What Is Marketing?

According to the American Marketing Association — marketing’s top association — marketing is “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (American Marketing Association 2013).

Our goal is to better understand how the consumer experience has been transformed and why it has become necessary to adopt a drastically different perspective on how to perform marketing online. Thus, as we re-conceptualize the ecosystem in which consumers and firms operate, we concentrate on the following elements of that definition: “processes for creating, communicating, delivering, and exchanging offerings that have value.”

In other words, the role of marketing is to create value for a broad range of stakeholders. In this textbook, we concentrate on value creation for consumers. We concentrate on value creation because consumers “do not buy products or services, they buy offerings which … create value” in their lives (Gummesson 1995, p. 250). Hence, our focus will be on understanding how firms can create value in consumers’ lives — and how they can do so online.

Firms create value for consumers in many different ways. If we rewind back a few decades, we find that our understanding of value creation was tainted by the work of economists, and value was mostly thought of as being based on products’ utility. Utilitarian value, therefore, denotes the value that a customer receives based on a task-related and rational consumption behavior (Babin et al. 1994). Since then, our understanding of value has vastly broadened to include other types of value, such as hedonic value — value based on the customer’s experience of fun and playfulness (Babin et al. 1994)—or linking value, which is based on the creation of interpersonal links between consumers (Cova 1997). This is important for digital marketers because it means that there are numerous avenues to contribute to consumers’ lives through value creation that expand beyond the use of a product by a consumer to achieve a specific task.

Another important transformation of our understanding of value creation over the last decade is the idea that value is always co-created (Vargo and Lusch 2004). Value is co-created through the meeting of consumers, with their own resources such as skills, expertise, and existing possessions, with that of firms and their resources, such as brand campaigns, service delivery models, and the products they sell.

Let’s see these notions concretized through an example: Before, we would have conceptualized a consumer as buying a car because they wanted to extract the utilitarian value associated with the product (i.e., moving from point A to point B). Value resided in the car and was transferred to a consumer when they put that product into use. Nowadays, we understand the purchase of a car as conceptually very different. First, consumers can buy a car for reasons other than going from point A to point B. Maybe they want to belong to a community of other consumers, or what is referred to as a consumption community, and buying this car allows them to do so. This community-oriented strategy is employed by iconic brands such as Harley-Davidson. Or maybe the consumers see the car as a recreational object, where the end is not important (i.e., where they are going), but how they get there is. This has led to many ads that emphasize the pleasure of driving, rather than more utilitarian characteristics such as fuel economy. And we now understand the value created by a car as emerging from the interaction of a consumer and the car. For example, creating value by consuming a sports car can be limited by the skills of the driver. The car has a set of characteristics from which consumers can create value, but they can only maximize value co-creation if they possess the expertise to do so. Similarly, a consumer can co-create value when buying a Harley-Davidson while riding it, but they might leave undeveloped value when they do not participate in the worldwide community of Harley-Davidson drivers.

To sum up, value exists in many different ways, and it is always the result of the interaction between a consumer and a firm (and its products and services). This has important implications for digital marketing, one of them being the creation of content. Many firms participate in creating value in consumers’ lives by offering free content. This content can have hedonic value, such as a humorous YouTube video. It can also help consumers better their skills and knowledge, such as online tutorials. By increasing consumers’ expertise, firms allow consumers to expand their resources, which can lead them to create more value when consuming products. We will come back to this idea in the conclusion of this chapter.