Introduction to relationship marketing theory

Relationship marketing: theory and implementation | Praveen Pandey -

introduction to relationship marketing theory

Relationship Marketing: Theory and Implementation GEORGE M. ZINKHAN Introduction Relationship Marketing (RM) can be defined as an approach to. Introduction. The world of business has altered a great deal in the last few decades or so, globalization and information technology has produced a young breed. Relationship marketing was first defined as a form of marketing developed from direct response This research conclusion has been generally recognized later, but the research scope is only limited to the From a social anthropological perspective, relationship marketing theory and practice can be interpreted as.

The Five Articles in this Special Issue The five remaining articles in this special issue explore relationship marketing from a variety of perspectives and methods. Three papers are conceptual; one uses a case study approach; and one uses a survey method to understand the behaviors and attitudes of the sales force. The contribution and perspective of each article are discussed in the following sections. Relationship Marketing in a B2B Setting The first article, by Anderson, identifies the limitations of relationship marketing, especially with respect to a B2B setting.

One key limitation is that customers may be unwilling to commit to a long-term relationship when they consider all of the potential costs and disadvantages.

As mentioned above, business customers may prefer to have the option of soliciting bids from a group of qualified vendors. Once these limitations are understood, Anderson uses a case study approach to explore the ways that suppliers attempt to overcome customer unwillingness i. Specifically, the author studies the business customers of a supplier of fat- and oil-based additives. Based on the findings of qualitative research, the author develops a set of propositions.

They do not want to be required to commit resources to the relationship, at the early stages. Non-coercive strategies include efforts to change customer beliefs or attitudes. In contrast, coercive strategies require the customer to make a commitment of resources over time e.

At the relationship maintenance stage, the author proposes that the supplier has to be willing to transfer knowledge both to the customer and to other competing suppliers. In this way, Anderson emphasizes what the seller has to give up in order to gain the benefits of a long-term relationship.

This perspective is key. Too often as in the Computer City example described abovesellers merely assume that the customer will gain some benefit from the relationship. Here, the author emphasizes that, at each step of the relationship process, the seller must be willing to make some potentially risky one-sided investments and sacrifices. Stakeholder Theory The second paper, by Polonsky et al. First, the authors point out that the marketing discipline is slowly recognizing that relationships may be much broader than the traditional link between buyer and seller.

The creation of successful marketing strategy may also require that a wide range of stakeholder groups e. The authors make an important distinction between stakeholder catching and stakeholder keeping.

That is, one set of activities may be necessary to establish contact with a potential partner. But, a different set of activities may be required to maintain that relationship over time.

Product details

Learning is a key aspect of sustaining relationships. As a first step, organizations need to learn which actions will have a positive effect on the partner.

For instance, the manufacturer may discover that sales and profits can be increased by offering specific incentives e. At a more advanced stage, organizations can learn enough about their business partner so that they come to alter their own goals and objectives. Electronic commerce provides many opportunities for enhancing organizational learning Watson et al.

For instance, data bases can be created to summarize and recognize patterns in buyer preferences. In many instances, the collaborative learning technology may recognize patterns or suggest solutions that the consumers themselves could not articulate precisely.

Affinity Marketing The third article, by Horne and Worthington, is a conceptual paper that focuses on affinity marketing, which can be viewed as a sub-area of relationship marketing. In the extant literature, affinity marketing involves three different actors and seems more applicable for B-to-C situations.

Second, there is the for-profit organization which typically serves as the seller and initiator of the affinity process. Third, there is the typically non-profit organization, which commands loyalty from a segment of the population. Consider the following example. The non-profit organization could be a university e. The alumni, of course, are the potential customers who are, at present, loyal to the university. The initiating organization could be a credit card company such as American Express or a financial institution.

The financial institution contacts UT alumni, who are given the opportunity to obtain a credit card which includes the UT name and logo. In turn, the University of Texas may receive some sort of donation which is pegged at some percentage of the total charges which accumulate on the new credit card.

In this way, there is a possibility for all three parties to benefit. In this case, UT has a small opportunity to increase alumni loyalty and also benefits financially. The customers receive a new service, plus obtain the benefits of affiliating with their alma mater. Finally, the financial institution gets a stream of new customers.

Introduction to Relationship Marketing | The Case Centre, for programme administrators

In this way, the chocolate shipper is a fourth party who provides added value to the customer. The authors argue that there can be substantial disagreements among the four parties to the affinity arrangement. That is, affinity marketing does not necessarily create a win-win situation. In this way, Horne and Worthington provide a very specific example of the Polonsky et al.

introduction to relationship marketing theory

Relationships are complex, and they are quite easily frayed. Just as in the case of personal relationships, there are many problems which must be overcome for an organization to establish and maintain successful business relationships. Trade Incentives in a Retail Setting Parker et al. Of course, the sales force is a key instrument for establishing and maintaining customer relationships.

introduction to relationship marketing theory

Among the sales incentives considered here are: The respondents indicate that the most effective incentives for them are money, travel, and praise. However, the respondents also indicate that such incentives e. For instance, the salespeople seemed to be reluctant to try and get a customer to switch brand preference just so that they the sales force could achieve their goals e.

introduction to relationship marketing theory

In terms 88 ZINKHAN of future research, it would be interesting to see how promotions targeted to consumers interact with promotions targeted to a sales force. Do such short-term promotional tactics have the potential to create long-term, productive relationships?

Leadership The final article, by Locander et al. Leadership is an integral part of strategy formulation. At the same time, it is a key element in sales management. The starting point of relationship marketing is considered to be a new stage in the development of marketing theory, as it is shown in figure 1.

According to Christopher et.

Relationship marketing

During the development of business to business and services marketing, there have been identified many and significant differences between these economic sectors and consumers marketing, which generate the need to find new strategically and tactically methods for adapting to this specific environment. Development in marketing theory s s s s s s The future of marketing? Relationship marketing Services marketing Non-profit and societal marketing Business to business marketing Consumer marketing Source: Adapted from Christopher, M.

The empirical research realised by these specialists had get to the conclusion that many inter-firm transactions are conducted within enduring business relationships where mutual trust and adaptation are essential for both partners. In the same time it appears that business to business marketing involved not just managing exchanges between organizations but much more complex human interactions. The services marketing literature, was similar to the business to business sector, one of the first area for the development of relationship marketing research.

The spectacular growth of the services economy in many countries of the world which accounts, in present, 56,6 percent of worldwide gross national product and, in the same time, it absorbs a large part of the labour force shed by traditional industries has favourable influenced the review of some marketing instruments in domains like: These main differences that can be identified between goods and services are: Services characteristics and typology determines a specific way in which the marketing-mix tools will be defined and there become a favourite domain for the applicability of relationship marketing theory.

Consequently, the origins of relationship marketing approach are in the business to business and services industries. Besides, other terms have been frequently used either as substitutes for relationship marketing, or to describe similar concepts; these include: After a period of time, the same author Berry,p. The duration of the exchange is a core element in distinguishing the two terms.

A transactional exchange involves a single, short time exchange with a distinct beginning and ending. In contrast a relational exchange involves multiple linked exchanges extending over time and usually involves both economic and social bonds. As most definitions imply, relationship marketing is first and foremost a process.

introduction to relationship marketing theory

At a macro level, the term describes the relationship within which the organization engages with all stakeholders, thus the strategic issue is to establish the mix or portfolio of the relationship that is essential for the firm Stewart and Durkin, mentioned in Rao and Perry,pp. Several authors have declared relationship marketing a paradigm change for marketing theory.

Although the concept has become largely accepted in the marketing science, Backhaus mentioned in Hennig-Thurau, T. Relationship marketing is not relevant in certain market exchange e. The development of the relationship marketing theory and practice can be examined from a number of different perspectives, which is highlighted by the existence of three schools of thought Palmer, Lindgreen, Vanhamme,pp.