Long-term relationships Essay Example
Long-term relationships Essay Example

Long-term relationships Essay Example

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  • Pages: 4 (999 words)
  • Published: October 25, 2018
  • Type: Case Study
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Understanding long-term relationships with both customer and other stakeholder groups has been neglected in the mainstream marketing literature (Christopher et al. , 233-543; Dwyer, Schurr and Oh, 1987; Ford, 89-98; Gronroos, 213-243; Gummesson, 181-221; Hatkansson, 1982; Morgan and Hunt, 213-243; Moller, 1992, 213-243; Parvatiyar and Sheth, 181-221; Sheth and Parvatiyar, 180-211). Managing the organization's internal and external relationships needs to become a central activity; this central activity is relationship marketing (Brookes, Brodie and Oliver, 1998).Hennig-Thurau and Hansen (306-363) also point out reasons why competent management of relationships with other stakeholders, in addition to customers, is seen as necessary for economic profitability. These researchers provide strong support for considering multiple stakeholders within the context of relationship marketing. We consider that traditional marketing approaches have not placed sufficient emphasis on careful stakeholder management.

An exception is

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the approach to stakeholder management advocated within public relations (PR), and referred to as publics by PR practitioners. However, it has been argued that this approach is weaker in rigour and relational emphasis than a relationship marketing approach (Payne, 132-169). It is important to note that within the strategy field there has been considerable work undertaken on stakeholder management. Over the last fifteen years stakeholder theory has developed into an important area.However, within the strategy field there is little agreement on the scope of stakeholder theory (Harrison and Freeman, 69-96). In particular, there is considerable debate regarding the constituent groups an organization should consider as stakeholders.

Argenti (181-221) suggests an infinite number of potential groups, whilst Freeman (69-93) points to excessive breadth in identification of stakeholders. The insights from the strategy literature on stakeholders have influenced the development of multiple-stakeholder approaches in relationshi

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marketing.However, in contrast with the strategy literature, the relationship marketing literature on stakeholders has developed categorization schemes of special relevance to the consideration of value in the marketing context. A number of researchers working in the relationship marketing field have developed models which propose the broadening of marketing to include relationships with a number of stakeholders or market domains. Gummesson (233-543) has provided a comparison of four of the best-known approaches to classifying multiple stakeholders, including those of: Christopher et al.(365-734), Gummesson (213-243), Kotler (56-98) and Morgan and Hunt (213-243).

The first three of these are concerned with the relationships which an organization has with its traditional stakeholders. The 30R approach of Gummesson (213-243,180-211) goes considerably beyond the coverage of this paper in that it identifies relationships beyond stakeholder relationships including ones not of interest to us here such as the criminal network relationship. The other three models have strong similarities between them. The Christopher et al.(365-734) framework has six market domains which are then divided into sub-markets, whilst that of Kotler (108-132) identifies ten specific players. Morgan and Hunt (306-363) suggest ten relationship exchanges with four partnership groups.

Other similar models have also been proposed, including the SCOPE model which identifies five key stakeholder groups; customers, employees, partners, suppliers and owners (Buttle, 32-87). Like the six markets model, SCOPE has the customer as the central constituency of the model. For the purpose of this study we have chosen the six-market model.This has been selected for a number of reasons: it is arguably the most comprehensive (of the three approaches that are concerned with relationships with traditional stakeholders) in that each of the six market domains can

be further subdivided in a manner which can cover all major stakeholder groups (Peck et al. , 211-245); it has been used successfully in projects with over 50 organizations (Peck et al., 233-543); furthermore, of the models above, it has been in existence the longest, is well known by researchers in the relationship marketing area and been used in a considerable number of studies, conference papers and books.Other models also exist within the field of relationship marketing. Perhaps the best known of these is the IMP research (e. g. Ford, 89-98; Ford et al. , 181-221).

However, this work is not central to this current paper for several reasons. First, our interest is in organizations in all sectors, including business-to-consumer and business-to-business markets. As the IMP work is solely concerned with business-to-business, this approach is not directly applicable to all sectors.Second, much of the network theory developed by the IMP researchers is primarily concerned with networks of companies and typically does not focus on stakeholders such as shareholders. Further, in this complex area of networks `conceptual development is in no way yet accomplished' (Hakansson and Snehota, 306-363). Thus the IMP research, whilst contributing greatly to our understanding of buyer-seller dyadic behaviour and networks in the supply chain, is not considered an appropriate conceptual model to use to review the role of value in the context of multiple stakeholders.

The role of the IMP research is, however, considered briefly in a later section dealing with supplier relationships with the external stakeholder group. The six markets relationship marketing framework (Christopher et al. , 365-734; Peck et al. , 98-112), provides a useful framework to review the role of an

extended set of stakeholders in the creation of total organizational value in both business-to-consumer and business-to-business markets.It proposes six key market domains, representing groups which can contribute to an organization's marketplace effectiveness.

While customers are viewed in this framework as a major stakeholder, five other stakeholder groups, or market domains, are identified; influence (including shareholder) markets, recruitment markets, referral markets, internal markets and supplier/alliance markets. A later version of the model is shown in Figure 2. Each market is made up of a number of key participants.For example, the customer markets are made up of buyers, intermediaries and consumers, and influence markets are made up from financial and investor groups, unions, industry bodies, regulatory bodies, business press and media, user and evaluator groups, environmental groups, political and government agencies and competitors. Companies need to manage all these different sub-markets or stakeholders in the relationship value-management process.

This model provides the key stakeholder groups represented in the framework for relationship value management, which is now developed.

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