Sociological Perspectives of Marketing

When & How

(Emergence of relationship in marketing)

Marketing focuses on the exchange process, making it relational, by definition

Relationship marketing is a dominant exmple of marketing practice
(Dwyer, Schurr and Oh 1987; Morgan and Hunt 1994)

It emerged in the B2B arena because the number of relationships managed were smaller (e.g. B2B sales) Is now dominant in the B2C arena via due to technology-laden concepts such as CRM and One-to-One Marketing

Marketing researchers and practitioners seek to understand relational behavior:

o o

Between firms and customers/consumers (traditional) Among customers/Among business partners (emerging work in customer collaboration, customer/professional communities/knowledge networks)

The fundamental ground of this talk Because marketing is relational, social network theory (SNT) helps to advance marketing theory and practice.

Social Network Theory (SNT)

Social network theory views social relationships in terms of nodes and ties
Nodes are the individual actors within the networks Ties are the relationships between the actors.
A social network is a map of all of the relevant ties between the nodes

A Historical Perspective

Marketers use basic SNT concepts, but questions and methods differ.
Points of Alignment:
Networks are socially connected actors (more than 2) Resources (e.g. information) are transferred among actors in a network There is a flow of resources within the network

Points of Difference:
SN theorist (and early marketing researchers) seek to describe individual actors and their relations/patterns of connections

Application of SNT in Marketing

Social Network Theorists Between-ness o The frequency with which an actor is intermediary to other nodes and controls the flow of resources Marketing Applications Word of Mouth
o

Actors: opinion leaders, gatekeepers, and followers

Those who are likely to influence others Those who know and provide information but have no influence Those who are likely to be influenced via passive or active solicitation of info

Profile of actors
Knowledgeable, involved, confident, active

Degree o The number of actors with whom an individual has a direct connection

Diffusion of Innovations & New product adoption

Finally, marketers tend to take a relational perspective of networks

(exception: Hopkins, Henderson and Iacobucci 1995)

Relational Perspective
focuses on the extent to which all actors are interconnected o Relations (strands):
content, direction and and strength

o o

Ties:
Weak/Strong based on frequency of social contact, importance of relation

Multiplexity
the number of relations in a tie

How has SNT advanced relationship marketing thought and practice?

The Most Popular SNT perspectives used in Marketing

The Structural Perspective

The Socio-Economic Perspective

The Socio-Cognitive Perspective

The Structural Perspective

The structure of relations drives marketing outcomes

Findings based on the Structural Perspective

Brand Similarity exists within social circles o even for privately consumed products (Reingen et
al 1984)

Strong ties and Weak ties affect marketing outcomes

o o

Strong ties are more likely to be activate as a referral sources but consumers also actively seek information from weak ties in situational conversation (Reingen and Kernan 1986; Brown and
Reingen 1987)

Individual influence in the buying systems in a B2B context (Ronchetto, Hutt and Reingen 1989)

The Socio-Economic Perspective

Utility maximization is enhanced by social ties

Findings based on the Socio-Economic Perspective

Social tie strength increases likelihood of transactions between buyer and seller
(Frenzen and Davis 1990)

This effect is moderated by perceptions about potential opportunism in WOM information exchanges (e.g. non-reciprocating behavior)
(Frenzen and Nakamoto 1990)

Weak ties are quite weak in B2B

o

The more valuable the info, the less powerful is the weak tie
(Frenzen and Nakamoto 1990)

Weak ties among horizontal partners are less powerful than among vertical alliance partners.
(Reindfleisch and Moorman 2001)

The Socio-Cognitive Perspective

Cognition intervene the effects of social relations.

(Bansal and Voyer 2000, Gilly et al 1991, Houston et al. 2001, Ward and Reingen 1996)

The Socio-Cognitive Perspective (contd)

The socio-cognitive perspective inserts cognition into the structural perspective, to better explain outcomes