Entrepreneur

Entrepreneur

Entrepreneur

Marketing theory to marketing practice

Contemporary developments in marketing theory and practice have to be seen against the backdrop of changes in the macro environment to understand its causes as well its implications. The last two decades have witnessed dramatic changes in the marketing environment characterized by unprecedented levels of diversity, knowledge richness and turbulence, as envisaged by (Zahra, Gedajlovic, Neubaum, Shulman 2009, 34-66). The turbulence in the business environment created by macro-environmental changes, namely, technological advances and globalization, poses challenges that are to be addressed by marketing practitioners and these issues then have a role in driving the practice as well as the theory development in the discipline. The article starts by setting the context enumerating the major changes in the environment in the last decade which has direct implications for marketing. It later reviews the major areas of research and then the innovations in practice. Figure 1 gives an overview of how the macro-environmental influences and changes at different levels. The economy, industry, market and customer are effecting developments in marketing theory and practice. (Zahra, Gedajlovic, Neubaum, Shulman 2009, 34-66)

Environmental Changes

Technological advances and globalization can be identified as the two key macro influences that had significant impact at all levels in the last two decades.

Technology Advances and Globalization

The technological developments, especially in computers and communications, have made the traditional economic concepts of scale, scope and structure irrelevant in the new economy, removing the time and place barriers of doing business (Zahra, Gedajlovic, Neubaum, Shulman 2009, 34-66)

The emergence of the Internet as a cost-effective faster information channel has made it feasible for firms to focus on their core competence and outsource other activities to be performed. Though the information revolution and services revolution are two sides of the same coin, the technological forces combined with forces of globalization have resulted in the transformation of the economy, industries, markets and customers, resulting in a connected knowledge economy, borderless global economy, globalizing, converging and consolidating industries, fragmenting and frictionless markets and active, connected, informed and demanding customers.

There is increasing globalization of the domestic economy, primarily through global sourcing and competition (Zahra, Gedajlovic, Neubaum, Shulman 2009, 34-66)

Marketing practices will have to understand and adjust to this reality of a borderless economy. Borderless markets emerge when four flows of products/services; people, money and information are driven by market practices and without government intervention. In a borderless economy, marketing practices related to procurement, marketing mix and customer understanding are bound to change. The traditional beliefs about the role of the market economy and private enterprises across the world have been changing over the last decade. This has resulted in privatization of the public sector, less regulation of most industries and development of pro-competitive policies to encourage innovation and the efficiency of different sectors of the economy, across the globe. Also, significantly different market practices across nations, which were based on government trade and employment policies, are likely to give way to more market-based practices in the future. The World Trade Organization and international financial institutions ...