Bruhn manfred relationship marketing elements

Services Marketing: Managing the Service Value Chain - Manfred Bruhn, Dominck Georgi - Google Книги

Relationship marketing is holistic, a sum of integrated parts that drive a firm's Bruhn, Manfred and Astrid Frommeyer (), "Development of Relationship. Services Marketing: Managing the Service Value Chain: Manfred Bruhn, University of BaselMarketing and Business AdministrationPetergraben. Sources and further Readings Bruhn, Manfred (): Relationship Marketing: . Philosophy Core Elements of a Marketing Concept Goals.

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As such, the amount of specific investments equally depends on the evaluation of the suppliers. Specific investments will be more likely when the relationship is aimed to be close and cooperative, because otherwise they would be lost. Such a close cooperation is characterized by the exchange of sensitive information about operations Anderson and Narus ; Dyer et al. Jap exposes that arm length relationships which are typically characterized by nonspecific investments, minimal information ex- change and low interdependence are incapable of realizing competitive advantages because of their lack of inimitability.

As such specific in- vestments are even considered as a core necessity for a strategic value enhancing partnership Dyer et al. The Supplier Relationship Life Cycle and Corresponding Manage- ment Tasks relationship contribution potential endangerment initialization degeneration time growth saturation socialization abstinence In-Supplier Mgt.

Intensity Supplier Development Mgt. The signal provides confidence for the partners, because each will sustain economic conse- quences in case of relationship termination and thus reciprocal actions tend to be reinforcing Jap and Ganesan The costs of acquiring new customers in CRM exceed the costs of maintaining them, making customer retention more efficient than cus- tomer acquisition Blattberg and Deighton ; Rust and Zahorik Besides external instances the investments at the beginning of a supplier relationship are expected to exceed the expenses later on.

This is due to the fact that 1 specific infrastructure may be needed to be set up and 2 the amount of mutual trust to the relationship is lower. After a social- ization phase, the level of mutual trust with suppliers can rise. This re- duces control and safeguarding costs, because the partners can act as if the future would be more certain Zajac and Olsen Fur- thermore trust can decrease the perception of inequity in case of specific investments by the partners Corsten and Kumar In the above illustrated situation the qualification or potential satis- faction of a purchasing firm is the reason for Set-Up Management and specific investments.

The necessity to invest in a new supplier can also be caused by the absence of alternatives. To maintain a certain quality level throughout the purchasing firm, this absence can be the cause for investments into so far unsatisfactory supplier relationships. This can be labeled an endangered situation because the current relationship to the supplier is below the satisfaction level of the purchaser, but better alternatives among the out-suppliers are lacking.

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To ensure an enduring valuable relationship a permanent Development Management is the second stage of the In-Supplier Management. In the course of Development Management potential areas of im- provement are identified, evaluated and enhancing activities can be un- dertaken. In a similar matter as in the set-up stage specific investments can occur within the Development Management. In contrast to the set- up phase within the course of the relationship they are usually more and more safeguarded by relational norms, like solidarity, information ex- change and participation Jap and Ganesan Specific investments per se and their amount must be justified and depend on the strategic importance of suppliers see Figure 2.

Similar to CRM the different actual and potential future contribu- tions to the relationship of suppliers need to be recognized within Development Management. According to Ulaga and Eggertrelationship value in business-to-business markets is a multidimen- sional construct containing five benefit dimensions product benefits, service benefits, Know-how benefits, time-to-market benefits, social benefits and two sacrifice dimensions price and process costs. We consider relationship contribution as a construct of how much rela- tionship value the partner adds to the collaboration.

For the assess- ment of the strategic importance of in-suppliers the criteria from Out-Supplier Management can be applied. Based on those experiences it is possi- ble to classify suppliers into a supplier portfolio Figure 2. Besides those different static criteria, the as- sessment can also cover the advancement of the supplier and thus the future tendency of development.

Empirical research demonstrates that the contribution to value creation from key suppliers increases moving through the life cycle Bowman and Narayandas ; Eggert et al. If deficits regarding the supplier value contribution are identi- fied, purchasing firms can act differently, depending on the strategic importance of the supplier and potential future value which could be generated for the purchasing firm.

In case of major strategic importance of the supplier, a professional Development Management has to be applied in most cases. This is due to the fact that the pur- chasing firm needs to keep these suppliers and has to make sure they neither shift their activities to competitors nor terminate the relationship. Development Management requires corresponding activities from both partners, whereas the perception of trust and commitment of the partners can be assumed to be a precondition for a fruitful cooperation and the willingness to invest in the relationship Morgan and Hunt In this regard the reciprocal action theory Goulder which has been empirically tested and proved in the Business-to-Business Context has to be mentioned.

It emphasizes that there is a tendency of firms to reciprocate behaviors Frazier and Rody Thus the per- ception of trust and commitment is assumed to be returned by the part- ner. Findings of Heide support this by recommending internal self-control governance modes for bilateral relationships.

Against this background a willingness to invest on the side of the pur- chaser cannot be assumed for every supplier relationship Dyer et al. This is consistent with the findings of Heide who recommends external monitoring procedures of predomi- nantly output-oriented tasks for such relationships.

According to Wuyts and Geyskenscontractual agreements can be seen as a substi- tute for a close partnership in avoiding opportunism in relationships. The purchasing firm is best when selecting only one governance mode otherwise opportunism will be triggered rather than prevented. These findings are consistent with our recommendations in Figure 2. The con- tributions to value creation from those suppliers which are regarded within Contract Management are usually secured through contractual agreements.

In contrast suppliers which are examined within Develop- ment Management contributions are usually secured by mutual specific investments. Suppliers of minor strategic importance can be described either as Value Contributors or as Underperformers: As Dyer et al. As indicated in Figure 1 this can already come along with absence of willingness to invest in Set-Up Management. In case of an underperformer with- out any alternatives the purchasing firm has four possibilities: In the last two cases he is probably not willing to invest in the unsatis- factory relationship with the current supplier.

However, when the purchaser has no alternatives, the relationship cannot be dissolved immediately. Within the scope of Disturbance Management the purchaser tries to avoid breakdown of continuous relationships.

Diverse reasons like, e. Thus three types of endings can be distinguished re- garding continuous relationships: As such Disturbance Management addresses the first case and the problems and conflicts that can occur in such relationships with suppli- ers. Disturbance Management precedes the potential dissolution of the relationship in an idealized supplier relationship life cycle.

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Neverthe- less, as indicated in Figure 1, relationship endangerment because of dis- turbances can occur throughout the whole life cycle. However, depending on the type of conflict they do not necessarily have to be harmful. As Amason et al. Still most conflicts between supplier and purchaser are assumed to lead to an endangerment of the relation- ship up to the intention of supplier replacement. Whereas switching in consumer markets is often impulse and easily reversed, switching the supplier or decreasing the share of one supplier often harms the relation- ship and is neither easily reversed nor quickly recovered Bowman and Narayandas Even more than for customer relationships it proves true that many stages in between an existing and a nonexistent relation- ship with a supplier do exist and those stages need to be recognized.

For example the purchaser can reduce the share of a certain supplier, which can be carried out by moving from a single sourcing to a multiple sourc- ing strategy. This can be a valuable strategy to react on perceived dis- turbances with the supplier.

This is in line with Jap and Ganesan who recommend besides relational norms the additional use of explicit contracts in the decline phase. Such suppliers can be labeled under- performers regarding the supplier portfolio Figure 2. The identification of potentially problematic aspects within the rela- tionship allows the proactive and careful management of these dis- turbance aspects and an early employment of de-escalation instruments like cooperative meetings or renegotiation of contract conditions.

As such different potential problems with suppliers are mentioned. A close cooperation is aimed to realize synergies by partner disposing over complementary capabilities and thus create value that could otherwise not be created by either firm independently Zajac and Olsen However, allocating such jointly created value Zajac and Olsen or the amount of specific investments within collaboration Corsten and Kumar can be a source of conflict, as is can lead to perception of inequity.

The study of Morgan and Hunt identifies commitment and trust as most important factors for a fruitful cooperation, leading to the assumption that their absence will lead to major disturbances. Addi- tionally in business-to-business contexts a control level above average can be a sign for a general distrust and unwillingness regarding specific investments can be a sign for a low level of commitment. In contrast to these findings, which mainly cover soft factors of the relationship, Johnston indicates that demand, price, availability and product are the main fields where disturbances occur in relationships to suppli- ers.

Eighty percent of the disturbances can be attributed to demand, for example a sudden change in the quantity of order and the price of the product. In-Supplier Dis- solution Management covers the evidence that an unwanted relation- ship—for whatever reason—has to be brought to an end.

Transactional & Relationship Marketing Differences

In this context a relationship end is defined as a state in which no resources are transferred between the partners Giller and Matear Some purchasers even es- tablish cross functional teams that streamline the supplier base. Many purchasers tend to reduce supplier base for several reasons: Although dissolution is a common task the importance of dissolution management is often underestimated in research as well as in manage- ment practice.

Morgan and Hunt point out that in marketing literature often only the switching costs to a new supplier are focused upon, and the costs of termination of the rela- tionship with the old supplier are not being considered. They differen- tiate between direct and indirect exit strategies. The two indirect exit strategies of business relationships are disguised exit and silent exit.

Within a disguised exit the purchaser hides his real intentions and changes the relationship conditions in a way that will most likely induce the supplier to end the relationship himself. When the purchaser does not explicitly voice the ending it is named a silent exit. A silent exit can be associated with a major disagreement, problems in supply or quality or any other kind of negative incident, so that the partners may share an implicit anticipation of the ending. In contrast to the indirect exit strategy the purchaser will communi- cate the intended ending directly to the supplier within the direct exit strategy.

First of all the exit is communicated within the management circle dyadic communi- cation stage. Additionally, this stage implies that the business exchange between purchaser and supplier declines and thus re- source ties begin to weaken.

It can be associated with a larger amount of necessary communication between supplier and purchaser, because the partners have to adjust the decline and negotiate about contract dis- engagement, property rights and copyrights as well as final invoices.

To avoid harmful and costly legal disputes this stage is of major importance within Dissolution Management. On the side of the disengager, in our perspective the purchaser, the disengagement information has usually been discussed before the dissolution decision is made.

Regardless of the stage, the purchaser can analyze the breakdown of the relationship to avoid future breakdowns. Following or parallel to this disengage- ment stage the network communication stage commences, because the ending may change the network structure and thus the disengagement can be communicated within the network.

An increasing strategic importance of the purchasing function has occurred within most organi- zations and has led to a closer cooperation between the purchasing func- tion and selected suppliers. As the dependence on those suppliers and therefore their importance has increased enormously, a need for profes- sional Supplier Relationship Management SRM has been identified. However, an overall framework covering the dif- Moeller, Fassnacht, and Klose 85 ferent tasks of a relationship, treating different suppliers, along the course of their relationship remains desirable.

As such, we aimed to contribute by proposing a Supplier Relationship Management frame- work see Figure 1 regarding those challenging aspects. To consider the course of time of a relationship we have integrated the supplier life cycle into our framework. In order to consider differences of suppliers a supplier portfolio is proposed which allows purchasing firms to identify the status of their suppliers to allocate resources adequately see Figure 2.

We have drawn our primary inspiration from common concepts and theories of CRM, which are transferred to the supplier side and findings from the purchasing and business-to-business marketing literature. Managerial implications that can be drawn out of our research are var- ious.

First of all our research takes into account and emphasizes the im- portance of the purchasing function and of the supplier base for the overall success and value creating potential of purchasing firms. In doing this we take a distinct view on the supplier base: This has long time been neglected in literature, first arm length relationships have been overemphasized whereas nowadays literature already warns that close cooperations are seen as universal remedy.

Managerial recommendations regarding specific SRM elements are given. Within the Out-Supplier Management we emphasize that out- suppliers have to be systematically integrated into supplier selection in order to optimize the supplier portfolio. However, it has to be regarded that Out-Supplier Management is costly, especially because the assess- ment of out-suppliers is not as easy as the assessment of the in-suppli- ers, as information is not as available.

Purchasers need to be careful that the benefits of Out-Supplier Management prevail in the long run.

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Within the In-Supplier Management we consider how to stabilize different types of relationships. In this regard we generally consider that resources of the purchaser are scarce and as investments are necessary to set up and hold on to close cooperation, we point out which suppliers are worth such a close cooperation and how they are usually treated.

Still, we do equally illustrate what to do in case of a missing alternative supplier. Additionally, we highlight the selection criteria to apply for different types of suppliers, the effects of trust and commitment for the relationship and the possibilities of safeguarding these investments un- der the different circumstances.

As endangerment is the precursor for dissolution, but can equally occur within the course of the relationship, we further highlight the most important issues, i. Disturbance of a relationship can lead to the intention of supplier replacement. However, we equally place emphasis on the fact that many stages between existing and non- existing supplier relationships exist.

The main management implications which arise from Dissolution Management are that it is frequently underestimated in terms of effort and costs. As such we shed light on the different possibilities to exit a relationship. Within the elements of SRM different activities are directed towards the suppliers, whereas usually different functions and persons are asso- ciated with those activities.

As such it is of utmost importance to adjust activities directed towards suppliers. Improvements of the collaboration can be realized if the accountancy knows, if a certain supplier is re- garded as Value Enhancer or Underperformer and if there is actually a perception of disturbance. Within the SRM Framework former separate activities can be integrated to detect potential to enhance efficiency and effectiveness In-Supplier Management.

We assume that purchasing firms that act according to the SRM Framework have a better supplier base, because they systematically in- tegrate out-supplier into their search. SRM assures that the actual sup- plier portfolio is not seen as permanent solution.

The SRM Framework sets an incentive for purchasing agents not to maintain relationships because of convenience reasons. Equally Out-Supplier Management enhances competition within the supplier base and enhances their re- sponsiveness. Further we assume that purchasing firms that act according to the SRM Framework are able to cope with major supplier problems more easily. In case of a breakdown of a supplier, Out-Supplier Management displays possible alternative suppliers.

The Disturbance Management makes pur- chasing firms prepared which tasks are likely to cause conflicts. Additionally purchasing firms which dispose over a SRM Frame- work will act better coordinated and more consistent towards the sup- pliers.

The different persons and functions have more transparency according to the status of the suppliers. This enables to make the best out of every relationship including generosity towards important sup- pliers and rigidness towards the less important ones. As shown treating suppliers according to the SRM framework can be advantageous in many aspects.

Thus we assume that applying the SRM Framework will overall enhance value creation for customers of the purchasing firms and thus increase customer satisfaction.

Moeller, Fassnacht, and Klose 87 This paper has limitations that must be considered. We had to leave out some aspects.

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Cooperative relationships identified within Supplier Relationship Management SRM imply a loss of power in combination with increasing dependencies, which uncover the negative aspects of cooperation.

The danger of being taken advantage of by opportunisti- cally acting parties always lingers. Another risk of close and long-term cooperation is that involved parties sometimes develop in different di- rections, which can result in the need for more and more specific invest- ments up to the point where the relationship is no longer profitable.

A further limitation of the paper is that our perspective is purchaser oriented, assuming all suppliers being willing to fulfill the orders given by purchasing firms, and that these also choose the intensity of coopera- tion.

Therefore, it has to be taken into account that the possibility of choosing a cooperation partner is not limited to the purchaser. For future research the framework can be extended in several direc- tions. First of all research could examine whether the Supplier Relation- ship Management SRM framework holds an empirical examination.

As mentioned we assume that applying SRM will have various advan- tages.