Marketing Exchange Relationships, Transactions, and Their Media

By Franklin S. Houston | Go to book overview
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Exchange: Ethical and Legal Foundations

A recent theme in marketing distinguishes short-term, discrete exchange transactions from exchange involving long-term, repetitive interaction with a relational emphasis (i.e., open-ended supplier contracts, franchisor-franchisee arrangements, strategic partnering, and joint ventures). Relational exchanges can facilitate heightened customer satisfaction, lower costs through transaction routinization, and raise barriers to competitive market entry. Examples of this trend are common today:

Motorola plans to cut substantially the number of outside law firms it retains. In an attempt to obtain higher quality legal services at a lower cost, Motorola intends to establish and build relationships with only a few primary legal service providers. ( Pollock 1991)

Toyota, a leader in production efficiency, is with small American suppliers in an effort to enhance these firms' productivity. Rather than taking their business elsewhere, Toyota is cultivating relationships with the suppliers and teaching them their production know-how. Toyota's commitment to these firms has led to design advances and quality improvements ( White 1991).

American Express is changing from a focus on product marketing to relationship marketing. The firm plans on emphasizing consumer needs to increase loyalty and usage for its green, gold, and platinum cards. Adopting a relationship management model, according to Phillip Riese, AmEx Executive VP, "is the way the customer battle will be won in the 1990's" ( McCormack 1992).

Beginning with Adler ( 1966) conception of symbiotic marketing, scholars have explored the trend toward relational exchange in marketing ( Varadarajan and Rajaratnam 1986). In early work on personal selling, Goodman ( 1971) emphasized the importance of sustaining relationships with customers. Arndt ( 1979) later noted the tendency for some exchanges to be circumscribed by longer-term associations, labeling this phenomenon "domesticated markets." More recently, Dwyer, Schurr, and Oh ( 1987) extended this concept to include


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Marketing Exchange Relationships, Transactions, and Their Media


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