In the B2C context, recent studies have viewed the concept of relationship marketing in a more practical sense. Although there are different terms used for relationship marketing, they are similar in meaning. Because, the above authors have adopted the perspective proposed in the earlier study of Berry, LL and Parsuraman (1991) or the subsequent study of Berry, LL (1995), in which relationship marketing (relational bonds) is viewed as the levels of marketing activities to nurture the relationship between buyers and sellers, depending on the types of benefits, bonds used to link the relationship to ensure customer loyalty.
Although there are many definitions of relationship marketing, most of them have certain inheritance from the perspective of Berry, LL and Parsuraman (1991); and Berry,
LL (1995). Through the process of synthesizing and analyzing theories, the author found that the views on relationship marketing of Berry, LL and Parsuraman (1991) and Berry, LL (1995) were cited and inherited by many researchers. However, authors such as Lin, N. et al. (2003), Hsieh, YC et al. (2005), Liang, C. et al. (2005), Yu, Tsu-Wei et al., (2013),... when researching only inherited the views of Berry, LL and Parsuraman (1991) and Berry, LL (1995) on the components of relationship marketing including financial relationship marketing, social relationship marketing and structural relationship marketing, but they did not divide these components into levels like Berry, LL (1995) to measure and test them in practice.
In the thesis, similarly, the author also inherits the view on relationship marketing of Berry, LL (1995) but only considers relationship marketing as marketing activities based on many types of ties/links that companies use to enhance customer loyalty, in which the components of relationship marketing include financial relationship marketing, social relationship marketing and structural relationship marketing. The author does not divide relationship marketing into levels of activities like Berry,
LL (1995). The viewpoint used by the author for research in the thesis follows the authors including Lin, N. et al. (2003), Hsieh, YC et al. (2005), Liang, C. et al. (2005).
2.1.2. Elements of relationship marketing
Lin, N. et al. (2003) suggest that businesses can build customer relationships by developing one or more types of relationship marketing activities, aiming to develop the relationship between two parties: customers and service providers. Other authors argue that to strengthen the relationship between customers and suppliers, it is necessary to rely on many types of relationship marketing activities to create bonds and connections between businesses and customers.
Therefore, some elements constituting relationship marketing have been studied in the literature and are summarized in Table 2.2.
Through the synthesis of the elements that make up relationship marketing in Table 2.2, the author finds that in the financial services industry in general and the banking industry in particular, most researchers believe that relationship marketing is composed of three types: financial relationship marketing, social relationship marketing and structural relationship marketing. In addition, it can be seen that in the studies of Peltier, JW et al. (2000), Lin, N. et al. (2003), Hsieh, YC et al. (2005), Liang, C. et al. (2005) all studied the separate impact of each type of relationship marketing on other relationship outcomes, rather than viewing them as a higher-order structure. This approach is consistent with the previous works of Berry, LL and Parsuraman (1991) and Berry, LL (1995), who hypothesized that relationship marketing can be implemented at one of three levels, depending on the type and number of relationship marketing activities undertaken to ensure customer loyalty.
Table 2.2. Summary of elements of relationship marketing
TT
Author, year | The elements of relationship marketing | The role of the elements relationship marketing | Field study | |
1 | Berry, L.L. and Parsuraman (1991) | Financial bond marketing (financial bonds - FB), social bond marketing (social bonds - SB), structural relationship marketing (structural bonds - StB) | Considered as levels of relationship marketing, including: financial relationship marketing (level 1), social (level 2), structural (level 3) | Service |
2 | Berry, LL (1995) | FB, SB, and StB | Similar to Berry and Parsuraman (1991) | Service |
3 | Smith, B. (1998) | FB, SB, and StB | See as a structure consists of three elements of relationship marketing | Service |
4 | Peltier, J.W. et al. (2000) | FB, SB, and StB | Inherited from the approach by Berry and Parsuraman (1991); and Berry (1995) | Service |
5 | Lin, N. et al. (2003) | FB, SB, and StB | Inheriting the approach of Berry and Parsuraman (1991); and Berry (1995) (Viewing them as separate variable) | Financial Services |
6 | Liang, C. et al. (2005) | FB, SB, and StB | Inheriting the approach of Berry and Parsuraman (1991); and Berry (1995) (Viewing them as separate variable) | Financial Services |
7 | Wang, W. et al. (2006) | FB, SB, and StB | Inheriting the approach of Berry and Parsuraman (1991); and Berry (1995) (See them as | Service |
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8 | Chen, Y. et al. (2009) | FB, SB, and StB | Treat them as separate variables | Service |
9 | Nath, P. et al. (2012) | SB, and StB | Berry and Parasuraman (1991) and Berry (1995) (See them as separate variable) | Bank |
10 | Yu, Tsu- Wei and Associates, (2013) | FB, SB, and StB | Inheriting the approach of Berry (1995) and Wang (2008) (See as a structure) includes three elements of relationship marketing) | Financial Services |
11 | Lin, N. et al. (2013) | FB, SB, and StB | Inheriting the approach of Berry (1995) and Wang (2008) (See as a structure) includes three elements of relationship marketing) | |
11 | Huang, Chao-Chin et al. (2014) | FB, SB, and StB | Inheriting the approach of Berry and Parsuraman (1991); and Berry (1995) (Viewing them as separate variable) | Retail |
(Source: Author's compilation) According to Berry, LL and Parsuraman (1991), and Berry, LL (1995), the first level of relationship marketing depends on price incentives to ensure customer loyalty (i.e. financial relationship marketing). This is often referred to as first-level relationship marketing and is considered the lowest level because competitors can easily imitate the price. The second level focuses on the components
social part through personalization of the relationship (i.e. social relationship marketing), which is not easily imitated by competitors. The third level of relationship marketing provides structural solutions to customer problems, providing great potential for competitive differentiation (i.e. structural relationship marketing). In his study, Berry only made theoretical statements without putting those relationships into empirical research for specific subjects. Subsequent studies by other authors have proven these relationships through empirical research.
The authors' studies inherited from the views of Berry, LL and Parsuraman (1991), and Berry, LL (1995) that relationship marketing is made up of three components: financial relationship marketing, social relationship marketing, and structural relationship marketing. These studies are all empirical studies conducted in many fields. The results of the studies also showed that there is a relationship between relationship marketing and relationship outcomes (satisfaction, loyalty).
However, some authors consider relationship marketing as a composite variable including all three components (financial relationship marketing, social relationship marketing, structural relationship marketing) affecting relationship outcomes, without considering how each of these components is related to relationship outcomes (Yu, Tsu-Wei et al., 2013; Lin, N. et al., 2013). And these studies all study the direct relationship between relationship marketing and customer satisfaction.
Meanwhile, some authors consider relationship marketing as a separate variable and they study the relationship between each component of relationship marketing and the relationship outcome. However, these studies do not consider the direct relationship of each component such as financial relationship marketing, social relationship marketing and structural relationship marketing to customer loyalty. (Chen, Y. et al., 2009; Huang, Chao-Chin et al., 2014).
Therefore, the thesis explores how loyal customers evaluate their relationships with banks, based on three distinct types of relationship marketing that impact
Relationship outcomes include satisfaction, trust and loyalty. Of these, loyalty is the final outcome. The thesis also studies the direct relationship between each component of relationship marketing and customer loyalty.
2.1.2.1. Financial bonds marketing (FB)
Financial relationship marketing is often referred to as frequency marketing or retention marketing, where the service provider uses economic benefits such as prices, discounts or other financial incentives to ensure customer loyalty (Berry, LL & Parsuraman, 1991; Berry, LL 1995; Lin, N. et al., 2003; Hsieh, Y.C. et al., 2005,…). In a broader perspective, Smith, B. (1998) proposed that financial incentives are functional links, he described functional relationship marketing as a variety of economic, operational, or instrumental relationships or benefits that promote continuity in the relationship. Functional relationship marketing activities are created through economic, strategic, technological (knowledge or information).
Berry, LL & Parsuraman (1991) and Berry, LL (1995) point out that the problem with financial relationship marketing is that it is the type of relationship marketing that is easiest for competitors to imitate. Therefore, this type of relationship marketing does not provide a sustainable competitive advantage, Berry calls this type the first level, which is considered the lowest level in relationship building.
Recent studies suggest that financial relationship marketing needs to be integrated with other types of relationship marketing, such as social relationship marketing and structural relationship marketing. That is, researchers agree that financial interest ties are a motivation for having a relationship with a service provider (Berry, LL 1995; Lin, N. et al., 2003; Hsieh, Y. C. et al., 2005; Liang, C. et al., 2005; Wang, W. et al., 2006).
With the above analysis, the thesis chooses the definition of financial relationship marketing by Lin, N. et al. (2003) and Hsieh, YC et al. (2005) for research. This is considered a comprehensive definition of financial relationship marketing inherited from the perspective of Berry, LL (1995). Therefore, the author considers financial relationship marketing as a
Financial systems are an important component in investigating buyer-seller relationships, especially in the banking context, where price has a major impact on relationship quality and loyalty.
2.1.2.2. Social bonds marketing (SB)
Social relationship marketing includes the benefits that customers receive through self-disclosure, closeness, support or advice, sympathy and emotions, feelings of attachment, bonding or affiliation, and shared experiences. Lin, N. et al. (2003) and Hsieh,
YC et al. (2005) provide a more comprehensive view by defining social relationship marketing as personal relationships involving service components, which provide interpersonal interactions, friendships and identification.
Social relationship marketing is defined as a type of benefit-based relationship that has been widely explored in the literature. Stone, GP (1954) initially proposed the importance of social exchange, acknowledging the existence of shoppers who value personal relationships in stores, because they do not like to be served in a uniform manner. Meanwhile, Berry, LL & Parasuraman (1991) and Berry, LL (1995) referred to social relationship marketing as a second level of relationship marketing aimed at ensuring customer loyalty. At this level, the service provider goes beyond price incentives to build long-term relationships, by building social bridges with customers without neglecting price competition. They argued that customers who are treated as individuals will have stronger reasons not to switch companies (Berry, LL & Parasuraman, 1991).
In the B2C context, Peltier, JW et al. (2000) argued that social relationship marketing activities are important and help prevent competitive pressure on prices. Liang, C. et al. (2005) asserted that although social relationship marketing cannot replace price attraction, it provides customized services to develop an independent relationship, allowing customers to trust and be satisfied with the retailer's service, supporting understanding and learning about customers' needs and expectations.
In general, social relationship marketing is derived from many aspects such as familiarity, friendship, social support, keeping in touch, self-disclosure or any interpersonal interaction (Price, LL & al., 1999), which measure the strength of the personal relationship between two parties, the buyer and the seller. This relationship can range from a business relationship to a close social relationship. Social relationship marketing develops through social interactions that are subjective in nature (Wilson, DT, 1995). Rao, S. & al. (2002) noted that multi-level contacts between buyers and sellers lead to the enhancement of social relationship marketing activities through the shift from formal organizational interaction to informal personal interaction. Companies express their friendliness or gratitude by giving gifts to customers, which serves to build stable relationships and improve relationship quality.
Through the synthesis and analysis process, the author uses the social relationship marketing perspective of Lin, N. et al. (2003) and Hsieh, YC et al. (2005) in related studies, because this definition inherits from the perspective of Berry, LL (1995) and has a comprehensive view, including all aspects of personal treatment that loyal customers may encounter during their interactions with the bank.
2.1.2.3. Structural bonds marketing (StB)
Initially, Berry, LL (1995) proposed that structural relationship marketing is created by providing customers with value-added systems that customers cannot build or use themselves and are not available from other sources. At this level, customer solutions focus on the structure and construction of technology-based service delivery systems (Berry, LL, 1995). According to him, a service marketer implementing relationship marketing must rely on the structural relationship marketing foundation, when providing solutions to customer problems designed into the service delivery system, rather than relying on the relationship building skills of individual service providers. Structural relationship marketing provides target customers with value-added benefits that are rare and costly to let customers