MSc INTERNATIONAL MARKETING
Developing and measuring marketing relationship dependencies: An operational research model
Table of Contents
1.1 THE IMPORTANCE OF THE RESEARch …………………………………….3
1.2 THE research objectives …………………………………………………4
- RELATIONSHIP MARKETING – A LITERATURE REVIEW ………………5
2.1 What are relationships and when do relationships exist?……………………………………………………………………………………………………………..6
2.1.1 Why do consumers enter relationships? ……………………………………6
2.1.2 Why do firms enter relationships? ………………………………………….6
2.2 Relationship marketing theory
2.2.1 The scope of RM theory ……………………………………………………..7
2.2.2 Indicators of relationship marketing ……………………………………….8
2.2.3 Factors that shape the nature of the relationship ………………………….8
2.3 The forms of relationship mk………………………..………………..9
2.4 The discipline in relationship marketing ……………………10
2.5 Factors that influence Relationship Mk Success ……….11
2.6 Marketing Mix Theory versus RM: From 4ps to 30Rs ……..12
2.6.1 Introducing the Thirty Relationships, The 30Rs ………………………….13
- THE TRAVELING SALESMAN PROBLEM …………………………..…………..14
3.1 The problem……………………………………………………………………..14
3.2 The proposed approach ………………………………………………….14
3.2.1 The three steps of the proposed approach……………………………….. 16
- E-MARKETING RELATIONSHIPS …………………………………………………..17
4.1 Building relationships with your customers……………..18
4.2 Examples of relationships……………………………………………..18
4.3 E-MARKETING OF TOURISM DESTINATIONS……………………………19
- RESEARCH DESIGN AND DATA COLLECTION……………………………….20
5.1 Research Philosophy……………………………………………………….20
5.2 The Research Approach ………………………………………………….20
5.2.1 The qualitative approach …………..………………………………………20
5.2.2 The quantitative approach …………..……………………………………..21
5.3 The Information Required………………………………………………21
5.3.1 The Phases of the Research…………………………………………………21
5.4 Limitations of the Research Methods ………………………….21
Table 1 : Definitions of Relationship Marketing …………………………………………22 Table 2: The benefits and costs involved in entering relationships ……………………..22
1.1 THE IMPORTANCE OF THE RESEARCH
The research area for this project is relationship marketing, which was first introduced by Berry (1983) in the context of services marketing as follows:
Relationship marketing is attracting, maintaining and – in multi-service organizations – enhancing customer relationships. Servicing and selling existing customers is viewed to be just as important to long-term marketing success as acquiring new customers.
Since then, there has been a major shift in marketing theory and practice and, relationship marketing has received widespread attention in the academic press. This is due to the fact that, the recent years competition is driving firms to adopt forms of defensive marketing rather than offensive marketing strategies by maintaining and developing relationships with personal customers, suppliers and competitors. The tendency for firms in advanced economies to be services oriented, adopt information technologies, be niche-oriented, be information-oriented and, be global in nature, has also be considered by Mulki and Stock (2003).
Furthermore, optimization methods are widely used in marketing, and in certain tourism applications, but appear to have been ignored in the relationship marketing literature. The application of an operational research model presents interesting potentials.
To test this model, the case of e-marketing relationships in Tourism destinations has been chosen. The nature of tourism industry and its characteristics are ideal for relationship marketing. Those characteristics are: the marketing environment; population and demography; incomes and standards of living; cultural attitudes; and social changes; consumer awareness; pleasures; ethnic diversity; and mainly technology. An opportunity to offer value to customers emerges through customized marketing interventions and products and through providing relational exchange.
Granted that a tourist destination marketing approach can better extract the desires of individual customer and/or of segments and subsequently can create added value for these targets, customers are likely to reward this value with repeat visits or transactions. As, Sheth (1995), has demonstrated, an important motivation of firms in developing relationships with their customers is to limit their choice, either actual or perceived. E-marketing seems the perfect vehicle to achieve this.
1.2 THE research objectives
The overall objective of this research is to develop and measure marketing relationship dependencies with the use of an operational research model. From this overall objective a number of more specific aims can be identified:
n to present the concept of relationship marketing and the theories launched until now. (Background information)
n to develop an operational research model, under the conception of the Travelling Salesman Problem, to explain marketing relationship dynamics. (model construction)
n to demonstrate the contextual setting of e-marketing relationships for Tourism Destinations. (analyzing a current situation)
n to apply the Travelling Salesman operational model in the above (evaluating the TSP model)
n to recommend future strategies for developing successful e-marketing relationships for Tourism Destinations (recognizing gaps and suggesting potential)
- RELATIONSHIP MARKETING – A LITERATURE REVIEW
The RM approach is multifunctional and integrative – it “views marketing as an integrative activity involving functions across the organization, with emphasis on facilitating, building and maintaining relationships over time”. (Coviello et.al., 1997) Still, the way firms develop relationships with external and internal constituencies, has been addressed by a number of researchers. The definitions given are summarized in Table 1.
At a micro level, RM is concerned with the nature of the relationships between the firm and customer and highlights a long-term relationship that takes account of the customer’s needs and values. At a macro level, RM is used as a term to portray the relationship within which the organization engages with its stakeholders, thus the strategic issue is to establish the mix or portfolio of the relationships that is crucial for the firm (Stewart and Durkin, 1999).
2.1 What are relationships and when do relationships exist?
Relationships can be seen as a series of transactions. As, Liljander and Strandvik (1995) argue a relationship consists of a number of episodes and buying a service twice is a minimum requirement for relationships to exist. Storbacka (1994) similarly argues that a relationship exists when a series of exchanges between customer and company occur.
Barnes (1997) points that, for an interaction to happen, two characteristics must exist. First, the relationship has to be mutually perceived to occur. Second, even if it is difficult to define, the partners will know when one exists. Relationships consist of more that these two characteristics but their absence implies that a true relationship does not occur.
Yet, there are many additional criteria that should be present before a relationship can be said to exist.. Such criteria for relationships can be found in social psychology literature (Duck, 1991,1992) These are:
- commitment on both sides;
- accommodation of the other party;
- mutual respect;
- mutual trust;
- good communications;
- prioritizing interests of the other party;
- assistance of the other party’s long term objectives
2.1.1 Why do consumers enter relationships?
Consumers perceive that the benefits of engaging in relational exchange with particular firms exceed the costs involved. In their “commitment-trust” theory of relationship marketing, Morgan and Hunt (1994) identify “relationship benefits” as a key predecessor for the kind of relationship commitment that characterizes consumers who engage in relational exchange. Furthermore, consumers desire relationship collaborators that they can trust and keep relational exchanges with partners with whom they share values.
Sheth and Parbvatiyar (1995) suggest that: consumers engage relational market actions to achieve greater efficiency in their decision making, to decrease the task of information processing, to attain more cognitive consistency in their decisions, and to reduce the supposed risks associated with future choices.
Bagozzi (1995) argues that: the most common and determinative motive for entering a marketing relationship is that consumers see the relationship as a means for fulfilment of a goal to which one had before, and committed.
Vargo and Lusch (2004) appraise marketing’s evolving “dominant logic”, according to which, the “focus is shifting away from tangibles and toward intangibles, such as skills, information, and knowledge, and toward intangibles, such as skills, information, and knowledge, and toward interactivity and connectivity and ongoing relationships.”
2.1.2 Why do firms enter relationships?
Firms enter into relational exchanges with individual customers when, as a result of these relationships are better able to develop market offerings that are customized to the tastes and preferences of individual consumers.
Firms enter into strategic alliances with other firms when the relationship between them results in the achievement or development of complementary and/or idiosyncratic resources. Finally, firms enter into relational exchanges with nonprofit organizations when the association of the firm with the nonprofit organization increases the importance of the firm’s market offering to consumers.
Summarizing, the benefits and costs involved in entering relationships are included in Table 2.
2.2 Relationship marketing theory
2.2.1 The scope of RM theory
The scope of marketing relationship theory is to provide systematized structures that, at the minimum, explain the relationship marketing phenomena. It enhances the concept that the market effectiveness of the firm is directly affected by its internal and external constituencies and their interrelationships. It answers the question “where to look for information and knowledge” and provides answer to the question on “how to look”, by outlining the significance of the inter-relational character of the firm’s constituencies and therefore information existing in each of these interrelationships.
Christopher et al.(1991), includes six markets namely, internal, customer, referral, supplier, influencer and employee recruitment markets. (Figure 1).
The basic premise of this model is that “marketing’s new remit will revolve around maximizing customer value through the boundary spanning roles of customer advocate, internal integrator, strategic director and, within network organizations, partnership broker” (Peck et al., 1999).
A latter role of RM was introduced by Gummesson’s (1987) saying that “everyone in the firm is a part-time marketer”. Meaning that, the customer value and satisfaction can not be delivered by one function alone and it is not only the responsibility of those with a direct customer contact.
Furthermore, Brodie et al. (1997) separate relationship marketing into three types:
- Database marketing. The use of information technology to raise customer loyalty, profits and customer satisfaction.
- Interaction marketing. The use of external marketing (employees) to enhance and facilitate relationships. Both database marketing and interaction marketing are used to describe relationships between organizations and their customers.
- Network marketing. Describes the connected relationships between organizations (for example suppliers and competition). Network marketing facilitates co-ordination between organizations for mutual profit, resource exchange and market admittance. (Brodie et al. 1997)
2.2.2 Indicators of relationship marketing
A study by Pressey and Mathews (1998) identified 13 indicators of Relationship Marketing to which effective relationships can be built up. The seven most used are:
- A high level of trust between both parties.
- A high level of commitment between both parties.
- A long time horizon (‘length of relationship’).
- Open communication channels between both parties, with information exchange.
- Having the customers’ best interest at heart.
- A commitment to quality for both parties.
- An attempt to satisfactorily lock-in or maintain the customer.
2.2.3 Factors that shape the nature of the relationship (Pressey & Mathews, 2000)
1) Personal/Impersonal. A high level of personal contact in service delivery facilitate the conditions for relationship marketing
2) Power. Services encounters with a lower imbalance or power facilitate the conditions for relationship marketing
3) Professionalism. Services with a high degree of professionalism involved within the service episode facilitate the conditions for relationship marketing.
4) Involvement. Services where the customer has a high degree of personal involvement facilitate the conditions for relationship marketing.
2.3 The forms of relationship marketing
Understanding RM requires distinguishing between the discrete operation, which has a “distinct beginning, short duration, and sharp ending by performance,” and relational exchange, which “traces to previous agreements [and] … is longer in duration, reflecting an ongoing process” (Dwyer et al, 1987, p.13). Classified with reference to a firm and its relational exchanges in supplier, buyer, lateral, and internal partnerships, Figure 2 shows ten forms of relationship marketing:
Figure 2 Forms of relationship marketing
- The partnering involved in relational exchanges between buyers and their goods’ suppliers.
- The relational exchanges involving service providers. (i.e. advertising agencies)
- The strategic alliances between firms and their competitors.
- The alliances between a firm and nonprofit organizations.
- The partnerships for joint research and development. (i.e. between firms and governments).
- The long-term exchanges between firms and ultimate customers. (loyalty programs).
- The relational exchanges of working partnerships- Intermediate customers.
- The relational exchanges involving functional departments.
- The relational exchanges between a firm and its employees.
- The within-firm relational exchanges. (i.e. between business units and subsidiaries)
According to Morgan and Hunt (1994), all ten are forms of relationship marketing.
2.4 The discipline in relationship marketing
The disciplines in relationship marketing can be explored using a simple analytical model (Figure 3).
Figure 3: Breakdown of RM into objectives, defining constructs and instruments (Lindgreen, 2001)
Objectives have been identified in terms of customer satisfaction and customer delight (Rust et al., 1996; Oliver et al., 1997), share of customer (Hammond and Ehrenberg, 1995; Johnson, 1992), customer retention (Buchanan and Gillies, 1990; Dawkins and Reichheld, 1990) and loyalty (Palmer, 1994; Reichheld, 1996).
Constructs, have been defined in terms of trust (Ganesan, 1994; Morgan and Hunt, 1994), commitment (Morgan and Hunt, 1994; Spekman and Sawhney, 1990), co-operation (Mohr and Spekman, 1994; Stern and El-Ansary, 1992), communication (Anderson and Narus, 1990; Moorman et al., 1993), shared values (Dwyer et al., 1987; Morgan and Hunt, 1994), conflict (Anderson and Narus, 1990; Spekman and Sawhney, 1990), power (Fontenot and Wilson, 1997; Thorelli, 1986), non-opportunistic behaviour (Morgan and Hunt, 1994) and interdependence (Spekman and Salmond, 1992).
Instruments have been defined as direct marketing and database marketing (Copulsky and Wolf, 1990; Fletcher et al., 1990), quality management (Ballantyne et al., 1995; Gummesson, 1988), services marketing (Berry, 1983; Rust and Zahorik, 1993), customer partnering (Anderson and Narus, 1990; Magrath and Hardy, 1994) and catchall phrases covering many different marketing disciplines (Gummesson, 1994; Morgan and Hunt, 1994).
2.5 Factors that influence Relationship Marketing Success
Eight types of factors have been identified that influence RM-based strategy success:
- Relational factors.
- Resource factors.
- Competence factors.
- Internal marketing factors.
- Information technology factors.
- Market offering factors.
- Historical factors.
- Public policy factors.
These factors are drawn from diverse literature streams and are often examined independently of each other. Each approach constitutes a component of relationship marketing, while all together, they provide a foundation for developing relationship marketing theory and provide guidance to researchers exploring the many forms of relational marketing.
Figure 4 Factors accounting for relationship marketing success
2.6 Marketing Mix Theory versus RM: From 4ps to 30Rs
The philosophy of RM is transformed into 30 relationships, the 30rs. As mentioned before, relationships require at least two parties – usually a supplier and a customer – who enter into interaction with each other. More complex relationships constitute networks.
Both the marketing mix theory (4Ps) and RM are based on the marketing concept which puts customers and their needs as the focus. However, in practice, the 4Ps are often used for manipulation of customers, exploiting customer ignorance. In the same way, RM assumes goodwill from all parties, in practice though, power and smartness enter the scene, and relationships are rarely symmetrical. Marketing most of the times is a means of trapping customers, to imprison them and even castigate their escape.
The shift in marketing paradigm from 4Ps to 30Ps is as shown in Figure 5. The 4Ps and their expansions will always be necessary, but the paradigm shift develops their role from that of being founding constraints of marketing to one of being contributing constraints to relationships, networks and interaction.
Figure 5. The shift in Marketing Paradigm
2.6.1 Introducing the Thirty Relationships, The 30Rs
There cannot be a simple sequence, as the Rs are not sequential by nature, and thus they appear concurrently in different constellations. As they composed of many qualities, they can partly overlap. Their numbering by Gummerson (1994) is an effort to transform theories of relationships, networks and interaction into something tangible which can be applied in a company’s marketing planning.
|R1||The relationship between the supplier and the customer|
|R2||The many-headed customer and the many headed supplier|
|R3||Megamarketing: the real “customer” is not always found in the marketplace.|
|R4||the customer-supplier-competitor relationship|
|R5||Alliances change the market mechanism|
|R6||Market mechanisms are brought inside the company.|
|R7||The service encounter: interaction between the customer and front line personnel.|
|R8||Interfunctional and interhierarchical dependency: the relationship between internal and external customers.|
|R9||Relationships via full-time marketers (FTMs) and part-time marketers (PTMs).|
|R10||Internal marketing: relationships with the “employee market”.|
|R11||The non-commercial relationship.|
|R12||Physical distribution: the classic marketing network.|
|R13||The electronic relationship.|
|R15||Quality providing a relationship between production and marketing.|
|R16||Personal and social network.|
|R17||The two-dimensional matrix relationship.|
|R18||The relationship to external providers of marketing services.|
|R19||The relationship to the customer’s customer.|
|R20||The owner and financier relationship.|
|R21||Parasocial relationships via symbols and objects.|
|R22||The law-based relationship.|
|R23||The criminal network.|
|R24||The mental and physical proximity to customers vs. the relationship via market research.|
|R25||The customer as member.|
|R26||The relationship to the dissatisfied customer.|
|R27||The green relationship.|
|R28||The knowledge relationship.|
|R29||The mass media relationship.|
|R30||The monopoly relationship: the customer or supplier as prisoners.|
- THE TRAVELING SALESMAN PROBLEM
The travelling salesman problem (TSP) looks for the shortest route to visit a collection of cities and return to the starting point.
3.1 The problem
Given a collection of cities and the cost of travel between each pair of them, the travelling salesman problem, is to find the cheapest way of visiting all of them -optimal tour- and returning to the starting point, verifying that no better tour exists. In the standard version, the travel costs are symmetric in the sense that travelling from city X to city Y costs the same as travelling from Y to X.
To measure progress in solving instances of the TSP, a simple judgment is to say that method A is superior to method B if A requires less time or less resources to solve every instance of the problem. This rule makes direct placing of methods next to impossible since closely related methods would defer such a simple comparison.
In other words, for a given number of cities n, the solver might want to concentrate on those n-city instances that cause the most difficulty for a proposed manner that he or she must evaluate. Adopting this approach, we would rank method A ahead of method B if for every large value of n the worst n-city example for A takes less time to solve than does the worst n-city example for B.
3.2 The proposed approach
Our approach will work reverse than the usual TSP problem. That is instead of looking for the arrangement that will result in lower costs, our main challenge will be to increase the total return of marketing relationships by ranking them in terms of sequence to be developed and their importance to affecting performance. The approach proposed will also use earliness and tardiness penalties. Significant references to this approach are Lawler et al. (1985) and Williams (1985). Until now, earliness and tardiness are normally associated with due dates in the context of sequencing problems, as proposed by Baker and Scudder (1990) and Ventura and Weng (1996).
The idea is to see the individual relationships as cities to be visited, costs of developing a new relationship after the previous as travel time between cities, and the due dates as the contribution of each relationship to the total return. Given the set of all orders required for developing a tourism destination policy, and the set-up matrix between all pairs of orders, the traditional TSP model would find the optimal implementation sequence which would minimize the total costs and maximize the return. In addition, the importance of one relationship divided by the total efficiency of marketing relationships arrangement will represent a visiting time to the corresponding city.
Nevertheless, the solution proposed using this approach, does not take into consideration the visiting times, as addressed by Baker (1983), neither the due sequence.
In the context of relationship marketing, it has been showed that even if successful, continuing relationships are characterized mostly by trust and commitment (Morgan and Hunt, 1994; Shemwell et.al 1994; Strandvik and Liljander, 1994), there is a sequence in the buyer’s conception. Commitment is advanced by satisfaction, lower quality alternatives and greater investment size and can be developed by the prerequisite of benefits superior to the shared values, alternatives, communication and goodwill. Relationship set-up and dynamics are informed by knowledge or resource imbalances, power, and influence. Antagonism, transactional mentality, and competition pervade exchanges; they tighten options, choices, and avenues for action.
Thus, comparing for each relationship the visiting date defined by the TSP with the corresponding due date, some alternatives might incur earliness, and others, tardiness penalties.
The former returns might be easily evaluated as: α x C x E, where
α is the return per day per unit of capital,
C is the return rate of the relationship and
E is the earliness measured in days.
Τhe cost of earliness may significantly affect the efficiency of the adopted marketing relationship scheme. As for tardiness penalties, the kind of costs involved are hard to estimate since they deal with subjective estimations such as the customer’s dissatisfaction and the service quality. However, given the competitive environment, this cost could be even higher than the earliness cost since there is a risk of losing the buyer.
Therefore, the TSP solution obtained should be revised to reduce the penalty costs. Relationships that are to be developed too early should be postponed while those that are to be enhanced late should be anticipated. However, changing the order between two relationships might increase set-up times and affect the cost of the remaining sequence. Thus, it cannot be unpretentiously implemented and a systematic way to improve the sequence should be adopted.
3.2.1 The three steps of the proposed approach
- The first one will be to obtain the TSP solution which maximizes revenues along the adoption sequence but ignores ‘due dates’, ‘visiting times’ and earliness and tardiness penalties.
- The second step will be to identify early and tardy adoptions, and evaluate the corresponding penalties.
III. The third step will be to evaluate the exchange of relationships’ order in a way so as to postpone some and to anticipate those that are tardy. The typical size of the problem is around 30 relationships in total, as they were introduced previously.
A definite result of this model will be the growing awareness by marketing executives of the relevance of the relationship development sequencing problem on efficiency of the marketing plan, customer service, and profitability.
The study outlined above helps a company improve its marketing relationship problem and seems to have wide applications in helping the solution of relevant problems in all sectors that marketing is needed. The introduction of penalties offers a way to make the TSP a more useful method in real life situations.
- E-MARKETING RELATIONSHIPS
E-marketing is the process of marketing a “brand” using the Internet. Its introduction came along with the explosion of outburst on the World Wide Web. As the Internet grew, means of targeting Internet audiences were developed. Internet users are not generally happy with advertising but when it appeals to them and their specific needs they are exceptionally responsive.
Ideas as the Customer-centric e-marketing were introduced to describe the application of all digital technologies which form online channels -such as Web, e-mail, databases, plus mobile/wireless & digital TV-, in order to support marketing activities aimed at achieving acquisition and retention of customers, by improving customer knowledge (profiles, behaviour, value and loyalty motives), and delivering targeted communications and online services that satisfy their individual needs.
As illustrated by a survey of the European Interactive Advertising Association, from November 2003. (http://www.eiaa.net/), for households with Internet access, the web is now the first port-of-call for finding information to select and/or buy the best deal. The popularity for browsing and purchasing products online is:
The figures represent a substantial growth in popularity of the Internet as a source for selection and purchase of products. In the beginning, music and books were the most popular online purchases. But today, these purchases have been overtaken by travel and data suggests that there is still large potential for growth in online browsing and purchases of products and services. Moreover, by 2009, is estimated that a quarter of all shopping in the developed countries will be conducted via the internet or mobile devices in a market worthing £80 billion and a further 20% of purchases will be influenced by online research.
All elements of e-Marketing operate in holistic harmony. Yet, the most important component in any online marketing campaign is the website, which acts as the central point. Its task is to ensure that the targeted visitors achieve the site’s main objective. This could be an information, enquiry, sale, registration, or subscription. Thus, it is important to ensure that the website achieves a satisfactory conversion rate.. Most websites usually convert at about 1%, or just under. This means that 98/99 of every 100 site’s visitors, leave without accomplishing the site owner’s desired objective. But, even if your site is adapting at an unbelievably good rate – like 20% – it also means that 80 out of 100 (valuable) visitors leave the site.
This is where e-mail marketing comes into play. Even if, most marketers consider email to be an acquisition tactic, the real benefit of e-mail lies in its ability to build relationships. If a site can get 20 of those 80 visitors to subscribe to its newsletter, these can be communicated to over time, rather than just being lost in the matrix for ever. This is because, not everyone who visits a website is at a purchase phase, still by providing information and offering a valuable program of ongoing communication, when the consumer is ready to buy, they will turn to the ‘brand’ that has welcomed and respected them.
4.1 Building relationships with your customers
The purpose is to develop an e-marketing plan that will guarantee an ongoing point of contact with the customers; collect information about them for e-marketing purposes; and build successful relationships with them. Building e-marketing relationships, is like building marketing relationships for business, which in turn is like building relationships between people. Pete Vossler (2006) noted that to achieve successful e-marketing relationships, one should consider the following:
While these are generalities, they apply to most people, regardless of how successful, well-known or “important” they are.
4.2 Examples of relationships
ü Answering common queries – questions customers ask on website – perhaps in the form of FAQs
- ü Asking visitors to register – to give them access to special content; it is also useful for gathering statistics and email addresses for direct mailings.
- ü Customer relationship management – create a customer database with the aim of identifying new sales opportunities, delivering improved customer service, or offering personalised services and deals.
- ü Refer their friends (Tell a friend) – if on average, your customers refer one friend a year over the five year period, then profits don’t come from sales, profits come from relationships.
In other words, simply by getting those people who have bought from you before to buy a little more frequently, and stay with you for just a little while longer you can greatly increase your profit.
4.3 E-MARKETING OF TOURISM DESTINATIONS
To start with, a destination is viewed as a “defined geographical region which is understood by its tourists as a unique entity, with a political and legislative framework for tourism marketing and planning” (Buhalis 2000).
With its long narration of relational exchange, tourism has witnessed the introduction of many relationship marketing schemes. These include: Airline frequent flyer programs (Gilbert 1996; Gilbert and Karabeyekian 1995; Liu, Wall & Westlake 2000), hotel frequent guest/loyalty programs (Danaher and Mattsson 1994; Palmer, Beattie & Beggs 2000), and car rental company customer preference programs (Chadee and Mattsson 1996). All of which have contributed to tourism being at the head of industries adopting relationship marketing.
Yet, despite its increasing maturity in the literature of relationship marketing, it is an untested model for destination marketers. It is our intention, to explore the opportunities and challenges faced by managers of tourism destinations in their attempt to engender loyalty and repeat visitation in a product domain traditionally considered highly complex, fragmented, and difficult to manage, with the use of e-marketing relationships. And, demonstrate this, by applying the Travelling Salesman Problem that we introduced previously.
5. Research Design and Data Collection
5.1 Research Philosophy
Our research aims to focus into the effectiveness of e-marketing relationships across the broad spectrum of destinations, and report on the findings of an exploratory study which will utilize both qualitative and quantitative methods. In an attempt to clarify the determinants of the problem, identify the relevant variables, and show relationships among them.
Given the range and diversity of destinations, many represent suitable case material for this project. However, ready access to Greece’s tourist product due to my personal involvement in the tourism industry as an owner of a small family hotel, facilitated the choice of Paros, in the context of a traditional Greek island of Cyclades destination.
The tourist product of Paros presents interesting characteristics in terms of geography, tourism mix, and seasonality, and it shares severe competitive conditions in its respective markets. In addition it has a destination marketing organization —with a strategic imperative to enhance existing levels of tourist loyalty which acknowledges relationship marketing and is keen to benefit from its implementation and the resulting benefits.
5.2 The Research Approach
5.2.1 The qualitative approach
Due to the sensitive nature of the subject, the complexity and dynamics of the product, and the need to obtain a holistic indication of the implantation of e-marketing relationship marketing at these destinations, a qualitative approach was deemed particularly suitable, as also indicated by (Aaker, Kumar and Day 1998).
One-to-one, in-depth interviews is scheduled to be conducted with representatives and clients of Paros and Cyclades tourism organizations. The thematic concerns for the interviews will be derived from an extensive review of the literature and the collective field experience of these authors.
With respect to this, the interviews will be semi-structured and conducted in an informal manner and will be tape-recorded and transcribed to collectively analyze the research findings. The
interviews will be conducted in the same time period – summer period 2007. In addition, an introduction to the research project, along with a list of issues to be discussed, will be made available to all respondents prior to interview.
5.2.2. The quantitative approach
An additional quantitative interviewer-completion survey will be conducted in selective Paros’ web destination pages, again in the same period. At the moment there are operating more than 700 web business pages- for hotels, resorts, beach bars etc, but only less than 5 operating as destination promotion guide, one of which belongs to the Municipality of Paros Island.
My intention is to collect over 300 fully-completed questionnaires, in order the findings of this survey, along with the findings of the abovementioned interviews to provide a base for a suitable framework for further investigation and give the foundation for future comparative studies.
5.3 The Information Required
Reviewing all the above specified aims, the information should also include: an overview of Paros tourism industry, a study of the use of the e-marketing to promote the destination as well as the individual businesses, and the marketing strategy of the Paros Tourist organization. Apart from this information, to complete the project, we should include the perceptions of visitors of Paros web pages.
5.3.1 The Phases of the Research
The research structure should contain explorative research, descriptive research and causal research together, as follows:
- The hypotheses of our model will have to be determined with the use of exploratory research. The results will then be tested and any possible corrections will suggest new concepts.
- Descriptive research refers the data that will result from the analysis of the current situation.
- To present the difference in between the current applied e-marketing relationship models with the one produced from this research project, a causal research method will be required.
5.4 Limitations of the Research Methods
As in any project, it will probable be avoidable not to contain errors and limitations. The main problem appears to be the limited theory background on e-marketing relationship theory for tourism destinations as well as their representation from operational research methods.
Other limitation seems to arise by the limited time available for carrying out the qualitative and quantitative research. The main tourist product of Paros Island has strong seasonality and the research will be from July to September 2007. Finally, I will probable not be able to control, if the sample collected from the web pages’ questionnaires will be representative.
Nevertheless, the most important issue seems to be the demonstration of e-marketing relationship dependencies using the Travelling Salesman Problem.
|Table 1 : Definitions of Relationship Marketing|
|Berry (1983)||Attracting, maintaining, and – in multi-service organizations – enhancing customer relationships.|
|Berry and Parasuraman (1991)||Attracting, developing, and retaining customer relationships.|
|Gummerson (1994)||Marketing seen as relationships, networks, and interaction.|
|Gummesson (1994)||To identify and establish, maintain, and enhance relationships with customers and other stakeholders, at a profit, so that the objectives of all parties involved are met; and that this is done by a mutual exchange and fulfillment of promises.|
|Sheth (1994)||The understanding, explanation, and management of the ongoing collaborative business relationship between suppliers and customers.|
|Sheth and Parvatiyar (1995)||Attempts to involve and integrate customers, suppliers, and other infrastructural partners into a firm’s developmental and marketing activities.|
|Morgan and Hunt (1994)||All marketing activities directed towards establishing, developing, and maintaining successful relational exchanges.|
|Aijo (1996)||There is a growing consensus on the definition of RM as involving the following aspects: a close long-term relationship between various (network) participants involved.|
|Table 2: The benefits and costs involved in entering relationships|
|· The hope that a particular partner can be trusted to provide quality market offerings;|
|· The premature elimination of offerings from other products/services that could be superior;|
|· The exchange is consistent with moral obligation;||· The monetary costs of co-production;|
|· The partnering firm shares common values with the consumer;||· The decreased prices as a consequence of accepting standardized market offerings;|
|· The customer has decreased search costs;||· The increased potential vulnerability of one partner’s opportunistic behaviour.|
|· The customer perceives that the risk associated with the offering is reduced;|
|· The exchange allows for customization that ends in better satisfying customer’s needs.|
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 Secrets of Successful Business Relationships Online,By Stoney deGeyter – July 11, 2006