Credit lender–borrower relationship in the credit card market – Implications for credit risk management strategy and relationship marketing

Lehman Brothers filed for bankruptcy in 2008, precipitating the international financial crisis. Many questioned the banks’ risk-taking credit system. Understanding credit risk and how the credit system functions may provide knowledge on managing credit, to avoid another such international crisis. We study the credit card field and present a pricing decision model for managing credit risk. Recent credit lenders’ portfolio re-pricing practices call for immediate attention to the credit lender–borrower relationship and relationship marketing. A literature review and recent phenomena in the credit card industry reveal that the lenders’ re-pricing strategy negatively affects the credit lender–borrower relationship and relationship marketing. Thus, we introduce a pricing decision model incorporating the lenders’ re-pricing strategy and the credit lender–borrower relationship. Further, we discuss the implications of, and the role of marketing in, credit risk management and the implications of relationship marketing for credit lenders in foreign markets, including the US market.     

Marketing Relationship Management: Antecedents to Survival and Dissolution

ABSTRACT

Though investing in relationships in order to continue them seems intuitive, is every relationship worth further investment? For those partnerships in unstable conditions, it is important to know which ones are headed for dissolution and which ones have the potential to survive.

In addition to assessing the economic value of continuing a partnership, this paper argues that the behavioral quality of a relationship should also be considered if relationship management is to be successful. A Partnership Survival Framework (PSF) is offered, wherein conflict response behaviors are shown to be predictive of not only survival but also the quality of a relationship. Here, the PSF is proposed and tested. Support is found for the framework and theoretical and managerial implications are discussed.     

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.     

Estimating cellphone providers' customer equity

This paper provides insights about how customer equity estimates can help businesses monitor the competition as well as aid managers in making their marketing investment decisions, and how companies can employ their marketing investments to maximize current and future yield/returns. The article concerns itself with the current offer of cellphone providers and their main products. The research includes survey data through interviews with 302 cellphone users of Sao Paulo, Brazil. The study uses this data combined with a number of economic assumptions and a financial marketing model to create an insight in customer equity values of cellphone providers in the region. The scenario dated October 2005 is that the estimated customer equity of the service provider Vivo is, respectively, 93 and 91% larger than those of competing providers Claro and TIM. The research underlines that on average the customer equity flowing from the post-paid segment is 3.5 times larger than that of the pre-paid. In addition to these results the study provides the customer lifetime value (CLV) estimates for Claro's, TIM's and Vivo's pre- and post-paid customers and analyzes the retention and loss figures of CLV. Also a discussion follows of the implications that these values will likely have for the companies' marketing strategy.     

How does sales force automation influence relationship quality and performance? The mediating roles of learning and selling behaviors

Sales force automation (SFA) technologies are increasingly used to support customer relationship management strategies. However, previous studies have reported mixed results about the performances of SFA technologies. Therefore, this study seeks to further examine the impact of SFA usage on both customer relationship quality and sales performance. Additionally, the mediating roles of learning and adaptive selling behaviors on the outcomes of SFA usage are investigated. The results highlight the mediating role of salesperson learning and adaptive selling behaviors in the SFA usage and sales performance relationship. Especially noteworthy is the impact of learning through adaptive selling on those outcome variables. Implications for SFA research and practice that may further improve our understanding of this increasingly relevant topic are also offered.     

What to do with mushroom pickers in my forest? Policy tools from the landowners’ perspective

Wild mushroom picking is a growing recreational and commercial activity. In Spain, wild mushrooms legally belong to the landowner, who seldom benefits from trade in mushrooms or from their recreational value. Cultural aspects (tradition, picker-related harms) and economic aspects (costly forestry works, income opportunities) constitute elements of the debate on how to deal with mushroom picking. Through a survey of private forest owners in Catalonia (north-eastern Spain), this paper examines their experiences with mushroom pickers, the factors shaping their related policy preferences and their willingness to engage in mushroom reserves.The results show broad support for introducing mushroom picking norms. A regulation would allow outsider pickers to enter private land, but only under certain conditions, i.e. to comply with socio-ecological rules of the area. Among respondents who support the regulation, active land owners who report instances of picker-related harm (both tangible and intangible) tend to support the establishment of a fee system which could be reinvested into forest management. That is also the position of the respondents who perceive mushrooms as a private right, i.e. they believe to have a legitimate right to exclude outsider pickers and, eventually, to raise revenues from that asset. On the contrary, forest owners who conceive mushroom picking as a free-access activity prefer neither to regulate it nor to charge fees. The option to establish a mushroom picking reserve depends on the landholder being a fee-supporter and perceiving instances of harm. Harm, instead, is mainly determined by the perception of congestion of pickers, which in turn is determined by the mushroom productivity of their forest, their level of privacy protection and their involvement to the primary sector. These findings help policymakers to better understand the logic and sensitivities of forest owners in view of designing mushroom picking policies that can effectively solve picker-landowner conflicts.     

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