Relationship Marketing Across Value Delivery Network: A ....doc

8th Global Conference on Business & Economics ISBN : 978-0-9742114-5-9

Relationship Marketing Across Value Delivery Network: A Literature Review

Abstract

Contemporary Marketing Management identifies Relationship Marketing (RM) as a paradigm

shift from traditional marketing practices to a strategic function. It is not only concerned with

Customer Relationship Management (CRM) but also plays a significant role in value creation

process at all levels across the value delivery network. Effort is made hereby to further validate

this statement through secondary literature sources and various references taken out from current

industry practices. The focus of the study is to understand the concept of relationship marketing,

its evolution and its role in current business scenario. This study is proposed to understand the

basic research problem i.e. “How value is created in a value delivery network (Supply Chain)

through relationship marketing”? The study concludes by proposing a hypothetical model of

relationship marketing across a value delivery network.

Effort is being made hereby to identify various types of relationships that exist across value

delivery network, their functions, and finally to identify the key performance variables that add

value through relationship marketing in a value delivery network. The proposed model further

provides a scope for research by identifying various research questions and hypothesis to test its

applicability in various industries in the current business scenario.

Key Terms: Relationship Marketing, value delivery network, key performance variables

October 18-19th, 2008Florence, Italy

1


“Relationship Marketing Across Value Delivery Network: A Literature Review”

Author(s)

*Dr. Tripti SinghLecturer, School of Management Studies, Motilal Nehru National Institute of Technology, Allahabad, Uttar Pradesh-211004, [email protected], [email protected] www.mnnit.ac.in

**Vibhava SrivastavaResearch Scholar, School of Management Studies, Motilal Nehru National Institute of Technology, Allahabad, Uttar Pradesh-211004, [email protected] www.mnnit.ac.in


2

http://www.mnnit.ac.in/

http://www.mnnit.ac.in/

mailto:[email protected]

mailto:[email protected]


Abstract

Contemporary Marketing Management identifies Relationship Marketing (RM) as a paradigm

shift from traditional marketing practices to a strategic function. It is not only concerned with

Customer Relationship Management (CRM) but also plays a significant role in value creation

process at all levels across the value delivery network. Effort is made hereby to further validate

this statement through secondary literature sources and various references taken out from current

industry practices. The focus of the study is to understand the concept of relationship marketing,

its evolution and its role in current business scenario. This study is proposed to understand the

basic research problem i.e. “How value is created in a value delivery network (Supply Chain)

through relationship marketing”? The study concludes by proposing a hypothetical model of

relationship marketing across a value delivery network.

Effort is being made hereby to identify various types of relationships that exist across value

delivery network, their functions, and finally to identify the key performance variables that add

value through relationship marketing in a value delivery network. The proposed model further

provides a scope for research by identifying various research questions and hypothesis to test its

applicability in various industries in the current business scenario.

Key Terms: Relationship Marketing, value delivery network, key performance variables


3


“Relationship Marketing Across Value Delivery Network: A Literature Review”

INTRODUCTION

In the present era of intense competition and demanding customers, relationship marketing has

grabbed the attention of scholars and practitioners. It has its proponents not only in the marketing

academia but in industry as well. It had a major impact upon the marketing discipline, triggering

a paradigm shift away from transaction-based marketing towards a relationship focus (Kotler,

1992; Webster, 1992). A number of terms synonym to Relationship Marketing, have evolved

over the period of time. Some of these terms are relational contracting (Macneil, 1980),

symbiotic marketing (Varadarajan and Rajaratnam, 1986), relational marketing (Dwyer et al

1987), working partnerships (Anderson and Narus, 1990), strategic alliances (Day, 1990),

internal marketing (Arndt, 1983; Berry and Parasuraman, 1991) and co-marketing alliances

(Bucklin and Sengupta, 1993). Though all these proposed terms are encompassed in the concept

of Relationship Marketing, it is further used to reflect a variety of themes and perspectives

(Nevin, 1995).

EVOLUTION OF RELATIONSHIP MARKETING

The concept of Relationship Marketing has evolved gradually. It was first evident in service

marketing as customer was identified as an integral part of the marketing and delivery process

which subsequently necessitates a close relationship between the customer and the service

provider. The phenomenon Relationship Marketing was first identified by some of the insightful

writers like Berry (Berry et al, 1983), Gronroos (1990) and McKenna (1991). Although

McKenna has often been credited with the term "relationship marketing", but it was Berry who


4


first defined and analyzed in scientific literature. However there was also a parallel development

in industrial marketing which contributed to the development of RM (Gronroos, 1990).

According to Berry et al (1983) customer relationship can be best established around a core

service, which ideally attracts new customers through its need-meeting character. However,

creating customer loyalty among the old customers is one of the main goals of Relationship

Marketing. Finally, Berry et al (1983) define internal marketing as a pivotal relationship

marketing strategy, where employees are seen as customers inside the corporations. At the same

time, Gronroos (1990) developed several new concepts in service marketing, which were later

incorporated as part of the Nordic School of Services. He identified relationship marketing as a

central theme of service marketing with no separation between production, delivery, and

consumption, thus the buyer-seller interaction must be considered as part of marketing's task

which can be fulfilled through relationship with the customer. Strangely enough, traditional

marketing concepts omitted or ignored it.

Industrial marketing has traditionally been seen different from consumer or service marketing.

As Gronroos (1990) points out that some of the tasks other than traditional marketing functions

are important in industrial selling. These tasks may include repairs, servicing, maintenance,

delivery, product development, installation, training, etc. Performing these tasks necessitates a

close seller buyer connection and often involves partners other than the seller and the buyer.

Consequently, even if the term "relationship marketing" was not used in industrial marketing, the

nature of industrial marketing clearly demonstrates several of its core characteristics.

Thus it can be concluded that there have been in fact two routes to the present-day RM. The first

was a gradual realization of the importance of relationships, initially in service marketing and


5


partly in industrial marketing. The second route was through a transformation of business in

general, due to rapid and radical changes in the environment. These changes resulted in an

emphasis on service, close customer contact, and a holistic view of the parties and processes

involved in marketing and business. The emphasis is on a holistic view of the supplier-

manufacturer-customer chain and process quickly became visible (Aijo, 1996). Cravens and

Piercy (1994) suggested that the cornerstones of relationship marketing are 'customer retention'

and 'process orientation', two issues that are likely to strike a chord with every organization at the

present time. Relationship marketing is now considered to be a feasible strategy in mass

consumer markets (Christy et al 1996; Gronroos, 1996; Sheth and Parvatiyar, 1995).

RELATIONSHIP MARKETING: CONCEPTS AND DEFINITIONS

The earlier definition of marketing by American Marketing Association (1985), states that

“Marketing is the process of planning and executing the conception, pricing, promotion and

distribution of ideas, goods and services to create exchange and satisfy individual and

organizational objectives”. However, this view of marketing was considered outdated, and its’

relevance was found only to certain types of firms and markets (Hakansson 1982; Gummesson,

1987, 1994; Gronroos, 1989). Further, argument was made that this perspective is overly clinical

and based solely on short-term economic transactions (Moller, 1992). Such criticisms have led to

the suggestion that a paradigm shift in marketing is needed if marketing is going to survive as a

discipline (Gronroos, 1995) and companies must move from short-term transaction-oriented goal

to long-term relationship-building goal (Kotler, 1992). Relationship marketing has been viewed

as buyer–seller encounters that accumulate over time with opportunities to transform individual

and discrete transactions into relational partnerships (Czepiel, 1990). This view supports the


6


notion that a relationship exists when an individual exchange is assessed not in isolation, but as a

continuation of past exchanges likely to continue into the future (Wong and Sohal, 2002). Thus it

is pertinent to say that RM ensures the continuation of exchange process between buyer and

seller by managing the existing relationship (Levitt, 1986). Nevin (1995) quotes that relationship

marketing has been used to reflect a variety of themes and perspectives which range from

industrial marketing perspective to service marketing perspective and has been defined in

numerous ways by different scholars and practitioners. Some of the selected definitions are

further compiled in Table 1 and analyzed to conclude a definition of relationship marketing in

current business practices.

Table I: Selected Definitions of Relationship Marketing

Key words that appear in contemporary definition of relationship marketing are identified as

follows: Attracting/getting customers, Retaining customers/loyalty; Relational

exchange/mutual/reciprocity; Time dimension–extended time horizon; Value creation and

sharing; Personalized marketing process; Structural/social bonds; Asymmetrical marketing

process; Strategic orientation; Input-outcome and ongoing assessment

Proposed Definition for Relationship Marketing: On the basis of above-mentioned definitions

of Relationship Marketing and considering its applicability in current business practices, an

appropriate interpretation of the term is proposed as, “Relationship Marketing can be defined as

an strategic marketing approach which is oriented towards attaining long-term profitability and

value creation by interactions and mutual exchange among customers suppliers and other

stakeholders.”

RELATIONSHIP MARKETING MODELS


7


Models give an explicit description of the various dimension associated with a particular aspect.

For the purpose of the aforesaid study effort is made to identify and select various models by

reviewing various literatures related to relationship marketing. These models have been

developed and tested by various authors. These models/literatures are based on different

dimensions viz, the process of relationship marketing, phases of its development, different

markets where relational exchanges take place, various types of relationships that can be

developed, managed and enhanced and finally identifying the variables of relationship marketing

for value creation leading towards attaining the long term profitability. In order to understand the

relationship marketing process and its applicability across value delivery network, following

models/literatures have been identified and selected, which are shown in Table 2.

Table 2: The Relationship Marketing Models/Literatures

These selected relationship marketing models/literatures suggest that:

These models have been developed as an extended perspective of relationship marketing. It

includes not only marketing as a discipline but also has various human resource implications

at different levels.

These models have been developed to identify different relationships which are to be

managed by a firm.

Different types of relational exchanges exists in form of different markets have also been

identified.

Key Relationship Marketing process can be identified as: Formation or development of

relationship, management of relationship, measurement of performances and finally

relationship enhancement or termination.


8


Key performance variables of Relationship marketing is a synergy of various functional

areas.

VALUE DELIVERY NETWORK

Globalization and technological innovation are creating dynamic network or chain of

interconnected players to bring and deliver value to the end user. The notion that value can be

created by cooperation has led marketers to search for ‘‘win–win’’ positions as a way to enhance

profitability through collaborative value creation (Anderson, Hakansson, & Johanson, 1994;

Kanter, 1994). The idea of value creation and exchange is the foundation stone of relationship

marketing. This view is based on three different assumptions of value exchange potentialities

(Christopher et al., 2002). These value perspectives suggest that value is created; as an offering

and delivered through recurrent transactions within a supplier-managed relationship; through

mutually interactive processes and shared through negotiated agreement within the life of a

relationship and shared in interactions that emerge from within networks of relationships.

Thus value has been considered to be an important constituent of relationship marketing and the

ability of a company to provide superior value to its customers is regarded as one of the most

successful strategies. This ability has become a mean of differentiation and a key to the riddle of

how to find a sustainable competitive advantage (Ravald and Gronroos 1996; Heskett et al 1994;

Nilson 1992; Treacy and Wiersema, 1993).

Walters and Lancaster (1999a and 1999b) determine value as the utility combination of benefits

delivered to the customer less the total costs of acquiring the delivered benefits and is then a

preferred combination of benefits compared with acquisition cost. There seems to be an

agreement that value is a function of what a customer gets, the solution provided by an offering,


9


and the sacrifice of the customer to get this solution. Consumer's overall assessment of the utility

of a product based on a perception of what is received and what is given, is known as perceived

value (Zeithaml, 1988). In a relational context the offering includes both a core product and

additional services of various kinds.

Many companies today have partnered with specific suppliers and distributors to create a

superior value delivery network, also called a supply chain (Magnet, 1994). Brown (1997) has

defined supply chain/value delivery network as a tool to disaggregate a business into

strategically relevant activities which enables identification of the source of competitive

advantage by performing these activities more cheaply or better than its competitors. It

comprises of larger stream of activities carried out by members like suppliers, distributors and

customers. Further Christopher (2002) defines a value delivery network/supply chain as the

network of organizations that are involved through upstream and downstream linkages in the

different processes and activities that produce value in the form of products and services in the

hands of the ultimate consumers. In order to gain competitive advantage value delivery

network/supply chain collaboration or integration is required i.e. the backward/upstream and

forward/downstream collaboration/integration. Mentzer (2001) says a value delivery network

comprises of number of players in which a firm whether manufacturing or service, holds the key

by creating and offering values in terms of output to its customers. This further can be justified

with the help of the notion that the core of relationship marketing is relations, maintenance of

relations between the company and the actors in its micro-environment, i.e. suppliers, market

intermediaries, the public and of course customers as the most important actor. Thus the more


10


pertinent issue is not what kind of an offering the company provides - rather it is what kind of

relationship the company is capable of maintaining.

PROPOSED MODEL FOR RELATIONSHIP MARKETING ACROSS THE VALUE

DELIVERY NETWORK

Considering the significance of relationship marketing in a value delivery network it becomes

imperative to develop a model so that it can be explicitly described. The objective of the

proposed model is:

To identify various types of relationships across a value delivery network.

To find out the function of various types of relationship across a value delivery network.

To identify key performing variables for relationship marketing across a value delivery

network.

In order to justify these objectives a model for relationship marketing across the value delivery

network is proposed hereby which is based on literature study and other references drawn from

industry practices. It is shown in Figure 1.

Figure I: Relationship Marketing across Value Delivery Network

Feasibility of the model

Types of Relationships in a Value delivery network: The basic thrust of the model is how the

focal firm manages the relationship with the players at both the ends of network or in other

words how the focal firm practices relationship marketing across value delivery network. The

key and more visible relationships across the network can be identified as relationship of focal

firm with suppliers and with customers, which in the proposed model of value delivery network

has been identified as RI and RIV respectively. These relationships can be termed as Supplier


11


relationship management (SRM) and customer relationship management (CRM) respectively. In

the proposed model of value delivery network, following various relationships can be identified:

Key Relations:

RI: Relationship between Focal Firm-Suppliers (B2B)

RIV: Relationship between Focal Firm-Customers/End Users (B2C)

Supporting Relations:

RII: Relationship between Focal Firm-Intermediaries (B2B)

RIII: Relationship between Intermediaries-Customers/End Users (B2C)

Function of various types of relationship across a value delivery network can be further

explained as follows:

RI: Relationship between Focal Firm-Suppliers: At the backward end/upstream of value delivery

network, supplier can be identified as the player supplying inputs to the focal firm which

subsequently provides value to the customer or end user. The usual approach of value adding

strategies is that the supplier adds technical product features or supporting services to the core

solution so that the total value of the offering is increased (Christopher et al, 1991). A firm's goal

is to establish and maintain a competitive advantage in its product markets (Walker, 1988) and

central to achieving this goal are the firm's sourcing policies and relationships with its suppliers

(Porter, 1979). Sheth and Sharma (1997) have identified four reasons for this phenomenon. First,

marketers or sellers are driving this change as firms have started identifying and catering to the

needs of specific customers. Thus, having a relationship with suppliers will enable firms to

receive better service and therefore be more efficient in procurement. Second, firms will

recognize that supplier relationships will allow them to be more effective and implement


12


strategies such as quality platforms. Third, there are enabling technologies that allow firms to

select their best customers and suppliers through computer programs that allow firms to calculate

profitability associated with each customer or supplier. Finally, competition and the growth of

alliances will force firms to develop better supplier relationships to maintain a competitive edge.

Kalwani and Narayandas (1995) have found a positive correlation between long-term

relationships and profitability of suppliers, has yet empirically demonstrated the association or

correlation between a company's adoption of relationship marketing programs and its

performance. A successful relationship with supplier can result into a number of economic

consequences. Eccles (1991) has further identified various relationship benefits viz cost benefits

and revenue benefits to create value across the network.

RIV: Relationship between Focal Firm-Customers/End Users: Customer or end user at the

forward end/downstream consumes the offerings and decides whether the offering is up to

his/her perceived value. The relationship with customers is the foremost relationship which

ensures not only the growth prospects for a firm but also the profitability of a firm (Sheth, 1996).

More personalized, customized and valued offerings are made to the costumers to gain

competitive advantage. The impetus for managing relationships with customers came from

Reichheld (1996), who verified that dramatic increase in profits can be achieved from small

increases in customer retention rates. The need to better understand customer behavior and to

focus on those customers, who can deliver long-term profits, has changed the way marketers

used to view the world (Winer, 2001). Customer Relationship Management is a comprehensive

strategy and process of acquiring, retaining and partnering with selective customers to create

superior value for the company and the customer. It involves the integration of marketing, sales,


13


customer service, and the supply-chain functions of the organization to achieve greater

efficiencies and effectiveness in delivering customer value (Parvatiyar and Sheth, 2002). The

overall purpose of customer relationship management is seemed to improve marketing

productivity and to enhance mutual value for the parties involved in the relationship. Improving

marketing productivity and creating mutual values can be achieved by increasing marketing

efficiencies and/or enhancing marketing effectiveness (Sheth & Parvatiyar, 1995a; Sheth &

Sisodia, 1995).

Key performance variables for relationship marketing in a value delivery network: Based on the

above mentioned literature references, it can be further concluded that various aspects of a value

delivery network can be identified in terms of value addition (R1), value perception (RIV) and

value offerings (RII and RIII). The performance variables for each of the relationships are further

identified, which are shown in Table 3.

Table 3: key performance variables in relationship marketing and value delivery network

These can be used to formulate hypothesis for further research study and exploration:

Competitive advantage can be gained through relationship marketing across a value

delivery network.

Profitability can be enhanced through relationship marketing across the value delivery

network.

Integration of various functions can be achieved through relationship marketing across

value delivery network.

Mutual values can be developed through relationship marketing across value delivery

network.


14


CONCLUSIONS

Relationship Marketing has evolved as a strategic marketing approach which is oriented towards

attaining long-term profitability and value creation by interactions and mutual exchange among

customers, suppliers and other stakeholders. It is an approach which can be adopted to enhance

the competitiveness and profitability of a value delivery network. Better integration and shared

mutual values can be developed through relationship marketing across value delivery network.

Subsequently the present study based on literature review further provides a scope to explore and

test the following research questions:

To find out the nature of existing relationships.

To identify variables in different relationships that exists in a network.

To find out correlation among various types of relationships.

Role of Information Technology (IT) in relationship marketing.

Measuring return on relationships and evaluating the contributions to profits from the various

players in a network.

Indicators to monitor productivity and quality in a network.

Specific issues hindering relationship marketing practices.


15


References“AMA board approves new marketing definition”, Marketing News, 1 March 1985Aijo, Toivo S. (1996), “The theoretical and philosophical underpinnings of relationship marketing: Environmental factors behind the changing marketing paradigm”, European Journal of Marketing, Vol. 30, No. 2, pp. 8-18Anderson, Erin and Barton A. Weitz (1992), “The Use of Pledges to Build and Sustain Commitment in Distribution Channels,” Journal of Marketing Research, 29 (February), pp. 18–34Anderson, J. C., Hakansson, H., & Johanson, J. (1994, October), “Dyadic business relationships within a network context”, Journal of Marketing, 58, pp. 1 –15Anderson, James C. and Narus, James A. (1990), “a model of distributor firm and manufacturer firm working partnerships”, Journal of Marketing, 54 (January), pp. 42-58Arndt, Johan (1983), “The political economy paradigm: foundation for theory building in marketing”, Journal of marketing, 47 (Fall), pp. 44-54Bejou, David (1997), "Relationship Marketing: Evolution, Present State, and Future", Psychology & Marketing, Vol. 14(8), pp. 727-736Berry, L.L., Shostack, G.L. and Upah, G.D. (Eds) (1983), Emerging Perceptions on Service Marketing, American Marketing Association, Chicago, IL, pp. 25-8Berry, Leonard L. and Parasuraman, A. (1991), Marketing Services, New York: The free PressBrown, L. (1997), Competitive Marketing strategy, Nelson, MelbourneBucklin, Louis P. and Sengupta, Sanjit (1993), “Organizing successful co-marketing alliances”, Journal of Marketing, 57 (April), pp. 32-46Christopher, M., Payne, A. and Ballantyne, D. (1991), Relationship Marketing: Bringing Quality, Customer Service and Marketing Together, Butterworth Heinemann, OxfordChristopher, M., Payne, A. and Ballantyne, D. (2002) Relationship Marketing: Creating Stakeholder Value, 2nd edition, Oxford: Butterworth HeinemannChristy, R., Oliver, G. and Penn, J. (1996), “Relationship marketing in consumer markets”, Journal of Marketing Management, Vol. 12, pp. 175-187Cravens, D.W., and N.E. Piercy, 1994, “Relationship Marketing and Collaborative Networks in Service Organization”, International Journal of Service Industry Management, Vol. 5, No. 5, pp.39-53Cravens, Davis W. (1995), “Introduction to the Special Issue”, Journal of the Academy of Marketing Science 23 (Fall): 235Crosby, Lawrence A., Kenneth R. Evans, and Deborah Cowles (1990), “Relationship Quality in Services Selling: An Interpersonal Influence Perspective,” Journal of Marketing, 54 (July), pp. 68–81Czepiel, J. A., 1990, “Service encounters and service relationships: Implications for research”, Journal of Business Research, Vol. 20, No.1, pp. 13 – 21Day, George S. (1990), Market Driven Strategy, New York: The Free PressDe Wulf, Kristof, Gaby Odekerken-Schröder, and Dawn Iacobucci (2001), “Investments in Consumer Relationships: A Cross- Country and Cross-Industry Exploration,” Journal of Marketing, 65 (October), pp. 33–50Doney, Patricia M. and Joseph P. Cannon (1997), “An Examination of the Nature of Trust in Buyer–Seller Relationships,” Journal of Marketing, 61 (April), pp. 35–51Dwyer, Robert F., Paul H. Schurr, and Sejo Oh (1987), “Developing Buyer–Seller Relationships,” Journal of Marketing, 51 (April), 11–27Eccles, Robert G., (1991), “The Performance Measurement Manifesto”, Harvard Business Review 69 January–February, pp. 131–137Evans, Joel R., and Laskin, Richard L. (1994)., “The Relationship Marketing Process: A Conceptualization and Application”, Industrial Marketing Management, 23, pp. 439–452 Gronroos, C. (1989), "Defining Marketing; A Market-Oriented Approach", European Joumal of Marketing, 23, No.l, pp.52-60Gronroos, C. (1990), Service Management and Marketing: Managing the Moments of Truth in Service Competition, Lexington Books, Lexington, MAGronroos, C. (1995), "The Rebirth of Modem Marketing: Six Propositions About Relationship Marketing", Swedish School of Economics and Business Administration Working Paper 307, HelsinkiGronroos, C. (1996), “Relationship marketing: strategic and tactical implications”, Management Decision, Vol. 34, No. 3, pp. 5-14Gronroos, C. (2000), “Relationship Marketing: The Nordic School Perspective”, (Sheth and Parvatiyar Ed.), Handbook of Relationship Marketing, SAGEGruen, Thomas W., John O. Summers, and Frank Acito (2000), “Relationship Marketing Activities, Commitment, and Membership Behaviors in Professional Associations,” Journal of Marketing, 64 (July), pp. 34–49Gummesson, E. (1987), "The New Marketing — Enveloping Long-term Interactive Relationships", Long Range Planning, 20, No.4, pp.10-20Gummesson, E. (1994), "Broadening and Specifying Relationship Marketing", Asia-Australia Marketing Journal, 2, No.l, pp.31-43


16


Gummesson, E. (1999), Total Relationship Marketing, Butterworth Heinemann, OxfordHakansson, H. (Ed.) (1982), International Marketing and Purchasing of Industrial Goods: An Interaction Approach. Chicester: John Wiley & Sons Ltd.Heskett, J.L., Jones, TO., Loveman, G.W., Sasser, W.E. and Schelsinger, L.A. (1994), "Putting the Service-Profit Chain to Work" Harvard Business Review, March-Aprii, pp. 164-174.Jackson, Barbara Bund (1983), Winning and Keeping Industrial Customers, Lexington Books, Lexington, KYJap, Sandy D. and Shankar Ganesan (2000), “Control Mechanisms and Relationship Life Cycle: Implications for Safeguarding Specific Investments and Developing Commitment,” Journal of Marketing Research, 37 (May), pp. 227–45Kalwani, M. and Narayandas, N. (1995), “Long-Term Manufacturer-Supplier Relationships: Do They Pay Off for Supplier Firms?” Journal of Marketing, 59 January, pp. 1–16 Kanter, R. M. (1994, July –August), “Collaborative advantage”, Harvard Business Review, pp. 96– 108Kotler, P. (1992), “Marketing's New Paradigm: What's Really Happening Out There”, Planning Review Special Issue, Sept. /Oct., pp.50-2.Kumar, Nirmalya, Lisa K. Scheer, and Jan-Benedict E.M. Steenkamp (1995), “The Effects of Supplier Fairness on Vulnerable Resellers,” Journal of Marketing Research, 32 (February), pp. 54–65Leo Y.M. Sin, Alan C.B. Tse, Oliver H.M. Yau, Raymond P.M. Chow, Jenny S.Y. Lee, Lorett B.Y. Lau (2005), "Relationship marketing orientation: scale developmentand cross-cultural validation", Journal of Business Research,Vol. 58, pp. 185– 194 Levitt, Theodore (1986), The Marketing Imagination, New York, The Free Press.Lewin, Jeffrey E. and Johnston, Wesley J. (1997), "Relationship Marketing Theory in Practice: A Case Study", Journal of Business Research, Vol. 39, pp. 23-31Macneil, Ian R. (1980), The New Social Contract, An Inquiry Into Modern Contractual Relations, New Haven, CT, Yale University PressMagnet, Myron (1994), “The new Golden Rule of Business”, Fortune, November, pp. 60-64 McKenna, R. (1991), Relationship Marketing: Successful Strategies for the Age of the Customer, Addison-Wesley Publishing Co., Reading, MA.Mentzer, John T. (2001), “Supplier Partnering”, (Sheth and Parvatiyar Ed.), Handbook of Relationship Marketing, SAGEMoller, K. (1992), "Research Traditions in Marketing: Theoretical Notes". In: Economics and Marketing in Essays Honour of Goesta Mickwitz, Nr, 48, Multiprint, Helsinki, pp.197-218Morgan, Robert M., and Hunt, Shelby D., “The Commitment-Trust Theory of Relationship Marketing”, Journal of Marketing, 58, 20–38 (1994)Morris, Michael H., Brunyee, Janinne and Page, Michael (1998), “Relationship Marketing in Practice: Myths and Realities”, Industrial Marketing Management, 27, pp. 359–371 Nevin, J.R. (1995), “Relationship marketing and Distribution Channels: Exploring Fundamental Issues”, Journal of the Academy of marketing Science, 23, pp. 327-334Nilson, T.H. (1992), Value-Added Marketing: Marketing for Superior Results. London: McGraw-HillParvatiyar, Atul and Sheth, Jagdish N., “Customer Relationship Management: Emerging Practice, Process, and Discipline”, Journal of Economic and Social Research, 3(2), 2001-2002 Preliminary Issue, pp. 1-34Payne, A. (1997), “Relationship Marketing-the six markets framework: A Review & Extension”, (working Paper), Cranfield, England: Cranfield University, School of ManagementPerrien, Jean, and Ricard, L., “The Meaning of a Marketing Relationship”, Industrial Marketing Management, 24, 37–43 (1995)Porter, M. (1979), "How Competitive Forces Shape Strategy," Harvard Business Review, 57, No. 2, pp. 137-145 Ravald, A. and Gronroos, C. (1996) "The Value Concept and Relationship Marketing", European Journal of Marketing, 30, No. 2, pp. 19-30Ravald, A. and Gronroos, C. (1996), "The Value Concept and Relationship Marketing", European Journal of Marketing, 30, No. 2, pp. 19-30Reichheld, Frederick F. (1996), The Loyalty Effect, Cambridge, MA: Harvard Business School PressShani, D. and Chalasani, S. (1991), “Exploiting Niches Using Relationship Marketing”, The Journal of Consumer Marketing, pp. 33-42.Sheth, J. N. & Sisodia, R. S. (1995), “Improving Marketing Productivity” In J. Heilbrunn (Ed.), Encyclopedia of Marketing in the Year 2000, Chicago, IL: American Marketing Association/NTC PublishingSheth, J.N. & Parvatiyar, A. (2000), “Relationship Marketing: The Nordic School Perspective”, (Sheth and Parvatiyar Ed.), Handbook of Relationship Marketing, SAGESheth, J.N. (1996), “Relationship marketing: A paradigm Shift or Shaft”, (Sheth and Parvatiyar Ed.), Handbook of Relationship Marketing, SAGESheth, J.N. and Sharma, A. (1997), “Supplier Relationships: Emerging Issues and Challenges”, Industrial Marketing Management, Vol. 26, pp. 91-100 Sheth, Jagdish N., and Parvatiyar, Atul (1995), “Relationship Marketing in Consumer Markets: Antecedents and Consequences”, Journal of the Academy of Marketing Science, 23, pp. 255–271


17


Sirdeshmukh, Deepak, Jagdip Singh, and Barry Sabol (2002), “Consumer Trust, Value, and Loyalty in Relational Exchanges,” Journal of Marketing, 66 (January), pp. 15–37Treacy M. and Wiersema, F. (1993), "Customer intimacy and other value disciplines". Harvard Business Review, January-February, pp. 84-93Turnbull, Peter W., and Wilson, David T. (1989), “Developing and Protecting Profitable Customer Relationships”, Industrial Marketing Management, 18, 233–238 Varadarajan, P. and Rajaratnam, Daniel (1986), “Symbiotic marketing revisited”, Journal of Marketing, 50 (January), pp. 7-17Walker, G. (1988), "Strategic Sourcing, Vertical Integration and Transaction Costs," Interfaces, 18, No. 3, pp. 62-73Walters, D. and Lancaster, G. (1999a), “Value and information-concepts and issues for management”, Management Decision, Vol.37, No.8, pp. 643-56Walters, D. and Lancaster, G. (1999b), “Value-based marketing and its usefulness to customers”, Management Decision, Vol.37, No.9, pp. 697-708Webster, F.E. (1992), “The Changing Role of Marketing in the Corporations”, Journal of Marketing, Vol. 56, Oct., pp. 1-17Wilson, David T. (1995), "An Integrated Model of Buyer-Seller Relationships", Journal of the Academy of Marketing Science, pp. 323-335Winer Russell S., “A Framework for Customer Relationship Management”, California Management Review, Vol.43, NO.4, Summer 2001Wong, A. and Sohal, A. 2002, “An examination of the relationship between trust, commitment and relationship quality”, International Journal of Retail & Distribution Management, Vol. 30, No. 1, pp. 34 – 50Zeithaml, V. A. (1988), "Consumer Perceptions of Price, Quality and Value: A Means-End Model and Synthesis of Evidence", Journal of Marketing, 52, July, pp. 2-22

Table 1: Selected Definitions of Relationship MarketingAuthors Definitions Berry (1983) Relationship marketing (RM) is attracting, maintaining and in multi-services

organizations enhancing customer relationships.Jackson (1983) RM is managing strong, lasting relationships with individual accounts. Jackson (1985) In industrial marketing Relationship marketing refers to marketing oriented

towards strong, lasting relationships with individual accounts.Turnbull and Wilson (1989) The formation of long-term buyer-seller relationships through the creation of

structural and social bonds between companies. Gronroos (1990) The purpose of marketing in the new context is to establish, maintain, and

enhance relationships with customers and other partner, at a profit, so that the objectives of the partners involved are met. This is achieved by a mutual exchange and fulfillment of promises.

Berry and Parasuraman (1991) Relationship marketing concerns attracting, developing and retaining customer relationships.

McKenna (1991); Shani and Chalasani (1991) Relationship marketing attempts to involve and integrate customers, suppliers and other infrastructural partners into a firm's developmental and marketing activities.

Morgan and Hunt (1994) Relationship marketing refers to all marketing activities directed toward establishing, developing and maintaining successful relational exchanges.

Evans and Laskin (1994) The role of relationship marketing is to augment the vendor’s core product, i.e., to differentiate the firm’s total offering in the marketplace. They define relationship marketing as a process that includes inputs (understanding customer expectations, building service partnerships, empowering employees, and total quality management); outcomes (customer satisfaction, customer loyalty, increased profitability, and quality products); and ongoing assessment (customer feedback, integrating relationship marketing into the firm’s strategic planning framework).

Sheth and Parvatiyar (1995) Developing close interactions with selected customers, suppliers, and competitors for value creation through cooperative and collaborative effort.

Cravens (1995) Relationship marketing, as a field of study, began to attract attention in the early 1990s as firms began to enter into long-term associations to counter the effects of increased customer demands and intensifying global competition.


18


Perrien and Ricard (1995) An asymmetrical and personalized marketing process that takes place in the long-run results in some bilateral benefits and rests on an in-depth understanding of customer needs and characteristics.

Sheth and Parvatiyar (1995b) RM can be defined as the process of developing cooperative and collaborative relationship with customers and other market actors.

Morris et al (1998) Relationship Marketing is a strategic orientation adopted by both the buyer and seller organizations, which represents a commitment to long-term mutually beneficial collaboration.

Evert Gummesson (1999) Relationship marketing is marketing based on interaction within networks of relationships.

Table 2: The Relationship Marketing Models/LiteraturesAuthor (s)/Model (s)/Literature Review Key issuesTriplet of Relationship Marketing by Gronroos (2000)

For a successful relationship marketing strategy, three processes are required:Interaction, Dialogue and Value Process

Relationship Marketing Process Model by Parvatiyar and Sheth (2000)

Relationship Marketing Process comprises of four sub processes: Formation; Management and Governance; Performance Evaluation and Relationship evolution/enhancement.

Relationship Development Process Model by Dwyer et al (1987)

Relationship between/among buyer and seller evolve through five general phases viz, Awareness, Exploration, Expansion, Commitment and Dissolution. Each phase represents a major transition in how parties regard one another.

Six Markets Model by Payne, A. (1997) Six different market domains have been identified where an organization can direct their marketing activities: Customer Market; Internal Market; Supplier/Alliance Market; Referral Market; Influence Market and Recruitment Market

The Relational Exchanges in Relationship Marketing by Morgan and Hunt (1994)

10 distinct forms of intra and inter-organizational relationships have been identified:Buyer partnerships with Intermediate Customers and Ultimate CustomersSupplier partnerships with Good Suppliers and Service SuppliersLateral partnerships with Competitors, Nonprofit Organizations and GovernmentInternal Partnerships among Various Business Units, Functional Departments and Employees of the Firm

Dwyer, Schurr, and Oh’s (1987) ; Crosby, Evans, and Cowles’s (1990)

Relational constructs are trust, commitment, relationship satisfaction, and/or relationship quality.

Morgan and Hunt (1994) Trust and Commitment, both are key to predicting exchange performance.Wilson (1995) Identified an extended list of relationship variables: commitment, trust,

cooperation, mutual goals, interdependence/power imbalance, performance satisfaction, and comparison level of the alternative, adaptation, non-retrievable investments, shared technology, summative constructs, structural bonds and social bonds.

Lewin and Johnston (1997) Proposed six important relationships construct: Relationship dependence, trust, commitment, communication, cooperation and equity.

Bejou (1997) The construct of relationship is not a universal concept.It may be different across different segments of the market.

Doney and Cannon (1997); Sirdeshmukh, Singh, and Sabol (2002)

Trust is alone the critical relational construct.

Anderson and Weitz (1992); Gruen, Summers, and Acito (2000); Jap and Ganesan (2000)

Commitment alone is the critical relational construct.

De Wulf, Odekerken-Schröder, and Iacobucci (2001); Kumar, Scheer, and Steenkamp (1995)

The construct of relationship quality is a combination of commitment, trust, and relationship satisfaction.

Leo et al (2005) Proposed Relationship Marketing Orientation (RMO) which is a one-dimensional construct consisting of six components: trust, bonding, communication, shared value, empathy, and reciprocity.


19


Table 3: key performance variables in relationship marketing and value delivery networkPerformance variables Literature References for

Relationship MarketingLiterature references for Value Delivery Networks/SCM

Competitive advantage -Technical product features or supporting services-Better service, quality-Enabling technologies

Christopher et al (1991);Sheth and Sharma (1997)

Ravald and Gronroos (1996); Heskett et al (1994); Nilson (1992); Treacy and Wiersema (1993)

Profitability Kalwani and Narayandas (1995); (Winer, 2001); and Eccles (1991)

Anderson, Hakansson, & Johanson (1994); Kanter (1994)

Integration of marketing, sales, customer service, and the supply-chain functions

Parvatiyar and Sheth (2002) Brown (1997)

Mutual values Parvatiyar and Sheth (2002) Mentzer (2001)

Figure I: Relationship Marketing across Value Delivery Network


20



21

Relationship Marketing Across Value Delivery Network: A ....doc

Documents

relationship marketing

marketing discipline

internal marketing arndt

transactionbased marketing

comarketing alliancesbucklin

value creationprocess

value deliverynetwork

valuedelivery network