CONSEPTUAL PAPER Essay

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.

RM’s 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. Einstein’s 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 win–win 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 supplier’s 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

customer–supplier 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-

actor marketing.