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Relationship marketing as a paradigm shift: some conclusions from the 30R approach

Relationship marketing as a paradigm shift: some conclusions from the 30R approach

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Published by Gandolfo Dominici
Relationship marketing as a paradigm shift: some conclusions from the 30R approach
Evert Gummesson
http://www.iei.liu.se/program/smio/722a26/lecturer_articles/1.125420/BRelationshipmarketingasaparadigmshiftconclusionsfrom30Rapproach.pdf
Relationship marketing as a paradigm shift: some conclusions from the 30R approach
Evert Gummesson
http://www.iei.liu.se/program/smio/722a26/lecturer_articles/1.125420/BRelationshipmarketingasaparadigmshiftconclusionsfrom30Rapproach.pdf

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[
267
]
Management Decision35/4 [
1997
]267–272 © MCBUniversity Press[
ISSN0025-1747
]
Relationship marketing as a paradigm shift: someconclusions from the 30R approach
Evert Gummesson
Stockholm University, Stockholm, Sweden
Stresses issues brought up inthe first World Wide Webconference on relationshipmarketing. Based on researchon relationship marketinggoing back to the early 1970swhich resulted in the defini-tion of 30 relationships inmarketing – the 30Rapproach. Brings up inconsis-tencies in marketing, amongthem the mix-up betweenrelationship marketing as aphenomenon and a term;values and ethics; practiceversus theory and education;differences between Europeand the USA; and the ghost-hunt for an unambiguousdefinition. Concludes thatrelationship marketingrequires a dramatic change inmarketing thinking andbehaviour; it is a paradigmshift, not an add-on totraditional marketingmanagement.This paper is based on asub-theme contribution tothe First Internet WWWConference on RelationshipMarketing in 1996. Thepaper has incorporatedcertain views from thediscussion and has beenrevised for journal publica-tion.
Introduction
This contribution to relationship marketing(RM) further stresses some of the issuesbrought up in the other papers and commentsin the Internet discussion, and adds my ownobservations and results. It is based onresearch on the RM phenomenon dating bacto the 1970s, with the first papers in Englishfrom the the early 1980s (Gummesson, 1983).My basic thinking on RM is a gradual exten-sion of the “Nordic School” approach to ser-vices marketing and management, and thenetwork approach to industrial marketing asdeveloped by the IMP Group (Industrial Mar-keting and Purchasing Group). Both areasemerged during the 1970s and have continuedto develop since. More recent sources of inspi-ration are above all total quality managementand the new theories on imaginary (virtual,network) organizations.My approach to RM has been presented inarticles and a recent book,
 Relationship Mar-keting: From 4Ps to 30Rs
(Gummesson, 1995),first published in Swedish and to bepublished in English in 1997; the paper firstsummarizes this 30R (30 relationships)approach to RM. It then discusses gaps andinconsistencies in marketing thinking andbehaviour. Finally, it is argued that RM is aparadigm shift.
Emerging theory of RM
Much of what is currently written about RMis theoryless, a stack of fragmented philoso-phies, observations and claims which do notconverge in the direction of an emerging RMtheory. For example, RM is often presented asa new promotional package to be sold to thecustomer, or a new type of marketing madepossible thanks to information technology.Efforts to contribute to a more comprehen-sive theory are found in Christopher, Payneand Ballantyne (1991) and in their later writ-ings; in Kotler (1992); and Hunt and Morgan(1994).My contribution to a theory of RM is calledthe 30R approach. Its core is the identificationof 30 tangible relationships that exist inbusiness and other organizations (seeGummesson, 1994, 1995, 1996) and their conse-quences. Examples of the 30Rs are: the classicdyad of the supplier and customer; relation-ships via full-time and part-time marketers;the electronic relationship; personal andsocial networks; mega-alliances (alliancesabove the individual corporations, such asthe EU and the NAFTA); and the relationshipto external providers of marketing services.The main features of the 30R approach to RMare summarized below:1
 Definition
: RM is marketing seen as rela-tionships, networks and interaction.2
 RM characteristics
: value for the partiesinvolved, of which the customer is one, iscreated through an interaction processbetween suppliers, customers, competitorsand others; suppliers and customers areoften co-producers, they create value foreach other in a joint effort.3
Values
: more win-win and less win-lose;more equal parties; all parties carry aresponsibility and can be active in a rela-tionship; long-term relationships.4
Tangibility and operational aspects
: thespecification of the 30Rs is an attempt tomake RM tangible and operational. The Rshave been grouped in market relationships(classic and special) and non-market rela-tionships (mega relationships above themarket relationships, and nano relation-ships below the market relationships).5
 Relationship portfolio and marketing plan-ning
: the selection of a relationship portfo-lio the relationships a certain companyintends to work with during the next plan-ning period – is part of the marketing plan-ning process.6
Theoretical and practical base
: primarilybuilt on a synthesis between marketing mix(the 4Ps) and traditional marketing man-agement, services marketing, the network approach to industrial marketing, qualitymanagement, organization theory, andobservations from reflective practitioners.7
 Links to management 
: RM is more thanmarketing management, it is rather mar-keting-oriented management – an aspect of the total management of the firm – and notlimited to a marketing or sales department;the marketing plan becomes part of thebusiness plan.
 
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Evert Gummesson
Relationship marketing as a paradigm shift: some conclusions from the 30R approach 
Management Decision35/4 [1997] 267–272
8
 Links to organizational structure
: RM isthe marketing manifestation of the imagi-nary (virtual, network) organization – andvice versa.9
 Advantages to a firm
: increased customerretention and duration; increased market-ing productivity and thus increased prof-itability; and increased stability and secu-rity.10
 Advantages to the market economy
: RMadds collaboration to competition andregulations/institutions. The symbiosisbetween these three forces contributes to amarketing equilibrium, a dynamic andoptimal balance of the market economyseen from a marketing management per-spective.11
 Advantages to society and the citizen
: RM ismarketing for the new economy – the ser-vice society, the information society, thepostmodern society or, as I prefer to call it,the value society – which adds valuethrough increased focus on customizedproduction and one-to-one marketing;diminished focus on standardized massmanufacturing and anonymous massmarketing.12
Validity
: RM provides a foundation for amore realistic approach to marketing thanis currently prevailing in marketing edu-cation. In practice, business is largelyconducted through networks of relation-ships.13
Generalizability
: RM can be applied to allkinds of companies and offerings, but therelationship portfolio and the applicationis always specific to a given situation.This is, of course, an extremely condensedpresentation; for further explication, see thesources mentioned above. As everything elsecurrently presented in RM, this is a personalinterpretation and RM is partly treated differ-ently by others. My perception of RM buildson research and practical experience, my ownas well as that of others, with the purpose of renewing our thinking and improving ourinsights.
Gaps and inconsistencies inmarketing thinking and behaviour
My research on RM has laid bare a series of gaps and inconsistencies in the thinking,development and execution of marketing.Five of these will be discussed below.
The origin of RM: new term vs oldphenomenon
There is a gap between the use of the
term
RMand the understanding of the actual
 phenomenon.
RM is a new term but an oldphenomenon. Too many scholars seem tochase the term rather than the content itrepresents. This may be part of the rat racefor tenure, consulting assignments, or recog-nition as (alleged) originators. Relationships,networks and interaction – which turn up asthe key terms for capturing the soul of RM –have been in the core of business since timeimmemorial. The literature and research thatare currently contributing to RM theorygeneration are primarily found in servicesmarketing, the network approach to businessmarketing, quality management, and newtrends in organization theory. The term rela-tionship marketing was used by Bund Jack-son in her project on industrial marketingfrom the late 1970s, and published in her book in 1985. Berry, in a paper in 1983, used theterm for services. Other terms that have beenused over the years are the network and inter-action approach, marketing as long-terminteractive relationships, and interactivemarketing. In an early attempt to make asynthesis of services marketing and the net-work approach to industrial marketing, theterm “a new concept of marketing” was used(Gummesson, 1983). The phenomenon of RMhas probably been treated in a number of nowforgotten texts. Wittreich, for example, beingone of the early proponents of the importanceof services marketing with an article in the
 Harvard Business Review
in 1966, representedone of the very few sources to which I hadaccess when I started research on profes-sional services in 1974 (see Gummesson,1978). Among other things, Wittreich says(1969, p. 9):
There is not a single point in the course of arelationship with the client where the sale ismade, but there are many points in thatrelationship where effective selling isrequired … the sale has never been fullyconsummated until the project has beencompleted to the clients satisfaction.
RM as lip service vs genuine change invalues and ethics
A gap between traditional marketing man-agement and RM can also be created by mar-keters who have not internalized the originalmarketing concept and its application in RM,and just perceive RM as a fad to which it issmart to confess. The old values have notkilled the new ones, just pushed them into acorner from which they make recurrentefforts to break out. Inadequate basic valuesand the absence of ethics are the biggestobstacles to success in RM.The basic values of RM should include theacceptance – in action, not only in rhetoric –of interactive relationships and a win-winsituation; of both the buyer and the seller and
 
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Evert Gummesson
Relationship marketing as a paradigm shift: some conclusions from the 30R approach 
Management Decision35/4 [1997] 267272
other parties being drivers of a network of relationships; of long-term relationshipsbeing advantageous to the parties involved;and of the customer being a co-producer of value and a partner. The ethical aspects of RM are salient. Frequently quoted propertiesof RM include trust, honesty, benevolence,reliability, commitment and diligence (Mur-phy, Wood, and Laczniak, 1996). The deonto-logical reasoning by philosopher Kant – “thecategorical imperative”, meaning that a per-son must be willing to accept his or her actsas a universal law – and the utilitarianistapproach – “the greatest good for the greatestnumber” – are efforts to provide guidelinesfor ethical behaviour (Takala and Uusitalo,1996).RM should clearly not be perceived as apromotional package to be sold to the cus-tomer, although it is sometimes presented assuch. Nor should RM be perceived as a morepotent way that a salesperson can manipulateand outsmart a consumer, or a way for a pow-erful customer to turn a dependent supplierinto its obedient slave. These types of asymmetrical relationship exist, however,and to point this out, one of the 30Rs islabelled, “The monopoly relationship: thecustomer or supplier as prisoner”.
The world of practice vs the world ofbusiness school education
I was first acquainted with the importance of relationships in 1968 in a very tangible way –it was a matter of professional survival – andI quote (Gummesson, 1996, p. 36):
Working in PA Consulting Group, a largeBritish international management consult-ing company, I was assigned the responsibil-ity of selling the services of a group of con-sultants in Scandinavia. At that time, therewas absolutely nothing in the marketingliterature on professional services, nor onservices in general. Through my own practi-cal experience and advice from senior col-leagues, I gradually learned that two thingsmattered besides a certain
 professionalknowledge
. One was the
image
of the con-sulting firm or of individual consultants; itattracted inquiries leading to assignments.The other was the
network of professionaland social relationships
that individualconsultants represented by birth, member-ship in certain social circles, or professionalachievements. These relationships were alsoimportant internally when consultants wereselected to staff new assignments.
Since then, I have had a series of experienceswith companies on the significance of rela-tionships. To my understanding, the realworld of business and marketing hasdeployed an RM approach (although it hasnot been labelled as such) while the academicresearch, to some extent, and education, to alarge extent, have become stuck in a narrowand mechanical approach to marketingthrough the dominant marketing manage-ment paradigm. Through business schooltraining, some practising managers havebeen led to believe that marketing is no morethen the received theories. These theorieshold important messages and knowledge forthe specific issues to which they are perti-nent, but they have claimed to be general andcomplete. They have therefore contributed tomoulding an “unreal reality”. Other practi-tioners reject marketing theories and createtheir own frameworks based on experienceand personality.Marketing scholars, consultants and prac-tising managers, who are now confessing toRM, are adding language and systems to along-existing phenomenon. This is no smalltask. However, using a metaphor: Americaexisted before Columbus got there. To saythat he “discovered” America is a one-sidedview; he discovered it for those who did notknow it existed, not for those who lived there.But he did not create it, he just gave it a nameand put it on a map. (To add to the confusion,Columbus did not,
ex ante
, know where hewas going, and he did not,
ex post 
, knowwhere he had been.)In conclusion, RM is new in the books, butancient in practice.
Differences between Europe and the USA
While US thinking in marketing issues is wellknown in Europe, European thinking in mar-keting is largely unknown in the USA. Inservices marketing the situation is better,which is shown in interpretations of the his-tory of services marketing presented byBerry and Parasuraman (1993), and Fisk,Brown and Bitner (1993).Even if international conferences and,increasingly, the Internet allow everybody tospread their papers and articles more glob-ally, it would be desirable if a dialogue coulddevelop and not just a series of parallel andlecture-like monologues. It is somewhat puz-zling for a northern European to note thatservices marketing, the network approachand TQM are not mentioned in reviews of thehistory and development of marketing pre-sented by American scholars. This is sodespite the fact that both services and qualityare viable areas for research and practice inthe USA (not yet the network approach toindustrial marketing, however). The contri-butions from the IMP Group during the past20 years, most of them available in English,are not even noted (see the anthologies editedby Axelsson and Easton, 1992; Ford, 1990;

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