The evolution of relationship marketing
.Introduction
There are different ways in which relationship marketing (RM) is being viewed today. This is not surprising because it is dealing with extremely difficult and composite phenomena. Research in marketing tends to take shortcuts and overgeneralize and oversimplify at a stage when the understanding is still shallow. This is a brief account for a way of approaching RM and link it to other developments. Within the limited space, only certain elements can be treated, and tentative conclusions be drawn.
These are the vantage points of the paper:
1. Life is interaction in networks of relationships: This is grand
theory, general for all life. After understanding this, the
next step is to make it specific to the marketing context.
2. The world is complex: Marketing uses methodologies from
social sciences. Too often, they emanate from positivism
and do not address complexity. More deep-going case
study research is necessary.
3. Theory generation: Grand theory can help us better see the
whole picture, process its complexity and condense and
simplify it into actionable mid-range theory.
RMs future is not as a special issue the way it is treated in the
mainstream literature. RM is part of a series of developments
that offer ideas which need to be synthesized to form more
general, grand theory. Theory generation in marketing is
underdeveloped. It is easier to get fragmented empirical
surveys published in a journal than new theory. This is
contradictory from a scientific standpoint. The bulk of
empirical research builds on taken-for-granted opposites such
as goods/services, quantitative/qualitative and supplier/
customer. These vantage-points are fuzzy sets, and to be
understood they have to be treated together as overlapping
and without clear boundaries. They can be used as characteristics on a lower level, but they do not earn the right
as overriding. More theoretical sensitivity through inductive
research is required.
Research and education in marketing is largely stuck in
positivistic quantitative methodology from the Classic
Scientific Revolution of the 1600s, even if there is a plethora of
efforts to deviate from this through interpretive and qualitative
methods, critical research and postmodernism. These
alternatives are second-rated by the mainstream and only
useful as a prelude to the real thing: statistical randomized
surveys followed by hypotheses testing. Factor analysis,
regression analysis, multivariate analysis, LISREL, etc., are
brought in and the outcome is presented with a zoo of
number-animals of which new species being born
continuously. Quantitative empirical research has elaborate
ways of giving an ambiguous outcome a pseudo-precise
identity. Examples are operationalization of variables,
averages, probabilities and distributions, where there are
exact indices and numbers, even with decimals. It is an
impressive way of saying precisely perhaps and exactly
approximate, but it offers few conclusive results. Despite this
it claims to be rigorous and systematically arrived at. It is
based on reduction of reality, instead of condensation of reality.
The outcome easily becomes rigorously derived ignorance.
By convention, explicit knowledge is considered scientific,
whereas tacit knowledge common sense, experience,
intuition, judgement calls and so on is considered
non-scientific. Despite its rejection of tacit knowledge,
quantitative research is replete with subjective assumptions. I
found that doing a statistical questionnaire survey included
some 30 weak spots where judgement calls have to be made by
the researcher. Marketing is applied science and the practical
reality decisions, action and results has to be recognized.
The combined effect of explicit and tacit knowledge is referred
to as pragmatic wisdom (Gummesson, 2017a).
Modern natural sciences can teach us about the need for
grand theory that is abstract and strives to be generally valid.
But the base should not be positivism from the Classic
Scientific Revolution, although it made certain contributions
that are still valid. Einsteins theory of relativity, published 100
years ago, started a New Scientific Revolution: Modern
Physics. In its wake came quantum physics, systems theory,
network theory, chaos theory, fuzzy set theory, fractal
geometry and others opening up for the study of real-world
complexity. The positivist paradigm is replaced by the
complexity paradigm. From that mid-range theory can be
derived and guide practical action. Mainstream research
techniques such as surveys and other types of interviews shun
complexity for the risk of not being rigorous. It leads to
superficial, oversimplified and overgeneralized results.
Relationships, networks and interaction as core
marketing concepts
When people started to exchange goods and services, they also
started to interact in relationships. At first, trade was local
barter and everybody knew each other; it was a two-party
relationship where value was exchanged for value. When trade
expanded, people had to build new relationships beyond
family and neighbors, and at present, most of our business
relationships are anonymous. The individual economy
became a multi-party, network economy. Money was invented
as a facilitator of exchange. Trade became marketing which
currently is a central discipline of business and management.
Business people have always known about the importance of
relationships, networks and interaction but handled them
more or less skillfully. The only ones who did not know were
the professors at business schools and the MBAs who were
examined by them. If the graduates landed managerial
positions before they had gained sufficient practical
experience, built tacit knowledge and developed pragmatic
wisdom, they would still dwell in a world of textbook models
of disputable validity.
Although some academics had brought up relationships before
it was not until the early 1980s and when the term RM was
suggested in two areas services marketing and B2B marketing
that it began to catch on. The conventional definitions of RM
list properties of relationships, first of all that transaction
marketing (one-shot buyer/seller relationships) should be turned
into long-term continuous relationships. Suppliers should
attract, win, build, establish, enhance, maintain and terminate
relationships; and make them enjoyable, enthusiastic, ethical and
personally and professionally rewarding winwin relationships.
Some even claimed that customers should not just like you but
love you and become glowing fans. Others went overboard and
talked about techniques to lock up and own customers thus
treating relationships as a new device to control customers.
These listings did not catch the soul of RM; a more
conceptual, abstract, general and inclusive definition was
needed. It became: Marketing is interaction in networks of
relationships (Gummesson, 1983). It has since included new
developments and was given the name Total Relationship
Marketing, TRM (Gummesson, 2017b). Others have
contributed in the same vein (Christopher et al., 2002).
Paradigm shifts
To sort out the development of marketing over the years is not
easy. There is no unified paradigm, as the progress is
non-linear and often non-cumulative. Marketing management
textbooks mainly offer a listing of everything there is and was,
with a lack of syntheses and theory generation. They carry
forward obsolete models and are thus historical and with very
little about the research frontline. New thinking is presented in
special marketing books and articles. Furthermore, academic
paradigms differ from practitioner paradigms and several
paradigms are living side by side.
Here is an effort to identify changes over the past decades.
All such efforts offer fuzzy rather than crisp categories with
time frames that are fuzzy.
Paradigm 1 (-1970s) was dominated by American marketing
management and the marketing mix (the 4Ps). All were
standardized, mass-manufactured and mass-distributed
consumer goods, business-to-consumer (B2C) marketing.
Business-to-business (B2B) marketing was a footnote.
Services and relationships were absent. Customer centricity
was stressed but on the conditions of suppliers who do
something to customers.
Paradigm 2 (1970s-2000s) formed an era of differences.
Service marketing and management was discovered focusing
on differences to goods marketing. The service encounter
introduced interaction between service providers and
customers, also noting that customers were partially present
during the production and delivery of service. B2B marketing
was also discovered and treated as different from B2C
marketing. RM, customer relationship management (CRM)
and one-to-one marketing were introduced and the
relationship, network and interaction concepts started to
appear more frequently. In the 1980s, quality management
was rediscovered in business and excellence, value and
customer satisfaction were in focus. Marketing was claimed to
be customer and relationship centric but, as before essentially,
based on the suppliers conditions: do something to the
customers.
Paradigm 3 (2000s-) is the beginning of an era of
commonalities, interdependencies and a systemic, stakeholder
centric approach, addressing marketing complexity and theory
generation. Service-dominant (S-D) logic opens up for higher
level theory, grand theory and connects former fragments but
also discards outdated and a non-viable theory claims. It is
supported by the practitioner-initiated service science, with an
increased emphasis on many-to-many networks and systems
theory. A new marketing and service theory and a science of
service based on cocreation of value in complex service
systems is in the making: do with others.
Selected comments to the paradigms
? S-D logic (Lusch and Vargo, 2014) offers the major
theoretical breakthrough. It has long been stressed that the
goods/services divide is counterproductive but with S-D
logic it has become a central issue. The major change is
that service was totally supplier-centric and has now turned
into a stakeholder-centric concept viewing goods as
packaged service. IBM and other companies are adopting
S-D logic in their practice when changing from the
supplier-centric computer science to service science
(Spohrer and Motahari-Nezhad, 2015). It is a token of
pragmatic wisdom. It addresses complexity and will keep
developing for the next decades with great support from
researchers worldwide. Despite this, there are forces trying
to dilute it, showing how low the understanding of the
need for grand theory is in marketing.
? As always, the USA dominates the literature, but
contributions come from many countries. In RM and
service early contributions came from Sweden and Finland
(The Nordic School: Gr?nroos, 1997; Normann, 2001;
Gummerus and von Koskull, 2015), the UK and France,
and, currently, RM is globally established. Through the
IMP (Industrial Marketing and Purchasing) Group in
Europe, B2B switched from dyads to complex networks
(H?kansson et al., 2009).? One-to-one especially stressed customers as individuals
the segment of one market share changed to share of
customer (Peppers and Rogers, 1993). If individual
customers have similarities, they can be categorized in
communities and networks. While traditional segments
were crude and based on gender, income and other
sociodemographic variables, communities are based on
interaction in networks of relationships. Examples of such
communities are consumption networks and brand
networks (N?rv?nen et al., 2014).
? Within a network of stakeholders, there are multiple roles,
all affecting the outcome. The most conspicuous are the
roles of the supplier and the customer. The customer role
has changed, and in the cocreative mode, there is resource
integration between customers and suppliers, and
customers can take initiatives and sometimes lead the
development and if supported, rather than controlled by
the supplier, the supplier can leave much of the marketing
to customer networks and communities (Gummessonet al., 2014). Much earlier, although it was hardly noted in
the marketing literature, do-it-yourself (DIY) had grown
powerful and opened up new markets. IKEA is partially a
DIY store, and stores provide people with equipment for
self-gardening, repair, etc.
? Online marketing and social media established themselves
and keep growing at a rapid pace. They change market
conditions and render additional and partially new
meaning to relationships, network and interaction. These
relationships are less understood and change continuously
with new platforms and new generations. Social media are
increasingly used for marketing and financed through
advertising.
? The idea that technology replaced human activity was
proven wrong. The high-tech/high touch concept says that
high tech asks for a balance with the human aspect, high
touch. When high tech increases, high touch goes up as
well, and the two grow together. Online and offline
interact in numerous patterns, partially understood
through networks and communities (N?rv?nen et al.,
2014).
? There were also other important contributions to RM that
are not treated in this brief paper. Among them are trustand commitment as necessary conditions for successful
customersupplier relationships (Morgan and Hunt,
1994). Others are efforts to measure the effect on
profitability of relationships, return on relationships.
Conclusion
RM should not be treated as a special case of marketing.
Marketing is a complex area that must be more deeply
understood through cases. The generation of grand theory is a
necessity for understanding the core of marketing and lay the
ground for actionable simplifications in the form of mid-range
theory. Following the definition of RM and marketing in
general as interaction in networks of relationships RM should
merge with other approaches. Its broading to TRM was a step
in this direction, but in the future, there may appear a better
designation. Examples of syntheses are Payne and Frow(2013) have successfully merged RM and CRM; and in the
article B2B is not an island! Gummesson and Polese (2009)
link IMP research with the general developments in RM,
TRM, many-to-many marketing, S-D logic and service
science. In this way, a link is established between B2B, B2C,
customer-to-customer and further generalized to actorto-