Marketing Principle #3 All Competitors React  Managing Relationship-based Sustainable Competitive Advantage Agenda

Targeting and Adapting Relationship Marketing Strategies

• Various causal drivers are responsible for RM effectiveness and building relationship equity; their effects also depend on environmental or contextual factors though
• When contextual factors increase a customer’s relationship orientation, or desire to engage in a strong relationship, they increase its receptivity to relationship building, prompting more effective RM
• RM with customers without a strong relationship orientation imposes costs without parallel benefits

Intensity of RM Should be Matched to the Relational Governance Needs of Customer
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Customer’s Evaluation of Relational Governance
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(Palmatier et al. 2008)
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Relationship Marketing Activities
Exchange Inefficiency
(- mechanism)
Exchange Performance
Relationship quality
(+ mechanism)

• Relationship proneness
• Product dependence
• Category involvement
• Relationship stage
• Salesperson competence
• Industry Norms

Relationship Orientation

Firms Are Becoming More Global, But Use US-based RM Insights

• International trade accounts for 20% of global GDP
• Among the S&P 500 firms that report foreign sales, 46% of their total revenues in 2010 came from foreign markets
• Meta-analysis of 144 papers, across 29 countries, 43,000 relationships, which represents 82% of global GDP
• US ranks only as 16 of 25 countries in terms of RM effectiveness on performance: RM is more effective outside the US
• Especially in BRIC countries, RM is 55% more effective than in US at driving performance

(Samaha, Beck, and Palmatier 2014)