International Business Review Vol. 4, No. 4, pp. 471-481, 1995 Copyright © 1995 Elsevier Science Ltd Printed in Great Britain. All fights reserved 0969-5931/95 $9,50 + 0.00

Relationship Marketing: Local Implementation of a Universal Concept
Adrian J. Palmer
De Montfort University, Leicester Business School, The Gateway, Leicester LE1 9BH, UK
Abstract -- Relationship marketing has been described as a new paradigm for the study of exchange. However, current interest in developing relationship marketing programs overlooks the existence of relational exchange as the dominant form of exchange in many of the world's economies. This paper discusses the nature of relational exchange and governance within a cross-cultural context and advises caution in the implementation of western style tactical relationship marketing activity in markets where relationships represent core cultural values. Key Words -- Relationship Marketing, Exchange, Globalization.

Local Implementation of a Universal Concept

Introduction Relationship marketing has recently excited the minds of marketing academics and practitioners alike. However, this excitement must be seen in perspective, for it has mostly originated from western countries, overlooking the fact that relational exchange is the norm in many other cultures and indeed has been the norm in previous eras in western economies (Sheth and Parvatiyar, 1993). Formulations of relationship marketing based on contemporary western interpretations may fail if transplanted to overseas countries where the cultural and economic environments differ significantly from the country for which a relationship marketing policy was originally formulated. There is now an extensive literature to guide companies in the development of a marketing mix strategy in overseas markets in a manner that meets the needs of those markets (e.g. Keegan, 1989; Levitt, 1976). However, less attention has been given to the sensitive adaptation of exchange mechanisms to meet the needs of overseas markets. Given the growing trend towards globalization of markets (Porter and Fuller, 1986), and the increasing deployment of organizations' employees overseas (Smith, 1992), it is important that employees, organizational structures and processes are sympathetic to the exchange needs of a market. This paper seeks initially to identify the multiple dimensions of relationship marketing, drawing on contemporary literature. It will be argued that relationship marketing is not a universal paradigm capable of uniform global application. Western prescriptions of relationship marketing must consider the state of economic and social development of a country as factors influencing

competitor orientation and inter-functional co-ordination (Narver and Slater. relationships between government bodies and private sector organizations (Waddock. 1989. Morgan and Hunt. 1991). At a tactical level. It has. . At the tactical level. 1995). A considerable body of literature has been developed to explain the antecedents and consequences of relational exchange between buyers and sellers. Defining Relationship Marketing It is now widely accepted that a transactional exchange framework is inappropriate for studying a wide range of buyer-seller transactions (Levy and Zaltman. 1993). Recent conceptualizations of marketing as being the integration of customer orientation. 1994). 1990).. 1993). Perrien et al. Cycles of social and e c o n o m i c d e v e l o p m e n t can be i d e n t i f i e d w h i c h can affect the local implementation of relationship marketing strategies.. relationship marketing has been conceptualized as a core business p h i l o s o p h y which is fundamentally about adding value to a relationship through mutually rewarding co-operation (Han et al. 1982). 1988. 1980) and between a firm and its employees (Berry and Parasuraman.472 International Business Review 4. technological. Rusbult and Buunk. to the point where relational exchange is characterised by stable.. using all employees of an organization to profitably meet the changing lifetime needs of targeted customers better than competitors. It has been pointed out that such programs do not guarantee long-term loyalty from customers (O'Brien and Jones. relationship marketing has been stimulated by the falling costs and increasing user-friendliness of databases through which a company can gain a better understanding of its customers to enhance future exchange possibilities (Copulsky and Wolf. 1975. geographical and time bonds (Liljander and Strandvik. relationship marketing has focused on loyalty programs which are often very short-term in nature and perform a similar role to sales promotion activity. 1995. transactions between parties at the same level of a supply chain (Nueno and Oosterveld.. The study of relational exchange initially focused on the behavior of industrial buyers in relation to the suppliers of industrial goods (Hakansson and Ostberg. Cunningham and Turnbull. This has been subsumed under the title of 'relationship marketing'.4 the pattern of exchange between buyers and sellers. friendly relationships based on reciprocated trust and commitment involving both cognitive and emotional components (Gupta. 1990) stress the key features of a relationship marketing philosophy. Campbell. Finally. and has since been applied to c o n s u m e r m a r k e t s (Crosby et al. 1985. although this term has now been so widely used that it means quite different things to different people (Fisk et al.. relationship marketing has been seen as a process of 'tying in' customers through the creation of legal. 1993). 1975. 1990). Comer et al. 1983. 1992). 1994). 1993). however been suggested that it may be more appropriate to talk about such bonds leading to involuntary customer detention rather than willing retention (Dick and Basu. At a more strategic level. economic. Bucklin and Sengupta.

1983). The Universality of Relationship Marketing Relationship marketing strategies are not appropriate to all buyer-seller relationships. Where products are complex and involve a high degree of buyer uncertainty. It has been suggested that in many sectors.. Sellers of generic commodity products may find relationships difficult to achieve in a market where customers have no reason to remain loyal to one supplier and routinely seek out the supplier which is the lowest cost and/or most accessible. Some groups will shift their primary focus away from the pure economic aspects of the purchase to secondary social exchange factors and develop interpersonal relationships with suppliers (Blau. The nature of the product i n f l u e n c e s r e l a t i o n s h i p d e v e l o p m e n t t h r o u g h the level of its complexity which influences buyers' perceived risk. For some products. relatively low risk product in one market may be seen as high risk in another (for example. the purchase of telephone equipment may be perceived as much more risky in developing economies where there is a poor infrastructure to facilitate repairs and upgrading). the characteristics of its customers. Customers differ in their receptiveness to relationship development and in the level of suspicion they show towards attempts to create relationships. 1994). It has been suggested that both suppliers and customers seek the security of relationships where the market environment is turbulent (Zeithaml. a relationship may allow preferential treatment or semiautomatic responses to requests for service (Marshall et al. If implemented as a tactical tool. 1994). 1989). 1985. 1984). Lovelock. To be successfully implemented. Fern and Brown. A tactically led relationship marketing program which has succeeded in a home market may fail if i m p l e m e n t e d in a culture which places greater value on the emotional elements of a relationship philosophy. database led relationship marketing has been implemented alongside a weakening of the emotional relationship that customers feel towards an organization (Barnes. 1993). 1981). and the characteristics of the organization itself. the likelihood of customers seeking a relationship is increased (Berry. relationship marketing will fail if it overlooks the fundamental need to deliver a quality and depth of relationship that customers value (Barnes. 1983. relationship marketing should reflect the value system of the population to which it is targeted. A stream of research has sought to segment customers according to the importance individuals attach to the economic as against the social aspects of an exchange (Jackson. 1979). The extent to which marketing strategy is relationship focused is dependent upon the characteristics of an organization's products. for example banking. thereby reducing transaction costs. What may be seen as a straightforward. The extent to which organizations are relationship orientated can be related Local Implementation of a Universal Concept .473 M u c h o f the c u r r e n t interest in r e l a t i o n s h i p m a r k e t i n g in w e s t e r n economies is driven by the emergence of powerful user-friendly databases which allow companies to develop a degree of intimacy with their customers (Treacy and Wiersema.

"time I I ! ! ! I I . a supplier is likely to be able to judge the credit worthiness of each customer. through price advantage.474 International Business Review 4. Reichheld and Sasser. Ring and Perry. 1975). Relationship building based on personal knowledge becomes more difficult. 1994). 1. consumers. Buyers are able to learn through personal experience of the abilities. less efficient producers. to calculate the lifetime value of a customer (Reichheld. consistency and reliability of a supplier. or willing. It has been pointed out that relationships may fail to develop where the differing cultural backgrounds of organizations prevents the development of agreed social norms (Rainey. With the development of mass production methods. to encroach on the traditional markets of smaller. Relationship Marketing and Economic Development Economies in an early stage of development are characterised by small scale production processes and relatively local markets (Watts. Organizations differ in the extent to which they are able.4 to their structure. The development of economic systems in terms of the transition from relational-dominant to transaction-dominant exchange is illustrated in Fig. 1991. In impersonal mass-markets. There has been much recent interest in the development of extended network-type organizations (Achrol. who cannot judge a product on i i l !il J Figure 1. 1985). 1992) and the i m p l i c a t i o n s of such structures for the development of 'seamless' inter-organizational collaboration (Gummesson. relationship development between producer and consumer is relatively easy to achieve. Q u i n n . processes and core values. 1993. In such systems. producers are able to achieve economies of scale in production and. 1983. 1990). Through personal knowledge and trust. while suppliers are able to adapt simple production methods to the needs of individual customers who are known personally.

at a tactical level (e. During that era. 1994. It is no longer sufficient to offer better merchandise.. technology did not allow large scale manufacturers to keep in touch with their final consumers. the functional attributes of a brand predominate. 1992). values and lifestyles of customers (Sirgy. In developing economies with less mature markets. retailers have been better able to develop relationship marketing policies. 1989). industrialization of goods manufacturing and service industries allows large scale production to be combined with one-to-one relationships between producers and consumers. through other means. better quality of relationships can give competitive advantage (for example. 1991). 1984). it has been argued that consumers have become increasingly critical of both the functional and emotional dimensions of brands.g. In relatively simple societies. especially those aimed at creating abstract emotional brand personalities (Biel. had no direct relationship with the manufacturers of their products. The brand emerged as a means of providing reassurance of consistent quality to spatially dispersed customers who. It has been suggested that consumers increasingly evaluate products on the basis of the quality of relationship with the supplier (Christopher et al. hence the resort to brand building and the use of intermediaries. 1991). or even better levels of service. Branding creates a product which has unique physical. The apparent decline in brands in many western countries has been associated with the growth in retailers' private label products (Richardson et al. These refer to the purity. Venkatraman. and at a philosophical level (e. the marketing of cars in the more developed economies has moved from an emphasis on better design characteristics and brand image. knowing and satisfying the needs of their customers so well that customers come to trust them more than owners of manufacturers' brands). Today. and subsequently to superior relationships which provide complete finance. ready to experiment and to trust their own judgement and less tolerant of products that do not contribute to their own values (King. Simmons and Meredith. As societies develop. 1982. maintenance and replacement facilities.. the use of Electronic Point Of Sales systems linked to loyalty schemes).g. the emphasis remains on better physical design and brand image). 1990). to better service facilities. When markets become saturated. It is interesting to note that branding achieved prominence in the wake of the industrial revolution of the nineteenth century. instead seek reassurance . through the medium of direct marketing (Vavra. By being closer to their customers. Local Implementation of a Universal Concept . reliability and durability of a product. at a strategic level (developing added value programs for 'club' members). It is also claimed that consumers are becoming more confident. functional and psychological values and can help to transform commodities into unique products (Jones and Ward. 1988).475 the basis of a trusted relationship with a supplier. because of the use of intermediaries. Research has suggested that consumers are becoming increasingly critical of the messages of brand building advertising. whereas the emotional attributes of a brand refer to the image that a product creates in relation to the needs.

that social. Yet exchange is a multidimensional concept whose dimensions are not uniform between all buyerseller relationships. 1983. and when these basic needs are satisfied. the individual moves on to seek satisfaction of higher order social and self-actualizing needs. Business strategy in overseas markets with respect to the pattern of exchange will only be successful where the exchange philosophy is in accordance with the . Within the context of industrial buyer-seller relationships. attempts by other suppliers to attract buyers on the basis of more tangible economic benefits may fail. In the case of transactional exchange.4 Relationship Marketing and Exchange Exchange has been considered by many authors as being at the heart of marketing (Hunt. and sociality. While the first two are common to most commercial exchanges. and any analysis of exchange elements must consider a wide range of social and economic factors that form part of exchange. the elements are relatively easy to identify. It follows that in some cultures. The diverse focal points of exchange can be related to a hierarchy of needs (Maslow.476 International Business Review 4. information. In the case of relational exchange. family and spiritual needs may override m a n y physiological needs. 1971. needs are satisfied in a hierarchical manner and a particular need only becomes a motivator when it is unmet. H i e r a r c h i c a l m o d e l s o f needs have b e e n c h a l l e n g e d for failing to differentiate between different sets of cultural values (Hofstede. The meaning of the social element of exchange can differ between cultures. as the presumption is made that the parties involved bring no previous history of exchanges to the current e x c h a n g e . from a tactical to philosophical level. drawing on frameworks developed in social psychology and organizational behavior (Kotler and Zaltman. In Maslow's model. It was noted earlier that relationship marketing can be attributed with a number of dimensions. In cultures where social aspects of exchange form a relatively important part of the total exchange benefits received by a buyer. It has been pointed out. 1954). relationship marketing programs that emphasize material rewards for repeated purchase may act as a much weaker motivation than a program which emphasizes the honour of maintaining long-term relationships with a trusted supplier. 1974). nor do they expect the o u t c o m e of the current e x c h a n g e to influence future exchanges. money. A number of authors have sought to identify the principal elements that parties give to each other in marketing exchange. Kotler and Levy. for example. the last condition is not met. they can also be important in private buyer-seller relationships (Blau. Hakansson (1982) identified four elements which are exchanged between buyer and seller: a product. 1989). 1969). The most basic needs which an individual seeks to satisfy are characterized as physiological needs. Although social ties have received considerable attention in the context of industrial buyer-seller relationships. Luck. 1991). as e v i d e n c e d by rituals of fasting observed by some cultures. information and sociality assume greater importance where the relationship has a time dimension.

There is. 1985). Heide and John. 1985. Governance systems can be placed on a continuum from being predominantly legally based to predominantly morally based (Gundlach and Murphy. Similarly. Morgan and Hunt. its theoretical inconsistencies for the development of ongoing relationships have been noted (Macneil. for example. 1993). 1992). Before relational exchange takes place. There have been numerous analyses of the stages in the development of trust that buyers pass through before they trust a seller (Schurr and Ozanne. 1994).offer. attempts to develop long-term relationships based on mutual trust and sociality may fail in a transactional culture which is preoccupied with obtaining the best deal for each transaction. Models of trust based in social psychology often conceptualize trust as the outcome of a process of exploratory interaction between parties (Swan and Nolan. shared ethical values form the dominant governance mechanism for relational exchange. While contract law may be an appropriate governance system for one-off exchanges. Attempts to implement relationship marketing at the tactical level of database marketing alone will fail in a culture which seeks uncertainty avoidance through relationships which are characterised by commitment at a cognitive and emotional level.477 culture and motivations of individuals in that market. The industrialization of economies leads to the development of extensive impersonal relationships. It has been argued that governance through contract law is most appropriate to societies based on transactional rather than relational exchange and this is reflected in the traditional steps of contract formation -. Williamson. Relational exchange requires cooperation. acceptance and performance (Gundlach and Murphy. there may be a lengthy period during which partners gain the social acquaintance and trust of each other. 1993). as a prerequisite for business exchange to occur. Many exporters fail in overseas markets because they have not understood the basis of buyerseller governance and the prerequisites for turning transactional exchange into relational exchange. 1991). a presumption in many Far Eastern cultures that exchange partners will be faithful in delivering their part of a bargain. resting on a foundation of shared interests and mutually agreed rules of conduct and exchange out of which norms of behavior develop (Solomon. 1980. . Trust may be an important means of governing e x c h a n g e where the network of exchange partners is closed and a defaulter to an exchange fears being shamed by his community. 1992. Many western exporters have found it a time consuming task to enter this network of trusting relationships. Local Implementation o f a Universal Concept Basis of Governance Exchange occurs within a framework of rules and norms. and this may account for the gradual replacement of moral governance with contractual governance. It has been suggested that the r e n e w e d interest in relational exchange calls for a reaffirmation of the moral framework within which exchange takes place. In many societies.

Less attention has been paid to adapting methods of exchange which are sympathetic to the governance systems and exchange values of local cultures. While companies seek to exploit information technology to develop relationships with their customers. the philosophy of relationship marketing is enshrined in current business practice but marketers there may need to make better use of available technology for developing relationships at a tactical level. such as Japan. local producers. loyalty programs may be viewed by regulatory authorities with suspicion as a device for limiting competition. This paper has suggested the necessity of researching the exchange values of overseas markets before seeking to implement a relationship marketing program. 77-93. but it does not allow for a symmetrical evaluation of exchange partners within a closed network.478 International Business Review 4. October. Companies seeking growth in overseas markets have often failed by imposing a marketing mix formula which had worked in the very different environment of the domestic market. the infrastructure and technology may itself present a constraint on the extent to which relationship marketing can be developed tactically. In short. Information technology may help companies to keep in touch with their customers. References Achrol. will the development of information technology influence the exchange values of a culture? Relationship marketing has a long history and will feature prominently in future global marketing activity. prescriptions for relationship development must have regard to the social. the close network of relationships may not be available to companies dealing with large numbers of private consumers.Journal of Marketing. In some countries. the types of relationships now enjoyed are very different compared with those that existed between customers and small scale. (1991) Evolution of the Marketing Organization: New Forms for Turbulent Environments. but it must be recognized that technology itself may influence exchange values. In less developed countries of Asia and Latin America. R. Effective relational exchange must evolve in accordance with the needs of local culture and the availability of technology. While relational exchange is not new in western economies.4 Conclusions Relationship marketing is not the new paradigm that its proponents have often claimed. through functional and emotional brands back to a focus on quality of relationships? Or will Information Technology allow relationship building during the process of industrialization? More fundamentally. Although research evidence suggests that commercial buyers and sellers develop norms and frameworks for governing their relationship. economic. In some countries.pp. political and technological environment of the host country. its form differs from that which existed in an era of relatively simple economic development. . Will less developed countries follow the pattern of western economies in the transition from relationship based small scale production.

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