Impact of Traditional Chinese Culture on Business-to-Business Relationship Marketing and Service Firm Performance

ABSTRACT

Purpose: This work addresses the mixed findings in relationship marketing studies regarding the importance of traditional culture-level (i.e., interpersonal) relationships on service firm outcomes.

Methodology/approach: This article leverages customer relationship marketing (CRM) theory to advance a framework for understanding the causal relationship between the Chinese cultural worldview and relationship marketing in order to better predict firm performance.

Findings: The author suggests that five major Chinese cultural characteristics—iren-qing, wa-pao, mianzi, chaxu-geju, and collectivism—can qualify the business-to-business (B-to-B) relationship building process and impact the effectiveness of interpersonal and/or group relationships on service firm outcomes.

Research implications: The study’s framework suggests that Chinese cultural characteristics, universal concepts manifest in the activities of Chinese society and organizations, have a positive effect on customer relationship marketing. Chinese culture characteristics can be used to generate excellent relationships with customers and thus create a consumer preference for certain companies and drive service marketing repurchase.

Originality/value/contribution: This study’s theoretical framework (a) distinguishes between Chinese cultural characteristic and relationship marketing relationships; (b) suggests that Chinese cultural characteristics and customer relationship marketing have a positive and substantial effect on service firm performance and that Chinese cultural characteristics are related to customer relationship marketing in their effect on service firm performance; and (c) provides managerially relevant guidelines for strategic sales planning.     

The Effect of Flexibility on Export Venture Performance

Abstract

Although both international marketing theorists and practitioners have been expounding the importance of flexibility little or no research has been done to examine the effect of flexibility on export venture performance. Most of the research to date was directed towards examining the effect of flexibility on performance in the domestic context. Moreover, the studies in the literature also gave exclusive attention to the performance-enhancing effect of flexibility and ignored the moderating effects of organisational and environmental contingencies on the flexibility-performance relationship. This paper will present the results of a study that assessed the effect of flexibility on export performance.

The findings support the proposition that flexibility is significantly related to export performance but that environmental dynamism, legal forms of business ownership, international experience, control mechanism, and exporter-distributor cooperation have a moderating effect on the relationships between flexibility and export venture performance. The study also found that firms that were challenged by intense competitive rivalries, spent a lot of time and effort on monitoring foreign marketing activities, and had substantial cooperation with overseas distributors were more flexible in their manufacturing, marketing, financial, and organizational activities.     

The Influence of Customer Relationship Marketing Strategies on Supply Chain Relationships: The Moderating Effects of Environmental Uncertainty and Competitive Rivalry

Purpose: A firm's customer relationship marketing strategy also may affect its attitudinal loyalty toward its main supplier. Furthermore, environmental uncertainty and competitive rivalry could moderate this relationship. This research investigates both questions.

Methodology/Approach: The empirical study involves a structured survey of 141 industrial firms. A structural equation technique with EQS 6.1 estimated the causal model. Multi-sample analysis revealed whether environmental uncertainty and/or competitive rivalry act as moderators.

Findings: The influence of customer relationship marketing on attitudinal loyalty toward the main supplier is positive but indirect, working through effective communication, satisfaction, and trust. However, when environmental uncertainty is high, the negative direct effect becomes significantly more intense, and when competitive rivalry is high, the positive indirect effect through satisfaction and trust is less intense.

Originality/Value: This study explores potential new paths in the relationship marketing field. Most scholars focus on the influence of a firm's relationship marketing strategy on customers' loyalty, but no previous works consider its potential influence on the firm's relationship with other partners in the supply chain, notably its strategic suppliers.

Research Implications: Structured academic research on this topic is lacking, even though many firms have implemented customer relationship programs. Supply-side researchers must evaluate the effects of such programs. Furthermore, this study combines different theoretical approaches.

Practical Implications: Practitioners can use the findings to segment their customer base and develop specific programs adapted to each target.     

Close to the customer: But is it really a relationship?

Everyone is developing relationships. Customers are being invited to have relationships with telephone companies, banks, auto dealers, airlines, and other suppliers of products and services. Relationship marketing is being touted as an effective strategy to guide companies into the next millennium. Recently there has been widespread reference to relationship marketing in the popular literature, and the concept has been embraced by many companies and organizations. There is little consensus, however, on what the concept means and even less consistency in how it is practised. What is relationship marketing? Practising marketers and articles in the trade press use the term in one way, while authors in academic journals seem often to be referring to something quite different. This paper reviews how the concept has been viewed by marketing authors and draws from social psychology to shed light on the characteristics of relationships. Some insights are drawn from a preliminary analysis of the results of focus group interviews that suggest how consumers describe their relationships with businesses.     

Improving relationships between sales and marketing: the relative effectiveness of cross-functional coordination mechanisms

ABSTRACT

The importance of effective sales and marketing working relationships is well known and this article examines the effectiveness of various coordination mechanisms used to improve this cross-functional relationship. Six coordination mechanisms are measured to identify their effect on sales and marketing conflict and collaboration, which in turn influence business performance. The results reveal that not all coordination mechanisms are equally effective. Structuring sales and marketing as a single unit and creating cross-functional project teams improve the interface, as do providing opportunities for job rotation and establishing cross-functional meetings. However, employing cross-functional training and co-locating sales and marketing do not influence this working relationship. Finally, reducing conflict and increasing collaboration between sales and marketing is shown to independently, and positively, influence business performance.     

Targeting direct marketing campaigns by neural networks

Abstract

Market-oriented companies increasingly aim at maximising the return of targeted direct marketing campaigns, rather than trying to reach customers and prospects indistinctly, according to a mass marketing approach. The profitability of direct marketing campaigns depends on a detailed definition of prospects and an accurate prediction of the response rate. This study shows how the use of Artificial Neural Networks (ANNs) can improve the effectiveness of direct mail marketing campaigns thanks to a better prediction of the response rate for subjects included in the target population according to factors that are believed to have an impact on their purchase intention. Results show the effectiveness of ANNs – in comparison with multiple regression analysis and logistic regression analysis – in identifying complex relationships among the data, and particularly in profiling customers and prospects and anticipating their behaviour.     

Supplier-Retailer Relationships in Grocery Distribution in Malaysia: Indications of Dominance,Conflict, and Cooperation

ABSTRACT

This exploratory study sets out to assess the presence of dominance, conflict and cooperation in channel relationships between grocery suppliers and retailers in Malaysia. There have been extensive studies on these channel issues in markets of developed countries but very little is known in markets of developing countries such as Malaysia. The initial assessment identifies traces of dominance, conflict and cooperation in the Malaysian channel environment. The findings suggest that the retailers perceive the suppliers as being more in control of the grocery distribution channels as indicated by the extent of influence they exert on channel functioning. The suppliers also acknowledged their roles in channel functioning as they felt that most channel issues are within their control. There also appears to be evidence of relationship characteristics identical to aspects of relationship marketing.     

Developing an Inter-Organization Relational Management Perspective

Abstract

Relationship marketing has become a frequently used strategy to increase the efficiency and effectiveness of an organization's marketing efforts. In order to manage relationships effectively over time, the domain (i.e., type of relationship) and the relational linkage (i.e., richness of interaction and communications) must be determined. In this paper, a process for establishing virtual management perspectives is developed illustrating the steps necessary for managing relationships between organizations and individuals within organizations. Taking a proactive approach to the management of relationships appears to be an essential dimension in insuring their success.     

Marketing planning: Operationalising the market orientation strategy

Abstract

Despite strong empirical validation of the relationship between market orientation and business performance, the literature is inconclusive on the implementation of the strategy. This paper reviews the implementation of market orientation, and investigates the associations between market orientation and marketing planning and their associations with business performance. A survey of 216 Australian larger business organisations was conducted to find evidence of these relationships. The results highlight a close association between market orientation and marketing planning, with virtually the same level of association between them, and the business performance measures used. This evidence suggests that they arguably represent the same domain. The results suggest that marketing practitioners may use the marketing planning technique as an intangible productive resource to operationalise the market orientation strategy, and use it to design a specific style and magnitude of market orientation suitable for an organisation.     

Factors of determining long-term orientation in interfirm relationships

Marketers have witnessed a paradigm shift in which establishing, maintaining, and forging long-term buyer–seller relationships are considered the core of marketing activities. Accordingly, investigating a long-term orientation (LTO) has become a steady research stream in the marketing literature. Building on this on-going research stream, this study confirms that an essential precursor of a manufacturer's LTO is trust that, in turn, is formed by relational norms and satisfaction with supplier performance. Interestingly, however, the seemingly strong trust–LTO path is moderated by both power asymmetry and environmental uncertainty in buyer–seller relationships. The empirical findings suggest that regardless of emerging relationship marketing where buyer and seller are portrayed as parts of a team, power is still in use to control suppliers. In addition, a manufacturer facing uncertainty is less likely to form LTO toward its supplier for fear of losing flexibility in the time- and quality-based competition.     

An Investigation into the Relationship Between Consumer Satisfaction,Marketing Performance,and Firm Performance in a Services Environment

Abstract

The study reported investigates the relationships between consumer satisfaction, marketing performance, and firm performance with the context of service organizations. The results indicate that consumer satisfaction is positively related to marketing performance, explaining more than seventy percent of the variation. However, marketing performance is not shown to be significantly related to firm performance. In addition, firm size is identified as a significant covariate of performance.     

To Be or Not to Be [Locked in]: An Investigation of Buyers' Commitments of Dedicated Investments to Support New Transactions

ABSTRACT

This study draws on two prominent theoretical frameworks, transaction cost analysis and social exchange, which serve as the basis for much of the empirical literature in relationship marketing to investigate the investment behavior of industrial buyers. Specifically, we examine the manner by which situational and contextual factors identified from those frameworks influence buyers' commitment of dedicated investments to support new transactions within ongoing exchange relationships. Our empirical results show that buyer dedicated investments are positively influenced by the extent of supplier dedicated investments, thus supporting the safeguarding rationale posed by transaction cost theory and the reciprocal nature of commitments derived from social exchange theory. Such investments are also positively influenced by the extent of past adaptations made within the pre-existing relationship, consistent with the generalized hostage explanation from the transaction cost literature and theories of the incremental development of relationships. These investments are also positively influenced by the size of the procurement but negatively influenced when a multisourcing purchasing strategy is being pursued, which are consistent with means to manage dependency. It was also found that buyer investments are not uniformly influenced by perceived environmental uncertainty related to supply and market sectors and technological conditions, suggesting that buyers respond to the risks associated with each of these environmental sectors in a distinctive manner.     

Book reviews

There is currently a tremendous interest in the development and use of expert systems (ES), and marketing activities have not been immune to such enthusiasm. The degree of enthusiasm expressed is often strongly at variance with reality. The purpose of this paper is to give a moderating view on the role of expert systems in marketing.

The paper begins with a short review of “conventional” management support systems (MSS). This provides a firm base from which to develop a comparison between MSS and ES in terms of the components of these systems. Throughout the comparison, characteristics are highlighted that might at first glance appear to be uniquely characteristic of Expert Systems but are available in “traditional” MSS. The present state of expert systems in business, and particularly in marketing are then discussed. Consideration is then given of the strengths and weaknesses of ES and of the match of these characteristics with marketing activities.     

Buyer/supplier partnering in British industry: The automotive and telecommunications sectors

Practitioners and academics in the fields of marketing and purchasing management share an interest in the effective management of inter‐firm buyer‐seller relationships. Buyer/supplier partnering has been advocated as an effective approach to the management of key customer or supplier relationships. Within both the automotive and telecommunications sectors of the British economy there is intense interest among major buying organisations in the development of durable partnerships with key suppliers. However, within both industries the major UK and American owned firms have to operate under the shadow of traditionally antagonistic relations with suppliers. The current state of buyer/supplier partnering within the two industries is evaluated within this historical context, and the key problem identified is the need to overcome antagonism within the inter‐organisational culture. The costs and benefits of partnering approaches to both marketing and purchasing are discussed, and implications for marketing managers seeking to develop partnerships with major customer organisations are outlined.     

Uncertainty representation and risk management for direct segmented marketing

ABSTRACT

Mining for truly responsive customers has become an integral part of customer portfolio management, and, combined with operational tactics to reach these customers, requires an integrated approach to meeting customer needs that often involves the application of concepts from traditionally distinct fields: marketing, statistics, and operations research. This article brings such concepts together to address customer value and revenue maximisation as well as risk minimisation for direct marketing decision-making problems under uncertainty. We focus on customer lift optimisation given the uncertainty associated with lift estimation models, and develop risk management and operational tools for the multiple treatment (recommendation) problem using stochastic and robust optimisation techniques. Results from numerical experiments are presented to illustrate the effect of incorporating uncertainty on the performance of recommendation models.     

The Role of Logo Recoloring on Perceptual Fluency in Cause-Related Marketing Campaigns

Abstract

This article investigates the influence of brand esthetics on consumer response to cause-related marketing campaigns. Drawing on brand visual identity and advertising research, a processing fluency perspective is explored in the relationship between stimulus characteristics and consumer judgment. Processing fluency suggests color enhances the ease with which consumers recognize and process brand elements, and more broadly, cause-related marketing campaigns. Brand logos were recolored to enhance the perceptual fluency of the two entities. Its joint effect with conceptual congruence (e.g., fit) indicate that both low and high fit brands benefit from enhanced processing fluency, with a more robust outcome for high fit brands. These effects were mediated by logo evaluation, leading to a new path of fit perceptions in CRM initiatives.     

The Contingency Effects of Supplier Influence Strategies and Their Implications for Retailer Cooperation

Abstract

The success of manufacturers' consumer marketing programs often hinges on whether they are implemented at the retail level. Manufacturers use various influence strategies to persuade retailers to adopt their marketing programs. We investigate how well those influence strategies shape the retailers' positive attitudes toward their suppliers' marketing programs. We find that the effectiveness of those influence strategies depends upon the extent of uncertainty in the retailers' market. We also find that the manufacturer's investment in specific assets to support its relationship with the retailer strongly affects the retailer's attitude toward the supplier's programs.     

Marketing and Technological Absorptive Capacities: Environmental Antecedents and Performance Outcomes in High-Tech Firms

Purpose: This article investigates marketing and technology absorptive capacities as distinct types of external knowledge while considering three environmental conditions, namely uncertainty, munificence, and heterogeneity and two distinct outcomes, namely innovation and financial performance.

Methodology/approach: Using a quantitative approach, the authors analyze data from 141 Israeli business-to-business high-tech firms.

Findings: The data mostly supported the hypotheses. Empirical findings imply that an uncertain environment is a precursor for a strong effort to develop a technological absorptive capacity and, to a lesser extent, a marketing absorptive capacity. Technological and marketing absorptive capacities were found to be distinct constructs with positive impacts on financial and innovation performance. Marketing absorptive capacity had a stronger impact than technological absorptive capacity on financial performance. Surprisingly, marketing absorptive capacity was negatively associated with innovation performance.

Originality/value: This study attempts to overcome some limiting assumptions of absorptive capacity theory that have contributed to its reification in order to make three theoretical contributions. First, it distinguishes between marketing and technological absorptive capacities. Second, it tests differential responses of the two absorptive capacities to environmental contingencies. Third, it compares the differential impacts of marketing and technological absorptive capacities on financial and innovation performance.     

The organization of the future: Unity of marketing and strategy

Marketing and strategy, while once diverse activities and entities, are moving ever closer together—in this paper it is speculated that they may someday become one. This is in response to changing business environments, and to the emergence of new organizational forms. However, a more fundamental force may be the simple recognition that without relationships there is no need for strategy, and that relationships are fundamental to marketing.     

Developing Absorptive Capacity through e‐Business: The Case of International SMEs

This research uses the absorptive capacity concept as a theoretical lens to study the effect of e‐business upon the internationalization performance of small and medium‐sized enterprises (SMEs), addressing the following research issue: To what extent are manufacturing SMEs successful in developing their potential and realized absorptive capacity in response to the environmental uncertainty brought about by their internationalization? Results of a survey study of 588 manufacturing SMEs indicate that e‐business capabilities have a significant impact on internationalization performance to the extent that these capabilities are developed as a response to increased environmental uncertainty. Moreover, these capabilities are realized through the development of networking, advanced manufacturing, and marketing capabilities that also respond to environmental uncertainty.