In Search of a New Logic for Marketing—Foundations of Contemporary Theory

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In Search of a New Logic for Marketing—Foundations of ContemporaryTheory, by Christian GronroosIvan Snehota a

a University of Lugano, Switzerland

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To cite this Article Snehota, Ivan(2010) 'In Search of a New Logic for Marketing—Foundations of Contemporary Theory,by Christian Gronroos', Journal of Business To Business Marketing, 17: 1, 95 — 103To link to this Article: DOI: 10.1080/10517120903566744URL: http://dx.doi.org/10.1080/10517120903566744

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Journal of Business-to-Business Marketing, 17:95–103, 2010Copyright © Taylor & Francis Group, LLC ISSN: 1051-712X print/1547-0628 onlineDOI: 10.1080/10517120903566744

WBBM1051-712X1547-0628Journal of Business-to-Business Marketing, Vol. 17, No. 1, Jan 2010: pp. 0–0

Book Review

In Search of a New Logic for Marketing—Foundations of Contemporary Theory, by Christian Gronroos. John Wiley & Sons, 2007Book ReviewBook Review

Christian Gronroos, professor of service and relationship marketing at theHanken Swedish School of Economics and Business Administration inFinland, is familiar to many marketing scholars and practitioners for histhree decades of pioneering contributions to the field of service marketing.His book Service Management and Marketing, first published in 1990 byWiley and now in its third edition, has been well received for the scholarlyand thought-provoking examination of services marketing management.Gronroos’s current work, In Search of a New Logic for Marketing, is a per-sonal account of his past research in the field of service marketing and ofhis early contribution to the advancement of the idea of relationship market-ing. It is a retrospective on the so-called Nordic School of marketingthought of which he has been one of the central characters since the 1980s.

The book is a collection of nine articles on service and relationshipmarketing published in scholarly journals over a period of some thirty years.But the aim of the book is not simply to tell the story of Gronroos’s pastresearch or to become a collection of readings. The ambition of the authoris to address two broad issues that animate the debate among marketingscholars. The first is whether the general theory of marketing, the concep-tual foundations of the mainstream marketing, need to be reviewed,amended, or reformulated. The second is how it can be done, in whatdirection should it be developed, and on what foundations should a generaltheory of marketing be built. The overarching central argument of the bookis that the current state of both the marketing discipline and the practice isnot satisfactory and that both could benefit from the logic that has emergedin service and relationship marketing.

The introduction, the ninth chapter, and the conclusion frame the eightchapters on service marketing and relationship marketing and relate them tothe general marketing theory. The stage is set in the introduction, whichcontains considerations on the current state of the marketing discipline anda brief story of the so-called Nordic School of marketing. In the concludingchapter several propositions with regard to the foundations of a contemporary

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marketing theory are formulated based on the research of the author andhis colleagues on service and relationship marketing.

The need to rethink marketing is discussed in the introduction. It startsfrom the consideration that there is a sizeable stream of studies and reportsshowing the declining impact of marketing on the thoughts and decisions oftop management. Gronroos ponders signs that the discipline of marketing islosing credibility. He refers to several voices among academics and practi-tioners that have expressed dissatisfaction with the current state of themarketing discipline and practice. At the same time businesses today appearto operate in markets that are rapidly changing and performing in thesemarkets is demanding for management. Most observers concur that manag-ing the customer side of businesses appears more complex and morecritical for business performance than ever. That leads to the question: Whyis the marketing discipline losing credibility in times when marketing issuesin most businesses are of major concern? The answer offered by Gronroos isblunt: “marketers are hostages of outdated and too narrow frameworks forthinking and doing,” elaborated and proposed by the mainstream of themarketing discipline. It is suggested that mainstream marketing in researchand teaching as well as in practice has been overly preoccupied with tacti-cal issues and consequently is “doing bad job in taking responsibility forcustomer management,” which is much needed in companies. In manybusinesses, in particular services and business-to-business, the responsibilityfor actual “customer management” appears to be taken on by other thanmarketers. Both marketing and sales functions in companies apparentlytend to have a major role in making promises to customers and generatingnew business but the actual delivery and building of customer loyalty tendsto be left to others in the company.

To some readers, such assessment of the current state of the marketingdiscipline may sound harsh and some are probably ready to disagree and tochallenge it. Others are ready to share the opinion of the author. Critics ofthe current state of the marketing discipline are likely to point to mountingempirical evidence of “marketing in crisis.” On the whole, the issue shouldnot leave many marketing scholars indifferent.

If we admit that to rethink the conceptual foundations of marketing isneeded, and possibly urgent, the question becomes: What does it involvesto review the conceptual foundations of marketing in terms of research andconceptual development? The story of the Nordic School might offer somehints of what such an endeavor involves. Looking back at the origin of theSchool in the late 1970s, the author recalls the substantial lack of conceptualframeworks for dealing adequately with marketing issues in service compa-nies at that time. While the growing importance of service businessesbecame evident and problems faced by management striking, the availablegeneral marketing theory turned out to be problematic not only as guidancefor practice but also for a systematic analysis of marketing situations that


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service businesses were facing. These circumstances can explain whyresearch in the Nordic School tradition has been problem driven rather thantheory or data driven and the emphasis on theory development rather thanon theory testing. Service marketing researchers apparently had little choicebut to start from empirical observations and to develop ad hoc analyticalframeworks. Proceeding along this path entailed using a variety of researchmethods to collect empirical data and to develop conceptualizationsgrounded in the collected empirical evidence. It might explain the evidentplurality of methodological approaches and mix of research methods thathas characterized the research of the Nordic School, which has been quanti-tative and qualitative, exploratory and descriptive, but also concept andtheory testing. As a consequence, the empirical observations are intertwinedwith the conceptualizations and the line that separates the two is not alwayseasy to draw.

The four chapters that make up the part of the book dealing withservice marketing contain several propositions that underlie the main threadof the book. The broad argument offered here is that in service, businessesempirical studies invariably show that it is not the single transactions butrather the development of relationships between the business and itscustomers that are the central issue in marketing management. The proposi-tions formulated in this part of the book originate in extensive empiricalevidence collected by the author and colleagues over a couple of decadesin the form of company cases and surveys, even though much of the data ispresented neither systematically nor in detail.

In the first of the four chapters on service marketing (written back in1978) the peculiarities of service businesses are discussed. The difficulties toapply the general marketing concepts dominated by the marketing mixmodel from the late 1950s and early 1960s for the analysis of managementproblems in service businesses are discussed pointing to the peculiarities ofservices. There is a substantial agreement among both researchers andpractitioners of marketing that “service products” are different. The peculiarfeatures of services frequently emphasized in writings on services marketingand management are that services are intangible, produced and consumedsimultaneously, and that they always require some involvement of thecustomer in the marketing activities of the service provider. Acknowledgingthese peculiarities the question becomes: What are the consequences ofthese for marketing management in service firms? While there has beensizeable research on the impact of the intangibility of how customersevaluate the “service product,” the consequences of the simultaneity of pro-duction and consumption and of the involvement of the customer in themarketing activities have been explored much less systematically. Consid-ered more closely, the simultaneity of production and consumption and thecustomers’ involvement have a profound impact on marketing management.Gronroos argues that rather than characteristic of the “service product”


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these two features characterize the whole service business. They also makethe very concept of “service product” to some extent less relevant. Marketingtheory that has at its center product transactions is of limited help in bothresearch and practice because in service situations there is no preexistingproduct. One of the reasons for this limited relevance is that in productionand consumption processes the time dimension is important while thetransaction-centered perspective of mainstream marketing does not give itmuch attention. Customers’ involvement in production and marketingactivities has consequences for how far these production and consumptionprocesses can be controlled and managed.

This line of thought is further developed and sharpened in the follow-ing chapter in which the argument is that service “is an activity rather than athing, and production and consumption are, at least to some extent, simul-taneous activities” (p. 43). The “process nature” of service can be easilyobserved empirically. In the service context it often becomes difficult evento capture and pin down the transaction to a specific moment in time. Inservice marketing time is important because the service process tends toinitiate long before and to stretch far beyond the transaction episode. There-fore, marketing cannot be conceived as limited to activities that aim atacquiring the customer but has to embrace the delivery and the keeping ofthe customer. The process features of services are not captured by the con-ceptualizations of marketing of tangible goods, which put the single transac-tions at the center of marketing and assume that market transactions can bemore or less clearly confined. Indeed, the difficulty of applying the market-ing mix model of marketing management to services depends on its roots. Itoriginates in the idea of determining the parameters of a transaction as thecentral problem of marketing. Observing the service process, it is evidentthat it is open to the participation of customers (and possibly others) andtherefore involves more or less extensive interactions over time between theservice provider and the customer. The transaction episode is not the mainpart of the service process.

Chapter 4, which is from 1984, explores the consequences of the pro-cess nature of service marketing on what and how customers evaluate inrelation to service providers. The Service Quality Model that has inspiredthe development of the much used SERVQUAL model in the late 1980s ispresented here. It is based on the observation that in the service contextconsumers will evaluate various elements in connection to the productionand consumption of the service and that the ways in which customers’opinions are formed are complicated. Customers evaluate the quality of theservice from a provider taking into consideration expectations but mainlyvarious aspects of the process they actually experience. It is possible to dis-tinguish the “technical” and “functional” aspect of service experienced bycustomers. The former is referred to as the perceived instrumental outcomesof the process, the later as the experience of the customer in all interactions


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with the service provider of how these outcomes have been achieved.Empirical evidence shows that functional quality tends to be judged by thecustomers as equal to, if not more important than, the technical quality ofthe service. That indicates the importance of managing interfaces andinteraction in service marketing.

Acknowledging the process nature of the service marketing makes thetask of the “marketing function” in service organizations appear in adifferent light. Gronroos argues that because marketing management has totake into account the whole process, which entails more or less complexinteractions between the service customers and providers of service, there isneed for a distinct “service marketing model.” Marketing involves differentresources, activities, and actors and the task of marketing becomes,therefore, to manage different resources involved in the buyer-seller interac-tions over time and numerous interfaces between the company and itscustomers. He suggests that three types of resources involved can be distin-guished and each poses specific managerial problems: the front-line person-nel in contact with the customers; the physical environment in which theinteraction, production, and consumption takes place; and the customersthemselves. Customers can be considered as the most important resource tobe managed because of the impact they have on the “service outcomes”and thus on customer satisfaction and loyalty. He argues then that once thetask of marketing is viewed broadly in this way it cannot be managed by aseparate organizational unit, isolated and disconnected from the rest of theorganization. Therefore, marketing is a function that is diffused in the orga-nization and as such many different departments can have responsibility for it.

In chapter 5, “Marketing Services: The Case of a Missing Product,” thedistinction between process and outcome consumption is introduced. Thereasoning is that “the service consumption and production have interfacesthat are always critical to the customers’ perception of the service andconsequently to their long-term purchasing behavior” (p. 70) and thereforeconsumption of a service is process consumption rather than outcome con-sumption. This sets the service marketing model apart from the traditionalproduct marketing model where products are assumed to be preproducedoutcomes of the production process and are therefore a central variable inmarketing activities. “[W]hen there is no such product marketing becomesdifferent, because there is no ready-made, pre-produced object of market-ing and consumption. There is only a process that cannot begin until theconsumer or user enters the process” (p. 71). This conceptualizationbecomes an important pillar of the broad claim of the book that marketingcould benefit from the service marketing logic. It is argued that such situa-tions are common not only in what is traditionally called service businessesbut also in all cases when firms offer customers solutions that include theprovision of both goods and services. Therefore, “understanding serviceprocesses is becoming an imperative for all types of businesses.”


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The following four chapters that deal with relationship marketing buildon the conceptual development from research on service marketing. Thechapters emphasize the process nature of marketing in these situations andthe ensuing need for marketing to manage interaction interfaces. Indeed,the very title of the first chapter, which is from 1990, is “RelationshipApproach to Marketing in Service Context.” Gronroos has been among thefirst scholars to propose the concept of relationship marketing, sustainingthat marketing can be seen to revolve around relationships, some of whichare like single transactions while others are broader in scope, continuousand enduring. He proposes to define the task of marketing as “to establish,maintain, enhance and commercialize customer relationships (often but notnecessarily long term relationships) so that the objectives of the partiesinvolved are met. This is done by mutual exchange and fulfillment of prom-ises” (p. 98). Here the foundation of the logic that permeates the author’sreasoning is laid: if and when marketing has to deal with relationships, thenit reflects the service logic.

The thesis that the relationship marketing paradigm can be consideredan alternative paradigm in general marketing theory appears in chapter 7,which is from 1994 and contains critique of the marketing mix modelunderlying the mainstream marketing theory between the 1960s and 1990s.It is observed again that the mainstream marketing theory focuses entirelyon the market exchange transactions and therefore on marketing activitiesleading to the transaction. Putting the transaction at the center of attentionleads to a narrow view of the process by which customer needs are satis-fied, neglecting what precedes and follows the transaction, and leads to anarrow and limited conception of the scope of marketing management.Empirical evidence from service research is used to show that managingcustomer relationships effectively requires managing not only what leads tothe transaction but also the consumption process that follows the transac-tion. If we conceive the task of marketing in such a broad way then themarketing department concept “has to be replaced by some other way oforganizing the marketing function.”

The relationship marketing concept is further elaborated in chapter 8from 1999, which offers a comprehensive definition of marketing as “theprocess of identifying and establishing, maintaining and enhancing, andwhen necessary also terminating relationships with customers and otherstakeholders, at a profit, so that the objectives of all parties involved aremet; and this is done by a mutual exchange and fulfillment of promises.” Itis emphasized that marketing based on relationships requires new organiza-tional solutions in order to be managed. Eight viewpoints are offered thatsum up the organizational challenges of accepting the relational view of themarketing problem. The core theme is that it is virtually impossible to pre-define the set of variables needed to produce a solution that actually cansatisfy customer problems and needs. Tangible goods tend to be only one


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of several possible resources involved in delivering an effective solution forthe customer. In addition to a good company’s personnel, technology, andknow-how, customer’s time and capabilities also tend to be critical toproducing value for the customer. The set of resources involved in customerrelationships is likely to involve more than a predefined portion of anycompany and therefore it is illusory to organize marketing in the companyas a separate organizational unit; it must be conceived organization-wide.An important aspect of marketing when relationships matter becomes thechoice of customers to serve and decisions about how to serve them, whichmust be based on information and knowledge that is obtained at thevarious interfaces between the company and the customers.

The nature and content of the relationship marketing process is furtherdetailed in chapter 9, the last of the articles dedicated to relationshipmarketing. The point of departure is the consideration that “the consump-tion of a service is service consumption rather than outcome consumption”and when this is the case the “service consumption and production haveinterfaces that are critical to the consumers perceptions of the service and tothe long-term purchasing behavior.” The management of these interfaces is“interactive marketing” because of the more or less heavy involvement ofcustomers (p. 147). The author suggests that three processes have to bemanaged: personal interaction, communication, and value creation. All ofthese tend to create the new knowledge necessary to develop and deliverthe solutions required over time.

In the final part of the book—chapter 10 (which is an article from the2006 Adopting a Service Logic for Marketing) and the conclusion—thevarious findings and conceptualizations that stem from the author’sresearch on relationship marketing and service management are broughttogether. The broad purpose is “to discuss marketing based on servicelogic and to analyze if and how this perspective fits the marketing ofgoods as well” (p. 175). The discussion here is related to the positionspelled out by Vargo and Lush (2004). While the broad claim that servicelogic also fits goods marketing is the same, Gronroos discusses the rea-sons for it in a somewhat different way. His argument is that “service is aperspective on value creation rather than a category of market offerings”(p. 180) and that the value-creating processes take place in the “customersspace” rather than in the producers space. Suppliers offer resources andsupport to the value-creating and when they interact they engage in co-creation of the value-in-use. Following this line of reasoning, goods arevalue-supporting resources while services are value-supporting processes.Supplier firms that facilitate processes that support customers’ valuecreation and products or tangible goods are but one of the resource ele-ments needed for that. Here the author presents a slight difference withrespect to Vargo and Lush (2004), who take the position that goods aretransmitters of service.


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In the conclusion the logic for the development of a contemporarymarketing theory is discussed. The discussion starts with three broadassumptions about the scope of marketing and results in four propositionsfor the development of marketing theory. First, marketing resources andactivities are those resources and activities of the firm that influence acustomer’s preferences and behaviors. Second, these resources and activi-ties have to be present and function where customers can experience them.Finally, it is up to the customer to decide which of the resources andactivities of the firm are marketing. Therefore, what is marketing “will varyfrom situation to situation, customer to customer and even from time totime” (p. 195). This point of departure from value-in-use offers a broaderperspective on marketing than starting from the value-in-exchange, whichsuggests that it has been made ready in the suppliers design and productionand then transferred to the customers for use. An important feature ofmarketing is that it involves interactions with customers that enable the firmto enter the consumption and usage process of the customer by which thevalue-in-use is created. Therefore, interaction rather than exchange shouldbe the focal construct of marketing. Since the interaction needed is multi-functional and involves varying portions of the supplier organization“marketing cannot be managed, planned and implemented as one organiza-tional function” but has to be seen as “customer-focused managementabove the departmental level and throughout the organization” (p. 206).

Four propositions about the guiding principles for the development ofa contemporary theory of marketing sum up the argument. First, value isnot delivered but created in consumer processes and the role of marketingis to develop value proposition and to support customers’ value creation ininteraction. Second, customers can be in relational or nonrelational mode,so development of relationships is not a goal in itself even if longer-termrelationships with customers are often a basis for profitable business. Third,marketing cannot be implemented by one organizational function only. Tobe effective it requires customer-focused technologies and systems through-out the organization. Fourth, customers have both explicit and fuzzy expec-tations that should be fulfilled by the supplier. Fulfillment of expectationscreated by promises made form a firm’s marketing process.

In a final note Gronroos contemplates the term marketing and offersthe consideration that marketing appears to evoke a concept possibly toonarrow for the scope of the marketing phenomenon as it appears in theservice perspective. He suggests that customer management perhaps is aterm that is less worn out and better captures the scope of the marketingprocesses.

The end result is an interesting volume that has a somewhat ambiguoustarget that appears to be the fellow scholars of marketing concerned withbroad marketing theory. The main drawback of the book is its form. It is noteasy reading for those simply interested in the promise of the title. Being a


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collection of articles, the text is to some extent repetitive and at timesredundant. Some of the articles are less coherent than the author suggests. Itleaves to the reader much of the burden to connect the various pieces ofthe conceptual framework presented. It can be enjoyed in particular byreaders who are interested in how certain ideas develop and take shape.

The main merit of the book is to bring together a wealth of ideas andnovel concepts that capture different aspects of marketing seen both as pro-cess and as requirements for marketing management. The conceptualframework brought forward by the author builds on valid arguments thatrest on solid empirical grounds even though the references to empiricalfindings are limited. It relates well to propositions that others offered in thecall for and attempt to reformulate the general theory of marketing. Eventhose that do not share the author’s position will likely find several of hispropositions thought provoking. Certainly, the book is a thoughtful contri-bution to the scholarly debate on the nature and future of marketing.

Ivan SnehotaUniversity of Lugano

[email protected]


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In Search of a New Logic for Marketing—Foundations of Contemporary Theory