understanding of relationship marketing and as a focus of future research. ... relationships with other organisations in order to improve business outcomes, such ...
INTER-RELATIONSHIPS BETWEEN RELATIONSHIP MARKETING, BRANDING AND SERVICES: IMPLICATIONS Jillian C. Sweeney University of Western Australia
Abstract In this paper we describe the contexts in which relationship marketing has been used and in particular, focus on its usefulness in describing consumer-brand relationships. This is perhaps its most recent application and one which we believe is particularly fruitful in assisting brand managers in understanding consumer-brand relationships, for furthering academic understanding of relationship marketing and as a focus of future research. In particular, we examine the potential for research on consumer-brand relationships in the service context.
Background While relationship marketing is recognised as an important topic to both marketing academics and practitioners, the scope and future direction of the discipline are disputed (Payne 1997). The objectives of this paper are threefold: to examine the shift in the relationship marketing concept over time; to describe how, by extending the concept to include interpersonal relationships how it can be fruitfully used to describe and explain a variety of relationships, rather than the single prescriptive “long-term” relationship which has dominated our view of the relationship phenomenon. Consumer-brand relationships will be particularly discussed in this context. Thirdly, the research initiates discussion on the similarities in the relationship marketing and branding concepts and associated opportunities for research.
Literature Review Development of relationship marketing Business-to-Business Relationships Since the 1970’s the IMP group (Industrial Marketing and Purchasing Group) has argued that a relational approach rather than a transactional approach to marketing is appropriate in industrial markets, for example between buyer and seller. The competitive nature of business is prompting firms to seek a different route to competitive advantage, that of forming relationships with other organisations in order to improve business outcomes, such as quality, efficiency and effectiveness (Nowak, Broughton and Perreira 1997). Such an approach involved a shift from a purely competitive approach to one involving its antithesis, collaboration. Characteristics of such an approach involve collaboration, a long-term focus, commitment to and trust in relationship partners, mutual goals and objectives, a relatively small number of exchange partners and inter-dependence (Dwyer, Schurr and Oh 1987; Kanter 1994; Iacobucci and Ostrom 1996; Nowak et al. 1997). A core concept in relationship marketing, resulting from these characteristics, is reciprocity. Bagozzi (1995 p275) asserts that reciprocity is a disposition, a feeling that we should “return good for good in proportion to what we receive”. A relationship that can be described in terms of these characteristics has
been likened to a marriage in an interpersonal relationship context (Dwyer, Schurr and Oh 1987; Kanter 1994). This is reflected in Gronroos’s relationship definition of Marketing (1990, p138): “Marketing is to establish, maintain, and enhance (usually but not necessarily longterm) relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfillment of promises.” The vast majority of studies in relationship marketing have adopted a buyer-supplier focus in investigating business-to-business relationships (e.g. Anderson and Narus 1984; Dwyer, Schurr and Oh 1987; Morgan and Hunt 1994). Firm to Consumer Relationships The benefits of consumer-firm relationships have been recently addressed. For example, benefits to the firm include increasing efficiency and effectiveness in maintaining current customers rather than recruiting new customers, and improved competitive advantage (Reicheld and Sasser 1990; Sheth and Parvatiyar 1995). Sheth and Parvatiyar (1995) suggest that the consumer benefits through consumer learning, in that experiences can be stored, processed and retrieved to use in subsequent situations. This leads to an ability to manage future decisions based on simplifying problem-solving situations and reducing risk (Sheth and Parvatiyar 1995). Gwinner, Gremler and Bitner (1998) further found that consumers benefit from relationships for confidence, social, economic and customisation reasons. Long-term Relationships not Always Desired However, it is clear that relationships are not always desired by customers (Blois 1996; Barnes 1997; Benapudi and Berry 1997; Fournier, Dobscha and Mick 1998) and the efforts of the firm to maintain such a relationship may not only lead to customer irritation but also be costly for the firm in terms of money invested in undesired relationships. Gronroos (1997) describes three categories of consumers, those that actively engage in a relationship with a firm, those that passively engage in a relationship with a firm and those that are not interested in a relationship. This is illustrated by Fournier et al (1998, p44) “Caught up in our enthusiasm for our information-gathering capabilities and for the potential opportunities that long-term engagements with customers hold, is it possible that we have forgotten that relationships take two? .....that the consumer is not necessarily a willing participant in our relationship mission?” Conventional relationship marketing has focused on long-term, committed and affect-laden partnerships relationships in both business-to-business settings and also firm to consumer settings. It has also assumed to some extent that relationships are always desirable. Thus it has ignored equally fundamental and rewarding short-term relationships, or less committed relationships that reflect the nature and choices of customers, in particular consumers. Indeed Gronroos’s (1990) definition suggests that relationships should not necessarily be long-term, although most probably are. Further, relationships may vary in form, intensity, length and desirability as the above discussion suggests.
The Application of Inter-Personal Relationships to Relationship Marketing Understanding this variability in firm to firm and firm to consumer relationships, we turn our attention to the inter-personal relationship concept, which suggests that relationships vary on a series of dimensions resulting in an array of relationship types (Iacobucci and Ostrom 1996). Iacobucci and Ostrom (1996) explore three types of commercial dyadic relationships between individuals, between firms and between individuals and firms and compare them to classic interpersonal relationships (e.g. team-mates). Results indicated that all relationships between firms were close and long-term, the authors supposing that this was due to the process of the difficult task of coordinating a relationship between groups of people, inevitably requiring closeness. In contrast, relationships between individuals usually in a service setting (e.g. waiter and restaurant patron) were often distant and short-term, but not always so (e.g. psychotherapist and client). This suggests that relationships have different characteristics and that this will vary not only across the partner type (e.g. firm or individual) but also according to the type of firm and perhaps the type of customer. For example, the relationship may vary according to stage of the relationship with the firm or the family history with the firm. The inter-personal relationship concept can thus be used to further understand inter-firm relationships or firm to consumer relationships, using dimensions of interpersonal relations to explain the needs and motivations of such relationships. Consumer-brand Relationships Recently Fournier (1998) took advantage of the richness of the inter-personal relationship metaphor to develop a framework for understanding consumer’s relationships with their supermarket brands. This notion of consumers having relationships with brands extends the understanding of brand dynamics beyond existing concepts of brand attitude, satisfaction, loyalty, and brand personality (Fournier 1994). Specifically, the marketing actions, which incorporate a set of behaviours of the brand, can be considered as the role played by the brand in the relationship. (Fournier 1998; Dall’Olmo Riley and de Chernatony 2000). Such inferences suggest that not only do consumers’ view themselves as active in the consumerbrand relationship, that is through what they receive from the brand, but also form a perception of a role played by a brand. Fournier (1998) developed a typology of 15 consumer-brand relationships including arranged marriages, marriages of convenience, best friendships, kinships, rebound or avoidance-driven relationships, courtships, flings and enslavements. Consumer-brand Relationships in the Service Context It should be noted that consumer-brand relationships might be particularly relevant in services due to the inter-personal component of services. The differences between services and goods are well documented, for example services are intangible, therefore riskier to purchase and further, production and consumption are inseparable hence the opportunity for contact between the producer and the customer is greater in the context of services (e.g. Lovelock, Patterson and Walker 2001). Sweeney and Chew (2000) found initial support for Fournier’s typology of relationships in the context of services.
Modelling the Integration of Relationship Marketing, Brand and Service Concepts In summary, relationship marketing has evolved from an IMP focus on firm-to-firm relationships to a wider context, which includes the application of the interpersonal relationships to consumer brand relationships. This latter approach is particularly fruitful in that it offers depth to the understanding of consumer brand relationships largely through variety in relationship types offered by the framework. For example, relationships can vary according to favourability, length, intensity and affect. The consumer-brand relationship is a powerful concept. It represents a drawing together of two fundamental concepts, brand management and relationship marketing. So how do these two areas inter-relate? First, consider relationship marketing. Relationship marketing focuses on value creation and value sharing across parties (Anderson 1995; Wilson 1995; Payne, et al 1995; Sharma and Sheth 1997). For example, the firm and supplier operate collaboratively to reduce costs and/or add value. Although buyer and seller achieve different benefits, benefits are clearly critical to each party for a relationship to take place (Sweeney and Webb, 2002). Further the key to maintaining relationships are trust, commitment and the fulfillment of promises (Gronroos 1990; Morgan and Hunt 1994; Bitner 1995). Both buyers and sellers make promises about their commitments with respect to the relationship. Promises need to be kept on both sides if the relationship is to be maintained. Trust and commitment are critical to participating in and maintaining the relationship and believing that the other party will not act opportunistically. Thirdly, relationships also serve to protect the firm from competition in terms of reducing switching, reducing customer risk and simplifying customer decisionmaking (Sheth and Parvatiyar 1995; Wathne, Biong and Heidi 2001). By engaging in relationships, buyers learn more about the marketer, their products and services and consequently, hence reduce perceived risk in the relationship outcomes. Further, due to the investment in the relationship, changing relationship partners is costly. Now considering the brand we also find that it has similarities to relationship marketing in purpose. For example, a strong brand adds value to both the firm and to the customer. It increases loyalty, as discussed in the brand equity literature and creates a strong identity (Doyle, 1990; Keller 1993; Simon and Sullivan 1993; Aaker 1996). Further, the credibility of the brand acts to increase the perceived truthfulness and dependability of the brand, hence reducing risk, simplifying decision making and increasing trust (Park and Lessig 1981; Greatorex and Mitchell 1994; Low and Fullerton 1994; Erdem and Swait 1998). As stated by Berry (2000, p129) “A strong service brand is a promise of future satisfaction”. Thirdly, a brand is used to make the decision processes simpler and more efficient. Since the consumer is faced with many forms of information, short cuts, such as purchasing brands that have proved satisfactory in the past, are used (Doyle, 1990). This is particularly likely for low involvement products. A strong brand also acts as a source of differentiation thorough its name, symbol or personality (Doyle, 1990; Aaker, 1996; Aaker, 1997). Thus, there are strong similarities between the two streams of literature, suggesting interesting inter-relationships between the two. Indeed Arnold (1992) suggests that the brand is an expression of a relationship between customer and product. The parallel between brands and relationships is particularly apparent in the service context, in which the firm essentially is the brand (Berry 2000). The connections between the two domains and their relevance to services are illustrated in Figure 1. As discussed the brand and the relationship both share the motivations suggested in
area A of the diagram (e.g. trust, reciprocity, fulfillment of promises). Area B implies that in a service firm, the primary brand is the firm (Berry 2000), and thus, as the firm offers a service, the primary brand is the service. However, relationships are not always desirable, as discussed earlier, hence there is no need for a relationship in all service firms. Thus the service and the brand may co-exist in a non-relational context. Area C of this model suggests that in a service context, there is a greater opportunity for a relationship. Relationships are most likely when there is an extended service encounter (such as hotels or hospitals) or membership status (e.g. banking, education). Finally, the centre of the diagram represents the intriguing combination of the brand and the relationship in a service context, where the need to increase customer confidence is greatest due to the intangibility of the product.
Future Research The similarities of the roles of brands and relationships offer an intriguing area of study. For example, when do relationships between people and/or firms and brands act in the same way in commercial relationships? When are they synergistic? When does one become more important than another? How does this differ across goods and services? Lemon, Rust and Zeithaml (2001) discuss the contribution of brand equity, relationship equity and value equity to overall customer equity and conditions under which, each is most appropriate. The same authors have also developed a highly practical model of tradeoffs between expenditure on increased equity and financial benefits (Rust, Lemon and Zeithaml 2001). Further research needs to address such tradeoffs in the context of consumer-brand relationships. That is, what are the benefits of expenditure on improving consumer-brand relationships? The powerful combination of the concepts of brands and relationships, that is the consumerbrand relationship, offers a wide-open field of research, particularly in the context of services. Overall, it is hoped that this paper encourages others to investigate this fruitful area.
Finally, relationship marketing increases marketing productivity in terms of efficiency and effectiveness (Sheth and Parvatiyar, 1995). Efficiency in increased through different consumer values being recognised and individual’s needs being better addressed and effectiveness through greater customer retention and higher profits.
(C) Opportunities for relationships due to human factor
Physical evidence Process People
Individuals and/or Firms
Brand=service firm=basis for customer relationship
(B) Brand =service firm (not everyone wants a relationship)
(A) Trust Risk reduction Fulfilment of promises Protection from competition Reciprocity
Name Image Personality
Customer retention Higher profits Referrals
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