Relationalism in marketing channels and marketing strategy
European Journal of Marketing (2011)
The purpose of this paper is to examine the relationship between marketing strategy types aggressive marketing, price leadership and product specialization strategies and the extent of relationalism in marketing channels.
Relationalism in marketing channe...
Relationalism in marketing channels and marketing strategy Audhesh K. Paswan, Charles Blankson and Francisco Guzman Department of Marketing and Logistics, College of Business, University of North Texas, Denton, Texas, USA Abstract Purpose ��� The purpose of this paper is to examine the relationship between marketing strategy types ��� aggressive marketing, price leadership and product specialization strategies ��� and the extent of relationalism in marketing channels. Design/methodology/approach ��� Data were collected using a self-administered survey from managers responsible for marketing and channels management in US pharmaceutical firms. The responses to the questions capturing focal constructs were measured using a five-point Likert type scale. Data were analyzed using Principal Component Analysis and Structural Equation Modeling procedures. Findings ��� Aggressive marketing strategy and price leadership strategy are positively associated with the level of relationalism in marketing channels. In contrast, product specialization (focus) strategy is negatively associated with the level of relationalism in marketing channels. Originality/value ��� The relationship between marketing strategy and the emergent relationalism among marketing channel intermediaries is critical for the firm���s ability to meet objectives. This relationship has not been investigated so far and, from a managerial perspective, managing marketing channels is critical for successful implementation of marketing strategies. Keywords Relationship marketing, Marketing strategy, Distribution channels and markets Paper type Research paper Introduction The concept of relationalism (i.e. extent to which relational norms guide the interactions between business partners) has been extensively studied within the overlapping rubrics of marketing channels (see Black and Peeples, 2005 Boyle et al., 1992 Dant and Schul, 1992 Paswan et al., 1998 Zhang et al., 2003), logistics, and supply chain networks (Bienstock et al., 1997 Davis and Mentzer, 2006 Germain and Iyer, 2006 Griffith and Myers, 2005 Mentzer et al., 1989 Morris and Carter, 2005 Srivastava et al., 1999 Williams et al., 1997). The general consensus in the literature is that the presence of strong relational norms among marketing channel intermediaries is associated with factors such as performance (see Black and Peeples, 2005 Griffith and Myers, 2005 Kahn et al., 2006 Morris and Carter, 2005), channel management and governance, and conflict resolution (Boyle et al., 1992 Brown et al., 2000 Dant and Schul, 1992 Gonzalez-Hernando �� et al., 2003 Jap and Ganesan, 2000 Liu et al., 2008 Paswan et al., 1998 Vazquez et al., 2007), information exchange (Holmes and Srivastava, 1999), and competitiveness (Zhang et al., 2003). Notwithstanding, to our best knowledge, the relationship between marketing strategy and the emergent relational norms in marketing channels has not received adequate research attention in the extant literature. Closing this gap in the literature is crucial given that both marketing strategy and marketing channels, including norm based governance of marketing channels, are inextricably linked to the success of the marketing function. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0309-0566.htm Relationalism in marketing channels 311 European Journal of Marketing Vol. 45 No. 3, 2011 pp. 311-333 q Emerald Group Publishing Limited 0309-0566 DOI 10.1108/03090561111107203
To this end, the focus of this study is to examine the linkages between the level of relationalism among marketing channel intermediaries and the marketing strategy. Before proceeding any further, we would like to acknowledge that while the focus of this study is on relational norm (or relationalism) within the business-to-business context, a review of the literature shows that relationalism and relationship marketing are mutually inclusive (Christopher et al., 1991 Gummesson, 1987 Veloutsou et al., 2002). In fact, according to Veloutsou et al. (2002), the scope of relationship marketing includes external and internal and upstream and downstream constituencies. While modern marketing practices reflect the maximization of customer value, the onus of relationship marketing is reflected in the dictum proposed by Gummesson (1987) that everyone in the firm is a part-time marketer. The latter is taken further by Veloutsou et al. (2002) who assert that relational and transactional forms of relationships are not necessarily mutually exclusive. The authors suggest that in order for firms to engage with their dynamic target markets (i.e. business-to-business, business-to-customer, or both), and to effectively manage the relationship with them over time, firms should develop relationship marketing chains (see also, Peck et al., 1999). Pursuant to the aim of the study, the first focus of this research reflects the fact that a key marketing objective is to meet the customer���s needs, wants, and aspirations and that in order to fulfill these goals, firms must manage the channel intermediaries and logistics function to ensure the effective and efficient flow of goods, information, and revenue (see CSCMP, 2005 Dant and Schul, 1992 Germain and Iyer, 2006 Gill and Allerheiligen, 1996 Larson et al., 2007 Stank et al., 2007). Studies in the field of channels and logistics acknowledge that marketing channel networks with strong emergent relational norms (i.e. spirit of cooperation, long term orientation, and a feeling of solidarity are likely to yield better results. Some have even suggested that relationalism is the cure for all business problems (for example Gill and Allerheiligen, 1996 Kahn et al., 2006 Noordeweir et al., 1990 Womack et al., 1991). However, others have taken a more cautious stance towards the linkage between the concept of relationalism and its outcomes (see Curhan et al., 2008 Dant and Schul, 1992 Paswan et al., 1998). The second focal direction of this study is marketing strategy ��� the way in which firms create value and define their operational boundaries. The literature also stresses the importance of a good fit between marketing strategy and governance structure (see Black and Peeples, 2005 Galbraith and Kazanjian, 1986 Griffith and Myers, 2005 Mentzer et al., 2001 Porter, 1980 Powell, 1992 Slater and Olson, 2000, 2001). Together, the relationalism in marketing channels and marketing strategy literature streams imply that while long term relationships between marketing channel intermediaries may be pivotal for a firm���s strategy, there is some ambiguity about the exact nature of this relationship in other words, not all strategies harmonize well with relationalism in marketing channels. To that end, this investigation focuses on the following research question: RQ1. Are relational norms among marketing channel intermediaries suitable for every marketing strategy, or are some marketing strategies more suitable for relational norms while others may in fact be negatively affected by the presence of strong relational norms? From a managerial perspective, managing marketing channels is critical for successful implementation of marketing strategies. Given the fact that governance using EJM 45,3 312
relational norms is considered by most as a more effective way of managing marketing channels, managers need to be cognizant of the exact relation between emergent relationalism in marketing channel and marketing strategy. In the ensuing sections of this paper, the literature on relationalism in marketing channels is examined, followed by a discussion on marketing strategy and the rationale for the hypotheses. The method section is presented next. The last sections include a discussion of the findings, managerial implications, and limitations of this study. Marketing channel intermediaries and relational norms Marketing channels typically consist of intermediaries that function in a cohesive manner to meet the customer���s needs and wants while fulfilling the intermediaries��� goals (see Alderson, 1954 Bowersox et al., 1980). While contractual or corporate channels are not uncommon, recent studies have questioned the traditional linear perspective of the supply chain and have suggested a more complex network perspective (Achrol, 1997 Achrol and Kotler, 1999 Snow, 1997 Walker, 1997). Achrol and Kotler (1999, p. 148) define a network organization as: an interdependent coalition of task- or skill-specialized economic entities (independent firms or autonomous organizational units) that operates without hierarchical control and is embedded, by dense lateral connections, mutuality, and reciprocity, in a shared value system that defines ���membership��� roles and responsibilities. For the purposes of this research, we focus on channel intermediaries that are independent businesses and loosely aligned through consensus. They could be part of a simpler supply chain or could be part of a more complex network. In any case, to fulfill customer needs and wants, marketing channel systems or networks perform various activities such as physical distribution, warehousing, storage, flow of information, flow of revenue and profits, and logistics, to name a few (see Bowersox et al., 1980 Stern et al., 1996). These words also appear in some combination under labels such as supply chain management and logistics (see Bowersox et al., 1995 Christopher, 1992 Cooper et al., 1997 CSCMP, 2005 Forrester, 1958 Gibson et al., 2005 Jones and Riley, 1985 Mentzer et al., 2001 Min and Mentzer, 2000). Despite the divergent perspectives, the importance of relational norms towards the efficient and effective functioning of a distribution channel has been acknowledged in the channels and supply chain areas (e.g., Boyle et al., 1992 Dant and Schul, 1992 Ganesan, 1994 Kaufmann and Dant, 1992 Kaufmann and Stern, 1988 Mattila, 2001 Mentzer et al., 2001 and Paswan et al., 1998). Most researchers and practitioners in marketing channels, supply chain, and logistics agree that coordination and collaboration between channel members, and the relational norm guiding such behavior are the essence of modern day marketing channels management. From a strategic perspective, Morgan and Hunt (1994) confirm that changes are taking place in the practice and theory of business relationships in other words, towards establishing, developing, and maintaining successful relational exchanges. The importance of developing and maintaining enduring relationships with intermediaries is also widely accepted in logistics and supply chain literature (e.g., Fugate et al., 2006 Kahn et al., 2006 Mentzer et al., 2001). At its core, relationalism is built on an expectation of continuity of exchange and a shift in focus towards long term payoffs based on relational norms. In support, Heide Relationalism in marketing channels 313
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