Relationship marketing concepts theories and cases

RELATIONSHIP MARKETING: Concepts, Theories and Cases - SUPRIYA BISWAS - Google Books

relationship marketing concepts theories and cases

Relationship Marketing Concepts, Theories and Cases SECOND EDITION Supriya Biswas Professor, NSHM Business School, Kolkata Formerly Deputy General. Briefly comments on the possibility of developing a general marketing theory based on . of the marketing concept and the process nature of market relationships. .. Indeed, this is the case in much of the academic research into marketing. The paper shows that the concept of relationship marketing . the theories pertaining to the evolution and management of marketing relationships creates several .. a special strength of theory-generating case studies (Eisenhardt ).

To do this, we will adopt Walter and Ritter and Liu and al approach, while distinguishing direct and indirect functions of relationship value concept as their research field is close to ours B to B relationships.

relationship marketing concepts theories and cases

Relationship Marketing key Concepts and Relationship Value In order to understand the association between relationship marketing and relationship value, this research suggests to explore the interactions between relationship marketing key concepts mentioned above satisfaction, trust and commitment: Trust and Relationship Value Authors are not unanimous regarding the relationship between trust and relationship value.

Indeed, some of them suggest that relationship value determines trust Ulaga and Eggert, Others, by cons, assume that trust determines relationship value Walter and al, According to this approach that we are adopting because we seek to determine the effect of trust on relationship value trust in the trading partner integrity, increases the perceived relationship value Morgan and Hunt, To better understand the link between trust and direct and indirect relationship value, a more detailed analysis is necessary.

According to Walter and al and Walter and Rittertrust increases the relationship value by increasing in one hand, the direct value and in other hand the indirect relationship value. Indeed, first, trust between a supplier and a customer leads to a higher business volume, because this mutual trust permits to these partners to understand each other, and to reduce transaction costs Doney and Cannon, control costs for example that refers to volume and profit value creation function as explained by Walter and Ritter Mutual trust between a client and a supplier endorses more cooperation Morgan and Hunt,strengthen the association among these two parts and reduce the dependence on other suppliers safeguard functionhence the positive effect of trust on direct relationship value Walter and al, ; Walter and Ritter, These elements permit to present the following hypothesis: Satisfaction and Relationship Value Numerous researches support the positive effect of satisfaction on relationship value Walter and al, According to this approach, a satisfied customer tends to reduce complaint behaviour, to reduce alternative supplier searching Walter and al, Customer satisfaction increases the difference between what is received and what is given in a relationship as it allows, at least, control costs reduction.

Industrial customer satisfaction increases motivation to implement specific relationship decisions Achrol, suggesting greater willingness to engage in the relationship, and thus more business volume Singh and Sirdeshmukh, Thus, the positive association between satisfaction and value creation volume function set by Walter and Ritter Satisfaction has respectively a positive effect on profit and safeguard functions referring to the direct profits for the products or services, as well as guaranteed a volume of business through contractual arrangements between exchange parties.

Indeed, a satisfied customer from its relationship with his supplier tends to benefit the maximum Gabarino and Johnson, Therefore, he is more likely to increase his profits, his business volume with his supplier and ensure business volumes through contractual arrangements Walter and Ritter,hence the positive association between satisfaction and direct relationship value.

Customer satisfaction also fosters a closer relationship with his supplier which will encourage the latter to introduce the customer to a third party operating on the market technology provider, service company Liu and al, A satisfied customer will also be more likely to adapt his production and innovation processes Doney and Cannon, It is therefore, possible to think about the positive effect of satisfaction on relationship value indirect dimension Walter and al, ; Matri Ben Jemaa, Hence the following hypothesis: Commitment and Relationship Value Authors have placed great emphasis on the role of commitment on relationship value increase in B to B context Shamdasani and Sheth, Indeed, commitment generates perceived risk reduction and thus, favourably affects performance and relationship value between exchange parties Moore, Commitment is, indeed, a central element partnership value, as relationship committed customers tend to reduce claims, and to limit alternative suppliers to avoid unsatisfactory products and services Sharma and al, Commitment increases the direct relationship value, as it promotes increased business volumes and revenues through contractual arrangements with suppliers Walter and Ritter,Ritter and Walter, ; Mohr and Spekman, Commitment increases also indirect relationship value as it encourages cooperation and investment referring to product or process innovation innovative function.

Commitment allows also gaining new customers or suppliers market function and market development scout function Moller and Torronen, Marketing Relationship key Concepts Interaction The Link Between Trust and Satisfaction The new research trend articulates the importance of trust and satisfaction association in showing a positive relationship between these two concepts Nefzi, In B to B context, Mohr and Spekman prove the positive impact of trust on satisfaction, as well as on business volume increase.

Thus, more a customer is satisfied more he tends to assume that his supplier is honest a trust dimension and thus have confidence on him Chouk and Perrien, ; Sharma, ; Eddaimi, In this research, we assume that trust is an important source of satisfaction because many researches in B to B context have validated this assumption Mohr and Spekman, Hence our fourth hypothesis: Customer trust in a supplier is positively linked to the fisrt satisfaction.

relationship marketing concepts theories and cases

The Link between Satisfaction and Commitment The literature does not converge regarding the link between satisfaction and commitment. For some authors, the satisfaction influences directly and positively commitment in a relationship Ganesan, ; Mohr and Spekman, and is one of its most important determinants.

In this regard, Dwyer and al state that a satisfied customer search less an alternative supplier and will therefore be more committed. In this same vein, Abbad and al point out that a satisfied customer regarding his supplier has more confidence on him in the future and will be committed in the relationship.

Other theory stipulates that there is at least no direct relationship between satisfaction and commitment Walter and al, Indeed, according to this theory supporter, satisfaction effect on commitment can pass through trust Walter and al, ; Rao, For our research, we will align to Ganesan and submit the following hypothesis: The Link between Trust and Commitment Trust reduces transaction costs Doney and Cannon,perceived risk Benamour, and allows cooperation Morgan and Hunt, Trust ensures lower control procedures and encourages exchange parties agreements Gode- Sanchez, Thus, the nature of the relationship between exchange parties changes thanks to mutual trust feeling and become more tight and stable Walter and al, Trust leads, therefore, to relationship commitment Ganesan, Trust can also be seen as an indispensable commitment determinant Abbad and al, Hence our sixth hypothesis: The trust of a customer has a positif impact on his commitment in a relationship with his supplier.

Conceptual Model Above development, allows bellow conceptual model development Figure 1. The model highlights the contribution of relationship marketing key elements in value creation in B to B context. This model is a small contribution to Walter and Ritter model. Research conceptual model Research Methodology Population This research was carried out among industrial buyers in the electronic subcontracting sector in France to study the effect of Internet use on industrial relationships.

However, we observed the interaction between relationship marketing key concepts and relationship value, which in some cases is not consistent with the literature. We tried, for that reason, to highlight this aspect through this research. Measures Scales measures used for this research are shown in the table below.

Scales measures Analysis Our hypotheses were validated using structural equations maximum likelihood method on using Amos 16 software. We have performed a confirmatory factor analysis in order to test the structural model and also the research hypotheses.

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Correlation between constructs Results Table 3 presents the correlations between constructs under the diagonal, and the square roots of average extracted variance in bold on the diagonal. This table, therefore, confirms divergent and convergent scale measures validities. RMR is above the recommended threshold, but acceptable as it approaches the threshold of complex models. Hypothesis validation Discussion, Conclusion and Recommendations To validate the effect of relationship marketing key concepts trust, satisfaction and commitment on direct and indirect relationship value, we issued six hypotheses, three of them were validated and three rejected.

In the other side, the results confirm that the satisfaction is neither linked to direct nor to indirect relationship value. These results confirm partially previous research as those of Walter and al and Walter and Ritter The term was first mentioned by Berry in and the origins of relationship marketing approach are considered to be in the business to business and services industries due to the special characteristics of these areas and the need for closer buyer-seller relationships.

At the centre of the relationship marketing perspective is the idea that customers have continuing value over the period they stay in business with a specific company. The focus is, therefore, on the relationships rather than transactions.

Relationship Marketing Key Concepts as Relationship Value Determinant

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: Additional, in the relationship marketing literature can be also found several mid-range perspectives which suggest that a company should manage a portfolio of transactional and relational strategies depending on the customer-supplier relationship and the level of customer commitment and profitability for the company.

In the last twenty years the concept of relationship marketing has been a major theme of discussion in the marketing theory and practice. This is the reason why prestigious economic journals e. Journal of Marketing, Journal of Business and Industrial Marketing, Journal of the Academy of Marketing Science, International Journal of Bank Marketing, Journal of Strategic Marketing and international conferences have regularly presented the benefits of this new business perspective.

RELATIONSHIP MARKETING: Concepts, Theories and Cases - SUPRIYA BISWAS - Google Livres

These changes known also as key drivers in the development of the relationship marketing concept can be resumed as: In this new business context, marketers realised that the methods, techniques and instruments of traditional marketing named also classic or transactional marketing were no longer adequate for helping companies to plan their activities and predict their future market position.

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. 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.

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  • RELATIONSHIP MARKETING: Concepts, Theories and Cases

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.

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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: