In an increasingly global market, local or native marketing strategies may not translate to other countries into which organizations are moving or attempting to move. In other words, just because a marketing strategy works in country A does not mean it will work in country B. Two strategies which have gained more attention recently are relationship marketing (RM) and loyalty programs (LPs). The article being reviewed is “Understanding Relationship Marketing and Loyalty Program Effectiveness in Global Markets” by Beck, Chapman, and Palmatier (2015). The main thesis of this study is to explore RM and LPs and examine how these strategies can be influenced by those elements which typically distinguish global markets as well as how developmental and cultural factors impact the effects of RM and LPs with regard to seller performance. In addition to the increasingly global environment which demands a clearer understanding of RM and LPs and how they may ‘translate’ from one country to another, the authors note that there is a significant problem with the literature on these topics. Beck, Chapman, and Palmatier (2015) observe that RM and LPs tend to be quite effective in the United States, and much of the literature which discusses these topics does so from within American-centric frameworks. This is problematic given developmental and cultural factors; in other words, trying to assert that the effectiveness of these strategies in American guarantees their success in other countries. The authors argue that these U.S.-centric frameworks do not do justice to the multifactorial elements which influence the effectiveness of marketing strategies. By expanding beyond these American-centric frameworks and considering the effect of different factors on the RM and LP strategies, the authors hope to further define theories related to RM and LPs and enlarge the scope of global research on both topics.
In support of their proposition, Beck, Chapman, and Palmatier (2015) conduct a review of the literature. Using the literature they identify five mechanisms related to RM and LPs (which appear to be U.S.-centric) as well as a collection of cultural contingency factors and developmental contingency factors. The identification and categorization of these mechanisms and their component parts represent many of the facts the authors use to bolster their argument. Given the international emphasis of the authors’ work and their intention to more clearly defined RM and LP theories, the authors identify key examples and definitions in the studies they reviewed. These examples, definitions, and other findings are presented in tables to highlight their importance and relevance to the study. Perhaps the most important pieces of information are those that illuminate how those developmental and cultural factors influence marketing strategies and their effectiveness.
The literature review approach by Beck, Chapman, and Palmatier (2015) offers a broad view of RM and LPs. The work of Kristiani, Sumarwan, Yuliati, and Saefuddin (2014) provides a specific example which demonstrates how culture can influence consumer response to relational marketing. The authors focus specifically on a frequently flyer program (FFP) associated with an airline in Indonesia. They studied how the non-financial value of such loyalty programs essentially motivates program participants to engage in behaviors which serve as marketing efforts. These behaviors are considered relational and reflect the purpose of relational marketing. Such behaviors in the context of Indonesia include word of mouth (WOM) and openness as well as other prosocial behaviors which serve to promote both the FFP (which extends the effectiveness of the program with minimal effort or investment on the part of the airline) and the airline itself. This study demonstrates a specific example of RMs and LPs in a non-American context and their effectiveness. Kristiani et al. (2014) offer an example that Beck, Chapman, and Palmatier (2015) would have sourced for their findings which emphasize the role that cultural factors play in behavioral responses to marketing strategies. Despite being published prior to the Beck, Chapman, and Palmatier study, the Kristiani et al. (2014) study is an excellent example of the kind of research that Beck, Chapman, and Palmatier said is lacking in the literature.
Beck, Chapman, and Palmatier (2015) conclude their article with several suggestions for future research. One of the most important is that more research should be done on how RM and LP strategies can or should be adapted in global markets, as was demonstrated in the Kristiani et al. (2014) study. Beck, Chapman, and Palmatier (2015) also note that while they are most certainly interconnected, RM and LPs are separate domains; however, the significant overlap between them suggests that they must be studied in concert to better understand their complementary features (including how one may give rise to the other). The authors also emphasize the need to focus more research on the negative aspects of adapting RM and LP strategies for global markets, to understand how failure to adapt such strategies can backfire or otherwise go astray and become counterproductive. The authors also note how the age of a relationship between an individual and a product/service/organization may affect the other factors which influence RM and LPs.
Overall, while this article highlighted one of the challenges of global marketing (that is, the challenges of adapting RM/LPs for global campaigns), the lack of detail regarding the authors’ methods for identifying the key findings is frustrating. It is not obvious why certain findings were selected and used over others. How the authors chose the mechanisms they studied is also not clear. However, the authors’ conclusions and recommendations set the foundation for research that hopefully will be more effective than the work of Beck, Chapman, and Palmatier.
- Beck, J. T., Chapman, K., & Palmatier, R. W. (2015). Understanding relationship marketing and
loyalty program effectiveness in global markets. Journal of International Marketing, 23(3), 1-21.
- Kristiani, E., Sumarwan, U., Yuliati, L. N., & Saefuddin, A. (2014). The role of relational reward
benefits for developing the non-financial value of a customer to an organization: Structural equation modeling approach. Gadjah Mada International Journal of Business, 16(2), 111-142.