Classifying Contemporary Marketing Practices
This paper introduces a finite-mixture version of the adjacent-category logit model for the classification of companies with respect to their marketing practices. The classification results are compared to conventional K-means clustering, as established f
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1 Introduction Although emerging markets and transition economies are attracting increasing attention in marketing, Pels and Brodie (2004) argue that conventional marketing knowledge is not valid for these markets per se. Moreover, Burgess and Steenkamp (2006) claim that emerging markets offer unexploited research opportunities due to their significant departures from the assumptions of theories developed in the Western world, but call for more rigorous research in this domain. But, the majority of studies concerned with marketing in transition economies are either qualitative descriptive or restricted to simple cluster analysis. This paper seizes the challenge by: • • •
introducing a finite-mixture approach facilitating the fitting of a response model and the clustering of observations simultaneously, investigating whether or not the Western-type distinction between marketing mix management and relationship management holds for groups of companies from Russia and Lithuania, and exploring the consistency of the marketing activities.
The remainder of this paper is structured as follows. The next section provides a description of the research approach, which is embedded in the Contemporary Marketing Practices (CMP) Project. In the third section, a finite-mixture approach is introduced and criteria for determining the number of clusters in the data are discussed. The data and the results of this study are outlined in section 4, and section 5 concludes with a discussion of these results.
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Ralf Wagner
2 Knowledge on interactive marketing 2.1 The research approach In their review of reasons for the current evolution of marketing Vargo and Lusch (2004) propose that all economies will change to service economies and that this change will foster the switch from transactional to relational marketing. Another argument for emphasizing relational, particularly interactive marketing elements, is supported by the distinction of B2B from B2C markets. Unfortunately, these claims are based on deductive argumentation, literature analysis, and case studies, but are hardly supported by empirical analyses. Subsequently we aim to investigate the manner as to how marketing elements are combined in transition economies. For this purpose we distinguish the conventional transaction marketing approach (by means of managing the marketing-mix of product, place, price, and promotion) from four types of customer relationship and customer dialogue-oriented marketing (Coviello et al. (2002)): Transaction Marketing (TM): Companies attract and satisfy potential buyers by managing the marketing mix. They actively manage communication ‘to’ buyers in a mass-market. Moreover, the buyer-seller transactions are discrete and arm’slength. Database Marketing (DM): Database technology enables the creation of individual relationships with customer. Companies aim to retain identified customers, although marketing is still ‘to’ the customer. Relationships as such are not close or interpersonal, but are facilitated and personalized through the use of data
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