The Backward Paradigm Shift: Relationship Marketing
Product, price, promotion and place have long been thought of as key factors in conceiving and implementing strategies to market a product. These factors are also known as the “4P’s marketing framework”, being formulated by E. Jerome McCarthy. Yet, with digital marketing and the new networked ways of customer behavior coming into play, the 4Ps have gradually stopped influencing the marketing narrative.
As Dr. Augustine Fou wrote in a Forbes article [1]:
[T]he 4P’s are dead. Why? Because it’s an academic framework for marketing that is not practical or actionable.
What is more interesting is the fact that these 4Ps have been criticized as reductionist for a long time now. For example, Grönroos, Finnish academic working in the field of service and relationship marketing, points out that the 4Ps have been most possible wrongly borrowed by Neil Borden and subsequently iteratively imposed in both academic and educational marketing literature [2].
Relationships Matter
In his “From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing” Grönroos proved that the 4Ps were designed for the mass marketing of consumer goods and have no value in the field of services or in business-to- business (B2B) interactions [3].
But apart from a nice-to-have fact for those of us who believe marketing is much more than a network of transactional-oriented actions, how can this knowledge help us approach people in a more considerate and non-intrusive way?
What other frameworks can we use to strategize around building relationships?
We might easily go into the direction of Kotler’s four C’s: co-creation, currency, communal activation, and conversation, as described in MARKETING 4.0 Moving from Traditional to Digital [4].
But that is actually not the original source of a differentiation, although a valid and valuable one.
[bctt tweet=”Where differentiation actually starts is not with digital. Digital is only a magnifying glass of something basic: the relationship building aspect of marketing.” username=”TheodoraPetkova”]
That said, we need to get back to basics and dig into what I find conceptual core of marketing communication – that is – relationship marketing.
Relationship Marketing Theory
Relationship marketing theory helps us understand and appreciate the role of networks and the importance of being farmers rather than hunters in our marketing communication activities om the Web.
One of the first definitions of relationship marketing contained dialogue as an integral part of the process of doing business by building long-term relationships Here the sources contradict each other. In Grönroos, 1980 is indicated as the beginning of the use of the term relationship marketing. In Varey, the year is 1960, and Lester Wunderman is considered as the founder of this trend in marketing. In 1960, Lester Wunderman gave a speech at the Massachusetts Institute of Technology (MIT) in which he described how ongoing dialogue and other forms of interaction between buyer and seller could build long-term customer loyalty.
According to Don Peppers, speaking at the CRM Focus Conference, Boston 2001, “a mass marketer is a hunter – a relationship marketer is a farmer”. I would only add that we are now farmers in information ecologies that thrive on knowledge dissemination, sharing and co-creation. Ecologies which motivate us to better examine the nature and dynamics of networks and the many-to-many conversations they are built of. Networks that hardly tolerate manipulation.
Understood in this way, marketing expands the scope of marketing communications and places them beyond purely transactional relationships, into the field of building long-term relationships.
Relationship Marketing To Drive Us From Transactions Towards Interactions
In fact, relationship marketing is also often conceived as a departure from traditional, mass transactional marketing.
In the book “Financial Services Marketing”, Tina Harrison [5] outlines the differences between transactional marketing and relationship marketing, highlighting the approaches these types of marketing have towards exchange, such as:
- single sale vs. customer retention;
- short term communication vs. long term communication;
- low intensity of the exchange vs. deeper engagement; low vs. high loyalty.
The difference between relationship marketing and traditional marketing is also well summarized by researchers Seren Hougaard and Mogens Bjerre who argue that “relationship marketing to some extent replaces the idea of manipulation with the idea of co-operation, subject though to differences in regulating mechanisms.“ [6]
Gettin Back To Basics In Marketing Communications
In their study authors remind us that relationship marketing is nothing more than bringing marketing back to its roots. We can safely say that the relationship approach to marketing represents a kind of “backward” paradigm shift.’” [7]
This backwards shift in marketing communications can be traced in detail in the model of two-way marketing communications developed by Ballantyne [8] and later in co-authorship with Richard Varey [9].
The model emphasizes the potential of dialogue to bring new knowledge into the business environment or to create conditions for mutual learning among the participating parties. A key concept in the model is the transition from mass market to a networked one. In a marketing communications matrix [10], the closer communications come to a network scenario (multilevel interconnectedness), the more the communication evolves into a dialogic exchange.
This evolution towards a dialogic exchange does not come without challenges. Some of them are. presented as inevitable challenges to marketing communications, in the context of the aspiration to be dialogic. These challenges are rooted in the fact that Shannon and Weaver’s communication model (originally an information exchange model) is overexposed in marketing communications texts. This, say Ballantyne and Varey, is a problem because Shannon and Weaver’s model is unrepresentative of the spontaneous act of interaction and cooperation implicit in voluntary market exchange—factors that cannot be ignored when we study marketing communications.
Our Web And The Challenge and Need For Dialogic Orientation
Another challenge to the dialogic orientation (reminding us that dialogue is not a method of communication, but an orientation) is the perception of marketing communications and the processes associated with them as activities that assume the message contains a fixed meaning and that this meaning can be encoded in such a way that the transfer and perception get regulated. The dialogic orientation is a mindset that accepts the message solely and only as initiating the first step towards a subsequent shared creation of meaning, knowledge and, last but not least, value. Dialogic orientation focuses on learning, and monologic orientation focuses on manipulation. And if the first is characterized by influence without manipulative intent, in which beliefs are not imposed, then the second is characterized by exaggerated statements, unrealistic promises, corporate mendacity and manipulative advertising messages.
We have seen the latter on the Web – lack of conversational experiences, legacy practices of pushing content and gathering leads at all cost. And while it is true that marketing communication is the primary process by which marketing activities and resources produce economic results, focusing on economic outcomes without giving due credit to the processes that make those outcomes possible, we may miss the obvious: marketing is based on strategic (targeted) social interaction. [11]
It’s high time we dethrone the kinds of marketing that are slow to function as feedback machines, as conversation catalyzers and as systems that serve value, not only ads.
I explain in more detail why and how we can approach marketing from the perspective of value, dialogue and connected data creating in Being Dialogic.
Part of the notions I work with when developing the coceptualization of marketing communications being about knowledge management not about manipulating the marketing mix:
Footnotes:
[1] Fou, Augustine. “4P’s Are Dead—Because They’re Academic, Not Practical and More Irrelevant Than Ever.” Forbes, January 27, 2021. https://www.forbes.com/sites/augustinefou/2021/01/25/4ps-are-deadbecause-theyre-academic-not-practical/?sh=682059506a27.
[2] Gronroos, Christian. “From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing.” Asia-Australia Marketing Journal 2, no. 1 (August 1, 1994): 9–29. https://doi.org/10.1016/s1320-1646(94)70275-6.
[3] Maxim, Andrei. “Relationship marketing – a new paradigm in marketing theory and practice.” Scientific Annals of the Alexandru Ioan Cuza University of Iasi 56, no. 1 (January 1, 2009): 287–90. http://anale.feaa.uaic.ro/anale/resurse/23_M04_MaximA.pdf.
[4] Kotler, Kartajaya, and Setiawan, Marketing 4.0: Moving from Traditional to Digital, 2016. pp. 50-51.
[5] Harrison, Tina, and Hooman Estelami. The Routledge Companion to Financial Services Marketing. Routledge, 2014.
[6] Hougaard, Soren, and Mogens Bjerre. The Relationship Marketer: Rethinking Strategic Relationship Marketing. Springer Science & Business Media, 2010.
[7] Hougaard and Bjerre, The Relationship Marketer: Rethinking Strategic Relationship Marketing.
[8] Ballantyne, David. “Dialogue and Its Role in the Development of Relationship Specific Knowledge.” Journal of Business & Industrial Marketing 19, no. 2 (March 1, 2004): 114–23. https://doi.org/10.1108/08858620410523990.
[9] Varey, Richard J., and David Ballantyne. “Relationship Marketing and the Challenge of Dialogical Interaction.” Journal of Relationship Marketing 4, no. 3–4 (February 21, 2006): 11–28. https://doi.org/10.1300/j366v04n03_02.
[10] ResearchGate. “Marketing Communication Matrix | Download Scientific Diagram,” n.d. https://www.researchgate.net/figure/Marketing-communication-matrix_fig1_215915361/actions#reference.
[11] Varey and Ballantyne, “Relationship Marketing and the Challenge of Dialogical Interaction.”