Relationship Marketing and Customer Loyalty in a Retail Setting: A Dyadic Exploration

Customer loyalty is increasingly seen to be crucial to the success of business organisations, with the growing realisation that attracting new customers is far more expensive than retaining existing ones. It has been suggested that a way of increasing customer retention is through secure relationships between buyers and sellers. Surprisingly, however, and despite the growing body of literature on relationship marketing issues, little empirical research has been conducted on the link between relationship marketing and customer loyalty in a retailing context. This paper attempts to address this gap by presenting and testing a conceptual model of the process by which the implementation of relationship marketing can enhance such loyalty. A dyadic exploratory study of clothing store managers and their customers was conducted. Findings reveal that customers' perceptions of clothing stores' relationship marketing efforts are crucial to enhanced commitment and loyalty. Implications are drawn from these results, and future research directions are discussed.     

A Model of Interorganizational Networking Antecedents,Consequences and Business Performance

Purpose: This quantitative study intended to examine the communication interactions that develop within a business network among various actors (i.e., customers, providers, cooperators, etc.), together with their effects upon business networking and performance. To these ends, we developed a conceptual model of dyadic marketing-oriented and network-oriented communication exchanges (i.e., interorganizational antecedents), interorganizational networking consequences, and business performance. Specifically, interorganizational networking consequences were examined in terms of tactical and strategic cooperation, whereas business performance was examined in terms of adaptability, productivity and efficiency.

Methodology/approach: To set the hypotheses of the study we delved into the wide stream of marketing literature pertaining to interorganizational networks and business-to-business relationships, and specifically to the marketing orientation theory, the social network theory, and the IMP approach. These research hypotheses were tested using advanced statistical analysis and causal modeling. The research sample comprised 1,000 business-to-business international companies, which were mostly U.S., and European and were randomly selected from the yahoo.com business-to-business companies’ subdirectory. The data collection involved a two-wave e-mail survey, in which the quantitative research instrument was emailed to the respective marketing directors’ personal accounts. Totally 249 high ranking marketing executives responded, thus yielding a 24.9% response rate. The selected data were, then, subjected to rigorous advanced statistical analysis of structural equation modeling, using the AMOS21 statistical package, to test reliability and stability of selected measures and validity of the research model, as a whole.

Findings: Overall, the research findings provided sufficient evidence that the proposed model was robust. Moreover, the findings supported that communication exchanges that deploy within a wide array of participants (i.e., within a network of organizational members, customers, partners, and other interacting partners within a market), may have stronger explanatory powers upon a company’s networking effects and business performance, than communication exchanges that evolve merely at a dyadic company-customer level.

Originality/value/contribution: This research is original; that is, it deals with empirical, quantitative data and makes an attempt to combine marketing concepts mainly from 3 marketing streams studying the long-term business-to-business relationships. Our approach is based on existing marketing literature, suggesting that networks, apart from being embedded in previous relationships and interactions, they may also be based on more loosely coupling between organizations. Thus, we use the IMP approach to formulate the measures of our study; however, we don’t discriminate between strong and weak ties in relationship bonding. In this research we focus on specific communication behaviors that may nurture interorganizational networking and look for effects upon cooperation and business performance. The research findings imply that marketing executives would worthwhile expand their communication exchanges beyond their narrow customers’, or providers’ network, to the wider array of trustworthy business circle, as such a behavior may largely favor their companies’ adaptability to environmental changes, flourish innovation, and lead to synergies in efficiency and productivity gains.     

Value Co-Creation in Business-to-Business and Business-to-Consumer Service Relationships

Abstract

The purpose of this study is to examine the interrelationships among value co-creation, switching costs (SC), and customer share (CS) in both business-to-business (B2B) and business-to-consumer (B2C) relationships. In spite of increasing attention to value co-creation in the Service Dominant Logic, there are only a limited number of empirical studies on this concept. Furthermore, few researchers have investigated the inter-relationship among value co-creation, SC, and CS in a single framework for both B2B and B2C relationships, although many enterprises serve both types of customers. The conceptual framework is developed primarily based on relationship marketing and services marketing. This study evaluates six hypotheses, analyzing survey data from 209 enterprises and 337 individuals by structural equation modeling (SEM). Further, confirmatory factor analysis (CFA) is conducted to confirm the convergent validity and discriminant validity. In conclusion, the positive impact of execution of value co-creation (EVC) activities on SC and CS is supported with appropriate statistical evidence in both B2B and B2C relationships. Also, the causal relationship between values in relational exchanges (VRE) and CS is confirmed with adequate empirical findings for both relationships. These results suggest to marketing managers that service firms may achieve larger CS by executing value co-creation activities and providing VRE for customers.     

Customer-Perceived Value in Long-Term Buyer–Supplier Relationships: The General B2B Insurance Sector

This article explores the role of customer-perceived value in long-term buyer–supplier relationships. This article aims to identify what creates value for organizational customers, particularly in the field of professional business-to-business (B2B) general insurance services. On the integrated grounds of customer relationship theory in marketing and the resource-based view in strategic management, qualitative research, coupled with interviews, was conducted to explore insights from various representatives of different Vietnamese general insurance firms. The findings suggest that reliability, risk coverage, reputation, technology, interpersonal skills, and technical skills are the six most important types of resources that insurance companies should possess to enhance customer-perceived value.     

The Influence of Internal Communities of Practice on Customer Perceived Value in Professional Service Relationships

Effective customer-related knowledge transfer can be seen as the cornerstone of customer value creation in collaborative relationships between professional service organisations and their customers. Our intention in this paper is to describe how different work groups within organisations (communities of practice) influence the perceived customer value. We approach this phenomenon from a relationship management perspective and use literature from relationship marketing, organisation research and knowledge management as a theoretical basis. Empirically the paper is based on an information-rich explorative case study of a professional service organisation, operating in the consultancy and training business, and its relationship with one of its customers.     

Examining the Role of Brand Equity in Business Markets: A Model,Research Propositions,and Managerial Implications

ABSTRACT

This paper presents a model of brand equity for business markets. It is argued that the potential benefits of branding and brand equity development have been neglected in business markets and that a general model and stream of relevant empirical research could be useful to managers in business markets depending on the situational nature of their market and competitive structure. The model adapts and extends existing brand equity literature to reflect the unique aspects involved in a business-to-business marketing context. The model developed considers marketing strategies as antecedents, two different classes of moderator variables, brand equity as a perception by the buyer or the market, a series of consequences of brand equity perceptions, and perceived risk as a moderator of the brand equity-consequences relationship. Propositions have been defined and discussed to help facilitate research and provide guidelines for industrial marketing managers.     

The impact of customer-specific marketing expenses on customer retention and customer profitability

We study the effects of customer-specific marketing expenses on customer retention and customer profitability in a business-to-business setting. Using data from a company providing hygiene services, we look at the impact of a hitherto unstudied type of expense targeted at individual customer relationships: the offering of free equipment to customers. The data allow tracking the activities performed in more than 4,500 customer relationships over a period of 4 years. Retention rates are higher for customers targeted with free equipment, but this effect results from an interaction with customer size. First-order dynamic panel data analyses show that the impact of targeted marketing expenses on customer dollar profit is positive for large customers, but there is no effect for smaller customers. Thus, targeted marketing expenses seem to be a tool for relationship maintenance rather than customer development: they help in retaining large customers that generate more profit, but they do not seem to work in developing new customers into larger, more profitable ones.     

The Role of Business and Friendships on WeChat Business: An Emerging Business Model in China

ABSTRACT

WeChat business is an emerging way of doing business in China, which can be considered as a marriage between traditional e-business and social networking communications. In WeChat business, firms have developed customer relationships along two distinct ways: business relationships and friendships. However, research on the combination of business relationships and friendships is relatively nascent, and there are contradictory findings. In this study, we examine the effectiveness of the two relationship strategies using data from a field experiment through the WeChat platform by an apparel firm. Results from the field experiment suggest that development of friendships with new customers can help the strategy of developing business relationships; but developing friendships and business relationships with experienced customers negates each other. The study contributes to the literature on relationship marketing and role theory, and helps WeChat managers clarify how new social networking relationships with customers can be effectively leveraged.     

Market segmentation

Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or “sets of buyers” which would then become targets for the company's marketing plans. The advantage to marketing management is that this technique divides total demand into relatively homogeneous segments which are identified by some common characteristics. These characteristics are relevant in explaining and in predicting the response of consumers, in a given segment, to marketing stimuli.

The market can be subdivided by geographic, demographic, psychological, psycho‐graphic or behavioural variables. The advantages and disadvantages of each of these types of segmentation variables are discussed in detail in this paper. Kotier (1984) has identified four requirements that a marketer can use in evaluating the desirability of potential market segments, namely measureability, accessibility, substantiality and actionability. Once a segment has been identified which meets these requirements, it is possible to develop a product or service which meets the unfulfilled needs of this segment. A marketing mix can then be devised to reach the segment identified economically and efficiently. A strategy of market segmentation attempts to regain some of the benefits of the closer association with customers which was the strength of traditional business operations.     

Determining Relationship Quality in the Development of Business-to-Business Financial Services

ABSTRACT

The quality of relationships built with customers during the New Service Development (NSD) process is a current concern of researchers in relationship marketing (and NSD) and is particularly important in a highly competitive environment characterised by rapidly changing customer needs like the one of financial services. The primary relationship analyzed in relationship marketing is the one between seller and buyer, but the focal type of relationship for new product and service development is the one termed “the knowledge relationship” (Gummesson 2002), a relationship used to create knowledge. This paper reports the results of in depth qualitative research on the factors that impact on the quality of such relationships developed between new service developers and their customers during the NSD process of business-to-business financial services. Results show that the most important factors that affect relationship quality are: communication quality of the relationship; the development of strong relationship bonds; the quality of relationship partners; a strong customer orientation in NSD based on a proactive approach of relationship partners during the NSD process, and proficiency in knowledge brokering.     

Mapping out the Field of Gender and Buyer-Seller Relationships: Developing a New Perspective

Buyer-seller relationships have long been of intense interest to marketing academics and practitioners, most particularly within the domain of business-to-business markets, but also more recently within the purview of business-to-consumer markets. This paper looks at the role of gender in buyer-seller relationships. Covering the literature from sales and from consumer behaviour, the general lack of a specific gender perspective in the interactions between buyers and sellers is identified and weaknesses in the current literature are highlighted. It identifies an opportunity to develop and apply feminist research practice to this increasingly important area. The benefits, opportunities, and limitations of the feminist research approach are specified and some initial conclusions presented.     

When Plentiful Platforms Pay Off: Assessment Orientation Moderates the Effect of Assortment Size on Choice Engagement and Product Valuation

Popular digital platforms, such as Netflix and GrubHub, purposefully aggregate offerings, according to the premise that customers value products chosen from plentiful assortments. Yet academic literature provides little clarity about when, for whom, or how larger online retail assortments affect the value of the products. To provide new insights, the current article aims to address ambiguous extant findings about the effects of larger product assortments. Specifically, this research tests whether customers with high, as opposed to low, assessment orientation value products more when they have chosen them from larger, as opposed to smaller, assortments. Four experiments affirm this idea, such that customers with a high assessment orientation value products more when they have chosen them from platforms with relatively larger assortments. Sequential mediation of the effect occurs through increased choice engagement and attitude certainty. For managers, customer segmentation along the assessment dimension offers benefits, while assessment type marketing communications can increase the likelihood of product selection, like in our field study, where we find an increase of 27%.     

Loyalty or lethargy? Keeping sellers committed,not entrenched

While business sellers frequently enjoy long-term relationships with their buyers, not every extended association is based on a genuine sense of customer loyalty. Many organizations remain in relationships with providers for too long; while the seller has stopped providing value, the buyer sticks to the routine. Building from empirical research and theory on buyer-seller relationships, this research extends our understanding of customer complacency and seller entrenchment and introduces the concept of customer lethargy. Synthesizing theory from multiple domains with exploratory interviews conducted with business customers, this article offers insight into the functioning of organizational buying centers, the evolution of business exchanges over time, and how some exchanges can be undermined by various forms of relational dysfunction. I define customer lethargy, explore its root causes and offer business buyers a strategy which aims to help them self-audit their loyalty, avoid complacency and lethargy, and keep sellers committed, not entrenched.     

The role of customer gratitude in making relationship marketing investments successful

This paper recognises that customer loyalty is important for many competitive organisations, and that retail firms make investments to build and maintain loyal relationships with their existing and potential customers (e.g. loyalty programs). However, there has been little focus on the mechanisms by which these relationship investments operate to achieve customer loyalty. This paper examines one mechanism, namely customer gratitude, which works to make a firm’s relationship marketing investment a success or a failure. Using data from 1600 undergraduate students, this study empirically confirms the mediating role of customer gratitude between the customers’ perceptions a firm’s relationship marketing investments and customers’ perceptions of the value of the relationship with the firm. Further, a significant moderating effect of perceived benevolence on the relationship between customers’ perceptions a firm’s relationship marketing investments and customer gratitude was identified. For theorists, this customer gratitude model offers a better psychological explanation of how relationship marketing investments operate to improve the value that customers place on their relationships with retailers. Our research suggests that managers should invest resources to stimulate customer gratitude in order to build strong customer–seller relationships.     

Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets

The degree of adaptation or standardization of the marketing program is critical in international business ventures. However, findings within this important research field and, consequently, implications for practice remain contradictory and confusing. The purpose of this paper is to examine determinants of an international marketing-mix strategy within a specific business-to-business context that includes the effects of uncertainty. Is the degree to which the marketing program is adapted or standardized dependent on the managerial perception of uncertainty? Does a firm's international entrepreneurial ability or the use of networks positively influence the degree of positive assessment of the environment? Data were collected from German companies working in different international business-to-business markets. The results indicate that international entrepreneurship has a greater impact on uncertainty reduction than the use of networks. After having reduced uncertainty, a firm tends to adapt their communication and pricing strategy, whereas the adaptation of the product and distribution strategy in general is not significant.     

Customer Loyalty in Clusters: Perceived Value and Satisfaction as Antecedents

Purpose: This article studies, from the perspective of relationship marketing, the loyalty behavior of industrial customers in the context of an industrial cluster. Loyalty is a key variable for studying long-term relationships between firms.

Research implications: Recent advances in consumer and services marketing consider that perceived value and satisfaction are central to explaining customer loyalty. However, very few business-to-business (B2B) studies explain the antecedents of customer loyalty, where perceived value acquires a multidimensional perspective. This study adopts the relationship marketing approach, and loyalty behavior is analyzed in a specific setting: an industrial cluster. Furthermore, the effect of the number of suppliers is analyzed as a possible moderator in the relationships of the model.

Methodology approach: We have chosen the Spanish tile cluster to test a series of hypotheses. Questionnaires were elaborated from primary and secondary information and structural equation models (SEM) have been used for statistical treatment and confirmatory factor analysis (CFA).

Findings: This study highlights the importance of the relationships among perceived value, satisfaction, and loyalty and the importance of the different dimensions of perceived value.

Practical implications: The empirical study and the results provide important evidence for managers, specifically, the critical influence of the emotional and social perceived values by the customer on his or her level of satisfaction and on the achievement of final loyalty—the importance in the commercial training programs of this matters.

Originality, value, and contribution: This study highlights the importance of the most intangibles dimensions of value for the industrial cluster relations between companies.     

Electronic Marketplace: A Distinct Platform for Business-to-Business (B-to-B) Procurement

Purpose: The purpose of this study is to examine whether buyers perceive different electronic marketplaces (EMs) as distinct types of procurement platforms. More specifically, it empirically investigates to what extent professional buyers expect different benefits from different EM types and perceive different barriers associated with their usage.

Methodology: A Web-based survey of purchasing professionals in the United States was conducted with 359 responses received. A multivariate analysis of variance (MANOVA) was performed to determine if there are significant differences between EM types with respect to expected benefits (market aggregation and inter-firm collaboration) and perceived barriers (financial risks and trust barriers).

Findings: The results show buyers' expectations of benefits differ significantly between public EMs (i.e., third-party exchanges and industry-sponsored marketplaces) and private EMs (i.e., private trading networks), and between neutral EMs (i.e., third-party exchanges) and biased EMs (i.e., private trading networks and industry-sponsored marketplaces). Likewise, their perception of barriers differs significantly between public and private EMs.

Research limitations/implications: The research confirmed empirically that EMs are a distinct platform for business-to-business procurement. Nevertheless, by examining EMs from business buyers' perspective, this study necessarily limits itself to purchasing-related issues.

Practical implications: By providing insights into buyers' perceptions, our findings can help managers focus their promotional efforts aimed at potential firms that would like to use EM for procurement by emphasizing specific benefits or addressing specific perceived barriers based on the type of EM they manage.

Originality/value: This study fills a void in academic literature on EMs that currently contains few empirical studies with respect to EM types. Its main contribution is in establishing empirically that EMs do not constitute a single, homogeneous marketspace but are instead comprised of distinct types that offer users specific benefits and expose them to certain risks.     

Analysis of customer profit contribution for banks with the concept of marketing mix strategy between 4Cs and 5Ps

This paper takes the high-net-worth customers in the private wealth management division of a case study bank as the research objects, and introduces the concept of marketing mix strategy by combining the 4C (customer, cost to the customer, convenience, and communication) model and 5P (product, price, place, promotion, and people) model in the examination of the attributes of customers and financial advisors in relation to the customer profit contribution and proposes management implications for practitioners. It attempts to establish a win–win business mechanism or marketing strategy that is beneficial to both banks and consumers.     

The Metrics of Relationships

Abstract

In the last two decades, it has been suggested that the marketing discipline is undergoing a paradigm shift from a transactional perspective to a relational perspective (Sheth & Parvatiyar, 2002). At the same time, there has been a call for the discipline to focus on accurate measurement of the outcome of marketing activities (Rust, Ambler, Carpenter, Kumar, & Srivastava, 2004). Extant research in this area has predominantly examined the sales and profitability of relationships through customer life time analysis or examined attitudinal measures such as satisfaction and loyalty. This paper attempts to combine both streams of research by examining the profitability, satisfaction and probability of switching associated with transactional customers, relationship customers (less than five years of relationship) and deep relationship customers (more than five years of relationship) in three business to business industries. The results demonstrate the transactional customers are most profitable followed by relationship and deep relationship customers. The probability of switching was in the reverse direction of profitability and there were no difference in satisfaction measures. Implications for research and practice and also derived in the paper.