Relationship marketing as a paradigm shift: some conclusions from the 30R approach

Management DecisionEmerald Article: Relationship marketing as a paradigm shift: some conclusions from the 30R approachEvert Gummesson

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To cite this document: Evert Gummesson, (1997),"Relationship marketing as a paradigm shift: some conclusions from the 30R approach", Management Decision, Vol. 35 Iss: 4 pp. 267 - 272

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Management Decision35/4 [1997] 267–272

© MCB University Press [ISSN 0025-1747]

Relationship marketing as a paradigm shift: someconclusions from the 30R approach

Evert GummessonStockholm University, Stockholm, Sweden

Stresses issues brought up inthe first World Wide Webconference on relationshipmarketing. Based on researchon relationship marketinggoing back to the early 1970swhich resulted in the defini-tion of 30 relationships inmarketing – the 30Rapproach. Brings up inconsis-tencies in marketing, amongthem the mix-up betweenrelationship marketing as aphenomenon and a term;values and ethics; practiceversus theory and education;differences between Europeand the USA; and the ghost-hunt for an unambiguousdefinition. Concludes thatrelationship marketingrequires a dramatic change inmarketing thinking andbehaviour; it is a paradigmshift, not an add-on totraditional marketingmanagement.

This paper is based on asub-theme contribution tothe First Internet WWWConference on Relationship Marketing in 1996. Thepaper has incorporatedcertain views from thediscussion and has beenrevised for journal publica-tion.

Introduction

This contribution to relationship marketing(RM) further stresses some of the issuesbrought up in the other papers and commentsin the Internet discussion, and adds my ownobservations and results. It is based onresearch on the RM phenomenon dating backto the 1970s, with the first papers in Englishfrom the the early 1980s (Gummesson, 1983).My basic thinking on RM is a gradual exten-sion of the “Nordic School” approach to ser-vices marketing and management, and thenetwork approach to industrial marketing asdeveloped by the IMP Group (Industrial Mar-keting and Purchasing Group). Both areasemerged during the 1970s and have continuedto develop since. More recent sources of inspi-ration are above all total quality managementand the new theories on imaginary (virtual,network) organizations.

My approach to RM has been presented inarticles and a recent book, Relationship Mar-keting: From 4Ps to 30Rs (Gummesson, 1995),first published in Swedish and to bepublished in English in 1997; the paper firstsummarizes this 30R (30 relationships)approach to RM. It then discusses gaps andinconsistencies in marketing thinking andbehaviour. Finally, it is argued that RM is aparadigm shift.

Emerging theory of RM

Much of what is currently written about RMis theoryless, a stack of fragmented philoso-phies, observations and claims which do notconverge in the direction of an emerging RMtheory. For example, RM is often presented asa new promotional package to be sold to thecustomer, or a new type of marketing madepossible thanks to information technology.Efforts to contribute to a more comprehen-sive theory are found in Christopher, Payneand Ballantyne (1991) and in their later writ-ings; in Kotler (1992); and Hunt and Morgan(1994).

My contribution to a theory of RM is calledthe 30R approach. Its core is the identificationof 30 tangible relationships that exist in business and other organizations (see

Gummesson, 1994, 1995, 1996) and their conse-quences. Examples of the 30Rs are: the classicdyad of the supplier and customer; relation-ships via full-time and part-time marketers;the electronic relationship; personal andsocial networks; mega-alliances (alliancesabove the individual corporations, such asthe EU and the NAFTA); and the relationshipto external providers of marketing services.The main features of the 30R approach to RMare summarized below: 1 Definition: RM is marketing seen as rela-

tionships, networks and interaction.2 RM characteristics: value for the parties

involved, of which the customer is one, iscreated through an interaction processbetween suppliers, customers, competitorsand others; suppliers and customers areoften co-producers, they create value foreach other in a joint effort.

3 Values: more win-win and less win-lose;more equal parties; all parties carry aresponsibility and can be active in a rela-tionship; long-term relationships.

4 Tangibility and operational aspects: thespecification of the 30Rs is an attempt tomake RM tangible and operational. The Rshave been grouped in market relationships(classic and special) and non-market rela-tionships (mega relationships above themarket relationships, and nano relation-ships below the market relationships).

5 Relationship portfolio and marketing plan-ning: the selection of a relationship portfo-lio – the relationships a certain companyintends to work with during the next plan-ning period – is part of the marketing plan-ning process.

6 Theoretical and practical base: primarilybuilt on a synthesis between marketing mix(the 4Ps) and traditional marketing man-agement, services marketing, the networkapproach to industrial marketing, qualitymanagement, organization theory, andobservations from reflective practitioners.

7 Links to management: RM is more thanmarketing management, it is rather mar-keting-oriented management – an aspect ofthe total management of the firm – and notlimited to a marketing or sales department;the marketing plan becomes part of thebusiness plan.

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Evert GummessonRelationship marketing as aparadigm shift: some conclusions from the 30Rapproach


8 Links to organizational structure: RM isthe marketing manifestation of the imagi-nary (virtual, network) organization – andvice versa.

9 Advantages to a firm: increased customerretention and duration; increased market-ing productivity and thus increased prof-itability; and increased stability and secu-rity.

10 Advantages to the market economy: RMadds collaboration to competition andregulations/institutions. The symbiosisbetween these three forces contributes to amarketing equilibrium, a dynamic andoptimal balance of the market economyseen from a marketing management per-spective.

11 Advantages to society and the citizen: RM ismarketing for the new economy – the ser-vice society, the information society, thepostmodern society or, as I prefer to call it,the value society – which adds valuethrough increased focus on customizedproduction and one-to-one marketing;diminished focus on standardized massmanufacturing and anonymous massmarketing.

12 Validity: RM provides a foundation for amore realistic approach to marketing thanis currently prevailing in marketing edu-cation. In practice, business is largelyconducted through networks of relation-ships.

13 Generalizability: RM can be applied to allkinds of companies and offerings, but therelationship portfolio and the applicationis always specific to a given situation.

This is, of course, an extremely condensedpresentation; for further explication, see thesources mentioned above. As everything elsecurrently presented in RM, this is a personalinterpretation and RM is partly treated differ-ently by others. My perception of RM buildson research and practical experience, my ownas well as that of others, with the purpose ofrenewing our thinking and improving ourinsights.

Gaps and inconsistencies in marketing thinking and behaviour

My research on RM has laid bare a series ofgaps and inconsistencies in the thinking,development and execution of marketing.Five of these will be discussed below.

The origin of RM: new term vs oldphenomenonThere is a gap between the use of the term RMand the understanding of the actual phenomenon. RM is a new term but an old

phenomenon. Too many scholars seem tochase the term rather than the content itrepresents. This may be part of the rat racefor tenure, consulting assignments, or recog-nition as (alleged) originators. Relationships,networks and interaction – which turn up asthe key terms for capturing the soul of RM –have been in the core of business since timeimmemorial. The literature and research thatare currently contributing to RM theorygeneration are primarily found in servicesmarketing, the network approach to businessmarketing, quality management, and newtrends in organization theory. The term rela-tionship marketing was used by Bund Jack-son in her project on industrial marketingfrom the late 1970s, and published in her bookin 1985. Berry, in a paper in 1983, used theterm for services. Other terms that have beenused over the years are the network and inter-action approach, marketing as long-terminteractive relationships, and interactivemarketing. In an early attempt to make asynthesis of services marketing and the net-work approach to industrial marketing, theterm “a new concept of marketing” was used(Gummesson, 1983). The phenomenon of RMhas probably been treated in a number of nowforgotten texts. Wittreich, for example, beingone of the early proponents of the importanceof services marketing with an article in theHarvard Business Review in 1966, representedone of the very few sources to which I hadaccess when I started research on profes-sional services in 1974 (see Gummesson,1978). Among other things, Wittreich says(1969, p. 9):

There is not a single point in the course of arelationship with the client where the sale ismade, but there are many points in thatrelationship where effective selling isrequired … the sale has never been fullyconsummated until the project has beencompleted to the client’s satisfaction.

RM as lip service vs genuine change invalues and ethics A gap between traditional marketing man-agement and RM can also be created by mar-keters who have not internalized the originalmarketing concept and its application in RM,and just perceive RM as a fad to which it issmart to confess. The old values have notkilled the new ones, just pushed them into acorner from which they make recurrentefforts to break out. Inadequate basic valuesand the absence of ethics are the biggestobstacles to success in RM.

The basic values of RM should include theacceptance – in action, not only in rhetoric –of interactive relationships and a win-winsituation; of both the buyer and the seller and

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other parties being drivers of a network ofrelationships; of long-term relationshipsbeing advantageous to the parties involved;and of the customer being a co-producer ofvalue and a partner. The ethical aspects ofRM are salient. Frequently quoted propertiesof RM include trust, honesty, benevolence,reliability, commitment and diligence (Mur-phy, Wood, and Laczniak, 1996). The deonto-logical reasoning by philosopher Kant – “thecategorical imperative”, meaning that a per-son must be willing to accept his or her actsas a universal law – and the utilitarianistapproach – “the greatest good for the greatestnumber” – are efforts to provide guidelinesfor ethical behaviour (Takala and Uusitalo,1996).

RM should clearly not be perceived as apromotional package to be sold to the cus-tomer, although it is sometimes presented assuch. Nor should RM be perceived as a morepotent way that a salesperson can manipulateand outsmart a consumer, or a way for a pow-erful customer to turn a dependent supplierinto its obedient slave. These types of asymmetrical relationship exist, however,and to point this out, one of the 30Rs islabelled, “The monopoly relationship: thecustomer or supplier as prisoner”.

The world of practice vs the world ofbusiness school educationI was first acquainted with the importance ofrelationships in 1968 in a very tangible way –it was a matter of professional survival – andI quote (Gummesson, 1996, p. 36):

Working in PA Consulting Group, a largeBritish international management consult-ing company, I was assigned the responsibil-ity of selling the services of a group of con-sultants in Scandinavia. At that time, therewas absolutely nothing in the marketingliterature on professional services, nor onservices in general. Through my own practi-cal experience and advice from senior col-leagues, I gradually learned that two thingsmattered besides a certain professionalknowledge. One was the image of the con-sulting firm or of individual consultants; itattracted inquiries leading to assignments.The other was the network of professionaland social relationships that individualconsultants represented by birth, member-ship in certain social circles, or professionalachievements. These relationships were alsoimportant internally when consultants wereselected to staff new assignments.

Since then, I have had a series of experienceswith companies on the significance of rela-tionships. To my understanding, the realworld of business and marketing hasdeployed an RM approach (although it hasnot been labelled as such) while the academic

research, to some extent, and education, to alarge extent, have become stuck in a narrowand mechanical approach to marketingthrough the dominant marketing manage-ment paradigm. Through business schooltraining, some practising managers havebeen led to believe that marketing is no morethen the received theories. These theorieshold important messages and knowledge forthe specific issues to which they are perti-nent, but they have claimed to be general andcomplete. They have therefore contributed tomoulding an “unreal reality”. Other practi-tioners reject marketing theories and createtheir own frameworks based on experienceand personality.

Marketing scholars, consultants and prac-tising managers, who are now confessing toRM, are adding language and systems to along-existing phenomenon. This is no smalltask. However, using a metaphor: Americaexisted before Columbus got there. To saythat he “discovered” America is a one-sidedview; he discovered it for those who did notknow it existed, not for those who lived there.But he did not create it, he just gave it a nameand put it on a map. (To add to the confusion,Columbus did not, ex ante, know where hewas going, and he did not, ex post, knowwhere he had been.)

In conclusion, RM is new in the books, butancient in practice.

Differences between Europe and the USAWhile US thinking in marketing issues is wellknown in Europe, European thinking in mar-keting is largely unknown in the USA. Inservices marketing the situation is better,which is shown in interpretations of the his-tory of services marketing presented byBerry and Parasuraman (1993), and Fisk,Brown and Bitner (1993).

Even if international conferences and,increasingly, the Internet allow everybody tospread their papers and articles more glob-ally, it would be desirable if a dialogue coulddevelop and not just a series of parallel andlecture-like monologues. It is somewhat puz-zling for a northern European to note thatservices marketing, the network approachand TQM are not mentioned in reviews of thehistory and development of marketing pre-sented by American scholars. This is sodespite the fact that both services and qualityare viable areas for research and practice inthe USA (not yet the network approach toindustrial marketing, however). The contri-butions from the IMP Group during the past20 years, most of them available in English,are not even noted (see the anthologies editedby Axelsson and Easton, 1992; Ford, 1990;

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Håkansson, 1982; and Håkansson and Sne-hota, 1995).

“Histories” of marketing, that are claimedto be universal and general, are in fact localand specific. As long as this is recognized,those histories can be valuable contributionsto our understanding of the past and to thedevelopment of a field. It is a reminder of thesociology of scientific progress, the limita-tions of scientific research and the random-ness with which “accumulation” of knowl-edge takes place. Despite the increasing glob-alization of marketing, marketing thinkingand its dissemination is cultivated by cliquesthrough their access to journals, publishers,associations, and conferences. On the otherhand – but this is discouraging – it may be thebest we can do as resources in time, braincapacity, and communication are limited.

The search for a universal, clear andcomplete definition of RM: a ghost huntAs I find much of the discussion on defini-tions of RM a ghost hunt, I venture to elabo-rate briefly on the function and nature ofdefinitions. Many currently contribute defini-tions of RM. Every definition says something,but it does not tell the whole story. A briefdefinition is usually only understood by thosewho have a profound insight into a phenome-non already. Comments such as “the defini-tion does not say much” or “the definition isnot complete”, which seem to be common inthe debate on RM, are meaningless per se.

Lack of clarity of phenomena and theirdefinitions stands out as a major source offrustration, both for scholars and practition-ers. However, no definition of RM will ever beprecise and all-inclusive. It cannot, becausesocial phenomena are not in themselves pre-cise. Definitions can only be used as vehiclesfor thought, as perspectives, or as indicationsof essential properties of a phenomenon.

In mainstream scholarly research, clearlydelimited and non-overlapping definitions arepromoted as the ideal. If phenomena cannotbe defined in short statements or listings,they can be linked with a certain method ofmeasurement and operational definitions areborn. In the latter case we are distorting andlimiting reality, which, for example, statisti-cians are forced to do. This is justified incertain cases, not least for practical researchpurposes, such as the aggregation of quanti-tative data to higher-level categories. Opera-tional definitions can hardly ever be claimedto represent a phenomenon in an objectiveand general way, however.

One way of approaching phenomena insociety is to accept that they have vague andformless contours. Set theory in mathematicsuses the term “fuzzy sets” – sets which are

not clearly defined. We handle such sets inbusiness and teaching every day.

Shirouzu (1989, pp. 55-6) shows that it hasbeen easier in Japan to accept fuzzy phenom-ena than in the USA, where the scientificcommunity has termed them “comical” and“content-free”. Attempts are being made inJapan to develop software with “… fuzzylogic, a branch of mathematics designed tohelp computers simulate the various kinds ofvagueness and uncertainty found in everydaylife” (p. 55). He also indicates that, in Japan,extensive product development is being car-ried out on the basis of “fuzzy logic”. Fuzzylogic is not the same as sloppy logic; it is amore fertile approach to reality.

People show fuzzy symptoms of physicaland mental disorders, something which West-ern medical research lacks the ability tohandle. Company, market, customer, competi-tor, product, services and quality are all veryindistinct concepts. Nevertheless, they have acore of something essential, which experi-ence, intuition and common sense enable usto perceive. They are not clearly delimitedand they overlap one another. Despite thesealleged shortcomings, we use them and wecannot do without them. The ambiguous andthe chaotic are also found in the managementliterature. For example, Peters and Waterman(1982) considered that one had to accept ambi-guity and Peters later wrote a book entitledThriving on Chaos (1988). Chaos researchfrom the natural sciences has also, to a cer-tain extent, been applied to social sciencethinking (Prigogene and Stengers, 1985).

I do not use my definition of RM – “RM ismarketing seen as relationships, networksand interaction” – as a a clearly delimitedconstruct, a “box”. The definition provides aperspective – “Let’s look at marketingthrough the relationship eyeglasses”. Newcategories, concepts, models and theories canserve as lenses through which we perceivethe world. If the lenses are wrongly curved,the world will look fuzzy. If they are tinted, itmay look sunny when in fact it is cloudy.Certain lenses improve our vision at closerange, others at a distance. As marketing is acomplex field, a single pair of glasses is notsufficient. There are bifocals that allow twoperspectives, but we need more than two.

The definition can also be perceived as ashortlisting of the core variables that haveemerged out of real-world studies and thosetheories that have so far contributed to thecurrent efforts of identifying the content ofRM. These core variables provide a focus forour search for a meaningful content of RM.The more we know about RM, the easier itwill be to make a short definition, not a pre-cise one in a mechanistic sense, but one that

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captures the essence of RM enough to guideus into improved understanding and insight.

Conclusion: RM is a paradigm shift

New concepts, models and theories can verywell be the emperor’s new clothes – but oldand recognized theories can also be non-existent clothes. Only the innocent childdares says the obvious: “But he doesn’t haveanything on!” I have come to the conclusionthat RM provides a new costume which isboth visible and tangible. I believe RM offersmore common sense in marketing, and that itmakes important phenomena visible in theconfusing world in which marketers searchfor meaning. Although RM exists in practice,putting the academic headlights on RM willincrease the awareness of RM in business andintroduce new concepts as vehicles forthought and more systematic ways ofapproaching relational issues.

It is not enough to think in new ways to claima paradigm shift; it must also materialize inaction. A new paradigm requires new scien-tific attitudes, methods and techniques. Cur-rent obstacles are the belief that knowledge isincremental and builds on previous knowl-edge, a lack of lateral thinking, and the misun-derstanding of what a paradigm shift is.

A more innovative use of researchapproaches is necessary. McKenna (1991),who has written a practitioner book on RM,claims that successful marketing first andforemost is the outcome of qualitative studiesand assessments, and not of quantitativeresearch. Quantitative marketing research inits application often represents a fundamen-talist and narrow view of science and thesearch for reality. The strengths of quantita-tive methodology are degraded because of theubiquitous abuse of its techniques. Trivialdetails are tested and what cannot be cap-tured through a set of statistical techniques isthen at risk of “not existing”, that is, most ofreality gets branded as unreal. This delays –maybe also kills – a paradigm shift. It is thehallmark of ignorance of the theory of scienceand lack of innovativeness and originalitywhen a researcher masters one or two mea-surement techniques and never goes beyondthese. The belief that “objective”, rule-gov-erned research is the road to knowledge, is

naive. Statistical methods are based on sub-jective values, personal arbitrary choices,and intersubjectivity, and their “logic” is butone of several possible logics. That quantita-tive results demand qualitative interpreta-tions is treated as a taboo. This lack of under-standing is less prevalent among practisingmanagers as reality and complexity are moreobtrusive for them.

The claim of paradigm shift in marketing iscontroversial. It rejects the requisite that newmarketing thinking should build on existingknowledge and that knowledge developmentis just a matter of accumulation. A paradigmshift is a new foundation for thinking. Exist-ing knowledge can be incorporated in a newparadigm but cannot provide its foundation.The understanding that the earth is round isnot just an add-on to a flat earth. However,much of the knowledge that we accumulatedon the premiss that the earth was flat isapplicable to the round earth, but does notconstitute its foundation.

There are those who claim that RM is justanother add-on to a solid core of marketingmanagement knowledge, but would probablydeserve to get its own chapter in the text-books in the future. I have come to the conclu-sion that RM is a paradigm shift in market-ing. In the initial but brief overview of theelements of the 30R approach, some of thearguments were listed. In conclusion let usrecall and stress some of the reasons for see-ing RM as a paradigm shift :• RM represents ubiquitous and ancient

practices in business (albeit, other termsare deployed) but relationships and net-works are treated as a footnote in market-ing education and general marketing man-agement theory.

• The two major theories of marketing thathave emerged during the past 20-yearperiod – services marketing and the net-work approach to industrial marketing –although they represent different substan-tive areas, both offer the same core vari-ables: relationships, networks and interac-tion. These core variables also appear inother types of management research, notleast in new organizational theory andquality management.

• Competition is usually hailed as the driverof a market economy. Apart from competi-tion we need regulations and institutions,either formal ones or informal throughtradition and shared values and acceptedbehaviour. The really significant contribu-tion of RM is the emphasis that RM puts oncollaboration. We need collaborationbetween customers and suppliers, betweencompetitors, between firms and govern-ment, etc. A dynamic balance, the marketing

“…There are those who claim that RM is just another add-on toa solid core of marketing management knowledge, but wouldprobably deserve to get its own chapter in the text-books in thefuture. I have come to the conclusion that RM is a paradigmshift in marketing…”

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equilibrium, includes the three factors – ofcompetition, collaboration and regulations/institutions.

• Finally, and this is an argument thatrequires a future treatise of its own: societyis a network of relationships in which weinteract. If we dissolve the networks of relationships, we become hermits, isolatedand self-supporting. We need no marketing.But business and marketing are embeddedin society and marketing is a property or asubset of society. Consequently, marketingis also part of the network of relationships,a fact that has so far not been recognized inmarketing theory.

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Relationship marketing as a paradigm shift: some conclusions from the 30R approach