Value Creation in Marketing

This assignment examines the evolution of marketing from an exchange-based model to a value creation paradigm. It analyzes the influence of competition and customer feedback on this shift, highlighting the importance of CSR policies in sustainable value creation. The discussion emphasizes how companies like Unilever utilize innovation to enhance value and differentiate themselves in the market.

Running head: ESSAY
Shift in Marketing Definition
Name of the Student
Name of the University
Author’s Note

1ESSAY
There has been a shift in the definition of marketing in American Management
Association. The paper describes the shift in the definition of marketing between the periods of
1985 to 2004, where it shifted from exchange perspective to value creation (Sheth & Uslay,
2007). This assignment will be focusing on the concepts through application to the specific
marketing problem with references of real world examples. A detailed understanding of the
marketing concepts is provided and an in-depth explanation is given through its application to
the specific marketing problems related to it. This information is utilized in the later part for
analyzing and evaluating a marketing context. A brief recommendation is provided in the final
part of the essay.
The concept of exchange had been the fundamental for many decades. It was defined as a
way of meeting the society’s problem. This exchange framework is a concept that relates the
number of exchange with the number of outcomes. Marketing according to this definition is to
create exchanges to satisfy individual and organizational goals (Sheth & Uslay, 2007). Three
types of exchange can be identified broadly by different scholar that are generalized, restricted
and complex. The first type of exchange that is generalized exchange denotes the reciprocal
relationship among a minimum of three actors in exchange. These actors are related indirectly to
each other. Whereas, restricted exchange is the type of exchange that involves only two parties
and it represents the reciprocal relationship in-between the parties (Hill & Martin, 2014). Last
but not the least, the complex type of exchange refers to a system of mutual relationship between
at least three parties. It can also be referred as the channel distribution. Generalized and complex
exchanges are mostly visible in present day marketing scenario (Achroll & Kotler, 2014).
Whereas, value creation concept reaches out the aspects of value other than exchange.
These other types of values are taken into consideration for value creation for the growth in the

2ESSAY
business. It also gives a proper explanation for the development and growth of intra and extra-
networks (Sheth & Uslay, 2007). These non-financial factors that are considered into value
creation help the organization to create long-term value. There are certain themes of value
creation that supports its definition (Lusch, 2007). Value creation takes place within a context
out of which it is meaningless. The financial value of a company is obviously important for a
company, but it is insufficient for assessing value creation. The value of an organization is
created from both tangible and intangible assets. Value is created utilizing both public and
private resources. Purpose off the value creation is to satisfy the needs of the organization and
others. Connectivity between wide ranges of factors facilitates the creation of the value.
Various assumptions have been made in due time regarding the shift of marketing
paradigm from exchange to value creation. The traditional exchange paradigm of marketing
conveyed the message to the customers about the benefits of the products and services in solving
problems or to enhance a situation. On the other hand, value creation which introduced the
relationship marketing. In this, the organization focuses on the need of the consumer, and
provides the product and services to meet that need, which helps them to build up a long term
relationship with their customer. This minute detail explains various reasons behind the change
that occurred. The market pressure can be identified as the first factor that play crucial role in the
change. The Corporate Social Responsibility is the second reason for that is involved in the
change of marketing paradigm that can be identified. Present market situation demands the
business organizations to look after the societal sustainability and also the sustainability of the
company. It also helps the company to differentiate themselves from other similar companies
(Suliman, Al-Khatib & Thomas, 2016).

3ESSAY
Pressure or the competition that prevails on the present market scenario led the
organizations to think of satisfying the customers and acquire the brand loyalty to survive in the
market. It differs from the traditional market as the marchent company had the dominating power
in the market. At present time, the customers are the dominating factors as they have plenty of
options in hand to meet their satisfaction. For example, Amazon is a big name in the e-commerce
industry around the globe. On the other hand, Netflix, Google, eBay and are present in the
international market challenging Amazon in their business process (Grönroos & Voima, 2013).
Hence, to maintain the customer base and loyalty, the marketing team of the company has to
focus on the value creation by different means. The business strategy of the present day needs to
incorporate themselves into the lives of the customers and seek out the requirements of the
customers. Moreover, one time exchange is no more the focus of the organizations. As the
dominating power is shifted from the merchant organizations to the customer due to the
abundance of available companies, the marketing team of the organization is in tension of
increasing the brand value of the customers by several means. One of the important ways of
creating value is to provide the customers the opportunity to provide feedback. It helps the
company to deal with the issue faced by the customer and provide the best possible value for
their product (Tantalo & Priem, 2016).
The CSR policies that are implemented in different companies are to supplement the
value creation of the company. The degradation of the society is the prime reason for the
companies to adopt a proper CSR policy to maintain the sustainability of both the company and
the society in order to continue their business in the target market (Tai & Chuang, 2014). For
instance, if the resources used by the company to manufacture their product are in danger, it will
be a problem for them to maintain their business. On the other hand, the company requires new

4ESSAY
and innovative way to manufacture and deliver their products to the customer in a more efficient
and cost effective way. For instance, Unilever invented the drier that consumes less water in
operation which supplements the sustainability of the company. It differentiates the company
from other companies selling similar products that is the value creation of the company. It helps
them to increase their sells in respect to other competitors in the market.
In conclusion, we can state that the shift of the paradigm from the exchange to the value
creation was absolute necessary for the marketing. The traditional way of marketing seemed to
have limitations that required change in earliest attention. The market competition can be
considered as the primary factor that facilitated the change. The value creation helps an
organization to attend more exchange than just the economic one. Moreover, the use of CSR
policy as an integrated part of an organization has direct impact on value creation. It facilitates
the cause of the change in the paradigm.

5ESSAY
References
Achroll, R. S., & Kotler, P. (2014). The service-dominant logic for marketing. The service-
dominant logic of marketing: Dialog, debate, and directions, 320.
Grönroos, C., & Voima, P. (2013). Critical service logic: making sense of value creation and co-
creation. Journal of the academy of marketing science, 41(2), 133-150.
Hill, R. P., & Martin, K. D. (2014). Broadening the paradigm of marketing as exchange: a public
policy and marketing perspective. Journal of Public Policy & Marketing, 33(1), 17-33.
Lusch, R. F. (2007). Marketing's evolving identity: defining our future. Journal of Public Policy
& Marketing, 26(2), 261-268.
Sheth, J. N., & Uslay, C. (2007). Implications of the revised definition of marketing: from
exchange to value creation. Journal of Public Policy & Marketing, 26(2), 302-307.
Suliman, A. M., Al-Khatib, H. T., & Thomas, S. E. (2016). Corporate Social
Responsibility. Corporate Social Performance: Reflecting on the Past and Investing in
the Future, 15.
Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.
Tantalo, C., & Priem, R. L. (2016). Value creation through stakeholder synergy. Strategic
Management Journal, 37(2), 314-329.