The theoretical and philosophical underpinnings of relationship marketing: environmental factors behind the changing marketing paradigm.(Nordic Perspective on Relationship Marketing)

Keywords Marketing theory, Paradigms, Relationship marketing, Services marketing

Discusses the theoretical and philosophical underpinnings of relationship marketing (RM) to show that RM is but one, albeit perhaps a major, manifestation of the ongoing paradigm shift in business and marketing. The rapid revolutionary changes in the economic and technological environment of business (such as the information revolution) made simultaneously both possible and necessary the changes that can be summarized as a fundamental paradigm shift. Further, it can be argued that this paradigm shift itself is a logical end result of two phenomena: the perennial quest to get closer to the customer and the ever widening scope of business and marketing towards a holistic view of the processes. The external and internal forces that led to the paradigm shift in business and marketing were manifested early in service marketing for natural reasons. Thus it is understandable that the concept of RM was first conceived of in service marketing but it is by no means limited to it. The parallel development in business is often labelled partnering (strategic alliances and partnerships).

Introduction

The purpose of this article is to shed light on the nature of relationship marketing (RM). Is it a fad, a new area of marketing, a new marketing strategy, a new marketing concept, a new emerging school of marketing or a new marketing paradigm? The premises here is that there is indeed a revolutionary paradigm shift taking place both in business and in marketing, and that RM is one, perhaps even a major, manifestation of that paradigm shift. It will also be shown that these paradigm shifts have clear underlying environmental causes. Finally, some of the emerging future trends, such as "virtual corporation", etc. will be introduced briefly.

It is easy to see why the circumstances that later gave birth to the concept of RM first became evident in service marketing, the customer is an integral part of the marketing and delivery process which necessitates a close relationship between the service provider and the customer. The phenomenon was identified first by such insightful writers as Berry (Berry et al., 1983), Gronroos (1990) and McKenna (1991), to name just a few. Although McKenna has often been credited with the term "relationship marketing", it was first defined and analysed in scientific literature by Berry. As Gronroos points out, Interestingly enough, there was also a parallel development in industrial marketing which contributed to the development of RM.

It will be shown that early attempts to formulate a general theory of marketing already included a relationship perspective. However, this perspective did not acquire the importance it has today, because the environmental factors were not sufficiently strong at the time. Thus there have been in fact two routes to the present-day RM. The first was a gradual realization of the importance of relationships, initially in service marketing and partly in industrial marketing.

The second route was through a transformation of business in general, due to rapid and radical changes in the environment. These changes resulted in an emphasis on service, close customer contact, and a holistic view of the parties and processes involved in marketing and business. The emphasis on a holistic view of the supplier-manufacturer-customer chain and process quickly became visible, for example in total quality management.

The emergence of RM in service and industrial marketing

After the post-industrial or service economy, most of the developed world is now entering a new, information economy. Perhaps it was natural, then, that the new developments first appeared in the maturing service industries of the 1970s and 1980s. Berry et al (1983) surveyed the factors and developments in service marketing that later gave rise to RM. These factors Include the combined impact of low growth rates and deregulation, resulting in "everyone getting into everyone else's business". This naturally meant increased competition. According to the writers, this forced companies to think more in terms of "keeping customers" as opposed to only "winning new customers".

According to Berry et al (1983, p. 26) a customer relationship is best established around a "core service," which ideally attracts new customers through its "need-meeting character". However, creating customer loyalty among the old customers is …