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Research Proposal - Relationship Marketing

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 Research Methods
SOE11131
Matriculation No. 40094994 Research Proposal
Relationship Marketing and its co-relation with Marketing
Communication channels as means to built-up loyalty & enhance
customer engagement within the Sporting Goods Industry Word Count: 3,015
Date: April 29th, 2013
Table of Contents
Introduction ......................................................................................................... 3
Aim and Objectives ............................................................................................. 4
Key Literature Review......................................................................................... 5
Research Design ................................................................................................. 9
Stage 1 ............................................................................................................ 10
Stage 2 ............................................................................................................ 11
Stage 3 ............................................................................................................ 11
Ethical Issues .................................................................................................. 11
Research Plan ................................................................................................... 11
Project´s organization ...................................................................................... 11
Project Plan ..................................................................................................... 12
Gant Chart ....................................................................................................... 13
Reference List.................................................................................................... 14
2 Introduction Relationships are commonly acknowledged as a set of interactions between the
parties involved, but when those interactions are between the brand and the
consumer, a greater need for trust and mutual commitment starts to develop.
Furthermore, relationships in marketing have played a fundamental role, because
of the set of collaborations by producers and consumers aiming for a mutual cocreation of value, which enhances customer loyalty. From a marketing point of
view, relationship marketing is described as “marketing based on interaction within
networks of relationships” (Gummesson, 2002).
Additionally, an improved communication network is now reachable to almost any
kind of consumer around the globe. Nowadays, customers are more empowered
as well as informed more than ever, not to mention the fact of an increasing market
competition offering such a diverse set of alternatives. With this in mind, many
consumers started to seek contact towards the firms and its brands in order to
increase satisfaction and match expectations with previous experiences. One of
the outcomes was “Relationship Marketing”. Gummesson (1999) describe it as
marketing seen as interactions, relationships and networks, which emphasize the
significance to create and maintain certain value with the customers.
The focus for the research is within the sporting goods industry where competition
is highly abundant and the brand´s switching costs for consumers are relatively
low. With this in mind, the benefits of focusing in relationship marketing are been
recognized from both the company and the customer viewpoint. Including benefits
such as increased profitability, competitive advantage or opportunities to develop
interactive communications using multimedia technology in order to add value to a
certain product or service. A dialogue between the supplier or service firm and its
customers only emerge from value-enhancing interactions (Grönroos, 2004). In
fact, there has been an intense focus on building online communities that enhance
consumer-to-consumer (C2C) interactions that could provide valuable feedback to
3 create a more meaningful and engaged consumer-brand relationship. As it will be
evaluated further during the research, customers are not willing to only interrelate
with the company itself anymore rather with their own kind as well, which shares a
similar mind-set for the brand and common characteristics or interests that could
become the crucial factors to encourage more consequential interactions.
This research aims to embrace insights of the development of customer
engagement with brands such as Adidas and Nike in regard with consumer
interactions that frames their consumption choices and how such companies
manage to adapt their marketing communications practices into a relationshiporiented approach.
Aim and Objectives
The aim of the research project is to examine the co-relation of relationship
marketing (RM) with some marketing communications channels from companies
like Nike or Adidas and identify the key factors influencing brand loyalty. More
precisely, to understand the motivational factors, trends and influences from
consumers and companies that make them engage in RM.
The set of research questions behind the studies include:
•
What influences consumers to engage in RM?
•
Why the concept of “online community building” is gaining more attention from
companies? And how they integrate it in their marketing communications
strategy?
•
What benefits brings an “engaged community” to the brand itself?
•
To what extent interactive media technology influences customer-brand
relationships?
4 The re-framed objectives of the research are:
• To critically analyze the literature relevant to RM and relate it to the context
within the sports goods industry.
• To analyze the companies’ marketing communication channels (Facebook, You
tube, Mobile-Apps and online brand communities) and identify factors that
“boost” customer engagement.
• To assess and evaluate the benefits to co-create value between customers and
brands so that the parties involved are able to develop consequential
engagement experiences.
• To examine how community sites and online social platforms impact the
customer´s interaction with the company regarding brand loyalty in order to gain
new sources of competitive advantage.
The research questions stated earlier will be answered by the achievement of the
re-framed objectives specified in above.
Key Literature Review Several studies have been made on the importance of relationship marketing (RM)
for companies in general and the benefits that an “engaged” relationship with the
customer brings to the brand. Although, not too many address the viewpoint from
the consumer and analyze the factors that makes them engage in such relationship
especially when rough economic conditions threatens the stability of the customerbrand link. Marketers who believe in this philosophy, called relationship marketing,
interact with customers on a regular basis and give them reasons to maintain the
bond with the company over time (Solomon, 2013). Addressing the fact that
consumers during tough economical times are more likely to valuate more carefully
brands as trusty relationships partners or not and if its worth to engage with them.
5 In fact, consumers are not passive anymore, rather “co-producers” of the brands
and they underline the collaborative activities that enhance mutual value which
ultimately drive brand engagement. Such degree of engagement goes further than
a simple product transaction. Supplementary, diverse companies recognized the
“need” to embrace an interaction with customers and claiming diverse benefits for
the customer involvement (Alam and Perry, 2002; Alam, 2006). Such benefits
include the opportunity to add value within certain features of the products. Even
the most ingenious invention will be a market failure if it does not meet the needs
of the customer (Kristensson et al., 2008). Underlining on the importance of the
customer engagement within any new product or service development, which can
provides richer insights regarding the satisfaction of the “latent” need rather than
an apparent customer need. However, there is a dilemma regarding the level of
inclusion from the customer that in simple terms is co-creation versus
customization. Co-creation refers to collaboration with customers for the purposes
of innovation and has become a foundational premise of the service-dominant logic
(Lusch et al., 2007). In other words, it represents the tailoring process from
customers in regard with products and services. Prahalad and Ramaswamy
(2004), argue that co-creation could be compared with customization, although, the
difference lies in the degree of involvement. The customer plays a less active role
in customization than in co-creation (Kristensson et al., 2008). Either way, the bond
between the customer and company is being enhanced and the level of
engagement becomes greater and could eventually foster the relationship.
Additionally, some other authors argue that one of the factors for a relationship
marketing success comes through investing in costumers. Decisions concerning
investment in relational approaches should be made on the basis of the customer´s
lifetime value (Hollensen and Opresnik, 2010). Such view, emphasize on the fact
that companies should understand the value of an individual consumer rather than
the amount of them while deciding the strategy for RM.
6 An investment in customers aims to improve their post-purchase skills, for example
by increasing their ability to use the full range of products features or to maintain
the product adequately (Hennig-Thurau, 2000). Highlighting the fact that some
customers might not be able to benefit from the complete range of attributes
certain goods could offer. In the other hand, there are some other kinds of
consumer that are eager to make the most out of every feature within the product
and are willing to learn or even spent their “valuable” time within the process of cocreating value. Such customers are the ones that could, eventually, improve the
interactions for a more meaningful engaged-relationship, which supports the point
made earlier in this research regarding the importance to focus on the potential of
individual consumers rather than cover large amounts of customers which are not
committed or interested in such relationship.
With this in mind, the consumer empowerment is becoming more sophisticated
which leads to an increasing demand of “extra” features from goods and services.
Customers are more informed and networked due to the fact of the knowledgeable
usage of a widespread communication tools and technologies that are socially
interactive. Customers have learned how to use these new tools to make their
opinions and ideas heard, and involve themselves in the value creation process
(Ramaswamy, 2008). Such understanding, offers a more practical insight, which
stresses the fact that these interactions could be the prerequisites to develop an
engaged customer-brand relationship.
According to Grönroos (2004), three areas are vital for the successful execution of
a relationship strategy:
•
An interaction process (IP) as the core of relationship marketing.
•
A planned communication process (PCP) supporting the development and
enhancement of relationships.
•
A value process (VP) as the output of relationship marketing.
7 Based on Grönroos (2004), the IP could be outlined to consist of value-enhanced
communication that provides mutual benefit for the parties involved within the set
of interactions. PCP includes interactive elements of an integrated marketing
communication and the need to fully embrace a two-way dialogue. Finally, VP is
acknowledged to be close related to the customer perception in such way that the
customer is indeed a co-creator. After a clear understanding of the three
processes, a successful execution could be developed. In order to illustrate the
applicability of the theoretical framework behind the vital areas (interaction,
communication and value) based on Grönroos (2004), into business practices, it is
necessary to relate them to a company, which has developed successfully the
execution of a relationship marketing strategy.
According to Meyerson (2010), Nike Plus (Nike´s community site) successfully built
brand loyalty via online social networking because it focuses on what runners like.
Nike’s innovative Nike+ running experience combining music, personal coaching
and fitness networking is revolutionizing the way people run, creating in its first
year, the world’s largest online running destination at nikeplus.com (Nike, 2007).
Nike’s Vice President of Global Brand and Category Management said “It started
as a simple idea and has quickly become the world’s largest networking place for
runners. Whether their goal is fitness, fun or a cause, runners of all levels are
embracing Nike+ and nikeplus.com to become part of a global running community.”
It is clearly appreciable how such co-creative interactions between the brand and
the consumer influence the success of finding new sources of value through this
engaging platform. They do this by sharing their interactions and experiences –
these ranges from their ideas about how to improve or customize products to their
feelings when they use products (Ramaswamy, 2008).
Ramaswamy (2008) offers a practical insight on the co-creation of the value
process through the DART co-creation model. The DART Model (Dialogue,
8 Access, Risk-Return and Transparency) sets the guidelines to fully embrace
improved practices within the grounds for value co-creation. Each section are
described as follows:
The first part of the model (Dialogue) reflects the importance of a meaningful
dialogue, which customers perceive as an engaging two-way communication
process including not only the link between company and customer but also the
customer-customer link. The online communities from the company represent such
network, which at the same time embodies the next part of the model (Access).
The following part of the model (Risk-Return) exemplifies the relationship between
the customer and the company in terms of how both parties can contribute and
manage their respective risks involved within the interaction process. Finally, the
last part of the model is probably the most important one because it includes the
transparency of the process. In other words, the quality and credibility of the
information shared clarifies the reason why both company and customer engage
and benefit form each other´s insight. As Ramaswamy (2008) said, “This input
provides Nike with a goldmine of ideas for potential innovations”.
The interactive nature from the model of this particular author provides a
complementary viewpoint along with the insights from previous authors, which can
foster an effective execution of a strategy within relationship marketing.
Research Design
This research project will take an interpretivist epistemological approach. Based on
Saunders et al (2012), such approach is related to subjective meanings and social
phenomena as well as having a focus upon the details of situation, a reality behind
these details and subjective meanings motivating actions. In other words, the aim
to achieve is to understand the differences among “feelings” and “attitudes” rather
than “resources” and “objects” in the role of social actors. According to Saunders et
al (2012), an interpretivist viewpoint is vastly appropriate in the case of business
9 and management research but more precisely in areas such as organizational
behavior or marketing.
It is intended to embrace a deductive approach in order to develop a set of
hypothesis, which will be supported by colleting data through undertaking primary
research from the literature review.
Based on the nature of the research, it is expected that a qualitative method is
ideal in regard with the aims to achieve including a richer understanding on
behaviors, attitudes and opinions, Saunders et al. (2007) argues that a qualitative
research method is necessary rather than a quantitative. Both research methods
(qualitative and quantitative) involve diverse weaknesses and strengths however;
the nature of this research project reflects a qualitative research method
orientation. Based on Bryman and Bell (2007), the inclusion of methods concerned
with the analysis of language as a form of qualitative research implies greater
variability. Emphasizing the comparison between both methods and underlining the
benefit of flexibility at the time of data collection. In the other hand, the qualitative
research method also provides a sense of critique that could be described as
lacking transparency (Bryman and Bell, 2007). For instance, the process on how to
select people for the interview could be sometimes unclear or how the researcher
obtained the study´s conclusions. In order to avoid this particular deficiency, it is
intended to use diverse means to recruit the right people as well as providing
transparency throughout the project. The summary research will follow the next
stages:
Stage 1
The initial stage of the research will contain an exploratory study that is intended to
examine, through literature review, a diverse set of theoretical standpoints related
to relationship marketing. Then, the aim for this research project is to relate the
applicability of the theoretical framework in the context of the sports goods
industry.
10 Stage 2
Based on the literature review, it is intended to deduce a set of hypothesis or
testable propositions that could be compared and examined through further
research. Once the propositions and hypothesis are deduced, it is projected to test
them with appropriate data collected via qualitative methods such as interviews
including face-to-face, telephone, Internet and intranet-mediated interviews. The
expected participants need to be related to the diverse set of consumption
activities within the sports goods industry.
Stage 3
Make a data analysis based on the results obtained and deduce patterns,
tendencies, behaviors and tendencies from the outcome of the participants in order
to report a rich understanding and draw conclusions regarding the initial set of
research questions.
Ethical Issues
The nature of this particular research involves collecting data from diverse sources
including secondary data as well as primary data through different types of
interviews. With this in mind, ethical practices will be adhered during the whole
process of the research project and make sure to fulfill the standards of behavior
from the institutions, individuals and the rest of the parties involved. Lastly, any
kind of work that contributed at some point to the development of the research will
be accordingly referenced in order to avoid plagiarism.
Research Plan
Project´s organization
The research project will consist of 5 chapters and will be organized like this:
Chapter one will provide an introductory description and set a framework of
relationship marketing. Chapter two will identify the more relevant theoretical
standpoints of the areas to study. Chapter three and four will provide the research
11 methods and techniques used during the data collection process as well as
presenting the outcomes and its corresponding analysis. Further discussions,
recommendations and conclusions will be included in Chapter five.
Project Plan
In order to identify the key events during my research plan stated above, it is quite
helpful to use a Gantt chart, which will help to visualize a more detail overview from
the project. The Gantt chart provides a simple visual representation of the tasks or
activities that make up a project, each being plotted against a time line (Saunders
et al, 2012).
Initially, the literature review related to the subject areas will be carried out almost
during the whole time frame of the project. Intentionally to keep track of any new or
updated material that could be included into the research. After successfully
submitting the research proposal, it is intended to have small break in between the
proposal delivery and feedback from my supervisor. The developing process of the
interview and the data collection progression is planned to start at the beginning of
the second week of May and supposed to go further into the following 4 weeks.
The inclusion of an auxiliary time frame during the end of May and beginning of
June named “Adapt / Plan B”, is planned precisely to be there in order to adapt the
research based on unexpected outcomes. The plan is to embrace a more flexible
approach due to the fact that it is quite challenging to predict the outcome from the
participants even with the support from secondary data.
Later on, if there are not drastic changes, the data analysis and the development of
strategic outcomes will be carried out within the respective 5 weeks. The next part
of the chart consists on the submission of the final draft in the middle of July
followed by the final feedback from my supervisor and the final submission of my
Master Dissertation on the 19th August 2013.
12 Gant Chart
Month
v&5&Activity&/&Week*&5&>&&&&&&&&&&
4
&March
11
18
&&&&&&April
25
1
8
15
&&&May
22
29
6
13
&&&&&& &&&June
20
27
3
10
17
&&&&&&&July
24
1
8
15
&&&&August
22
29
5
12
19
Literature&Review
Submit&Proposal
Holiday
Develop&Interview
Data&Collection
Adapt&/&Plan&B
Data&Analysis
Develop&Strategic&
Outcome
Submit&Draft
Feedback
Final&Submit
*Please note on the Gantt chart that a small number next to the section “week”
represents the first working day of the respective week of the month.
13 Reference List
•
Alam, I. (2006), “Removing the fuzziness from the fuzzy front-end of service
innovations through customer interactions”, Industrial Marketing Management, Vol.
35. No. 4, pp. 468-80.
•
Alam, I. and Perry, C. (2002), “A customer-oriented new service development
process”, Journal of Services Marketing, Vol. 16 No. 6, pp. 515-34.
•
Bryman, A. and Bell, E. (2011) Business Research Methods, (3rd Edition), Oxford,
Oxford University Press.
•
Grönroos, C. (2004), “The Relationship Marketing Process: Communication,
Interaction, Dialogue, Value”, Journal of Business and Industrial Marketing, Vol. 19
No. 7: pp. 99-113.
•
Gummesson, E. (1999), “Total Relationship Marketing. Rethinking Marketing
Management: From 4P to 30R.” Butterworth-Heinemann, Oxford.
•
Gummesson, E. (2002) “Relationship Marketing and a New Economy: It´s time for
De-programming”, Journal of Services Marketing, Vol. 16 No. 7: pp. 585-589.
•
Hennig-Thurau, T. and Hansen, U. (2000) Relationship Marketing: Gaining
competitive advantage through customer satisfaction and customer retention, (1st.
Edition), Heidelberg, Springer. pp. 127.
•
Hollensen, S. and Opresnik, M. (2010), Marketing: A Relationship Perspective, (1st
ed), Munich, Verlag Vahlen, pp. 13.
•
Kristensson, P., Matthing, J. and Johansson, N. (2008), “Key strategies for the
successful involvement of customers in the co-creation of new technology-based
services”, Journal of Service Management, Vol. 19 No. 4, pp. 475–491.
•
Lusch, R.F., Vargo, S.L. and O’Brien, M. (2007), “Competing through service:
insights from service-dominant logic”, Journal of Retailing, Vol. 83 No. 1, pp. 5-18.
•
Meyerson, M. (2010) Success secrets of the social media marketing superstarts,
(1st Edition), USA, Entrepreneur Media. pp. 59.
•
Nike, Inc (2007) “Nikeplus.com becomes world´s largest online running destination”
[Online] Available at: http://nikeinc.com/nike-running/news/nikepluscom-becomesthe-world’s-largest-online-running-destination Accessed April 25, 2013.
14 •
Prahalad, C.K. and Ramaswamy, V. (2004), The Future of Competition, Harvard
Business School Press, Boston, MA.
•
Ramaswamy, V. (2008), ‘‘Co-creating value through customers’ experiences: the
Nike case’’, Strategy & Leadership, Vol. 36 No. 5, pp. 9-14.
•
Saunders M., Lewis, P. and Thornhill, A. (2012), Research Methods for business
students (6th ed), Essex, Pearson Education Limited.
•
Solomon, M. R. (2013), Consumer Behavior: Buying, Having and Being (10th ed),
Harlow, Pearson Education Limited, pp. 39.
15 
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