Relationship Marketing and Its Application in Advertising Agency - Client Business Practice - a Conceptual Framework

RELATIONSHIP MARKETING AND ITS APPLICATION IN
ADVERTISING AGENCY-CLIENT BUSINESS PRACTICE
—A CONCEPTUAL FRAMEWORK

ABM Shahidul Islam*

Abstract: The objective of this paper is to explore and examine the relationship marketing theory. Explaining the theory an attempt has been made to explore how it can be used successfully by an advertising agency in maintaining a long-term relationship with a client. In this respect, a conceptual framework is developed based on strategies of relationship marketing. The article also addresses some empirical issues that need to be examined in future to verify the soundness of the relationship marketing theory in examining the long-term relationships between advertising agencies and their clients. Research and managerial implications are outlined respectively for the practitioners and the researchers concerned in this area.

Introduction

To practice the marketing successfully, either for goods or services, the essence of relationship marketing has become increasingly important (Berry 1983, Jackson 1985, Gummesson 1987, Gronroos 1989, Copulsky & Wolf 1990, Christopher et al. 1991). It has been argued that if there is a good relationship between buyers and sellers then presumably buyer will come repeatedly to the same seller and will remain as a long-lasting customer (Jackson, 1985). The way this good relationship can be maintained successfully, between buyer and seller, marketing academics called 'relationship marketing' (Berry 1983, Jackson 1985, Gummesson 1987, Gronroos 1989a). Therefore 'relationship marketing' is a tool in maintaining the business relationship between two organizations whether they are marketing products or services.

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*Mr. ABM Shahidul Islam is an Assistant Professor in the Department of Marketing, University of Dhaka, Dhaka, Dhaka-1000, Bangladesh.

In the last three decades increasing number of academics have investigated many aspects of relationships between different types of organizations. Among these have been the relationships between advertising agencies and their clients. However, a serious omission in the study of advertising agency-client relationships (AACRs) is the application of relationship marketing theory. Although, it seems that the concept of relationship marketing is relevant and applicable to the study of AACRs, this approach has been neglected by both organization researchers (e.g., Levine & White 1961, Levinthal & Fishman 1988, Seabright et al. 1992, Larson 1992), marketing researchers (e.g., Frazien 1983, Frazien et al. 1988, Dwyer et al. 1987, Crosby & Stephens 1987, Anderson & Narus 1984, 1990, McKenna 1991, Christopher et al. 1991) and advertising researchers (e.g., Booz. Allen & Hamilton, Inc., 1965, Michell 1983, 1988, Wackman et al. 1986/87, Johnson & Lackziniak 1991, Michell et al. 1992, Islam & Eadie 1993, Islam et al. 1993, 1994, Henke 1995, Michell & Sanders 1995, LaBahn 1996, Murphy & Maynard 1996). This paper, however, aims to fill the gap, linking relationship marketing theory with AACRs at a theoretical level.

The main purpose of this study is to explore the relationship marketing theory in examining the dynamics of relationship between agency and client in their business practice. In other words, how advertising agency and advertiser (i.e., client) can maintain the successful business relationship between them. The paper will argue that the relationship marketing theory is one of the best tools for agencies in maintaining long-term relationships with their clients. To achieve this, the paper is organized into four sections. Firstly, a review of literature on the basic meaning of relationship, nature, practice and strategies of relationship marketing. Secondly, relationship approach to service marketing. Thirdly, importance of relationship marketing in agency-client business practice. Fourthly, the applicability of relationship marketing theory in advertising agency-client business practice and the scope of empirical study. Finally, implications for the researchers interested in this area and the practitioners are discussed.

1. A REVIEW OF LITERATURE

1. Relationship—the basic meaning

The basic meaning of 'relationship' is the mutual exchange between two person or groups who have dealings with one another. There is different understanding or meaning of the 'relationship' in different perspectives. For example, it can be seen as (1) the way in which one thing is associated with another i.e., the state of being connected or related, (2) an association by blood or marriage, (3) an emotional or sexual affairs or liaison and (4) the social, political, or personal mutual exchange, dealings, connection, or feelings that exist between individuals, groups, nations etc. For this different meaning of relationship, different professionals and academics have used the 'relationship' term into their own field of interest.

Statisticians might be interested to investigate the relationships between two or more variables i.e., to what extent they are associated or related. Sociologists might be curious about the relationships among development, organization, functioning, and classification of human societies. Anthropologists are keen for studying the social and family relationships of two people or groups with the connection of origins, institutions, religious beliefs and so on. Social anthropologists deals the relationships with culture and social phenomena such as kinship systems or beliefs. Social scientists are concerned about the study of society and of the relationships of individual members within society including economics, history, political science, psychology, anthropology and sociology. Similarly, marketing academics and practitioners are vastly interested to inquire the nature of buyer-seller relationships, especially the strategies of relationship marketing that can be used by the service provider in maintaining the relationship with the service receiver. (Berry, 1983)

For the growing interest of marketing academics and practitioners and the need for recent era, relationship marketing has emerged as a new concept. Therefore, the next section discusses the nature of relationship marketing.

 1.2. Nature of Relationship Marketing

Although the marketing concept is considered as the basic philosophy of marketing, in most service situations the marketing mix approach to transferring the marketing concept to marketing in practice is partly useful (Gronroos, 1989). Therefore, Gronroos (1989) formulates 'a relationship definition of marketing' (compare with Gronroos 1989a, Gummesson 1987, Berry 1983 which states that: