oriented culture, people cannot consistently be market
oriented. Yet we would argue that culture is dynamic. Leaders cannot
simply tell people to be more customer oriented and expect a
transformation to occur, but they can lead by example and committed
groups of individuals can change the organisational way of doing things
by focusing on the delivery of customer value. This can lead to cultural
change and enhanced market orientation. Jaworski and Kohli10
endorse the importance of leadership in their analysis of the
antecedents of market orientation because of leaders' ability to
stimulate an external focus 'through continual reminders to employees
that it is critical for them to be sensitive and responsive to market
developments'.
Gainer and Padanyi11
argue that researchers see market orientation as a cultural construct
or a behavioural construct (separate or connected/correlated), or even a
hybrid incorporating both cultural and behavioural aspects. Their study
of nonprofit organisations showed that a positive relationship between
market-oriented behaviours and organisational performance is mediated by
market orientation. Further, Kee-hung and Cheng12
used data from 304 organisations, which had operational quality
management systems, to investigate the relationship between quality
orientation, market orientation and organisational perforeance. The
study (based on both qualitative and quantitative data) revealed that
quality orientation and market orientation are complementary and they
authenticate the view that quality management and marketing reinforce
each other in strengthening organisational performance. Lastly, Matsunoa
et al.13 compare three different scales (the scales of Kohli and Jaworski, Narver and Slater and EMO14—extended
market orientation). Their conclusion: the Narver and Slater scale was
found to be superior to the others in terms of predictive validity, but
based on scale reliability, limited unidimensionality and construct
domain no single scale examined here was found satisfactory.
APPLYING MARKET-ORIENTED THINKING
Market
orientation stresses the importance of connecting the organisation
together to deliver value to customers. It seeks to overcome the problem
of siloisation that is prevalent in organisations and supports the
concept of an organisation-wide approach. Researchers may debate whether
it is a cultural or a behavioural construct, but our view is that these
two ideas are interlinked. We see market orientation as a way of facing
the world—in that sense it is a cultural construct. Culture is,
however, about the way of doing things. It determines and is determined
by behaviours. Yet, the real challenge is that organisations struggle
with market orientation. Partly this is to do with the difficulty of
changing culture in a managed way and partly to do with the problem of
organisational fragmentation. Yet there seem to be other factors at
work. Jaworski and Kohli's 1993 paper addressed three specific
questions: (1) Why are some organisations more market oriented than
others? (2) What effect does a market orientation have on employees and
business performance? (3) Does the linkage between a market orientation
and business performance depend on the environmental context? Based on
two national samples the researchers argue that market orientation is
related to top management emphasis, the risk aversion of top managers,
interdepartmental conflict and connectedness, centralisation and reward
system orientation. Moreover, a market orientation is related to overall
business performance (but not market share), employees' organisational
commitment and esprit de corps. And even more important, the connection
between market orientation and performance appears to be consistent
across environmental contexts that suffer from varying degrees of market
turbulence, competitive intensity and technological change. We might
conclude from this that there are no environmental reasons to prevent
market orientation and plenty of benefits. This is supported by other
research:
- Slater and Narver15 showed that the benefits of a market orientation are long term even though environmental conditions are often transient. Becoming market oriented is costeffective in the long term in spite of any possible short-term moderating effects of the environment. 'A market orientation is a particular form of business culture', and 'becoming and remaining market oriented are essential to the continuous creation of superior value' (Slater and Narver15, p. 53).
- Siguaw, Simpson and Baker16 discovered that a supplier's market-oriented behaviour directly or indirectly affects all the channel relationships examined from the distributor's perspective. In particular, the distributor's market orientation, trust, cooperative norms, commitment and satisfaction have an impact on financial performance.
- Hampton and Hampton17 found that professionalism and rewards were positively correlated with market orientation. Further, the study revealed market orientation was strongly and eositively related to job satisfaction.
In
our judgment, market orientation suffers from three limitations: (1)
Researchers, while connecting market orientation to business
performance, have not explicitly linked it to brand-building capability.
(2) The measurement systems, as observed, have not been sufficiently
deep. (3) Insufficient attention has been paid to the reality of how to
engage the organisation to become market orientated. In particular, the
whole area of implementation has been underplayed. A market-oriented
culture is not only about inter-functional coordination (Slater and
Narver 1994), dissemination (Kohli and Jaworski 1990) or the type of
organisational antecedents (factors) that enhance or impede the
implementation of the business philosophy. Rather market orientation is a
consequence (although it in turn reinforces) of a supportive
organisational culture, HR drivers and leadership. To develop this line
of thinking, we have developed the concept of participatory market
orientation: a fusion of internal18 and external market orientations with an emphasis on realising the potential of market orientation.
PARTICIPATORY MARKET ORIENTATION
Here
we suggest a development of market orientation: participatory market
orientation (PMO). A participatory market-oriented philosophy aims to
build brand capability and brand equity by involving employees,
customers and other stakeholders in the development of the brand. This
suggests that the role of marketing as an organisational driving force
is to help the organisation become participatory, such that all
investments in external and internal marketing activities should
encourage participation and strengthen the brand.
This
indicates that PMO is an orientation that adheres to the idea of
entrainment. This belief in the value of participation steers the way in
which investments are made in both internal and marketing activities
and recognises their connectivity. It suggests as a principle that,
rather than an over-reliance on traditional marketing communications to
build a brand, funds are allocated to become entrained with customers
and to integrate a relevant organisational response encompassing
communications and actions. This goes beyond the ideas of brand
community19
to demonstrate how organisations can build networks of genuine interest
with customers. An example of this participatory process at work are
the Grathak Katha (consumer's voice) events held by the Bangladeshi
mobile operator GrameenPhone. GrameenPhone is the leading mobile telecom
company in Bangladesh with a 62 per cent share of the market and 8.5m
customers (September 2006). This is a high growth market, but it is also
extremely poor: the average GDP per head is $421 (US) and
GrameenPhone's business model is designed to work with customers whose
average spend on mobile telephony is $2 per month. To better understand
its customers and develop innovative ways of selling its services, the
company conducts regular market research studies and particularly the
delivery of customer service. In addition to this research, GrameenPhone
has initiated a process for removing the distance between the company
and its customers. This participative approach involves regular meetings
with customers in an environment that is both social and businesslike.
The idea is to obtain direct interaction with customers both as a way of
enhancing the reputation of the brand and as a means of learning about
and learning with customers. At the events, GrameenPhone matches the
attendees one to one with employees so that there is the opportunity for
personal dialogue. On these occasions, research is conducted and
results are presented, new products are discussed and customers provide
ideas on new opportunities. The idea is to mix the formal and the
informal and such has been the momentum behind the process that music
performances at the events are by groupe that combine employees and
customers playing together. GrameenPhone has discovered that the quality
of the feedback is high and the comments are genuine. Customers are not
concerned with trying to either attack or please GrameenPhone, they
just try to offer input and to relate their experiences. In one year the
company conducted more than 300 events with over 200,000 participants.
The key to maintaining the interest in the process both within
GrameenPhone and externally with customers is the rapid processing of
information, the actions taken as a result of input and the feedback
provided. Marketing Director Rubaba Dowla Matin argues that the success
is due to the organisational capability to validate, categorise and
analyse the data and to involve the relevant teams in the organisation.
It is these cross-functional customer management teams that play the
vital role in determining the nature of the insight and in generating
action and communication. This investment into deep and direct insight
and the willingness to encourage organisation-wide participation have
been the catalysts behind the success of the initiative and the
company's burgeoning reputation as an innovator.
Another example is sportswear company Quiksilver,20
which achieves entrainment through several key mechanisms. It recruits
people directly from the sports it serves (skateboarding, snowboarding,
surfing), such that most people at Quiksilver, from the CEO and the key
directors down, are board riders and employees are encouraged to take an
active part in their sports. This helps to ensure that managers and
employees are taking an active part in an ongoing dialogue with
customers. Quiksilver employees do not have to resort to abstracted data
to make informed decisions, they can work from current and direct
experience. This is, however, not just one way. Quiksilver encourages
interested people to contribute their ideas. The several hundred
professional riders and an army of supported amateurs are an extension
of the grassroots connection Quiksilver enjoyed in its early days when
it was run as a hobbyist surf shorts business. Quiksilver knows that
creativity has to meet with the approval of the enthusiast audience both
to ensure it is a trend leader and to maintain its authenticity. Some
innnovations are the direct result of input from riders, such as the
development of surfing fiction books aimed at girls, and some ideas are
the result of dialogue that provides inspiration for designers. Rapid
feedback also tells the company when its products are not working as
they should or its communications are not connecting. The important
element of collaboration is the ability to listen. Quiksilver achieves
this largely by treating the riders as insiders. The language of the
company reflects this: riders are part of the organisational structure.
They are welcomed at Quiksilver offices and they meet with employees at
sporting events.
Within Quiksilver itself, the
internal borders are played down and the importance of collaboration is
emphasised. Groups are formed from across departments to explore ideas
in largely informal, intuitive ways. The brand provides a template
against which decisions are made, but there is also a strong belief in
being open-minded so that good ideas—whether they come from inside or
outside—are not missed. Quiksilver's entrainment with its customers
enables it to develop new ranges and communications without recourse to
research.
The key requirements for entrainment are a
sufficient degree of interest (from both employees and customers) and a
receptivity to ideas from different sources both inside and outside the
company. For example, many of Apple's heralded innovations (iPod,
iTunes, multi-touch) have been adaptions and development of technologies
generated from outside the organisation. Similarly Lego's development
of its second-generation Mindstorms range was due to the unanticipated
input of AFOL (Adult Fans of Lego) users, which initialey the
organisation ignored and then, having realised its potential, co-opted
into product design. Also, online organisations such as Amazon, e-Bay
and Wikipedia, and the whole Open Source Movement thrive on an intensive
sense of engagement, because they enable people to achieve a Maslowian
sense of self-realisation and the plaudits of their peers. These online
brand builders have largely eschewed traditional forms of marketing
communication. Instead their power has grown through a transparent
approach, the encouragement of sharing and word-of-mouth engagement.21, 22
Our judgment is that in future, the only real control will be in having
an authentic, participative brand. That means bringing the customer
inside the organisation and aligning the whole organisation to create
relevant value. In software development, the writer Eric Raymond calls
this the Bazaar model and contrasts it with the Cathedral model where
the source code is a carefully guarded secret.23
In the essay 'The Cathedral and the Bazaar', Raymond suggests that the
Bazaar model is a more effective way of testing software code than the
Cathedral model, which has to guess customer reactions. In reviewing the
Bazaar and Cathedral model, Andreas Mack writes: 'Looking at brands we
discover cathedrals all around us. Polished up brands launching into
stardom or disappearing into failure. Brands secretly pre-tested and
pumped up with meaning, structure and visuals, creating identities to
last a lifetime... A bazaar approach to branding lets consumers,
retailers, press and public take a peek behind the scenes and have a say
when decisions are made...Smart brands will welcome the consumer's role
as a natural partner in a collective process of product and brand
development'.24
Marketing's
role then shifts subtlety with a PMO. Marketing becomes concerned with
helping to create an organisation-wide commitment to customers and a
supportive culture, style of leadership, governance and human resources
policies. Partly marketing must have an internal market orientation to
achieve this organisation-wide perspective and partly it must be a key
element in building bonds with customers and sharing knowledge about
them inside the organisation: externally sense-making and internally
sense-sharing. This internal/external approach builds the brand. The
value of this twin perspective is endorsed by a study of Sweden's 500
largest companies25
that shows organisations with the highest brand orientation index
(BOI), where branding is the hub of operations are characterised by an
ability to combine both an internal and external focus. Interestingly,
the profile of high brand orientation companies is found in roughly the
same frequency among business-to-business and business-to-consumer
companies (50/50) and goods to services (57/43). This study reinforces
the link between brand orientation and profitability suggested in the
PMO value chain, by demonstrating the correlation between the two with
the group of leaders in terms of orientation showing operating profits
almost double the lowest brand orientation group: 'the most important
outcome of this study is that we have been able to establish a clear
link between brand orientation and profitability: the more
brand-oriented a company is, the more profitable it is'.
Top of page
PMO AND BRAND EQUITY
In
recognising the importance of human capital and internal market
orientation, it must be remembered that the value of this is in building
brand equity and delivering customer experience. Brand equity and the
brand elements constituting a brand are much discussed in marketing
literature. Kapferer's26
brand identity model proposes brand components or dimensions (brand
elements) such as physiqee (a product's objective and tangible basis),
personality (the character), culture (set of values feeding the brand's
inspiration), relationship (love and friend), reflection ('the customer
should be reflected as she/he wishes to be seen as a result of using the
brand') and self-image (one's own internal mirror stimulating an inner
relationship with ourselves). Aaker and Joachimsthaler27
distinguish between product elements (scope, attributes, uses,
quality/value, functional benefits) and brand elements (brand
personality, symbols, brand/customer relationship, self–expressive
benefits, emotional benefits, user imagery, country of origin and
organisational associations). De Chernatony and Dall'Olmo Riley28
suggest a tangible – intangible spectrum ranging from concrete,
physical characteristics (tangible) to those of a more
abstract/immaterial (intangible) nature. Keller29
argues that the intangible elements do not constitute brand elements as
he believes a brand element is 'trademarkable' visual or verbal
information that identifies and differentiates a product or service —
the most common ones being names, logos, symbols, characters, slogans
and packaging. Most viewpoints on brand equity have an external
orientation to the building of the brand and imply that the way to
increase brand equity is through investments in marketing efforts. In
contrast, de Chernatony and McDonald30
see equity as broader by including organisational dimensions as input
variables in increasing brand equity. This underlines the importance of
the brand's vision, mission, organisational culture and values.31
It suggests that most of the value creation of the brand equity takes
place within the framework of the organisation and that customers'
confidence in the brand determines the financial value of the brand.
The
essential role of brand elements is to contribute to the formation of
consumer confidence. But brand elements by themselves do not create the
condition of confidence. Confidence and trust comes into being through
experience,32
which again suggests the vital role played in the delivery of customer
experience by brand aligned employees. For this reason, we differentiate
between brand elements and the organisational elements that deliver the
product and service. Vision, mission, values and cultural heritage are
not brand elements but are rather driving forces that guide the
strategic direction of the brand to enhance brand experience and thus
brand equity.
BECOMING PARTICIPATORY
Achieving a balance33
between the internal and external requires a PMO. This is something
that the organisational culture has to encourage and that leadership
must demonstrate by its communications and actions – something the BOI
study endorses with its discovery that in the most brand-oriented
companies, the executive management group is very active in
brand-related activity. Market orientation suggests as its first
principle that there is an organisation-wide responsibility to gather
market intelligence. Partly this is about the ability to gather and use
market research effectively, but it is also about the principle of
entrainment: of getting genuinely close to customers, so that the
acquisition of knowledge is direct and unmediated. This is what
Quiksilver does through its free-flow connectivity and GrameenPhone
achieves with their Grathak Katha. These are markets of exchange, where
organisations seek to listen to and connect with customers. The
challenge here is not to organise the mechanisms of exchange but to
approach the customer with an open mind and a willingness to accept
ambiguity and uncertainty: 'any creative thenker who ventures into new
territory risks chaos and fragmentation'.34
If
the organisation has permeable boundaries, so that it can easily absorb
knowledge, the next stage in PMO is the ability to connect people
internally in developing a response. This requires a sense of
organisational unity and a conducive communication climate. Referring to
how organisations communicate internally, Van Riel35
writes that communications research 'stresses the importance of "soft"
aspects in communication like openness, honesty and participation in
decision-making, resulting in the necessity for managers to pay serious
attention to communication climate, specifically their own role in
improving the climate'. Making the climate effective will always be
easier to achieve if there is a strong sense of unity built around the
identification with and internalisation of the organisational vision and
values and a connectivity with customers. If people have a common aim
and a shared sense of accountability, it is easier to react to events.36
This is not to suggest that individuals simply operate on automatic
based on the vision and values—rather it suggests that the implications
of the vision and values are understood and help in decision-making both
as a point of inspiration and as a guide to behaviour. In fact, the
forward momentum in the process of discussion and debate needs to be
contained within the vision and values themselves as this encourages the
discovery of meaning through discourse. The vision and values should
stimulate debate; the organisation needs the 'dirt' that fuels
creativity.37
This
importance of a shared vision and values might suggest the denial of
diversity. Yet we argue in favour of diversity and adaptability provided
there is a common understanding of the vision and values.38
There needs to be an organisational acceptance of tension, a
willingness to avoid too much control and an embracing of diversity that
creates the opportunity for innovation within the framework set by the
vision and values: 'we are starting to think of heterogeneity as
something valuable, not as an obstacle to unification'.39
When there is a lack of connection with the vision and values or an
attempt to force homogeneity, siloisation is more likely as people turn
inwards to their own business unit agendas and away from the
organisational whole. This fragmentation prevents the sharing of
knowledge and inhibits the development of a unified approach to events.
Although
homogeneity may appear desirable it creates contradictions. If the
organisation tries to prescribe employee behaviour in line with the
vision and values, it is reducing the opportunity to discover the
meaning of those same vision and values. It is trying to make something
that is inherently dynamic, static and unchanging. It is far more
productive to allow the meaning of the vision and values to develop in
response to events. This suggests that alongside the planned
organisational systems, there has to be sufficient allowance for
adaptation as the culture, identity and image of the organisation
change. The element that separates the participatory approach is the
idea of personal and direct engagement by managers and employees, who
understand and are able to explore the framework of the brand. It
suggests an ongoing dialogue with customers and with colleagues and
relationships built on trust and openness.
CONCLUSION
PMO
builds on the role of a free market in which most participants wish to
optimise the process of exchange. In other words, parties involved in
exchanges want to be as efficient and effective as possible: the
organisation wants to acquire insight and deliver relevant products and
services and extereal audiences want to acquire resources and the
accompanying rights of ownership or usage. In a market-oriented
organisation, the exchange is hindered potentially by several factors:
(a) the ability to collect meaningful and usable insights;40 (b) the ability to share knowledge within the organisation;41
(c) the ability to unify organisational actions to deliver resources.
These challenges are not the result of a flawed concept, but more the
lack of attention given to the operationalisation of the concept. This
has been the motivation behind the development of the concept of PMO.
This concept suggests a unity based on a closeness between employees and
customers and between employees. It is only when employees are
entrained with customers that they are able to acquire deep insight into
behaviour and it is only when employees and managers are able and
willing to work across organisational boundaries that value can be
delivered consistently to the customer. This indicates the importance of
such aspects as organisation culture and leadership. It is only when
the organisation is able to communicate effectively across boundaries
that closeness can be achieved. This relates to Ling's idea of internal
market orientation and the importance of fusing the organisation
together. One important element in this is bringing marketing and human
resources closer. This ought to be something that is considered in the
planning of management education and also in the structuring of
organisations.42
The
whole process of market orientation can be more or less participatory.
The lower the involvement of customers in the process, the more likely
it is that the organisation will be seller centric.43
The lower the involvement of employees, the more likely it is that the
organisation will not meet customer expectations. Therefore, the aim
should be for high levels of participation to become entrained with
customers. This suggests that many people in the organisation should be
involved with the marketing process and consequently with brand
building. As an area of functionality, people in marketing should be
responsible for and focus on the relationship with the customer:
researching attitudes and behaviour, sharing knowledge internally,
developing and executing marketing communication plans internally and
externally and stimulating collective thinking and actions. Within this
range of functions, we would stress the need for genuine insight into
customers, the need to share knowledge internally, and most importantly,
the ability to galvanise the organisation into action to deliver the
brand as a seamless experience.
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