Fostering Relational Exchange with the Internet The increasing importance of relational exchange The Internet’s impact on relational exchange in B2B and B2C markets

The Importance of Growing Relationships The Internet and 1:1 marketing Goal of creating unique relationships From share of market to share of customer Illustrated by four shifts Products to People (accountability, addressability) Competition to Cooperation (strategic alliances) Standalone to Networked (interactivity) Transactions to Relationships (resource exchange, collaborative orientation)

Measuring Relational Value Behavioral and psychological measures Behavioral Number of transactions Frequency of transactions Types of facilitating activities Psychological Satisfaction Trust Commitment

Developing B2C Relationships Relational exchange as a decision process Prepurchase – search and satisfaction Software agents pricingcentral, mysimon, julia Purchase – transactions and trust Payment systems u.are.u Postpurchase – complaints and commitment Justice theory for complaint handling starbucks Procedural, interactional, distributive

Developing B2B Relationships: Environmental Effects Business relationships help manage environment challenges Supply market characteristics Availability of other sources Variability of supply sources Situational characteristics Supply complexity Supply importance

Developing B2B Relationships: Dimensions of Relationships A framework for describing relationships (from Cannon and Perreault, 1999) Types of relationships organized by relationship connectors Operational – processes for exchange Info. exchange, cooperative norms, operational linkages Structural – forms of exchanges Legal bonds, buyer and seller adaptation

The Internet’s Impact: Reactive Internet affects supply market E.g., ease to locate alternative sources E.g., ease to communicate can locate better prices E.g., difficulty to discern seller identity (e-hub) Internet affects supply complexity E.g., buyer-supplier interaction  product re-design E.g., ease to locate supplier with more adaptive manufacturing capabilities

The Internet’s Impact: Proactive Businesses use the Internet to encourage relationship connectors E.g., buyer gets scheduling info about seller’s delivery constraint and acts to adjust inventory storage to accommodate seller, or choose another E.g., sellers tailor product offerings to increase dependence and switching costs for buyers E.g., sellers create extranets to automate re-buy processes