Does relationship marketing improve customer relationship satisfaction and loyalty?

Purpose - This study investigates the relationship marketing (RM) strategy of a retail bank and examines whether - after its implementation - customer relationships were strengthened through perceived improvements in the banking relationship and consequent loyalty towards the bank. Design/methodology/approach - A survey was conducted on two profitability segments, of which the more profitable segment had been directly exposed to a customer oriented RM strategy, whereas the less profitable segment had been subjected to more sales oriented marketing communications. Findings - No significant differences were found between the segments on customers’ evaluations of the service relationship or their loyalty toward the bank. Furthermore regression analysis revealed that relationship satisfaction was less important as a determinant of loyalty in the more profitable segment. Research limitations/implications - This study was conducted as a case study of one specific branch of a bank group in Finland, which limits the external validity of its results. It was not possible to ascertain if, or to what extent, customers of the more profitable segment had received the intended RM treatment. Other limitations are also discussed. Practical implications - Customer orientation is desirable within retail banking and more studies are needed on the differential drivers of loyalty across customer profitability segments. By identifying the aspects of a banking relationship that are more highly valued among more profitable customers than among less profitable customers, bank managers would be able to more effectively devise appropriate strategies for different segments. Originality/value - The study contributes to the RM literature and marketing of financial services by providing empirical evidence of the effects of RM activities on customer relationship perceptions in different profitability segments.

A Relationship Mediated Theory of Internal Marketing (summary section only)

This report presents a new theory of internal marketing. The thesis has developed as a case study in retrospective action research. This began with the personal involvement of the author in an action research project for customer service improvement at a large Australian retail bank. In other words, much of the theory generating ‘research’ took place after the original project ‘action’ had wound down. The key theoretical proposition is that internal marketing is a relationship development strategy for the purpose of knowledge renewal. In the banking case, exchanges of value between employee participants emerged as the basis for relationship development, with synergistic benefits for customers, employees and the bank. Relationship development turned out to be the mediating variable between the learning activity of employee participants at the project level and success in knowledge renewal at the organisational level. Relationship development was also a pivotal factor in the motivation and customer consciousness of employees. The conclusion reached is that the strength of relationship-mediated internal marketing is in combining a market focused commitment and employee freedom in project work to achieve knowledge renewal. The forgotten truth is that organisational knowledge can be renewed through dialogue and learning, through being trustworthy, and by gaining the trust of employees in return.

Interpretation of Services Marketing Concepts

Scholarly research has produced conceptual knowledge that is based on real-life marketing phenomena. An initial aim of past research has been to produce marketing knowledge as a base for efficient business operation and for the improvement of productivity. Thus, an assumption has been that the knowledge would be applied by organisations. This study focuses on understanding the use of marketing knowledge within the field of service marketing. Hence, even if marketing knowledge about service-oriented principles and marketing of services is based on empirical research, there is a lack of knowledge on how this marketing knowledge is in fact applied by businesses. The study focuses on four essential concepts of services marketing knowledge, namely service quality, servicescape, internal marketing, and augmented service offering. The research involves four case companies. Data is based on in depth interviews and questionnaire-based surveys conducted with managers, employees, and customers of these companies. All organisations were currently developing in a service-oriented and customer-oriented direction. However, we found limitations, gaps, and barriers for the implementation of service-oriented and customer-oriented principles. Hence, we argue that the organisations involved in the study exploited conceptual knowledge symbolically and conceptually, but the instrumental use of knowledge was limited. Due to the shortcomings found, we also argue that the implementation of the various practices and processes that are related to becoming service-oriented and customer-oriented has not been fully successful. Further, we have come to the conclusion that the shortcomings detected were at least in some respect related to the fact that the understanding and utilisation of conceptual knowledge of service-oriented principles and marketing of services were somewhat limited.

Silent Communication - A Challenge to Established Marketing Communication Practice

Purpose The paper examines the concept of silent communication and its implications in marketing communication. It defines silent communication and proposes an analytic framework enabling an expanded view of marketing communication. Design/methodology/approach By explicitly adopting a customer-oriented perspective, combined with insights from service marketing and relationship communication, the paper extends current models of marketing communication. Findings The paper identifies different types of silent communication and presents new perspectives on marketing communication. The authors outline a framework for understanding how the company can/cannot control different forms of marketing communication and discuss the implications of this. Research implications/limitations The paper concentrates on a conceptual analysis, offering a number of empirical illustrations. The conceptual development creates new research issues that should lead to a deeper understanding of customers’ meaning creation, actions and reactions. Practical implications Silent communication constitutes a managerial challenge as it is often invisible to the management. The paper points to the need to develop methods to reveal the effects of silent communication as well as create guidelines for managerially handling silent communication. Originality/value The customer-based perspective and the focus on silent communication provide a completely new approach to analysing and understanding marketing communication. The paper contributes to service marketing and marketing communication research by introducing conceptualisations of silent communication that have an interest for both academic research and practitioners.

Exploring Marketing in Micro Firms

Purpose - The purpose of the paper is to explore the practice of marketing in micro firms. Which are the challenges micro firms encounter and how do they handle them? Methodology - The research methodology is based on the theory-in-use approach (Zaltman, Heffring & LeMasters 1982) in order to inductively explore the practice of marketing in micro firms. The empirical findings rest on ten case studies, where data has been generated through repeated interactions with each case. Findings - The empirical findings show that micro firms handle their marketing challenges in a distinctive manner, by creatively using available resources and network relations. Marketing in micro firms is largely about a long-term, gradual development of a position on the market. This process we label germinal marketing. Two key dimensions of germinal marketing were identified: “earning your position” and “being your brand”. Research limitations and implications - The findings rest on an explorative study consisting of ten cases and the general applicability of the results need to be validated by further studies. These cases are however sufficient to illuminate the need for further research into the area. Value of the paper - The value of the paper is twofold. First, it expands the theory-in-use approach, and presents a research method for successful inductive empirical studies of small firm phenomena. Secondly, the paper widens our understanding of the marketing reality and practice of micro firms, identifying new dimensions of marketing and revealing the strategic implications of ordinary business activities.

What Can A Service Logic Offer Marketing Theory

The goods-dominated marketing model has major shortcomings as a guiding marketing theory. Its marketing mix approach is mainly geared towards buying and does not include consumption as an integral part of marketing theory. Although it is during the process of consuming goods and services that value is generated for customers and the foundation for repeat purchasing and customer relationships are laid, this process is left outside the scope of marketing. The focus in service marketing is not on a product but on interactions in service encounters. Consumption has become an integral part of a holistic marketing model. Other than standardized goods-based value propositions can be better understood when taking a servicebased approach. It is concluded that marketing based on a goods logic is but a special case of marketing based on a service logic and applicable only in certain contexts with standardized products.

Marketing and the Logic of Service: Value Facilitation, Value Creation and Co-creation, and Their Marketing Implications

The discussion of a service-dominant logic has made the findings of decades of service marketing research a topic of interest for marketing at large. Some fundamental aspects of the logic such as value creation and its marketing implications are more complex than they have been treated as so far and need to be further developed to serve marketing theory and practice well. Following the analysis in the present article it is argued that although customers are co-producers in service processes, according to the value-in-use notion adopted in the contemporary marketing and management literature they are fundamentally the creators of value for themselves. Furthermore, it is concluded that although by providing goods and services as input resources into customers’ consumption and value-generating processes firms are fundamentally value facilitators, interactions with customers that exist or can be created enable firms to engage themselves with their customers’ processes and thereby they become co-creators of value with their customers. As marketing implications it is observed that 1) the goal of marketing is to support customers’ value creation, 2) following a service logic and due to the existence of interactions where the firm’s and the customer’s processes merge into an integrated joint value creation process, the firm is not restricted to making value propositions only, but can directly and actively influence the customer’s value fulfilment as well and extend its marketing process to include activities during customer-firm interactions, and 3) although all goods and services are consumed as service, customers’ purchasing decisions can be expected to be dependant of whether they have the skills and interest to use a resource, such as a good, as service or want to buy extended market offerings including process-related elements. Finally, the analysis concludes with five service logic theses.