Contemporary Issues In Management Essays Online

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Coursework Header Sheet 228146-67 Course MARK1120: Contemporary Issues in Mktg Course School/Level B/UG Coursework Essay Assessment Weight 85.00% Tutor PR Holden Submission Deadline 20/04/2016 Coursework is receipted on the understanding that it is the student's own work and that it has not, in whole or part, been presented elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with the University's Regulations regarding Cheating and Plagiarism. 000919786 Tutor's comments Grade Awarded___________ For Office Use Only__________ Final Grade_________ Moderation required: yes/no Tutor______________________ Date _______________ CONSUMER EMPOWERMENT: BETWEEN ILLUSION AND REALITY Looking into how developments in technology pose opportunities and challenges for contemporary marketing Introduction While reading through Harvard Business Review Articles, I stumbled upon a very interesting sentence that put me to thought: “customers cannot envision a new concept. They cannot predict their own behavior. They can only compare against their current frame of reference” (Silverstein, 2016). I have decided to use this as a starting point for the debate around consumerism. If indeed customers don’t know what they want as Peppers $ Rogers (1997) are suggesting, isn’t it then the mission of marketing to create a sort of structure or order into all the choices out there and helping the consumer make sense of the chaotic assortment of various products and services? In fact, Beckett (2008) affirms that “the role of marketing is to help customers meet those needs to solve their everyday problems through informed consumption”. Interesting affirmation, isn’t it? Marketing becomes a solution for our uncertainties, however the question is: what does an informed consumption imply? From the other point of view what has created this uncertainty? Isn’t it the culture of consumerism hatched and developed by marketing? Following these questions puts us at risk of getting into a never ending vicious circle of trying to understand which came first the chicken or the egg or in our sophisticated analysis: the marketing or consumerism? This essay will critically look at these questions and analyze how developments in technology influence the concept of marketing and the way it is applied. Firstly, we will look at how technology is believed to empower consumers and create the so-called learning relationships between firms and customers. The virtual platforms and networks allow marketers to gather knowledge and understand customers, and therefore deliver the right messages at the right time. On the other hand, these relationships are making it difficult for the consumers to switch to other brand offerings due to convenience, hence we look at the difference between being empowered and feeling empowered. Secondly, we will look at how empowering the consumer is believed to be an illusion created by big corporations that gather consumer data and constantly watch over consumers’ online activity. Depending on the taken perspective and ideology background, scholars have different opinions about the notion of power in establishing marketing relationships. The online platforms raise a number of issues related to privacy of consumer data, uninformed consent to the usage of private information and the inconsistency between how companies use the acquired knowledge and how consumers think it is being used. Thirdly, we look at consumerism, what it implies and what is its relationship with marketing. Consumerism has been associated with marketing and hedonism, however many scholar affirm that materialism has always existed as part of the human nature. Finally, we end the analysis with an overlook of how marketing evolved as a concept over the years and how scholars with different backgrounds understand its definition. The conclusion after the analysis of these topics is that marketing is a very complex topic and technology doesn’t ease the work of marketers, nor does it set boundaries to how far marketing can be extended. It poses additional challenges for both consumers and marketers and it can be perceived as an opportunity or as a threat. The topic remains open for discussion and there cannot be one sole answer to the complex debated issues. Consumer Empowerment through the Prism of Technological Developments Many scholars believe that with all the changes brought by the information age and developments in technology, marketing is transforming as well. Peppers & Rogers (1997) create a picture of a new economy based on make-to-order model and a changing business environment due to progress in the IT sector and its implications specifically on marketing. With the rise of the Internet and social networks, consumers are becoming active online participants, continuously communicating their tastes, preferences and lifestyle choices. As the virtual world abolishes geographical distances, consumers are able to group into virtual communities or e-tribes and bond based on stories, empathy and understanding and discuss their interests and affiliations (Kozinets, 1999). Peppers and Rogers (1995) suggest that companies must use technology in their advantage to build “learning relationships” that require customers to put the effort and time in teaching companies what they need and what they want; therefore, with every choice, this relationship becomes smarter and smarter and this is what will ensure companies’ competitive advantage. As they put it, and Lynn Serafin (2011) agrees, customers don’t want more choices. They want companies to know what they want, how they want it and when they want it (Peppers & Rogers, 1997). Computerization facilitates the analysis of very detailed data at an incredibly rapid pace and with no cost constraints giving the marketers the advantage to understand their customers better, persistently improve this knowledge and therefore offer personalized products and services. Moreover, the learning relationships make it possible to anticipate customers’ needs even before they themselves know what they want. This in turn increases brand loyalty and customer retention. As the learning relationship is not based on an emotional connection but rather on convenience, customers don’t want to invest the same amount of time and effort to tell all this data to a new company (Peppers, et al., 1995). Peppers and Rogers (1995) affirm that companies must use technology to become two things: mass customizer and one-to-one marketer. The continuous listening and collaboration between companies and consumers will “keep customers forever” (Peppers, et al., 1995). Interestingly enough, indeed consumers have the freedom to communicate their desires and preferences, however they don’t necessarily have the freedom of choice; it seems that this learning relationship is tying consumers to one brand making it difficult for them to switch to another one. This undoubtedly raises the question of what does consumer empowerment actually imply and does it exist at all? Pires (2006) affirms that empowerment comes in two forms: as a process and as an outcome. As a process, it presumes mechanisms that offer control over issues that concerns consumers, whilst the latter refers to the “feeling” of being more empowered. This last idea is really interesting. Customization offers consumers more control, but at the same time influences their decision making, therefore the notion of empowerment becomes questionable. The Consumerist Panopticon: Looking into Who Has the Power in the Virtual World In the previous paragraph we have looked at how technology has changed the relationship between marketers and consumers, the last question posed being if technology really empowers the consumer or does it only create the “feeling” of empowerment? When talking about power we undoubtedly have to ask: Who governs the internet and what are the power relationships established among the online participants? Is the internet giving corporations and marketers more control or consumers more power? Unquestionably there is no single answer to these questions, and certainly not the right answer, however it is interesting to explore how scholars take different positions in analyzing the digital revolution and its impact on marketing and consumers. From a dystopian perspective, the online world has become more like Orwell’s description of Big Brother, or in our case data gathering corporations such as Google or Yahoo, who are constantly watching over consumers’ activity online and recording their preferences in order to sell them to advertising companies. The gathered data allows marketers to collect valuable knowledge which serves as a raw material that transforms people into means of production (Wilenius, 1998). Virilio (1999) goes further in developing this idea of illusion of consumer empowerment stating that the technological monopolies are centralizing the power creating a social division between the IT experts and the propaganda driven CEO’s. Moreover, this radical transformation that challenges the whole humanity leaves consumers with no points of reference. Marx has said that “man makes history, but not under conditions of his own making” (Campbell & Carlson, 2002); undoubtedly this can be an analogue to the discussion of power and governance over the internet, for how empowered consumers really are? “Delivering the right message to the right person at the right time” requires very advanced surveillance technology needing collection of data not directly related to one’s offline identity (Campbell & Carlson, 2002). Moreover, looking into postmodernists view that consumers are having various identities, how do marketers choose between them and who determines how valuable consumers are? Is technology becoming a discriminatory tool? If there is a “right” customer, it means that there is a notion of a “wrong” customer, emphasizing the fact that some people are more worthy economically. The online relationship between firms and consumers can be seen as an online Panopticon to understand how surveillance is used and deployed in modern capitalist system and comprehend how the “rational” consumer is produced (Campbell & Carlson, 2002). If the capitalist system offers a variety of choices to consumers who in turn make rational decisions, the question that arises is how do corporate actors compel individuals to engage in self-surveillance? How compulsion is accomplished in a system that by nature is not supposed to be coercive? Whitaker (2000) says that exclusion becomes a sanction in the modern panoptic model, which aligns with the criticisms of the consumerist society. Privacy in this case becomes a commodity, a burden restricting consumers to participate in the online e-commerce. Peppers and Rogers (1997) mention that it is essential for companies to create privacy policies in which they mention what information they need from the consumers and how they will NOT use it. Interestingly enough, companies don’t say for what they ARE using the collected information. So what is privacy in this case? Some scholars say that it does not become a legal issue as long as it doesn’t cause severe “economic” harm (Campbell & Carlson, 2002), but what about other types of harm? Where is the boundary between what firms can and cannot do? Participatory surveillance is displayed as a mutually beneficial partnerships: if consumers teach marketers about their lifestyles, marketers can offer personalized products and services. Isn’t this a carefully constructed illusion? Consumers have no idea how they are being assessed or how they are being categorized, making the online activity a “participation with no informed consent” (Campbell & Carlson, 2002). Jason Pridmore (2010) however points out that the online relationship is too complex and too subtle to state that consumers are being fully controlled; there are always aspects of care and control. The panoptic scenario of companies constantly watching over consumers and expecting them to act in a certain way is valid on the assumption that there exists a consumerist society and that people’s identity and social inclusion depends on their consumption choices. The question has been debated by many academics and the following section will look into the concept of the consumerist society, critically analyzing marketing’s relationship with it. Consumerism: a Consequence of Marketing or a Characteristic of Human Nature? Consumerism has become a characteristic symptom of post-modern marketing with the well-known slogan depicting our society: “I shop therefore I am” (The Independent , 2011). David George (2010) touches upon the notion of wasteful consumption, a topic debated in the last 50 years and serving as inspiration for various scholars. Benjamin Barber for example approaches this topic from a social perspective emphasizing the fact that consumerism or more specifically infantilized consumerism encourages society to choose “easy over hard”, “fast over slow” and “simple over complex”. However Barber slips from critically analyzing the issue and ends up telling people what they should prefer (George, 2010). Lynn Serafin (2011) mentions that traditional marketing encourages people to consume more based on the so-called marketing formula that uses fear, sex, and humor as main motivators influencing people’s behavior. Therefore they start consuming more than they can and spend more than they earn, which in the long run leads to the collapse of our current socioeconomic system. On the other hand, “the growing differentiation of goods and services reflects the growing differentiation of needs, values and lifestyles” (Toffler, 1980). Relating this idea with the afore mentioned concept of learning relationships, technology is making consumers’ and marketers’ lives easier by allowing data collection and analysis which generates knowledge that companies can use to personalize their offerings and give the consumers what they want, all these with the assumption that consumers are demanding more and more, seeking pleasure in consumption choices. The concept of consumer society has become to be associated with hedonism and globalization and it has become an orthodoxy to put these three terms in the same box (O’Shaughnessy & O’Shaughnessy, 2002). Marketing is assumed to be the driving force of “the consumer society, of a culture of consumption” (Saren, 2007). Hedonism, concerned with pleasure seeking, self-obsession and creation of an individualistic culture is assumed to be the sole purpose of marketing which in turns encourages consumerism- accumulation and consumption of material goods. Moreover, indulging one’s desires is seen as a source of guilt, which in turn generates impulsive and compulsive buying (Dedeoğlu & Kazançoğlu, 2010). Lynn Serafin (2011) mentions that marketing doesn’t bring holistic success and the positive and pleasurable emotions are short-lived; consumers cannot be completely satisfied with their purchases, however negative emotions like guilt are also short lived and depend more on the individual values such as the quest for distinguishing oneself (Dedeoğlu & Kazançoğlu, 2010). Critics of marketing, especially those taking a Marxist stance, see advertising as an activity that destroys human values and encourages commodification of social life. Marketing as a whole is created around power structures willing to maintain dominance, therefore promotion becomes a tool to stimulate people’s latent wants. The assumption is that consumers have no motivation and firms are the ones who are creating needs rather than meeting wants. People become part of consumer society in order to seek social membership and acceptance; they seek external validation that they are worthy. Postmodernists would argue here, affirming that self-identity is an individual choice, however what they forget is the fact that self-identity is formed as a consequence of social interactions, purchasing choices and using other people’s choices and identities as points of reference (O’Shaughnessy & O’Shaughnessy, 2002). If looking at marketing communications from a consumerist- critique perspective, it becomes a tool for creating social pressure to consume; it compels customers to feel excluded or believe that they are left out. They are “forced” to disclose their information in order not to be deprived from the “benefits” of the marketplace (Whitaker, 2000). However, placing the blame on marketing for complex social and economic issues seems a too easy answer. Is marketing really creating a consumerist society? Materialism has not been invented by marketers and hedonism characterizes any affluent society. In fact, marketing is open to everyone and is based on a set of value-neutral tools that can be used to proselytize any perspective. Consumer society offers a variety of choices and consumers attend to what concerns them and this is where communist planned economy fails: it can satisfy only consumers’ basic needs, however it does not address emotional or deep social wants (O’Shaughnessy & O’Shaughnessy, 2002). Firat (1999) agrees with this position, affirming that consumption has always existed; what has changed is the perception of what it implies. From a modernist perspective, it has always represented the opposite of production, however there is no production without consumption. In the modern capitalist system, production is highly organized and rationalized whilst consumption is private and free, however production occurs in consumption. Firat (1999) believes that through consumption, arises production of experiences which allows self-expression, purpose and identity that all characterize the human being. Wilson (2013) agrees with Firat’s stance, stating that “Marketing is about the human experience and is a fundamental function of human existence”; nowadays everyone is a marketer to some extent, the question is what kind of marketer do you want to be? Evolution of the Concept of Marketing: From an Economic Function to a Tool for All We cannot look into issues and opportunities arisen for marketing without looking at how the concept itself has been analyzed and studied over the last century. Even today there is no single definition of marketing and there is an ongoing debate about how far it should be extended, because depending on academics and their area of expertise, as well as the ideology they adhere to, the subject acquires various connotations. Philip Kotler (1972) extends the concept from its traditional economics meaning of a simple transaction or exchange of values towards an applied behavioral science, shifting the focus from commodity perception to social emphasis. Moreover, he mentions that marketing is “fundamentally a social process” that can benefit society. He has been criticized by many scholars, Luck (1969) mentioning that in Kotler’s eyes “anything can be marketing” and that the definition is too broad with no limitations in terms of institutions or purposes. Kurzbard and Soldow (2001) agree with Luck, affirming that the socio-cultural factor must be eliminated from the definition proposed by Kotler in order to avoid philosophical debates. As an answer to this, Kotler accentuates the changing nature of marketing and the fact that if limited only to the traditional concern with economic transactions, businesses might miss various opportunities and students of marketing will in turn deny the relationship of the discipline with growing sectors of the society (Kotler & Levy, 1969). More recently, postmodernism is used to analyze the changing nature of marketing and it has been widely criticized and wrongly used as a chic equivalent of “new” and “complex”. Post-modernists emphasize imperfections in marketing models and theories encouraging marketers to be concerned with “myopia of marketing” not “marketing myopia” as Kotler formulates. However, post-modernists seem to criticize everything and propose nothing (Brown, 1992), nonetheless it is interesting to look at marketing in post-modern terms of analysis to understand its changing nature. Cova (2006) introduces the idea of “neo-marketing” which concerns everyone and facilitates the two way conversation between consumers and marketers, allows personalization and transparency and shifts the power towards users. He says that when talking about neo-marketing, there are too many panaceas focusing on various aspects of marketing such as client relationships, market environment, subjective experiences, etc., however it is essential to take into considerations all perspectives in a responsible way. This actually offers an indication of how complex marketing has become and how connected it is to other areas of study. From a modern perspective, marketing puts the consumer at the center with a strong sense of self and a conscious goal of satisfying his/her needs- this allows for segmentation and positioning of target groups. In post-modern terms of analysis however, the consumer has different ways of being, is involved in fragmented moments of experience and is not committed to a single idea or system. Moreover functionality doesn’t play such an important role; purchasing decisions become paradoxical, as consumers acquire a product more for the image it represents (Firat & Shultz, 1997). In fact, Lynn Serafin (2011) emphasizes the fact that marketing sells ideas of happiness and freedom to make an impact. Homo sapiens evolves to homo consumericus in which consumption becomes a way of selfexpression. People are playing personalities and the market becomes “the locus of realizing the fragmented self” (Firat & Shultz, 1997). This idea of forming one’s identity based on consumption choices can be paralleled to the concept of the reflexive consumer which is constantly challenged to make sense of his/her own identity through his/her purchasing choices (Beckett & Nayak, 2008). If traditionally consumption was a reflection of one’s social identity, nowadays individuals construct their identities through consumption choices. This notion however seems to fit in the modern approach to marketing, in which the consumer is considered to have a strong sense of self and therefore makes conscious, “reflexive” decisions based on his/her needs. This is contradictory to post-modernists view however. As mentioned earlier, consumption decisions are not necessarily conscious: consumers acquire products mostly for what they represents rather than their functionality and this in turn helps them to construct a certain image in a particular situation (Firat & Shultz, 1997). Therefore, despite the debates around the definitions and the concept of marketing, either it is viewed as a process or as a function, one thing is certain: marketing is essential; it is up to the marketers to decide how they want to act and what message they want to deliver. Marketers need to constantly reposition their approaches and offerings as markets become fluid and constantly moving and merging. Toffler (1980) mentions in his description of the Third Wave of Change the fact that the concept of a mass market has long been obliterated with the emergence of smaller minimarkets that are changing and creating “a rising tide of diversity in which people refuse to melt in a general picture and are becoming more conscious about their backgrounds”. Therefore, marketers should empower consumers for greater participation and offer contexts for experiences and be skeptic to “a single order” idea and instead embrace the “try anything movement” (Firat & Shultz, 1997). The evolution of the concept of marketing makes it more complex with time and marketers are thrown in the unknown: there are many aspects that need to be considered and the new technologies pose challenges as to how the relationship between firms and consumers is established. It is indeed too subtle of an issue to come to a single agreed solution, however one thing is certain: our whole society is transforming rapidly and marketers need to become comfortable with the unpredictable and the unfamiliar. Firat (1999) affirms that marketers are the scholars who are closest to understanding the core elements of our contemporary culture and have the tools and the knowledge to challenge the old and create the new. Moreover, holistic marketers should be committed to empowerment of human beings through establishing trustworthy connective bonds. Marketing, especially on online platforms, can become an art delivering quality communications and engaging consumers’ senses (Serafinn, 2011). Following this position, marketers have all the tools to create a better change and challenge the status quo. As postmodernists are skeptical to the idea of one way of doing things, marketers nowadays have the freedom to act as they please with the ultimate goal of creating value for the consumers. Technology in this sense can be a facilitator or a destructor: it is up to the marketers how they choose to use it. Conclusion Consumer empowerment is a very complex debate, as depending from the perspective one looks at it, one may adopt different positions. Undoubtedly technology is influencing businesses and people and provides opportunities for establishing new relationships between marketers and consumers. Should companies use the new technologies and opportunities provided by the digital world to gain competitive advantage as Peppers and Rogers (1995) suggest is a highly debatable issue raising questions of ethics, privacy and protection of consumer data. If acting from a sole purpose of gaining detailed data about consumers to overwhelm them with more choices, firms risk to create an online Panopticon leaving the consumer powerless and vulnerable. Nonetheless, people will not stop using the online platforms for communication and self-affirmation. The virtual world allows people to connect and bond based on their interests and lifestyle choices and marketers can observe these in order to build learning relationships and make them stronger and stronger by getting to know their customers better. On the other hand, tying the consumers to one brand and one company is controversial with the notion of empowerment which many believe is an illusion created by big corporations. The question and the challenge for marketers therefore is how to manage and harmonize the two: coming with personalized offers while at the same time giving the consumers the freedom to choose something else. This leads to the notion of consumption and how it has become a way of building one’s identity. Although many believe that marketing and the capitalist system have created a culture of consumption, creating false needs and never leaving customers satisfied, other scholars note that materialism and hedonism are characteristics of any affluent society and they have not been invented by marketing. Consumption and production merge in our modern world, the former allowing the production of the human being in terms of identity and self-expression. Marketing becomes an initiator of human experiences and goes beyond meeting people’s basic needs. The concept has been debated over the last century with scholars taking different stances towards how far should the definition be extended. Although there is no agreement on this, it is certain that nowadays it is not a mere economic function and has to consider environmental, social and ethical issues. Marketers have the tools to create a better change in how marketing is practiced and perceived, especially when there is no single accepted way of doing things. References Beckett, A. & Nayak, A., 2008. The Reflexive Consumer. SAGE, 8(3), pp. 299-317. Brown, S., 1992. Postmodern Marketing?. European Journal of Marketing, 27(4), pp. 19-34. Campbell, J. E. & Carlson, M., 2002. Panopticon.com: Online Surveillance and the Commodification of Privacy. Journal of Broadcasting & Electronic Media, 46(4), pp. 586-606. Cova, B., Badot, O. & Bucci, A., 2006. Beyond Marketing: In Praise of Society. [Online] Available at: http://visionarymarketing.com/en/blog/2006/07/beyond-marketing-in-praise-ofsocieting-by-bernard-cova-olivier-badot-ampelio-bucci/ [Accessed 16 April 2016]. Dedeoğlu, A. Ö. & Kazançoğlu, İ., 2010. The feelings of consumer guilt: A phenomenological exploration. Journal of Business Economics and Management, 11(3), pp. 462-482. Firat, A. F., 1999. Rethinking Consumption. Consumption Markets & Culture, 3(4), pp. 283-295. Firat, A. F. & Shultz, C. J. I., 1997. From segmentation to fragmentation. European Journal of Marketing, 31(3/4), pp. 183-207. George, D., 2010. Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole. Review of Social Economy, 68(3), pp. 374-377. Golbeck, J. & Mauriello, M., 2014. User Perception of Facebook App Data Access: A Comparison of Methods and Privacy Concerns, s.l.: s.n. Kotler, P., 1972. A Generic Concept of Marketing. Journal of Marketing, 36(2), pp. 46-54. Kotler, P. & Levy, S. J., 1969. A New Form of Marketing Myopia: Rejoinder to Professor Luck. Journal of Marketing, 33(July), pp. 53-63. Kozinets, R. V., 1999. E-Tribalized Marketing? The Strategic Implications of Virtual Communities of Consumption. European Management Journal, 17(3), pp. 252-264. Kurzbard, G. & Soldow, G. F., 2001. Towards a Parametric Definition of Marketing. European Journal of Marketing, 21(1), pp. 37-47. Lesk, M., 2013. Big Data, Big Brother, Big Money. Security & Privacy Economics, July/August, pp. 8589. Luck, D. J., 1969. Boradening the Concept of Marketing - Too Far. Journal of Marketing, 33(July), pp. 53-63. O’Shaughnessy, J. & O’Shaughnessy, N. J., 2002. Marketing, the consumer society and hedonism. European Journal of Marketing, 36(5/6), pp. 524-547. Peppers, D., Pine, J. & Rogers, M., 1995. Do you want to keep your customers forever?. Harvard Business Review, March-April, pp. 103-114. Peppers, D. & Rogers, M., 1997. Enterprise One-to-One: Tools for Buildng Unbreakable Customer Relationships in the Interactive Age. London: Judy Piatkus. Pires, G. D., Stanton, J. & Rita, P., 2006. The internet, consumer empowerment and marketing strategies. European Journal of Marketing, 40(9/10), pp. 936-949. Pridmore, J., 2010. Reflexive marketing: the cultural circuit of loyalty programs. [Online] Available at: http://link.springer.com/article/10.1007%2Fs12394-010-0064-9 [Accessed 16 April 2016]. Saren, M., 2007. Marketing is everything: the view from the street. Marketing Intelligence & Planning, 25(1), pp. 11-16. Serafinn, L., 2011. The 7 Graces of Marketing: How to Heal Humanity and the Planet by Changing the Way We Sell. 1st ed. London: Humanity 1 Press. Silverstein, M. J., 2016. hbr.org. [Online] Available at: https://hbr.org/2016/03/what-it-takes-to-build-a-startup-into-a-brand [Accessed 18 April 2016]. The Independent , 2011. independent.co.uk. [Online] Available at: http://www.independent.co.uk/arts-entertainment/art/features/barbara-krugerslogans-that-shake-society-2281119.html [Accessed 19 April 2016]. Toffler, A., 1980. THE THIRD WAVE: THE CORPORATE IDENTITY CRISIS. Management Review, Volume 69, pp. 8-17. Virilio, P., Kittler, F. & Armitage, J., 1999. The information bomb: a conversation. Journal of the theoretical humanities, 4(2), pp. 81-90. Whitaker, R., 2000. The end of privacy: How total surveillance is becoming a reality. s.l.:The New Press. Wilenius, M., 1998. A New Globe in the Making: Manuel Castells on the Information Age (Book Review). Acta Sociologica, 1 January, 41(3), pp. 269-276. Wilson, J. A., 2013. Marketing the new core skill for all?. The Marketeers: Maestro, August, pp. 8287.

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