Economic subjects | Marketing » Dr. Miodrag Hitrec - Marketing paradigm shift, Worldview and servant marketing model

ECONOMIC DIPLOMACY SEMINAR – EDS 2008 Fužine, Croatia MARKETING PARADIGM SHIFT Worldview and Servant Marketing Model Prof. dr Miodrag Hitrec Associate Professor, Marketing Department University of Zagreb, Graduate School of Economics and Business, Dražen Glavaš, BS, MA, CMC Professor, Private Business College Vern’, Zagreb President, Partner Business Association, Zagreb e-mail: drazen.glavas@partnerhr This paper was presented at the International Conference, An Enterprise Odyssey: Economics and Business in the New Millennium 2002, University of Zagreb, Graduate School of Economics & Businesss, Zagreb, June 27-29, 2002 MARKETING PARADIGM SHIFT Worldview and Servant Marketing Model 1. INTRODUCTION In March 2002, ARTHUR ANDERSEN was indicted on charges of obstructing justice. In August 2002, ENRON pleaded guilty to money laundering. The WORLDCOM story continued the fraud chain including: ADELPHIA COMMUNICATIONS, TYCO, and IMCLONE SYSTEMS. A recent issue of FORTUNE

magazine (Sept 9, 2002) is entitled The Greedy Bunch - meet the 25 companies with the greediest executives. Among them are Lou Pai former ENRON division head who cashed out $270 million and Dennis Kozlowski former CEO of TYCO who cashed out $258 million before their companies fell. In the last year FORTUNE and and other business magazines have been writing about greed, failing ethics, and mistrust. The year before the title story of FORTUNE (July, 2001) was God and Business - the Surprising Quest for Spiritual Renewal in the American Workplace. In this paper we challenge economies and particularly marketing based on “Greed.” Our intention is to show the deeper underlying worldview, paradigm that produces “Greed” and to explore a different alternative - economy and marketing based on “God.” We live in a “global village” where the only constant is change. The computer power doubles every 18 months (Moore’s Law) and globalization is quickly spreading around the world

creating more and more complex cultural and human relationships. September 11th turned another page in world history bringing an emphasis on security as well as many other consequences that are not yet evident. The most significant was/is the war in Iraq Our world is divided, argues Harvard scholar Samuel Huntington 1, not so much by geographical boundaries as by religious and cultural traditions, by people‘s most deeply held beliefs –by worldviews. Huntington predicted a clash between the worldviews of three major traditional civilizations: The Western world, the Islamic world, and the Confucian East. Political scientist James Kurth, (Huntingtons former student) challenged him arguing that the most significant clash would be within Western civilization – “between those who adhere to a Judeo-Christian framework and those who favor postmodernism and multiculturalism.” 2 Charles Colson, former presidential aide to Richard Nixon, believes Kurth is right. “And the 1

Huntington, S. P (1998): The Clash of Civilizations and the Remaking of World Order, Touchstone Books, London 2 reason this conflict within Western culture is so significant is that Western culture may soon dominate the globe. Across the globe, people are complaining about what one French politician described as a ‘U.S cultural invasion’” 3 John Pilger puts it even more harshly quoting an article in Washington Post. “In an article entitled ‘Unilateralism is the key to our success’, Charles Krauthammer of the Washington Post described the world in the next fifty years as one without protection against nuclear attack or environmental damage for the citizens of any country except the United States; a world where ‘democracy’ means nothing if its benefits are at odds with American ‘interest’; a world in which to express dissent against these ‘interest’ brands one a terrorist and justifies surveillance, repression and death.” 4 The environment in which

“modern” marketing has developed and which it had influenced throughout the last ten years is rapidly changing. The mutual relationship of marketing and its environment may be looked at by merely noticing what is visible. Yet, it is possible to look more deeply, examining its foundations by trying to understand how worldview influences marketing. This is our intention in this paper This paper touches on a wide range of topics thus there is not always a satisfactory explanation for everything. Comprehensive explanations and arguments may be found in other works which we refer to in this study. Many people are disturbed by the recent high-profile meltdowns, but by which ethical norms in our postmodern, pluralistic global world do we judge these corporate frauds (enronisms) or Naomi Klein‘s 5 well documented brand-name secrets and transnational corporations scandals (Nike sneakers have been traced back to the abusive sweatshops of Vietnam, Barbie‘s little outfits back to the child

laborers of Sumatra, Starbucks‘ lattes to the sun-scorched coffee fields of Guatemala, and Shell‘s oil back to the polluted and impoverished villages of the Niger Delta.)? How do we know what is right and wrong? Deeper moral and ethical questions are louder and louder in the global market economy. The UN‘s Global Compact promoted by Kofi Annan, Hans Küng‘s World Ethos 6 and other global ethics initatives are trying to provide some answers. The answer to the question what is right and wrong depends on our worldview. 2 Colson, C.; Pearcy, N (1999): How Now Shall We Live?, Tyndale House Publishers, Inc, Wheaton, IL, pp 19. 3 Ibid., 19-20 4 Pilger, J. (2002): The New Rulers of the World, Verso, London, pp 10 5 Klein, N. (2001): No Logo, Flamingo, London, pp xviii 3 2. WORLDVIEW 7 “A worldview is a set of presuppositions (assumptions which may be true, partially true or entirely false) which we hold (consciously or subconsciously, consistently or inconsistently) about the

basic makeup of our world.” 8 Other synonyms of worldview include: “mental infrastructure”, “religious assumption”, “metanaration”, “cultural story”, Marxist call a worldview “ideology” and scientist a “paradigm”. Stephen Covey in his bestseller “Seven Habits of Highly Successful People” 9 compares a paradigm with a city map. Maps explain the reality we see around us It will be of little help to have a map of Vienna (on which by mistake is printed Zagreb) in finding a certain location in Zagreb. We can work hard on our behavior (trying more, working harder, speeding up etc.) or attitudes (positive thinking, developing self confidence, motivation, etc) but this will not help us arrive at the desired destination in Zagreb. The problem is that we have a wrong city map. Looking at the wrong map we interpret the reality around us wrongly Covey talks about two kinds of maps that we carry in our heads, one showing the “reality” (the things as they are) and

the other “values” (the things as they should be) through which we interpret everything that we experience. The way we see things determines our thinking and behavior. Our worldviews determine our values 6 Küng, H. (2001): Globale Unterhehmen – globales Ethos, Frankfurter Allgemeine Buch, Frankfurt am Main Another way to define worldview is through essential answers to the following seven questions: 1. What is prime reality – the really real? To this we might answer God, or the gods, or the material cosmos 2. What is the nature of external reality, that is, the world around us? Here our answers point to whether we see the world as created or autonomous, as chaotic or orderly, as matter or spirit; or whether we emphasize our subjective, personal relationship to the world or its objectivity apart from us. 3. What is a human being? To this we might answer: a highly complex machine, a sleeping god, a person made in the image of God, a “naked ape.” 4. What happens to a person

at death? Here we might reply personal extinction, or transformation to a higher state, or reincarnation, or departure to a shadowy existence on the “other side.” 5. Why is it possible to know anything at all? Sample answers include the idea that we are made in the image of an all-knowing God or that consciousness and rationality developed under the contingencies of survival in a long process of evolution. 6. How do we know what is right and wrong? Again, perhaps we are made in the image of God whose character is good, or right and wrong are determined by human choice alone or what feels good, or the notions simply developed under an impetus toward cultural or physical survival. 7. What is the meaning of human history? To this we might answer: to realize the purpose of God or the gods, to make a paradise on earth, to prepare a people for a life in community with a loving and holy God, and so forth. Dr James Sire in his book “Universe Next Door- a Basic Worldview Catalog” asks

those questions to each of the worldview described: Theism, Deism, Naturalism which includes Marxism, Nihilism, Existentialism, Eastern Pantheistic Monism, The New Age and Postmodernism. Cited in: Sire, J (1997): The Universe Next Door – A Basic Worldview Catalog, InterVarsity Press, Dovners Grove, IL, pp. 17-18 Other authors use different questions: 1. Who am I? Or, what is the nature, task and purpose of human beings? 2 Where am I? Or, what is the nature of the world and universe I live in? 3. What’s wrong? Or, what is the basic problem or obstacle that keeps me from attaining fulfillment? In other words how do I understand evil? 4. What is the remedy? Or, how is it possible to overcome this hindrance to my fulfillment? Cited in: Walsh, B. J; Middleton, J. R (1984): The Transforming Vision, InterVarsity Press, Downers Grove, IL, pp 35 8 Sire., pp 16 9 Covey, S. (1995): Sedam navika uspješnih ljudi, Mozaik knjiga, Zagreb, pp 17-18 7 4 An excellent history of the worldview

concept was provided by David K. Naugle in his book “Worldview.” 10 Some authors 11 talk about three basic worldview archetypes: NATURALISM or secularism (Naturalism sees reality as “ultimately physical”), BIBLICAL THEISM (Reality is “ultimately personal” because it has been created by the personal God) and ANIMISM (Animism views reality as essentially spiritual, “animated” by spirits). Darrow L. Miller analyzes the influence of worldview on development As an illustration we can look at how those three above mentioned worldviews understand history and what consequences this understanding has in development work. Miller asks two questions: The first is ontological: “Where have we come from?” The second is teleological: “Where are we going?” Animism answers both questions with a resounding, “No-where!” To the animist, life is like a wheel, a series of endless cycles: birth, marriage, death; spring, summer, etc. Human soul travels from one life to another in a

continuing process of a reincarnation. History does not have any meaning. Naturalism (secularism) answers the question where are we going with an emphatic, “To the grave!” Its symbol is the hourglass. Time and resources are running out. And while the secularist can indeed see time passing in a way the animist cannot, he has no transcendent historical perspective. Secularism has no answers to life’s ontological and teleological questions. Built upon Judeo-Christian theism, the development ethic introduces a radical concept of time – that it is linear, with past, present, and future. History is open, also; God, angels, and men can intervene to change its course. It’s no wonder, then, that cultures rooted in this ethic expect that life can get better, that progress is possible in the material world. These societies have hope for the future, a sense of optimism, a sense of ambition, action, and discovery. History is going somewhere What is the major worldview challenge today?

Some scholars 12 believe that the major conflict of our day is theism versus naturalism. Before we look at main characteristics of those two worldviews and their implication on marketing we need to have a historical context. We could start with 1450 and the invention of the printing press by Guttenberg but instead we will start with May 24, 1543. A few hours before his death Copernicus (1473-1543) published his only scientific work , On the Revolutions of the Heavenly Spheres about heliocentric theory. This started the first major paradigm shift replacing the Medieval Ptolemeic theory of 10 Naugle, D. K (2002): Worldview – The History of a Concept, Wm B Eerdmans Publishing Co, Grand Rapids, MI 11 Miller, D. L (1998): Discipling Nations – The power of Truth to Transform Cultures, YWAM Publishing, Seattle, WA, pp. 256-258 5 the world and opening a new page of the Renaissance history. “Kepler (1571-1630) building on the work of Copernicus, was creating something new in which

truth was not required to gain favor in God’s eyes. It remained for Galileo (1564-1642) who first used the telescope as an instrument of science (died in 1642 the year Isaac Newton was born) to make visible the unresolvable contradictions between science and theology, that is, between intellectual and moral points of view. Copernicus, Kepler, and Galileo put in place the dynamite that would blow up the theology and metaphysics of the medieval world.” 13 One of the consequences of these discoveries was the deenthronement of man and Earth from the privileged center in the universe. This thinking changed human relationship toward religion and started the chasm between reason and faith. Suddenly there were two sources of truth: Church and science. Unfortunately the moral decay 14 of clergy during those years also contributed to it. Dr Hans Küng, who played a major role in the writing of the documents of Vatican II, in his new book The Catholic Church – a Short History notes how

Martin Luther (1483-1546), Augustinian monk, furthered this change when he posted his ninety-five theses in Wittenberg in 1517 15: “From the perspective of the present day we can understand the Reformation better as a paradigm change: a change in the overall constellation of theology, church, and society. No less then the Copernican revolution in the change from a geocentric to a heliocentric picture of the world, Luther’s Reformation was an epoch-making change from the medieval Roman Catholic paradigm to the Protestant-Evangelical paradigm: in theology and the church it was a move away from the all too human ecclesiocentricity of the powerful church to the christocentricity of the gospel.” 16 12 Colson, C.; Pearcy, N (1999): How Now Shall We Live?, Tyndale House Publishers, Inc, Wheaton, IL, pp 20. 13 Postman, N. (1993): Technopoly – The Surrender of Culture to Technology, Vintage Books, New York, NY, pp. 30-32 Postman wrote a brilliant and provocative book about the

influence of technology on our lives 14 “The Renaissance popes maintained celibacy for their church with an iron hand, but no historian will ever discover how many children these holy fathers fathered, living in monstrous luxury, unbridled sensuality, and uninhibited vice. Three example may suffice: The crafty Alexander VI Borgia (was pope from 1492-1503, italics ours), Machiavelli’s model, who made his way into office with simony in the grand style and had four children by his mistress (and also other children by other women when he was still a cardinal), excommunicated Girolamo Savonarola, the great preacher of penitence, and was responsible for authorizing his burning in Florence.” Cited in: Küng, H (2001): The Catholic Church – A Short History, Modern Library, New York, NY, pp. 119-120 15 “In 1517 he (Pope Leo X, from 1513-1521, italics ours) failed to see the significance of an epoch-making event which was to usher in the end of the universal claim of the pope in West

as well. As professor of biblical theology in Wittenberg, an unknown Augustinian monk who had been in Rome a few months previously and who saw himself as a loyal Catholic published ninety-five theses against the trade in indulgences aimed at financing the gigantic new St. Peter’s, which was now built His name was Martin Luther” Cited in Ibid, pp 120. 16 Ibid., pp 126-127 6 Some of the most important figures during the “shift” period from theism to naturalism are: Francis Bacon (1561-1626); Thomas Hobs (1588-1679); Rene Descartes (1596-1650); John Locke (1632-1714); Isaac Newton (1642-1727); David Hume (1711-1766); Adam Smith (1723-1790); James Watt (1765 inventions of steam engine); Imanuel Kant (1724-1804); Georg Hegel (1770-1831); Charles Darwin (1809-1882) 3. NATURALISM This paper is too short to do justice to a worldview such as Naturalism, but we will just offer a brief overview for purpose of discussion: 17 1. Matter exists eternally and is all there is God does not

exist; 2.The cosmos exist as a uniformity of cause and effect in a closed system; 3. Human beings are complex “machines”; personality is an interrelation of chemical and physical properties we do not yet fully understand; 4. Death is extinction of personality and individuality; 5. History is a linear stream of events linked by cause and effect without an overarching purpose; 6. Ethics is related only to human beings Some problematic questions arise when we ask about meaning and purpose. Does naturalism give a foundation to think of ourselves as worthy? On what basis? Unique maybe, but even gorillas are unique. Can a being that just exists by accident be valuable? The main problem with naturalism is the meaning and purpose of human life. And if we do not have any purpose then we do not have any responsibility and it does not matter how we live. In morality, naturalism results in relativism If nature (cosmos) is all there is, then there is no transcendental source of moral truth and

people are left to make up their own rights and wrongs, according to their subjective or cultural criteria. Instead of morality, we have situational ethics. Dostoyevski (and before him Nietzsche) rightly maintained that everything is allowed if there is no God. Most naturalists (secularists) cannot live logically within their own system. Some ended up in Nihilism 18: Nietzsche, Hemingway committed suicide, Beckett wrote black comedies, Kafka and others. Existentialism came as an answer to nihilism. As dr Sire puts it”the essence of existentialism’s most important goal is summed up in one phrase – to transcend nihilism.” 19 17 Sire., pp 62 See Sire on Nihilism, pp.74 19 Ibid., pp 95 18 7 If we are just cosmic accidents without purpose a logical conclusion is well put by Leslie Newbigin: “If I do not know the purpose for which human life was designed, I have no basis for saying that any kind of human life-style is good or bad. It is simply an example of human life as it

is. Judgment about what is good or bad can only be personal hunches Each person will be entitled to her own. They will be, as we say, personal beliefs; and since there is no objective fact by which to test them, pluralism operates.” 20 The World that was created in the hundred years after the Enlightenment is a world of causes and affects. Everything is understood and explained in the terms of the fundamental law of physics. “In the context of a growing scientistic and mechanistic world view, it was almost inevitable that the ultimate goal of life would be something which could be mechanistically produced and mathematically quantified – namely economic growth.” 21 We have come to realize that economic growth does have definite ecological, social and psychological limits. Today we know from “particle physics” that the ultimate elements of what we call matter are not material. And the development of “quantum physics” has shown that the concept of a purely mechanical

system operating without purpose is mistaken. There are no “value-free facts” and a mechanical universe! Naturalism is important for our discussion because: 1. Marxism is “one of the most historically significant forms of naturalism” 22 that impacted socialist countries of former Eastern Europe for more then 45 years, and 2. because it dominates universities, colleges and high schools in the capitalist West and provides the framework for most scientific study. Understanding the predominant worldview (ideology) that has been influencing countries in transition and the global market economy might help in answering the question: Why is there a profound gap between the economies in transition and competitive democracies? Although this is not our main question we hope that our paper will be a small contribution to this discussion as well. Behind the fallen Berlin wall there is still a shadow Juraj Kušnierik and Milan Čičel in their research paper Shadows of the Past – The

impact of communism on the way people think in postcommunist society 23 provide a helpful summary of some of the consequences that communism had on the present business culture: -Fear of social problems. The social situation is perceived as something unalterable An individual is a mere helpless subject of the economic (and political) environment. 20 Newbigin, L. (1989): The Gospel in a Pluralist Society, Wm B Eerdmans Publishing Co, Grand Rapids, MI, pp. 16 21 Walsh. pp 136 22 C Stephen Evans cited in Sire, pp. 65 23 Kušnierik, J.; Čičel, M (1995): Shadows of the Past, SEN, Bratislava, pp 20 8 People often say; “There is nothing we can do to change the situation.” Responsibility for one’s own life is rare. -Lack of creativity in economic activities. An unwritten rule of communist economic activities was: “Anything not allowed is forbidden.” The postcommunist societies of Central and Eastern Europe are still not mobile and creative enough to properly handle the

complexities of a free-market economy. -High risk avoidance. The majority of the population would prefer safer, although less effective, ways of economic activity before riskier, but more profitable, ones. -Strong remnants of a collectivist culture. Individualism is still treated as something strange, almost evil. Social “empathy” with the unemployed is strong and officially supported by most of the political parties. Trade unions are quite influential, although strikes are rare (with Poland as an important exception). -Hierarchical thinking. Many companies, especially the larger, (formerly) state owned ones cling to outmoded hierarchical models of management. That causes many problems in the new, changed situation in which more up-to-date, team based management models fit much better. Also, people in the lower levels of a management hierarchy tend to be passive, feeling they cannot influence anything or very little. -Biased ethical values. It is very clear in the attitude to work,

employers, customers and the State. Work, although officially glorified under communism, is still understood as a necessary evil. There are big problems with discipline, quality control, financial mismanagement, etc. Employers, whether state or private, are perceived as potential enemies who exploit their employees. That is why cheating them is not seen as such a bad thing after all. Customers are not “always right” This is particularly evident when dealing with the bureaucratic monsters or state administration and big state-owned companies. Customers or clients are treated like intruders who disturb the peace and comfort of the employees. And finally, the State is still recognized as an economic enemy, taking unjustified taxes from its subjects. That is why tax evasion is generally justified in public opinion. After the bankruptcy of modernity and the fall of communism (both predominantly based on naturalism) McLuhan’s “global village” arrived. “It is neither inclusive nor

intimate and participatory,” 24 says Majid Tehranian from Harvard University. Globalization is the new 24 Tehranian, M. (Spring 1995): Global Communication and Its Critics, Journal of Communication, 452: 185-193. 9 stage at which modern marketing plays a significant role. The emerging globalization theories are new and much of the literature concerning them has appeared only since the late 70s and 80s. “Accordingly, globalization theory distinguishes itself from longer established worldwide perspectives in that it takes as its primary unit of social analysis the entire globe, which it treats as a single social system.” 25 Immanuel Wallerstein understands the modern global system as first and foremost an economy, 26 specifically a capitalist economy 27 based on market trade and commodification. For Wallerstein, the capitalist world-economy is now the global social context that conditions all other aspects of social life, namely polities and cultures. But this new global

context is full of paradoxes Charles Handy 28, a Fellow of the London Business School, points out the paradox of intelligence in which know-how and knowledge is the new source of wealth. The new paradox of work (the export of unproductive work mainly to China, outsourcing, more part-time jobs, working from home – a redefinition of the work as we know it), the paradox of Organizations, the presence of “virtual corporations” which can be no more than temporary project groups or corporations which are merely a “nexus of contracts” in the words of Oliver Williamson of Berkley (cited in Handy), organizations will organize without the need to employ and an organizing organization will look differently from an employment organization. The challenge for marketing is how to answer some of the paradoxes: • increase of material wealth vs. increase of poverty; “In 1960, the income of the richest 20 percent of countries in the world was 30 times the income of the poorest 20 percent.

In 1991, according to the United Nations Development Program, that figure had risen to 61 to 1. The net worth of the 358 billionaires on the planet listed by Forbes in 1994 was equal to the combined income of the bottom 45 percent of the whole world’s population (2.35 billion people)” 29 • increase of global power/s vs. increase of global terrorism; “A comparison of Western expenditure on foreign aid and the military is startling. In 1991, all major aid donors spent 3.55 percent of their GNP on military expenditures but gave only 034 percent to their 25 Beyer, P. (1994): Religion and Globalization, Sage Publication, London, pp 14 Ibid., pp 16 27 “This new kind of capitalism is in significant ways different from the one on which Karl Marx and Max Weber fashioned their accounts. Often referred to as neo-liberalism, the new capitalism has become, since the decline of the political left, so much the mindset of the West that many are prepared to agree with Margaret

Thatcher’s famous remark that ‘there is no alternative.’” Cited in Heslam, P S (2002): Globalization – Unravelling the New Capitalism, Grove Books Limited, Cambridge, pp. 11-12 28 Handy, C. (1994): The Age of Paradox, Harvard Business School Press, Boston, MA, pp 18-40 29 Sider, R. J (1997): Rich Christian in an Age of Hunger, Word Publishing, Dallas, TX, pp 25 26 10 GNP for economic aid. In 1992, world military spending was $815 billion, which was the combined income of 49 percent of the world’s people.” 30 This trend has increased dramatically after September 11th • increase of knowledge and information vs. inaccessibility of knowledge and information for many people; Five news agencies – Associated Press, United Press International, Reuters, Agence France Press, and the Russian International Telegraph Agency (former TASS) – control about 96% of the worlds news flows. An estimated 96% of all computers in the world are in the more developed countries. The

less developed countries, which account for about 80% of the world population, only own about 20% of the world media. “Unless we mean by communication that one side speaks and other side passively listens, to speak of ‘global communication’ may be therefore considered a hyperbole’ 31 writes Majid Tehranian. • increase of pollution vs. environmental protection; Rio de Janeiro 1992, Kyoto 1997, Johannesburg 2002 - Rio+10 • increase of corruption (and organized crime) vs. anti-corruption efforts and activities; “The losses of the modern society caused by psychological problems, violence, ignorance, crime, drugs, destruction of the environment, and other destructive activities, are somewhere around 10,000 billion USD a year. These figures speak for themselves“ 32 4. NEW MARKETING PARADIGM Social issues and social responsibilities, cultural diversity, environmental concerns and cause related marketing are becoming a central focus in consumer decision making. Respect,

dignity, security, loyalty, – old-fashioned qualities are in demand for a new-fashioned economy. We are living in a Service Economy (Jim Gilmore and Joe Pine talk about the Experience Economy 33 that we are now entering). In an economy built on service, our success will depend on our ability to educate, empower, and ennoble others and ourselves - but with compassion providing experience. In a network economy relationship marketing represents a natural step that focuses on building and enhancing sustainable relationships to customers but we must first ask for permission (permission marketing) to get close to people (we already have the term “intimate business relationship”). If marketing is authentically concerned with 30 Ibid., pp 32 Tehranian., pp 186 32 Nefiodow, L. A (1996): Der Sechste Kondratieff, Rhein-Sieg Verlag, Sankt Augustin, pp 101 33 Pine, B. J; Gilmore, J H (1998): Welcome to the Experience Economy, Harvard Business Review, Reprint 98407. 31 11 meeting real

consumer needs and concerns, it should also carefully evaluate how decisions impact and affect consumer expectations and quality of life. We need a new marketing paradigm. We will briefly look at three new marketing concepts: Integrated Marketing Communication (IMC) 34, Philip Kotler’s 35 new Holistic Marketing Concept and Servant Marketing Model 36. IMC: “What happened to the orderly world of the Four P’s? They turned into Lauterborns Four C’s. The new catechism said: Forget Product Study Consumer wants and needs You can no longer sell whatever you can make. You can only sell what someone specifically wants to buy. Forget Price Understand the consumer Cost to satisfy that want or need Forget Place Think convenience to buy. Finally, forget Promotion The new word is Communication For integrated marketing communications to really take hold, old assumptions must exit, assumptions about the role of advertising and sales promotion, about the organization of advertising and public

relations departments, about agencies and what they do, about the media, and most of all, about accountability. Our concept of integrated marketing communications is based on the need for a continual exchange of information and experiences between the marketer and the customer. The marketer seeks and stores information on each individual customer in a database. The customer, through transactions, surveys, and other methods is encouraged to communicate back to the marketer. Thus the fields of experience of both become greater and more useful to both parties. This relationship approach is central to our philosophy of integrated marketing communications. The ability to collect, store, access, and manipulate data, to turn data into information and apply it, in the laboratory, on the manufacturing floor, in the marketing department, and yes, in the home, changed everything.” 37 Start with the customer and work back to the brand, - IMC challenges the marketers. “Why is this

revolutionary?” asks Susan Jones direct marketing specialist. “Not because it is a new or controversial concept but because a whole culture of agencies, in-house departments, and consultants has grown up around the notion of separation for advertising, direct 34 Schultz, D. E; Tannenbaum, S I; Lauterborn, R F (1994): The New Marketing Paradigm – Integrated Marketing Communication, NTC Business Books, Chicago, IL 35 Kotler, P.; Jain, D C; Maesincee, S (2002): Marketing Moves, Harvard Business School Press, Boston MA 36 Hitrec, M.; Glavaš, D (2002): Principles and Technology of Modern Marketing in a “Servant” Economy, in: International Conference on ‘An Enterprise Odyssey: Economics and Business in the New Millennium 2002, Proceedings, University of Zagreb, Graduate School of Economics & Business, Zagreb, June 27-29, 2002, pp. 248-249 37 Shultz., pp 11-13, 28 12 marketing, sales promotion, and public relations efforts, rather than the harmonious customercentered

planning process that IMC requires.” 38 HOLISTIC MARKETING CONCEPT: Marketing expert Philip Kotler in his latest book calls marketers to deconstruct, redefine, and stretch marketing. “Marketing Moves presents a new framework for conducting marketing strategy and operations. We replace the selling concept, and the later marketing concept, with the holistic marketing concept. Our framework calls for integrating three types of management: demand management, resource management, and network management. We no longer believe that the marketer’s job is limited to managing the Four Ps or to determining segmentation, targeting, and positioning. To succeed, marketers must acquire skills in exploring, creating and delivering value. They must develop a cognitive understanding of their customers, assemble the core competencies needed in their business, and partner with collaborators that can deliver the other competencies needed for success. And this is the point of the holistic marketing

concept: Companies must redesign their business from a customer-driven starting point, so that they gather deep knowledge about customers and then have the capacity to offer customized products, services, programs, and messages.” 39 The importance of the customers’ needs (and wants) was long been neglected by mass marketing. Marketing gurus Jack Trout and Al Ries started the “Positioning Era” 40 in the seventies already then pointing out that positioning happens in the CUSTOMER’S MIND (not in the minds of a company or advertising executives). New marketing realities in the 90ties took some by surprise. The new word is EMPOWERMENT – customers can easily check all the available options (quality, prices, competition, and even the social responsibility of the company) on the global market, they are better informed and can communicate back their opinion. Customer-centered planning, cognitive understanding of the customers, customerdriven starting point, customers’ needs, -

behind these new marketing buzz words are there real concerns for real human needs or are they just new slogans for the selfish profit maximization regardless of any ethical or ecological consequences? What about the famous Marlboro cowboy, is it an all time marketing success or all time marketing failure? Our 38 Jones, S. (1998): Creative Strategy in Direct Marketing, NTC Business Books, Chicago, IL, pp 8 Kotler., pp x, xi, 46, 162, 164 40 Ries, A.; Trout, J (1986): Positioning, Warner Books, New York, NY 39 13 worldview plays a significant role in answering this question. The hierarchy of human needs is not the same if we believe that a human being is just an accident of random purposeless forces, or a person created in the image of God. Abraham Maslow developed probably the most famous hierarchy of needs. Maslow claims that all humans have the same basic set of needs. His famous pyramid arranges them in hierarchical order 1. Physical needs (food, water, warmth, sleep etc) 2.

Security (physical and psychological safety) 3. The need to belong (to love and be loved, to be part of a group of other human beings) 4. The need for esteem (self-satisfaction) 5. The need for self-actualization (quest for intellectual understanding, self expression, purpose in life, creativity, aestheticism) Maslow’s model is too simplistic. Newer reserach has shown that with the satisfaction of material needs humans will not automaticly move towards higher level needs. Quite the opposite, many are searching for the fulfilment of their needs with greater material consumption on all levels of needs including the level of self actualization. It is not so well known that Maslow moved his pyramid one step further. “Maslow was right when he postulated that there was a hierarchy of needs, that when you had enough material goods you moved your sights to social prestige and then to self-realization. If it stopped there, however, life would remain too self-centered, too egotistical. The

hierarchy needs another step Maslow recognized this himself toward the end of his life. In the preface to Toward a Psychology of Being, he accepted that he had been mistaken, that self-actualization is not the ultimate end, and that we need something “bigger than we are, to be awed by and to commit ourselves to.” 41 We agree with Maslow that we need something or someone bigger than we are because if nature (cosmos) is all there is, then there is no transcendental source of moral truth and people are left to make up their own rights and wrongs, according to their subjective or cultural criteria. The result of that is a world of war, hatred, lust, greed, competition, imperialism and environmental destruction. Today’s crisis is a worldview crisis Harvard’s social analyst Daniel Bell writes: “The real problem of modernity is the problem of belief. To use an unfashionable term, it is a spiritual crisis, since the new anchorages have proved illusory and the old ones have become

submerged. What holds one to reality, if one’s 41 Handy., pp 275 14 secular system of meanings proves to be an illusion? I will risk an unfashionable answer – the return in Western society to some form of religion.” 42 A spiritual crisis requires a spiritual solution. That brings us to the theistic worldview 5. BIBLICAL THEISM The basis of the theistic understanding of life and human beings is God’s creation. We shall consider this within the framework of Biblical Theism. Theism answers some of Sires questions as follows 43: 1. God is infinite and personal, transcendent and immanent, omniscient, sovereign and good; 2. God created the cosmos ex nihilo to operate with uniformity of natural causes in an open system; 3. Human beings are created in the image of God and thus possess personality, selftranscendence, intelligence, morality, gregariousness and creativity; 4. Human beings can know both the world around them and God himself because God has built into them the

capacity to do so and because he takes an active role in communicating with them; 5. Human beings were created good, but through the Fall the image of God became defaced, though not so ruined as not to be capable of restoration through the work of Christ God redeemed humanity and began the process of restoring people to goodness, though any given person may choose to reject that redemption; 6. For each person death is either the gate to life with God and his people or the gate to eternal separation from the only thing that will ultimately fulfil human aspirations. There are a few reasons why we put the Servant Marketing Model in the Christian theistic worldview: it is embedded in the foundation of European culture, we do not know well other worldviews, personal conviction that this worldview most comprehensively answers the basic questions about ultimate reality, life, human beings, moral and purpose. We prefer the term Biblical Theism because the word “Christian” has become packed

with so many conflicting interpretations and emotional reactions that the word itself gets in the way of understanding our points. In addition church history is unfortunately rich with examples where the terms 42 43 Walsh., pp 146 Sire., pp 21-38 15 Christian and biblical were not the same. After the 4th century, when it became the official religion in Constantin’s empire, Christianity significantly departed from its biblical roots. What are the fundamental needs of human beings as creatures made in the image of God? Dr. Miroslav Volf from Yale University in his book Work in the Spirit – Toward a Theology of Work suggest four “fundamental, anthropologically grounded needs and points out their relation to the Spirit of God: 1. The most fundamental of all human needs is the need for communion with God 2. The need for solidarity with nature 3. The need for fellow human beings 4. The need for personal development All four fundamental needs are grounded on the single, underlying

universal need, the need for the new creation, which is the kingdom of freedom. In relation to the need for God, the kingdom of freedom is a kingdom of perfect fellowship with God, of seeing “face to face” and of understanding as fully as one is ‘fully understood’ (1Corinthians. 13:12) In relation to the need for solidarity with nature, it is the kingdom of peace between human beings and nature liberated from corruptibility and the kingdom in which human beings jointly participate with nature in God’s glory (Romans 8:19, Isaiah 11:6; 65:25). In relation to the need for fellow human beings, it is the kingdom of unadulterated fellowship with one another, of pure “love, which binds everything together in perfect harmony” (Colossians 3:14). In relation to the need for personal development, it is the kingdom in which life is “realized only to be opened up to as yet unrealized possibilities.” For Jesus said, “Seek first his kingdom and his righteousness, and all these

things shall be yours as well” (Matthew 6:33). 44 In the Bible we do not only find a new picture of a man, but also we find the root of this new picture in a new picture of God. The God of the Bible is not a static Eastern god, nor an active and thinking logos of the Greek thought. He is in an active relationship with his creation and we see him working. The Old Testament speaks of a God who works: “In the beginning God created” Only in the Judeo-Christian worldview do we find a God who works. One of the human tasks from the beginning was to work and take care of the “garden,” which shows that 44 Volf, M. (1991) Work in the Spirit – Toward a Theology of Work, Oxford University Press, Oxford, pp 152154 16 the purpose of human existence from the beginning included work. “The Biblical tradition does not see a working man and the creator God as competitors, but as partners and this partnership is a fundamental aspect of the Christian understanding of work by which a

man in his daily work is cooperator Dei. This is the last and all encompassing meaning of human work.” 45 In the New Testament Jesus preached and proclaimed the kingdom of God. Throughout history theologians have struggled with the definition and meaning of the term kingdom of God. The importance of the kingdom is stressed in the Lords prayer that Jesus taught his disciples “your kingdom come” (Mathew 6,10). In Mathew 6,33 we read: “But seek first his kingdom and his righteousness” The story of Nicodemus illustrates the “radical nature of the calling into the kingdom.” 46 Jesus answers that “no-one can see the kingdom of God unless he is born again.” (John 3,3) For Nicodemus, although he was a famous religious teacher in his time, only a new mind-set, a new worldview, could help him to see the kingdom. “The new birth of which Jesus spoke is equally important today because of the secular mind-set that is so pervasive in our time. Only a new worldview can free one

from the power of the world’s mold” 47. Dr. James Halteman in his book “The clashing Worlds of Economics and Faith” 48 compares some characteristics of the kingdom of God and the kingdom of this World: KINGDOM OF GOD KINGDOM OF THIS WORLD -The total welfare of people -Individual freedom symbolized in the right of private property -Christian love -Self-interest with some moral restraints -Cooperation -Competition -Need based voluntary sharing -Auction price system -Church involvement in norm setting -Limited government and discipling This is a simplified model that can not explain all the complexity of the theological term, kingdom of God that “is here but yet to come” and its relationship to economic systems 45 Volf, M. (1991): Budućnost rada-rad budućnosti, pojam rada u Karla Marxa i njegovo teološko vrednovanje, Hrvatsko filozofsko društvo, Zagreb, pp. 105 46 Halteman, J. (1995): The Clashing Worlds of Economics and Faith, Herald Press, Scottdale, PA, pp

46 47 Ibid., pp 47 48 Ibid. 17 in the world. But this model illustrates the radical difference in the value system of those two kingdoms based on different worldviews. In the context of this tension we can easier understand some biblical requirements like: giving (Mt 5,42); forgiveness (Mt 6,14); peacemaking (Mt 5,9); love (Mt 5,44); compassion (Mt 7,12). Committed believers live in this tension like a “pilgrims and strangers” in this world. In comparison with secular systems especially the prevailing market economy and capitalism which is primarily based on naturalism some of these things might sound idealistic and utopistic. But is this so? Adam Smith (1723-1790), the “father” of the market economy, in his work The Theory of Moral Sentiments developed the idea of moral sympathy. “For Smith, the ‘invisible hand’ that guided economic activity toward harmonious ends was helped along by the moral sense described as ‘sympathy.’ In other words, market economies

needed to have a moral of a ‘sympathetic’ base before the common good could be served by pursuit of individual self interest.” 49 Today’s global capitalism is predominantly based on the neo-liberal, deregulated economy (Anglo American model) called “turbocapitalism” in which the shareholders profit is the main goal. The German (social market economy) and Japanese (economic ‘empire building,’ unique to their culture) models are different, but they were successful in building rich but relatively equal societies. In 1987, then Austrian Minister of Agriculture, Josef Riegler 50 began to prepare a model of economic and social policy designed to bring about Equilibrium between economic, environmental and social aspects: Eco-social-market economy. Dr Franz Josef Radermacher in his insightful book Balance oder Zerstörung 51 sees this model as the only one for the sustainable development of our world. We are briefly mentioning these market economy models because former

socialist countries are joining the global capitalist market and the question is which model will they adopt. Michael Novak puts it well: “Today, the formerly socialist nations of Eastern Europe (including the former USSR) are confronting, quite directly, the need to develop the moral and cultural habits necessary to undergird their dreams. they discovered that democracy alone was not enough: The people will not be happy merely to vote every two years or so; they want and demand an economic system that enables families to “better their condition.” It is not utopia they are asking for – just tangible progress. But the hardest lesson, is that they 49 Ibid., pp 122-123 Friewald-Hofbauer, T.; Scheiber, E (2001): The Eco-Social-Market Economy, Ökosoziales Forum Österreich, Wien 51 Radermacher, F. J (2002): Balance oder Zerstörung, Ökosoziales Forum Europa, Wien 50 18 cannot have either democracy or capitalism unless they acquire the appropriate moral habits and (of

course) adapt both their institutions and their laws.” 52 Here we ask Novak what are these moral habits of global unrestrained capitalism he is talking about? Naomi Klein gave us a well documented and researched answer about the “morals” of multinational corporations, John Pilger documents the “morals” of IMF, World Bank and the most powerful capitalist at that time in drawing up the plan for ‘market economy’ in Suharto’s Indonesia. One of such moral questions in our global world is the annual death of 8,8 million people from hunger. Benjamin Barber makes a point: It is not capitalism but unrestrained capitalism counterbalanced by no other system of values that endangers democracy. My criticism of McWorld is aimed at what may be called economic totalism. If the political totalism of the fascist and communist world once tried, at horrendous human costs, to subordinate all economic, social, and cultural activity to the demands of an overarching state, the economic

totalism of unleashed market economics seems now to be trying (at costs yet to be fully reckoned) to subordinate politics, society, and culture to the demands of an overarching market. 53 It might be worthwhile to include in this discussion the classic work of Max Weber “The Protestant Ethic and the Spirit of Capitalism” 54 in which he analyzes the beginning of capitalism. Weber observed that the members of religious groups that formed out of the Reformation had a strong sense of personal responsibility in their work that was needed in the beginning of capitalism. The reason was religious – the personal relationship with God which is a core value in Protestantism. Luther’s translation of the word “Beruf” (calling) contains a religious conception – the conception of a God-given task – it put professional, secular work on the same level as the spiritual work of the clergy. Weber concludes that this “moral justification of worldly activity was one of the most important

results of the Reformation.” 55 The religious cause was a strong support for capitalism that was later lost and gave primacy to the “mighty cosmos of an economic system growing out of technological and industrial revolution,” that did not need such support anymore. In his book “The Catholic Ethic and the Spirit of Capitalism” Michael Novak criticizes Weber’s thesis. “To put it simply, Weber detected something new, a novel Geist or spirit or cultural inspiration, some new complex of social attitudes and habits. He may have erred in calling it Protestant But he did not err in 52 Novak, M. (1993): The Catholic Ethic and the Spirit of Capitalism, The Free Press, New York, NY, pp 8 Barber, B. R (1996): Jihad vs McWorld, Ballantine Books, New York, NY, pp 295 54 Weber, M. (1992): The Protestant Ethic and the Spirit of Capitalism, Rutledge, New York, NY 55 Ibid., pp 40 53 19 identifying a moral and cultural dimension internal to capitalism. he identified something new in

economic history and glimpsed its moral and religious dimensions. he suggested in advance why Marxism, both as an explanatory theory and as a vision of paradise, was doomed to fail: Its resolute materialism excluded the human spirit.” 56 To close our discussion we see that there is a need for a moral and ethical framework of capitalism or market economy. Novak is right in pointing that former socialist countries of Eastern Europe in transition need to acquire the appropriate moral habits and (of course) adapt both their institutions and their laws. To restate Daniel Bell: “The real problem of modernity is the problem of belief. To use an unfashionable term, it is a spiritual crisis, since the new anchorages have proved illusory and the old ones have become submerged. What holds one to reality, if one’s secular system of meanings proves to be an illusion? I will risk an unfashionable answer – the return in Western society to some form of religion.” 57 A spiritual crisis

requires a spiritual solution. We think that only in the service of God and others can one truly increase social harmony. “This transcendent self-interest is foolishness to those who are not believers.” 58 And many believers are often not optimistic about the world’s progress toward social justice and harmony and sustainable development without the spiritual understanding and experience of the “radical nature of the calling into the kingdom.” We are called to “not conform any longer to the pattern of this world, but to be transformed by the renewing of our minds (Romans 12,2).” As a result we believe not only that we will be able to test and approve what is God’s will, but that we will be able to understand the difference between the building of the tower of Babel with one universal language (representing globalization) and Pentecost where the particularities of many languages are united through one historical fact, that of the death on the cross. If Jesus Christ is not

Lord of all he is not Lord at all. 6. SERVANT MARKETING MODEL 59 “Caring for persons, the more able and the less able serving each other, is the rock upon 56 Novak., pp 8-9 Walsh., pp 146 58 Halteman., pp 124 59 Is explained in more details in other works: Hitrec, M.; Glavaš, D (2002): Principles and Technology of Modern Marketing in a “Servant” Economy, in: International Conference on ‘An Enterprise Odyssey: Economics and Business in the New Millennium 2002, Proceedings, University of Zagreb, Graduate School of Economics & Business, Zagreb, June 27-29, 2002, pp. 248-249 Hitrec, M (2002): Servant marketing u zaštiti, Visoka škola za sigurnost na radu, IPROZ, Zagreb 57 20 which a good society is built.” Robert K Greenleaf 60 “Love is the killer app” Tim Sanders 61 The Servant Marketing Model is based on three elements: 1. LOVE (To live in love is life’s greatest challenge 62); 2. KNOWLEDGE (Life long learning, learning organizations, TQM; etc.) 3 NETWORK 63

(In the 21st century our success will be based on our networks and our partnerships) SERVANT MARKETING MODEL: SERVICE: Seek and serve the real human needs and wants and try to satisfy them with the contents of your offer, deliver a compelling experience; (not only promotion and communication) but EDUCATION: Educate and empower people to be wise in their decisions, providing true data, facts, information about you (as organization/enterprise/institution etc.), your activities and offer; (not only place and convenience to buy) but RELATIONSHIP: Relate and love people/customers, develop a long term relationships, enable them to use/spend/enjoy/participate, retain your customers; (not only price and consumer cost) but VALUE: Add value to the contents of your offer (product, service, message, other) having in mind a person’s well-being and social responsibility; and finally establish: ACCOUNTABILITY: Be accountable (economically, ethically and ecologically); NETWORKING: Network and share,

in the 21st century our success will be based on our networks and our partnerships; TRANSPARENCY: Be transparent! 60 Greenleaf, R. K (1977): Servant Leadership, Paulist Press, Mahwah, NJ Sanders, T. (2002): Love is the Killer App, Crown Business, New York, NY 62 Jesus was crucified, Gandhi and Martin Luther King Jr. were shot - to mention just a few Dr Leo Buscaglia in his bestseller book Love comments: “ Love has been ignored by the scientists. It’s amazing This is shocking because it is something we all know we need, something we’re all continually looking for, and yet there’s no class in it. It’s just assumed that it comes to us by and through some mysterious life force” Cited in Buscaglia, L. (1996): Love, Ballantine Books, New York, NY, pp7 Dr Siegfried Buchholz, management consultant, paraphrased the first letter of the apostle Paul to the Corinthians (Chapter 13) for business: If I would be able to speak all the languages and would be a perfect communicator but

could not love people, I would only produce noise and would never reach others. If I love people, I will have patience with them, I will treat them fairly, I will not always demonstrate my own superiority, I will not talk down to others, I will talk with them – not to them. If I love people, I can understand their feelings, I do not always seek my own advantages, I can control my ego, I will not dump my anger on others. If I love people, I will not be resentful, I will not always remind others of their mistakes, I will not rejoice when others fail but will rejoice when others succeed. If I love people, I will never give up on them, I will trust them and I will give them credit. I will give them hope and encouragement 63 Metcalfe’s law: the cost of the network expands linearly with increase in network size, but the value of the network increases exponentially. (http://wwwmgtsmsuedu/mgt487/mgtussue/newstrat/metcalfehtm) 61 21 MARKETING MODELS 4P’s MODEL 4C’s MODEL SERVANT

MODEL PRODUCT CONSUMER NEEDS SERVICE PROMOTION COMMUNICATION EDUCATION & EMPOWERMENT PLACE CONVENIENCE TO BUY RELATIONSHIP PRICE CONSUMER COST VALUE (PEOPLE) ACCOUNTABILITY (PERFORMANCE) NETWORKING TRANSPARENCY Different attributes of servant and conventional marketing are presented in Table 1. Table 1. Attributes of the servant and conventional marketing SERVANT MARKETING 1. WIN-WIN 2. FUNCTIONS AS A COMMUNITY OF INTERRELATED PARTS 3. LOVE IS A COMMITMENT AND IS UNCONDITIONAL 4. SERVANT LEADERSHIP 5. EMBRACE 6. TRANSFORMATION 7. PERMISSION 8. LIFE TIME VALUE 9. SENSE-AND-RESPOND 10. SELFLESS CONVENTIONAL MARKETING 1. WIN-LOSE 2. FUNCTIONS IN AN ATOMISTIC, INDIVIDUALISTIC MODE 3. LOVE IS A FEELING AND IS CONDITIONAL 4. LEADERSHIP AT ANY PRICE 5. EXCLUSION 6. EXPERIENCE 7. INTERRUPTION 8. IMMEDIATE TRANSACTION 9. MAKE-AND-SELL 10. SELFISH 7. CONCLUSION: We hope that this paper is another small step of a journey back to the future. It goes BACK to the originally

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