Academic journal article International Journal of Management and Marketing Research

The Role of Relationship Investment in Relationship Marketing in Nonprofit Organizations

Academic journal article International Journal of Management and Marketing Research

The Role of Relationship Investment in Relationship Marketing in Nonprofit Organizations

Article excerpt

INTRODUCTION

Relationship marketing includes all marketing activities conducted through the determination, development and management of long-term relationships (Lee at al., 2010). By implementing relationship marketing, both non-profit and profit-organizations hope to continuously establish relationships with partners. In order to realize these relationships, the organization undertakes various activities and efforts. The activities and efforts are referred to as relationship marketing investment or relationship investment. The previous research finds that many forms of investment activities and the efforts made by organizations to build relationships with customers, are expected to impact customer trust and commitment to the organization (Moorman et al., 1993, Morgan and Hunt, 1994; Sirdeshmukh et al. 2002; Sargeant and Lee, 2004; and Wulft et al., 2001), and also affects the customers gratitude (Palmatier et al., 2009).

In a relationship, partner trust is a factor that is required. Venable et al. (2005) revealed that trust and social exchange plays an important role in the donor's decision whether to donate money, time, goods or services to the organization. Similarly Sargeant and Lee (2002) note that donors have recognized the central role in developing the relationship between donors, philanthropy organizations, and recipient of donations. Sargeant and Lee (2002) also argue that trust is the foundation for philanthropy organizations in building their organization. In addition to trust, commitment is also a variable related to the determinant in a relationship. Gundlach et al. (1995) revealed that commitment is an essential element for the success of a long-term relationship. Dwyer et al. (1987) described that relationship commitment appears in the marketing literature as an important element for maintaining long term relationships.

Trust and commitment is a key concept in social exchange theory and relationship marketing literature (Lou and Donthu, 2007). Blau (1964) explains the concept of exchange in directing attention directly on the emergence of interpersonal relationships and social interaction. Several studies using social exchange theory as a foundation for commitment and trust in relationship marketing exist (Anderson and Narus, 1990; Dwyer et al., 1987; Morgan and Hunt, 1994, Smith and Barclay, 1997, Garbarino and Johnson, 1999; MacMillan et al., 2005). According to Palmatier et al. (2009) customer gratitude effects trust and intentions to buy.

Based on previous research (Morgan and Hunt, 1994, Smith, 1998; Garbarion and Johnson, 1999; Sargeant and Lee, 2004; MacMillan et al., 2005; and Palmatier et al., 2009), this research positions gratitude, trust and relationship commitment variables as mediator variables in relationship marketing. The relationship marketing investment variable is treated as an antecedent on the consequences of the intention of donor to redonate. This paper analyzes the role of relationship marketing investment variables in relationship marketing in nonprofit organizations, in the context of B2C relationships. This will provide benefits in the development of the relationship marketing concept. Until now studies on the topic of relationship marketing largely focus on profit-organizations as well as in area of B2B (Arnett et al., 2003). The paper continues with a literature review and hypothesis development. Next, we discuss the data and methodology utilized and result of the reseach. The paper closes with some concluding comments.

LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT

Relationship Marketing. According Gronross (1994), relationship marketing aims to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. Kotler and Keller (2012) describes four key elements to relationship marketing, including customers, employees, marketing partners (channels, suppliers, distributors, dealers, agents), and members of the financial community (shareholders, investors, analysts). …

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