BUSM096

RELATIONSHIP AND NETWORK MARKETING

An analogy of the implementation of Relationship Marketing principles among

the business-to-business marketing framework, as part of relationships occurring
between businesses and customers.

An academic essay developed by:

THOMAS Amélie (ID: 210815971)

SHAIKH Sahil (ID: 230915024)
BHADRESH SHAH Jay (ID: 230821622)
SMACHLIOU Georgios (ID: 230544329)

GROUP 35

Wordcount: 2170
Module leader: Dr. Muhammad Riaz

Due for the 16th of November 2023

1
 INTRODUCTION

In the evolving business landscape, marketing has shifted from transactional methods to
a more enduring strategy known as Relationship Marketing (RM). Unlike transactional
approaches focused on immediate gains, RM prioritizes long-term connections with customers.
It emphasizes understanding evolving customer needs beyond purchases, fostering loyalty and
satisfaction. RM involves tailored interactions, leveraging data to create personalized
experiences that build trust and loyalty. Indeed, businesses that prioritize transparency and
authenticity in their operations tend to attract loyal customers in today's information-driven
era.

The essay will consist of four sections. Firstly, it will explore the literature on relationship
marketing, discussing its theoretical and practical evolution. The subsequent section will analyze
the various influences contributing to the emergence of relationship marketing in a
contemporary business framework. The third part will delve into the relationship between
business-to-business marketing and the development of tailored RM for sustained customer
interactions. Finally, it will examine the advantages and drawbacks of RM in
business-to-business contexts and how these practices contribute to companies gaining
competitive advantages.

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 Question A: How has literature on “relationship marketing” developed over time?

The evolution of "Relationship Marketing" literature reflects a dynamic continuum,

showcasing its progression through shifting foundations, expanded paradigms, and enriched
discussions. It encompasses evolving perspectives, theoretical frameworks, empirical studies,
and strategic applications, contributing significantly to the discourse on Relationship Marketing.

Amidst a contemporary timeframe, relationships have become acknowledged as an integral part

of both contemporary marketing theory and practice. As a matter of fact, Relationship
Marketing is currently emerging as a new perspective and a continuity of marketing practices
dating back to the pre-industrial era (Gummerus, J., Von Koskull, C., Kowalkowski, C.; 2017). On
the first hand, retracing the history of marketing approaches enabled researchers to primarily
illustrate how the emergence of mass production, the introduction of middlemen and the
separation of the producer from the consumer within the industrial era induced the
implementation of a transaction-focused marketing (Jagdish N. Sheth, Atul Parvatiyar; 1995). In
addition, the growth of the service sector, embodied by long term relationships in which
customers are directly involved in the service outcomes, as focusing on customer-firm
interaction, directly led to a rise of relationship marketing. Accordingly, researchers implied that
relationship marketing would represent a paradigm shift in marketing practices (Berry, 1983;
Grönroos 1994; Gummesson, 1997), as displayed on figure 1. Then, other factors such as the
correlation between loyalty and profitability or the technological enhancements in both
identifying and tracking customers facilitated the arising interest in relationship marketing.
More precisely, former and current technological advances led to a staging comeback of direct
marketing, from which arised a relationship-based marketing perspective (Berry; 1995; Chenet,
Dagger, and O'Sullivan, 2010, Palmer, Worthington and Dann, 2013; Sheth, 2002). Relationship
marketing progressed from transactional to relational interactions (Dwyer et al., 1987; Morgan
and Hunt, 1994), prioritizing customer satisfaction, retention, and potential relationship
terminations. While customer attraction remained relevant, it ceased to be the sole focus
(Bitner, 1995; Berry, 1995). Scholarly attention shifted towards understanding factors that

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sustain long-term relationships, surpassing the initial exchange dynamics. Such factors include
relationship benefits (Hennig-Thurau, Gwinner and Gremler, 2002), relationship value (Ravald
and Grönroos, 1996), as well as, trust and commitment within relational exchanges (Morgan
and Hunt, 1994). Likewise and according to Wong and Shohal (2012), relationship marketing can
be depicted as one dimensional structure, composed of six overall components such as trust,
sympathy, connections, common value, link creation and mutual relationship (as shown in
figure 2). Besides, the shift towards a networked economy was significantly influenced by both
new technologies and a broader perspective on relationship dynamics. Previous literature
acknowledged relational exchanges among customers and other stakeholders on a larger scale
(Baron and Harris, 2010; Martin and Pranter, 1989; Pitta and Fowler, 2005; Gummesson, 2008;
Payne, Ballantyne, and Christopher, 2005), including relationships with brands (Fournier, 1998).
However, the emergence of new technologies introduced novel relationship types occurring
among "things" (e.g., the Internet of Things), between humans, and digital devices (e.g.,
Artificial Intelligence or cognitive computing like IBM’s Watson ecosystem).

Figure 1: Evolution of Relationship Orientation (Jagdish N. Sheth and Atul Parvatiyar; 1995)

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Figure 2: Relationship marketing essential components (Wong A, Shohal A; 2012)

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Question B: What were the influences that led to the development of relationship marketing?

Relationship marketing's origins trace back to a convergence of influential factors that

have shaped its development. Recognizing these influences is crucial for understanding how
relationship marketing has evolved and its significance within modern business paradigms. For
the purpose of this essay, it is crucial to first define relationship marketing as a subcategory of
Customer Relationship Management (CRM) strategy that has at its core, the aim of customer
retention and loyalty, long-term customer engagement, and which can directly or indirectly
affect the success of a company. Over the years, market expansion, as well as the oversaturation
and increasing competition in many business areas led to an ongoing evolution of marketing
practices (Filip and Dan, 2008). Subsequently and as a result of consumer sophistication,
consumers faced an overabundance of products and services, and therefore, progresively
became less receptive and persuaded by sellers’ promotion activities. These factors impacted
businesses' strategic positioning and competitiveness within markets, resulting in a subsequent
decline in their market share, affecting profitability and brand recognition negatively (Filip and
Dan, 2008). Rising competition in industries prompted businesses to seek differentiation among
their rivals.

To address this concern, marketers and communication specialists found it imperative to deviate
from conventional marketing strategies. Traditional approaches aimed to disseminate a singular
message about a product or brand to a broad audience, with the primary objective of
expeditiously selling products and services (Filip & Dan, 2008). In lieu of this, a paradigm shift
towards the adoption and implementation of relationship marketing strategies became
requisite. Unlike the erstwhile emphasis on selling singular products or services to the masses,
the focus shifted towards crafting positive experiences for existing customers, fostering
enduring and trust-laden relationships based on customer loyalty. (Palmatier et al., 2006).
Likewise, the prominence of the service industry emphasizes the significance of intangible
experiences and relationships, necessitating proactive customer engagement and trust for
success (Fournier, 1998).

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Within the domain of business-to-business (B2B) marketing, the intricacies of relationships
assume a pivotal role in the evolution and success of relationship marketing. Factors such as
prolonged sales cycles, substantial financial commitments, and the interdependence of
companies within supply chains contribute to the complexity of business-to-business
relationships (Anderson & Narus, 1991). Notably, protracted sales cycles necessitate precise and
timely communication, alongside the cultivation of trust between involved entities. For
instance, the strategic collaboration between General Electric and Boeing in the supply of
airplane engines underscores the significance of effective communication, collaboration, and
adaptability in such intricate B2B partnerships (Heimgartner, 2018).

A consequential catalyst for the transition from traditional to relationship marketing is

discernible in the service industry. Within this sector, relationship marketing assumes
paramount importance, as customer investment in services is contingent upon the
establishment of trust (Anderson & Weitz, 1989). In essence, relationship marketing is
fundamentally rooted in the cultivation and sustenance of trust between a business and its
customers, or between businesses. The inadequacies inherent in traditional marketing,
characterized by impersonal, mass-oriented product selling devoid of customer assurances,
precipitated the ascendancy and adoption of this more personalized form of interaction
between businesses and their clientele. On the other hand, market globalization and the
increased interconnectedness of businesses worldwide implied a more nuanced approach to
marketing, where companies needed to adapt their strategies to diverse cultural contexts and
establish long-term connections in various marketplaces. Finally, the advent of digital
technologies (eg: rise of the internet and social media) altered the overall communication
landscape and enabled immediate and direct communications between businesses and
consumers, fostering new opportunities for tailored interactions in the business-to-business
landscape.

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 Question C: What part did business-to-business play in this development?

The development of relationship marketing, integral to Customer Relationship

Management (CRM), owes much to the role of business-to-business (B2B) marketing. It
prioritizes customer satisfaction, retention, and the enduring value of customer relationships.
Cortez, Johnston, and Ehret (2023) emphasize the substantial impact of B2B relationships on
shaping the landscape of relationship marketing.

The thesis posits an intrinsic connection between business-to-business marketing and the
evolution of relationship marketing, contending that the former possesses the capacity to
positively influence customer relationships by addressing fundamental, psychological, and
self-fulfillment needs. B2B marketing, as elucidated by Jagodič and Milfelner (2022),
encompasses strategies and work content designed to enhance organizational efficiency and
productivity, thereby achieving operational targets. Notably, this approach plays a pivotal role in
shaping organizational management practices, reflecting the potential inherent in the
components of development.

Madhavaram, Hunt, and Bicen (2021) underscore the establishment of marketing capabilities as
a paramount strategy within the realm of B2B marketing. Concurrently, relationship marketing is
characterized as an emergent phenomenon oriented toward cultivating customer relations.
Durmaz, Güvenç, and Kaymaz (2020) advocate for the manifold benefits of relationship
marketing, citing its pivotal role in ensuring both customer and profit satisfaction, constituting a
critical step for businesses. Moreover, the essay posits that B2B marketing positively contributes
to the advancement of relationship marketing by fostering prolonged consumer retention,
thereby fostering customer loyalty. In this light, the strategic objectives and the enhancement of
relationship marketing are intricately influenced by the B2B marketing techniques employed by
an organization.

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 Figure 1: Maslow's hierarchy of needs theory (Oved, 2017)

According to this theory, human’s behavior is primarily explained by essential, emotional, and
self-actualizing needs. Self-actualization and its effect on self-fulfillment needs is a study by
Oved (2017). It is seen that accomplishments mainly address psychological needs depicted in
figure 1(Oved, 2017). The basis of this hierarchy includes safety, security, intimate relations, and
necessary elements such as food, water, and sleep.

The marketing approach within the business-to-business context plays a pivotal role in shaping
and advancing relationship marketing, demonstrating an inherent capacity to bolster customer
loyalty by addressing basic, self-fulfillment, and psychological needs. As posited by Gilboa,
Seger-Guttmann and Mimran (2019), relationship marketing encompasses dimensions of
personal care and social relationships. Furthermore, Hütten et al. (2017) underscore the
influence of evolutionary, life-cycle, and teleological factors on the processes underpinning
relationship marketing.

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Illustratively, Faridani's (2022) examination of Sendoso exemplifies a
business-to-business strategy centered on fortifying consumer relationships both offline
and online through a gift sending management approach. Consequently, drawing from the
tenets of Maslow's Hierarchy of Needs theory, the augmentation of relationship marketing
through the B2B paradigm is realized by addressing the fundamental and psychological needs of
consumers, thereby facilitating Customer Relationship Management practices.

The symbiotic relationship between relationship marketing and B2B marketing is evident in
their collective impact on enhancing the organizational brand image. This synergy is
characterized by a genuine commitment to consumer care, prioritizing it over an exclusive
fixation on sales.

In summation, the intricate connection between business-to-business (B2B) marketing and

relationship marketing's advancement is evident. Relationship marketing, a part of Customer
Relationship Management, focuses on delivering value to consumers. Conversely, B2B
marketing aims for efficient work methods and positive business outcomes within
organizations. Meeting basic, psychological, and self-fulfillment needs, along with considering
teleological, life-cycle, and evolutionary dimensions, significantly influences relationship
marketing's enhancement through B2B strategies. Therefore, the pivotal role of B2B marketing
in relationship marketing's development is emphasized, especially in shaping organizational
management practices.

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 Question D: How does relationship marketing lead to competitive advantage (or
disadvantage) in the business-to-business market?

The central premise of relationship marketing resides in the pursuit of attaining enduring
competitive advantages via sustained, long-term relationships, a principle often disregarded by
the majority of enterprises (Gansen, 1994). While numerous avenues exist for firms to secure
sustained competitive advantages, the conceptual framework of the resource-based view offers
profound insights into the optimization of firm resources, advocating their efficient utilization as
a strategic means to achieve and maintain a competitive edge (Conner, 1991; Penrose, 1959;
Wernerfelt, 1984).

The perspective of a resource-based view enables firms to engage in collaborative relationships.

Addressing the types of resources susceptible to sharing and exchange within relationships
draws upon insights from the research of Alderson (1957), Barney (1991), Day (1990), Hofer and
Schendel (1978), and Morgan (1995). Their collective findings suggest a categorization of firm
resources into distinct dimensions encompassing financial, legal, physical, human,
organizational, relational, and informational domains, as displayed in Figures 3 and 4.

Figure 3: Critical requirements of each category of resource to achieve sustained relationship-based

competitive advantage (Robert M. Morgan and Shelby Hunt, 1999).

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Figure 4: Level of effectiveness for each category of resource in order to obtain a sustained competitive
advantage (Robert M. Morgan and Shelby Hunt, 1999)

Additional scholarly discourse examines the role of relationship marketing in fostering customer
loyalty, consequently reducing the propensity for customers to switch to alternative providers.
This cultivation of customer loyalty is often characterized as “customer bonding”, manifesting in
various forms. Within the supplier-customer dynamic, bonding is perceived as a conglomerate
of activities encompassing contact opportunities, impediments to supplier transition, and the
establishment of customer preferences favoring a particular supplier (Diller, 1996). This
deliberate cultivation of bonds and relationships fosters heightened customer satisfaction,
aligning with their preferences and subsequently encouraging recurrent purchases.

From the same perspective, relationship marketing confers numerous advantages, notably
amplifying word-of-mouth marketing resulting from satisfied customers engendered by superior
customer service. It augments Customer Lifetime Value (CLV), a metric measuring a customer's
overall value to a company, facilitating recurring purchases and additional expenditure on
customer acquisition. Additionally, it curtails marketing costs by capitalizing on organic
word-of-mouth promotion and fostering repeat business from loyal clientele (cf: figure 5).
Moreover, it elevates brand visibility and yields higher-quality leads, ultimately culminating in
augmented sales and revenue (Ron Sela, 2023). Indeed, positive relationships highly contribute

12
in bolstering a company's standing and brand perception within its industry. A recognized image
for dependability, credibility, and the cultivation of robust associations serves as an influential
magnet for attracting fresh clientele and fostering further business prospects(Forbes, 2022).

However, the endeavor of developing and sustaining these relationships is inherently costly.
Therefore, suppliers must meticulously evaluate the rationale behind these expenses. Keith J.
Blois (1996). Likewise, overreliance on a select few key clients for a significant portion of
business operations presents a notable risk. The potential disruption of any of these critical
relationships carries the consequence of negatively impacting the organization's revenue
streams (Reinartz, Werner, and V. Kumar; 2002). Finally, long-term based relationships can
potentially engender a sense of complacency within an organization, wherein the company
presumes a sustained continuity of business operations without prioritizing innovation or
responsiveness to dynamic market demands (Elizabeth O'Halloran and Michael Schuster; 2007).

Figure 5: Research Model of Relationship Marketing and Customer Loyalty

(Mohamad Rizan, Ari Warokka and Dewi Listyawati; 2014).

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 Conclusion

As a matter of conclusion, this essay looked at contributions to relationship marketing

within both conceptual and practical business-to-business framework. The evolution of
relationship marketing literature showcased a progressive journey from initial concepts to
intricate explorations. It was evident that relationship marketing goes beyond immediate
transactions, fostering enduring collaborations, mutual value creation, and resilience amidst
market changes. Prioritizing trust, communication, and personalized engagement in applying
relationship marketing principles shaped robust business-to-business relationships, offering
sustained competitive advantages and improved outcomes. Embracing relationship marketing
not only transforms the contemporary business landscape but also establishes enduring
partnerships that effectively navigate dynamic challenges inherent in business-to-business
engagements, fostering sustained success and mutual growth. However, further discussions
emphasized the need for tailored strategies in individual B2B partnerships, incorporating
technology for efficient communication and data management. Adopting relational models
becomes crucial for the successful execution of relationship marketing in the B2B environment.

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 Appendices

Appendix 1: Juxtaposition table of the main theories discussed in the essay:

Sources Theoretical Key Concepts Mediating Antecedents Outcomes

Perspectives Factors

Cortez, Relationship Interplay in B2B Relational, Various factors Scrutiny of B2B

Johnston, and Marketing, B2B Relationships, Resource, influencing Marketing in

Ehret (2023) Marketing Landscape Impact Competence, relationship Relationship

Internal marketing Marketing

Marketing

Jagodič and Business-to-Busi Strategies, Work Marketing Organizational Positive Influence

Milfelner ness Marketing Content, Organizational Capabilities efficiency and on Customer

(2022) Efficiency productivity Relationship

Gummerus, J., Relationship Evolution of The emergence Historical Enrichment of the

Von Koskull, C., Marketing, Relationship of mass development of discourse

Kowalkowski, C. Marketing Marketing, Paradigm production, marketing surrounding

(2017) Evolution Shift middlemen, approaches Relationship

and separation Marketing

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Jagdish N. Relationship Historical Marketing Industrial era Industrial era Emergence of

Sheth, Atul Marketing, Approaches, changes, mass changes and their Transaction-focus

Parvatiyar Marketing Transaction-focused production, impact on ed Marketing

(1995) Evolution middlemen marketing Practices during

Industrial Era

Filip and Dan Relationship Evolution of Marketing Consumer Market Expansion, Ongoing

(2008) Marketing, Practices, Market Sophistication, Oversaturation, Evolution of

Marketing Expansion Increased Increased Marketing

Evolution Competition Competition Practices, Market

Differentiation

Palmatier et al. Relationship Positive Customer Shift from Traditional Focus on

(2006) Marketing, Experiences, Enduring Selling Products Marketing Customer

Customer Relationships to Crafting Strategies, Mass Retention,

Retention Positive Marketing Loyalty, and

Experiences Positive

Experiences

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Fournier (1998) Relationship Intangible Experiences, Prominence of Service Industry, Paramount

Marketing, Importance of Trust in the Service Customer Importance of

Service Industry Services Industry Engagement Relationship

Marketing in the

Service Industry

Gansen (1994) Relationship Pursuit of Enduring Disregard of Lack of Relationship Neglect of

Marketing, Competitive Relationship Marketing Practices Sustained,

Competitive Advantages Marketing Long-term

Advantage Principles Relationships

Conner (1991); Resource-Based Optimization of Firm Efficient Application of Achievement and

Penrose (1959); View Resources Utilization of Resource-Based Maintenance of

Wernerfelt Resources View Principles Competitive Edge

(1984)

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Alderson Resource-Based Categorization of Firm Sharing and Understanding Insight into

(1957); Barney View, Resources Exchange of Types of Resources Dimensions:

(1991); Day Collaborative Resources for Collaboration Financial, Legal,

(1990); Hofer Relationships within Physical, Human,

and Schendel Relationships Organizational,

(1978); Morgan Relational, and

(1995) Informational

Domains

Diller (1996) Relationship Customer Bonding, Cultivation of Establishment of Heightened

Marketing, Supplier-Customer Bonds, Customer Customer

Customer Dynamic Impediments to Preferences Satisfaction,

Loyalty Supplier Recurrent

Transition Purchases,

Customer Loyalty

22
 Appendix 2: Peer Assessment Form for BUSM096

Group Number: 35

As a group, you should keep a record of your meetings, attendance, and performance and contribution
of each of your group members based on the statements below.

The group work requires you to be proactive, i.e., if you notice issues in your group work, you should first
discuss them internally and try to work them out as a group. If you cannot resolve them after having
made all possible efforts, please notify the module organizer. This should happen at least 3 weeks in
advance of your group assessment deadline. You will need to provide tangible evidence to demonstrate
your group work issues (e.g., emails, scheduled meetings, attendance logs, task allocations, individual
contributions, working documents etc. – note: Snapchat logs or similar are not professional evidence). In
such cases, the module organizer will have a meeting with the group to resolve any issues.

If you cannot reach one of your group members, i.e., they are not responding to your emails or other
communications, please copy the module organizer in your emails to the respective group member as
well as notify the module organizer immediately. This also means that you must form your group at the
earliest possible time in order to ensure that every group member is on board, and issues around
non-engagement are spotted early.

Please fill out and submit the peer assessment form below as a group on the day of the assessment
deadline with your group work on QMplus. Please append the form to your group work submission (i.e.,
submit one document consisting of the submission plus the completed peer assessment form in the
appendix section). As a default, all team members receive the same grade. However, in cases in which a
member’s contribution is significantly less than the agreement, he/she may receive an adjusted mark.
Your group assignment will not be marked until a peer assessment form has been received.

Please list all your group members, including yourself, by name in the tables below (left column) and
then tick () the appropriate boxes for each group member.

1) Meeting attendance & punctuality

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Group Attended Attended all Attended Attended Attended Never
Member all meetings meetings but most most less than attended
& arrived was meetings meetings but half of the any
on time sometimes and arrived was meetings meetings
late on time sometimes
late
Amélie X
Georgios X
Sahil X
Jay X

2) Contribution to meetings/group discussions

Group Contributed Contributed Contributed Contributed Contributed Never

Member meaningfully meaningfully something something something contributed
to all to most to all to more to less than to meetings
meetings meetings meetings than half of half of
meetings meetings
Amélie X
Georgios X
Sahil X
Jay X

3) Listening to and respecting others’ ideas

Group Consistently Usually Sometimes Rarely Very rarely Never listened

Member listened to listened to listened to listened to listened to to and
and and and and and respected
respected respected respected respected respected others’ ideas
others’ ideas others’ others’ others’ others’
ideas ideas. ideas ideas
Amélie X
Georgios X
Sahil X
Jay X

4) Time management

24
Group Completed Completed Completed Completed Completed Completed
Member all of their most of around half less than none of none of
tasks on their tasks of their half of their their tasks their tasks
time on time tasks on tasks on on time
time time
Amélie X
Georgios X
Sahil X
Jay X

5) Quality of work

Group Consistently Usually Some of the Work Work tended to No

Member produced produced work tended to be of poor work
high quality high quality produced be of quality produc
work work was of high average ed
quality quality
Amélie X
Georgios X
Sahil X
Jay X

6) Overall contribution to the group assignment

Group Has Has Has at times Has only Has failed to Has failed to
Member contributed contributed made a made a small make any make any
significantly positively to positive positive positive contribution
to the group the group contribution contribution contribution to the group
assignment assignment to the group to the group to the group assignment
assignment assignment assignment

25
 Amélie X
Georgios X
Sahil X
Jay X

We confirm that members of our group have reached the above consensus:

Name Signature Date

Amélie Amélie THOMAS 15/11/2023

Georgios Georgios SMACHLIOU 15/11/2023

Sahil Sahil SHAIKH 15/11/2023

Jay Jay Bhadresh SHAH 15/11/2023

26