Does Multi-stage Marketing Pay?: Creating Competitive

Book Preface

Contemporary research supports the idea that firms must be market-oriented to be competitive. In a market-oriented culture, suppliers intend to create long-term competitive advantages that are sustainable and “continuous” rather than merely trying to encourage direct customers to demand the products they offer (Narver and Slater 1990, p. 21, referring to Levitt 1980). Market-oriented suppliers gain a deep understanding of their customers’ needs which enable them to provide superior products or services. The value suppliers deliver to customers increases and, consequently, improves the suppliers’ business performance (Narver and Slater 1990, pp. 20, and literature cited therein). However, as company networks and supply-chain partnerships grow in importance (e.g., Jüttner et al. 2007), some scholars propose to extend the concept of market orientation (Kohli and Jaworski 1990; Narver and Slater 1990). According to Hillebrand and Biemans (2011), this extended market orientation should include not only a company’s direct customers but also its indirect customers.1 This is especially important on business-to-business (B-to-B) markets with its derived demand. Marketing in B-to-B markets involves more than understanding and serving a company’s direct customers; these markets represent an intermediate market stage whose demand is often derived from subsequent market stages (Hillebrand and Biemans 2011, p. 72, referring to Fern and Brown 1984). “All business transactions in a downstream value chain are done in order to ultimately satisfy the final consumers’ needs. Because the demand of the supplier’s products and services is ultimately derived from the final consumers’, in the end suppliers and manufacturers are always dependent on the primary demand” (Kleinaltenkamp et al. 2009, p. 2). Thus, B-to-B marketing should include an analysis of the entire value chain, involving the customers’ customers in the firm’s marketing activities (Günter 1997, p. 214).