Download INTER-RELATIONSHIPS BETWEEN

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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