Managing customer relationships (lecture5)

Question 1

What is relationship management? (Palmatier et al, 2006)

Answer 1

all amrketing activities directed towards establishing, developping and maintaining sucessful relational exchanges

Question 2

What are the 2 zones of competitive environment?

Answer 2

1. Non-competitve zone
   High switching costs, few substitutes, brand equity and loyalty programs
2. Highly competitve zone
   Commodization, low differentiation, low switching costs etc.

Question 3

What is required for a good relationship?

Answer 3

Trust and committment

Morgen and hunt say if we want to operationalize relationship marketing we need to look at trust and commitment. There could be direct effects, indirect effects but trust and commitment will account for most of the variance

Question 4

Explain the relational meidator framework by Palmatier et al (2006)

Answer 4

This framework provides an overview of a meta-analysis.What are the causes (strategies) that lead to a relationship and what are the outcomes. They looked at 4 different moderators that all reflect how the data is collected. The moderator looks if the relationship gets stronger for different settings of these moderators.
The antecedents are the different strategies and are divided into 3 different groups; Customer focused antecedents, seller-focussed antecedents and dyadic antecedents.
The antecedents influence the relational mediators; committment, Trust, relationship satisfaction and relationship quility

This leads to the consequences; Customer focused oucomes, seller focues outcomes and dyadic c=outcomes

Question 5

What are the different antcedents of the framework by Palmatier et al?

Answer 5

1. Customer focused antecedents;
   - customer may perceive value in a relationship when they receive relationship benefits from an exchange partner, which increase their willingness to develop relational bonds  Relational benefits & dependence on seller
2. Seller focused antecedents;
   - relationship investments (time, effort, spending, resources) & seller expertise (knowledge/overall competence)
3. customer and seller focused antecedents are meaningful from one side of the exchange dyad, but other antecedents require the active involvement of both exchange partners and are equally meaningful from both perspectives.
   - Communication (amount, frequency and quality of information shared)
   - Similarity (commonality between individual boundary spanners, cultures, values, goals)
   - Relationship duration (length of time that relationship has existed)
   - Interaction frequency (number of interactions or number interactions per unit of time)
   - Conflict (overall level of disagreement between exchange partners)

Question 6

Whatr are the different relational mediators of the framework by Palmatier et al 2006?

Answer 6

Commitment -> enduring desire to maintain a valued relationship

Trust -> confidence in an exchange parnetrs reliability and integrity

relationship satisfaction -> customers affective/emotional state toward a relationship

Relationship quality -> an overall assessment of strenght of a relationship

Question 7

Whatr are the different consequences of the framework by Palmatier et al 2006?

Answer 7

• Customer focused outcomes
  o Loyalty
  o Expectation of continuity
  o WOM
• Seller focused outcomes
  o seller objective performance (actual seller performance enhancements)
• Dyadic outcomes
  o Cooperation: Coordinated and complementary actions between exchange partners to achieve mutual goals

Question 8

What are the moderators used in the framework by palmatier et al 2006?

Answer 8

Effects of relationship on outcomes (at least the effects on loyalty) are stronger for:
1. Services vs physical products
2. Channel exchanges vs direct exchanges
3. Business market vs consumer markets (effects on loyalty and seller objective performance)
4. Relationships with individuals vs relationships with organizations

Question 9

What are the results of the article by Palmatier et al?

Answer 9

1. The strongest effect was conflict which has a negative influence on relation
2. Then seller expertise is important
3. then communication is important

Question 10

What are key insights of palmatier et al 2006?

Answer 10

1. Companies with good relationships have better expectations of continuity, more customer loyalty, more customer mouth, more seller objective performance (this number is not so big but still positive)
2. Seller objective performance
   a. Relation quality has a strong effect on objective performance
   b. Relationship satisfaction looks at if relationship is good or bad on itself (relational mediator, tells us about the quality of the relation)
3. Having strong relations along with building loyalty and seller performance is most important for
   a. Service offerings
   b. Channel offerings
   c. Business markets
4. Conflict has the biggest effect, which is a negative impact on relational mediators (Proactive efforts will be wasted if conflicts remain unresolved)
5. Culture is an important moderator. It is interesting if the effect relationships play a different role so does the effect on loyalty get stronger or weaker in different cultures they conducted a follow-up study on this