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IJOEM 4,3

Relationship marketing: a Thai case

Apisit Chattananon
Faculty of Oriental Medicine, Rangsit University, Patumtani, Thailand, and

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Jirasek Trimetsoontorn
Faculty of Industrial Education, King Mongkuts Institute of Technology, Bangkok, Thailand
Abstract
Purpose The purpose of this paper is to explore the impact of relationship marketing in a Thai context by gathering both quantitative and qualitative data. Design/methodology/approach This research adopts a multi method approach. A preliminary model is developed from existing literature, and then tested with data collected from a mail survey completed by 166 salespeople in 30 steel pipe rms in Thailand. Finally, to better understand the quantitative results from a different perspective, in-depth interviews with 15 sales managers are undertaken and the model further rened. Findings The quantitative ndings indicate that from the perspective of industrial sales people, the key success factor of relationship marketing is trust. However, the results of the in-depth interviews with sales managers did not support the views of the salespeople. The sales managers endorse four variables: bonding, empathy, reciprocity, and trust, as affecting the success of relationship marketing. Further, company image, information exchange, and time are identied as key factors that contribute to the building of these variables, which in turn contribute to performance. Research limitations/implications The data are gathered from one industry in one country only, hence future research could extend these ndings to other industries and countries to test their general application. Practical implications The key implications of these ndings for marketing managers include support for the use of relationship marketing programs at a strategic level as well as suggestions for successful implementation of these programs. These ndings suggest that the existence of needs analysis and response adaptation characteristics in salespeople have a strong, signicant, and positive association with buyer-seller relationship development. Originality/value This paper contributes to relationship marketing research because a scarcity of empirical research still exists in this eld, particularly in emerging markets such as Thailand. Keywords Relationship marketing, Sales force, Thailand Paper type Research paper

International Journal of Emerging Markets Vol. 4 No. 3, 2009 pp. 252-274 q Emerald Group Publishing Limited 1746-8809 DOI 10.1108/17468800910968418

Introduction The evolution of relationship marketing has been one of the most signicant developments in marketing since the 1990s, particularly in relation to industrial marketing (Dwyer et al., 1987; Morgan and Hunt, 1994; Sheth and Parvatiyar, 1995). Relationship marketing proposes that closer attention is paid to long-term nancial growth and other benets of retained customers (Crainer, 1996; Heffernan et al., 2008; Sin et al., 2006). Even though the term has recently been applied to consumer marketing, where consumers and organizations both seek a relationship (Bagozzi, 1995; OMalley and Tynan, 2000; Sheth and Parvatiyar, 1995), relationship marketing originated from, and has so far been discussed mainly in relation to, industrial and

business-to-business marketing (Morgan and Hunt, 1994; Noordewier et al., 1990; Palmatie et al., 2006). As the popularity of the relationship paradigm has grown, its applicability has broadened to new areas (Jacobucci and Ostrom, 1996). While to date relationships have been extensively studied in marketing channels, industrial, and some consumer settings in Western cultural contexts such as Europe, the USA, Australia and the UK, few studies have examined the paradigm in an Eastern cultural context such as Thailand, China, Hong Kong, South Korea, or Malaysia. The only exceptions include studies of relationship marketing in an Asian market by Abramson and Ai (1997). Furthermore, no studies could be located that specically examined relationship marketing in a manufacturing industry context in South-East Asia. However, some Asian studies have examined the antecedents and consequences of close business relationships in China (Yau et al., 2000) and Hong Kong (Sin et al., 2002, 2006). These studies found that decision-making uncertainty and perceived similarity positively affect relationships, whereas opportunism negatively affects relationship. In addition relationship marketing positively affects business performance, mediated by relationship quality and interdependence (Lee et al., 2001; Sin et al., 2006). Despite repeated emphasis on the benet of relationships, the literature lacks a comprehensive model of relationship marketing, notably in Thailand. Therefore, the main purpose of this paper is to develop and test a model of relationship marketing in the Thai business context. By developing and testing a model of relationship marketing, this paper will add to our understanding of relationships and will provide international marketers with practical guidelines to develop relational exchanges in Thailand. Relationship marketing is often described with respect to its purpose as opposed to its instruments or dening characteristics (Gronroos, 2000; Newell, 1997; Sin et al., 2006). This being the case, it follows that there are gaps in our knowledge of and understanding about the key success factors of relationship marketing and how to measure the effectiveness of those factors that impact on business performance. To ll this gap in the literature, the objectives of this research were to: . develop a Thai model of the key success factors of relationship marketing of industrial rms; . test the model of key success factors of relationship marketing with salespeople; and . conrm the model of relationship marketing from the perspective of sales managers. To achieve these objectives, we take a multi-method approach to capture different perspectives and triangulate results. We begin by reviewing prior research on key success factors of relationship marketing to develop a conceptual framework for this paper. We compare and contrast a number of relationship marketing models, and identify common themes between models developed in both western and eastern cultures. We then outline the quantitative methods used to collect data from front line sales people to test the model before presenting and discussing the results. Next, we outline the qualitative research, in-depth interviews of sales managers, who also have an important role in relationship marketing. The results of the qualitative stage are triangulated with the results from the quantitative stage. Finally, we end with a discussion of managerial implications, limitations and directions for future research.

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Literature review Most observers agree that relationship marketing is not only based on looking at individual transactions (OMalley and Tynan, 2000). While transactional marketing is now viewed as integrated into relationship marketing (Tyler and Stanley, 1999), relational exchange is a long-term and complex relationship between service providers and customers, not simply or only a series of transactions (Berry, 1983; Jackson, 1985; Dwyer et al., 1987). Relationships are likely to rely less on contract law and more on issues such as trust, equity, responsibility, and commitment (Gundlach and Murphy, 1993). Many factors including product, quality, price, exchange rate, and demand can all have a major inuence on sales. However, relationship marketing can also impact sales (Heffernan et al., 2008; Lee et al., 2001; Sin et al., 2006). This paper concentrates on relationship marketing but accepts that many other factors also have to be managed optimally. Increasingly, marketing issues such as rapid customer turnover and the effects of discontinued customer relationships have become critical for many businesses. Growing competition, coupled with industry maturity and recessionary pressures, mean that organizations cannot totally depend on new customers to take the place of lost customers (Zeithaml et al., 2006). Customer attraction but not customer retention is at the heart of transaction marketing exchanges which develop, sell and deliver products by means of short-term, discrete economic transactions. Relationship marketing is considered by some academic commentators to represent the beginning of a paradigm shift in marketing (Gronroos, 2000; Gummesson, 1995; OMalley and Tynan, 2000). The evolution of relationship marketing has been one of the most signicant developments in marketing over the decades, particularly in relation to industrial marketing (Dwyer et al., 1987; Palmatier et al., 2006; Sheth and Parvatiyar, 1995). Yau et al. (2000) compared a relationship marketing orientation (RMO) with a traditional market orientation in terms of its relative impact on the business performance of rms in retail, wholesale and manufacturing industries from the perspective of Chinese managers in Hong Kong. The ndings of this paper suggested that while relationship marketing is relevant to every industry, it has particular importance to the manufacturing industry. The manufacturing industry is distinguished by few large business-to-business transactions (e.g. between suppliers or down the channel). Donaldson and Toole (2000) studied the relationship strength in industrial markets in the UK and concluded that businesses can benet through collaboration and high levels of relationship marketing rather than through strict competition. Following on the results from the Yau et al. research (2000) and in order to test whether their observations can be generalized to the manufacturing sector in other countries, this paper aims to nd the key success factors of relationship marketing in the manufacturing industry, specically the steel pipe industry in an emerging market like Thailand. The literature on market orientation has provided evidence of the positive relationship between RMO and the business performance of rms (Heffernan et al., 2008; Palmatier et al., 2006; Sin et al., 2002). As the business environment changes and customers become more demanding, rms must practice relationship marketing to

compete effectively (OMalley and Tynan, 2000; Paul, 1988; Perrien et al., 1992). Changes in the business environment will not only affect wholesale and retail business, but also the manufacturing sector through the entire supply chain. Likewise, as competition intensies, direct consumers as well as institutional buyers will become more demanding. Therefore, a market orientation is a necessary but no longer sufcient condition for rms to remain successful. This applies to rms of all sizes in all industries (Yau et al., 2000). Abramson and Ai (1997) studied the business-to-business sector in China and concluded that guanxi-style buyer-seller relationships (guanxi as a complex set of social relationships) were strongly related to reduced levels of perceived uncertainty about the business environment and a variety of improved performance outcomes. Wong (1998) undertook a study on guanxi and relationship performance on industrial buying in China and suggested that rms should adapt relationship marketing plans to compete in the changing environment of the Chinese market. The ndings of these studies indicate that relationship marketing has a signicant impact on the business performance of rms in both service and industrial marketing. Several studies on the effects of relationship marketing on the business performance of rms across a range of industries have been reviewed (Dupont, 1998; Kim and Michell, 1999; Palmatier et al., 2006; White, 2000). Given that relationship marketing is more important in the industrial business-to-business context than the consumer context, most studies are located in the industrial business-to-business context. Briey, the ndings of these studies indicate that relationship marketing has a signicant impact on the business performance of rms in both service and industrial industries (Gummesson, 1994; Lee et al., 2001; Sin et al., 2006), with particular importance in the manufacturing industry (Liu and Wang, 1999; Prabhaker et al., 1995; Wagner et al., 1994; Wang et al., 2000; Wong and Chan, 1999). A number of attempts have been made to develop a comprehensive model of relationship marketing, notably Lindgreen (2001), developed a comprehensive model. This simple analytical model of relationship marketing is shown in Figure 1.

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Relationship marketing

Objective - Customer satisfaction - Customer delight - Share of customer - Customer retention - Loyalty

Defining constructs - Trust - Commitment - Co-operation - Communication - Shared values - Conflict - Power - Non-opportunistic behavior - Interdependence

Instruments - Direct marketing - Database marketing - Quality management - Services marketing - Customer partnering - Catch-all phrases

Source: Lingreen (2001)

Figure 1. A simple analytical model of relationship marketing

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In regard to the dening constructs, a number of authors have sought to characterize relationship marketing in term of trust, commitment, co-operation, communication, shared values, conict, power, non-opportunistic behavior, and interdependence (Anderson and Narus, 1990; Dwyer et al., 1987; Fontenot and Wilson, 1997; Morgan and Hunt, 1994; Stern and El-Ansary, 1992). In terms of the instruments, relationship marketing has been interpreted as direct marketing and database marketing, quality management, services marketing, customer partnering, and catch-all phrases covering many different marketing disciplines (Ballantyne et al., 1995; Fletcher et al., 1990). In summary, based on the previous research outlined above, relationship marketing has had a positive impact on the performance of the rms studied. However, additional research is denitely needed to ascertain the existence and strength of the connection between relationship marketing, buyers and sellers attitudes as well as to uncover the conditions favoring or hindering the emergence of this relationship. Much of the relational literature has been concerned with identifying the key dimensions of relationship marketing and exploring how these dimensions interact, Morgan and Hunt (1994). Less attention has been devoted to how these constructs drive business performance (Kalwani and Narayndas, 1994), thus leaving largely unanswered those questions about the links between relationships and the value they create. Relational variables have been drawn from a wide variety of theoretical domains. Ahmed et al. (1999) identify six main sources of business partnerships: transaction cost analysis (Williamson, 1975, 1979, 1985), relational exchange theory (Macneil, 1982), resource-dependence theory (Pfeffer and Salancik, 1978), network theory (Ford, 1990, Achrol, 1997), political economy paradigm (Stern and Reve, 1980), and cross-cultural management. Each theory has provided a particular lens through which relationships, their dimensions and appropriate research methodologies, are viewed. Although marketing academics and practitioners have been examining relationship marketing for more than a decade (Berry, 1995, Levitt, 1983, Gronroos, 1990, OMalley and Tynan, 2000), most of the studies on relationship marketing have been criticized as overly simplistic because of their uni-dimensional perspective (Yau, 1995) unlike the model of Callaghan et al. (1995) which used a multi-dimensional perspective (Yau et al., 1998). Therefore, this paper adopts the relationship marketing construct as originally proposed by Callaghan et al. (1995). The items used to measure the relationship marketing construct were further enhanced by Yau et al. (1998) to operationalize the concept fully. The four common components are bonding, empathy, reciprocity and trust. A popular denition of relationship marketing was developed by Callaghan et al. (1995, p. 10) as follows:
Relationship marketing centres on the creation and maintenance of the relationship between two parties of exchange, the supplier as an individual and the consumer as an individual through the possession of the desire to be mutually empathic, reciprocal, trusting and to form bonds.

Bonding is dened as the dimension of a business relationship that results in two parties (the customer and the supplier) acting in a unied manner toward a desired goal (Callaghan et al., 1995). In the dyadic relationship of a buyer and a seller, bonding can be

described as a dynamic process that is progressive over time (Dwyer et al., 1987; Ganesan, 1994; Levitt, 1983). The bonding process begins with the very basic force of the need for a seller to nd a buyer for their product, and the desire for a buyer to purchase a product that will satisfy their needs. Various bonds exist between parties and indicate different levels of relationships. Bonds have served effectively to control social and business behavior in society (Chiao, 1982), and contribute to removing doubt, creating trust and forming close relationships (Hinde, 1997). The dimension of bonding as it applies to relationship marketing consists of the development and enhancement of consumer and brand loyalty and, as Levitt (1983) described, a long-term relationship (a bonded relationship) with the seller. Thus, a long-term relationship requires bonding in order to exist. At an advanced stage in the relationship, the bonds are so solidied that they are almost impossible to break (Heide and Weiss, 1995). Based on the results of these studies, the hypothesis relative to business performance is: H1. Bonding will have a positive impact on business performance. Empathy is the dimension of a business relationship that enables two parties to see a situation from the others perspective. It is dened as seeking to understand somebody else desires and goals. It involves the ability of individual parties to view the situation from the other partys perspective in a truly cognitive sense (Hwang, 1987). The empathy dimension plays a major role in Chinese business relationships (Brunner et al., 1989; Hwang, 1987) and is also apparent in western business relationships (Ferguson, 1990; Houston et al., 1992). These studies indicate that empathy is a necessary condition to foster a positive relationship between two parties. Thus, the inclusion of empathy as a dimension of relationship marketing must follow. Based upon these studies, the second hypothesis is: H2. Empathy will have a positive impact on business performance. Reciprocity is the dimension of a business relationship that enables either party to provide favours or make allowances for the other in return for similar favours or allowances to be received at a later date (Callaghan et al., 1995). In terms of aspects of social action between two individuals it covers the notions of bilateral contingency, interdependence for mutual benet, and quality of exchanged values (Lebra, 1976) and can be regarded as sociological dualism and mutual legal obligations of repaying (Malinowski, 1959). Several studies have indicated links of reciprocity and empathy to relationship marketing and exchange (Ellis et al., 1993; Houston et al., 1992; Smith and Johnson, 1993). Reciprocity and bonding are linked in such a way that a reciprocal arrangement is indicative of cooperation. Reciprocity is thus an appropriate dimension of relationship marketing. This leads to the following hypothesis: H3. Reciprocity will have a positive impact of business performance. Trust is dened as a belief or conviction about the other partys intentions within the relationship. In the context of relationship marketing, trust is dened as the dimension of a business relationship that determines the level to which each party feels they can rely on the integrity of the promise offered by the other (Callaghan et al., 1995). It is a widely accepted basis for relationships (Andaleeb, 1992; Crosby et al., 1990; Gronroos, 1990; Moorman et al., 1992; Sullivan and Peterson, 1982). It has been documented in the form of an exchange relationship (Gronroos, 1990), considered by some as a critical

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component of business relationships (Martin and Sohi, 1993; Moorman et al., 1992), and identied as a key construct in modeling relationship marketing (Morgan and Hunt, 1994). Trust has also been linked to components of the other three dimensions (bonding, reciprocity, and empathy) leading to cooperation (Anderson and Narus, 1990; Morgan and Hunt, 1994), communication (Anderson and Narus, 1990; Bialaszewski and Giallourakis, 1985; Mohr and Nevin, 1990) and bargaining (Schurr and Ozanne, 1985). This paper will test the following hypothesis regarding trust: H4. Trust will have a positive impact of business performance. Research methodology Having developed a preliminary model, primary data to further rene and test the model was gathered in two stages: study 1, descriptive stage involving the collection of quantitative data via a mail survey; followed by study 2, an exploratory stage consisting of in-depth interviews. Given the extent of prior research in western economies and the need to test these theories in an emerging economy, a single case approach was used where one industry was investigated in detail (Yin, 2003). The industry chosen was the Thai steel pipe industry. The overall market value of the steel industry about US$5,800 million in 2007 and it is typical of many manufacturing industries in Thailand such as water supply, gas, oil, chemicals, and numerous types of construction works. At present, the steel pipe products have been diversied for use in such industries as automobiles, food, furniture, machinery, and electrical conduit (Department of Industrial Promotion, 2007). The importance of the marketing concept is evident in the sample industry, which is characterized by its dyadic exchange process in which a rms employees interact with customers regularly and directly (Brown and Swartz, 1989; Zeithaml et al., 1990). Stage 1 A common operational practice, susceptible to strong criticism, is researchers use of only a single dimension, such as trust, reciprocity, bonding, or empathy, to describe relationship marketing (Callaghan et al., 1995; Gronroos, 1989; Houston et al., 1992; Morgan and Hunt, 1994). Moreover, it may be necessary to look beyond the literature of relationship marketing toward marketing in general and to literature from other disciplines that focus on the area of relationships. Based on past literature, this paper adopts the popular relationship marketing construct as originally proposed by Callaghan et al. (1995). The items used to measure the relationship marketing construct were further enhanced by Yau et al. (1998) to operationalize the concept fully. The four common components of relationship marketing are bonding, empathy, reciprocity, and trust. A series of pre-tests and interviews was conducted to operationalise the conceptual model from Figure 2. In order to develop the conceptual model, the perspective originally proposed by Callaghan et al. (1995) was used and the items used to measure the relationship marketing construct were further enhanced by Yau et al. (1998a) to operationalise the concepts fully. The questionnaire consisted of two key parts: the rst covered a series of statements describing the four business relationship constructs bonding, empathy, reciprocity, and trust, while the second part focused on obtaining information about the rms

Bonding

Relationship marketing: a Thai case

Business performance

Empathy

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Reciprocity

Trust Source: Developed for this research based on Callaghan et al. (1995)

Figure 2. A model of relationship marketing

operations and present business performance, company background and forecast of future business performance. The questionnaire was initially drafted in English, then translated and back-translated by Thai personnel skilled in English and Thai and familiar with the marketing literature. The questionnaires were then pre-tested in Thai language to ensure the English meaning of various concepts, phrases and words were equivalent in the Thai language and to ne-tune its ease of administration. Some modications were necessary as some words or phrases had no comparable Thai equivalent. Once drafted, the mail questionnaire was pre-tested using a sample of 40 respondents. Respondents were asked to complete the questionnaires and to document any concerns they had about it. The information was obtained by using the key informant method (Campbell, 1995; John and Reve, 1982). A careful examination of returned questionnaires revealed that virtually all items were well understood by the respondents. At the time of the study there were approximately 50 steel pipe manufacturers registered in the network organizations of the Thai Department of Industrial Works and the Board of Investment (Department of Industrial Promotion, 2001). All of these steel pipe rms were contacted by telephone to invite their participation in the study, with 30 rms expressing interest. Of the remaining companies, some had closed down, others had moved, while others declined to take part in the study due to an excessive workload, absence of the responsible manager, or because of a company policy prohibiting the disclosure of business information. Each of the 30 companies willing to participate in the study then sent a list of their sales persons with the nal usable sample comprising 250 sales persons who from the 30 companies with all salespeople having a direct selling relationship with customers. The salesperson is considered to be the most important factor in selling steel pipe to customers. Ingram (1990, p. 9) argues that if salespeople are to meet future challenges, they must:
[. . .] adopt the perspective of the true professional and employ a customer-oriented approach that employs truthful, non-manipulative tactics which satisfy the long-term needs of both the customer and the selling rm.

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Further, Swan and Nolan (1985) contend that rms are seeking out relationships with their customers and that salespeople are important in helping to build these relationships (Dwyer et al., 1987). Results Out of 250 questionnaires mailed, 166 usable questionnaires were returned, for a response rate of 66.4 percent. Early verses late responses were compared as a test of non-response bias (Armstrong and Overton, 1977) with no signicant variations noted. The validated RMO constructs developed by Yau et al. (1998) were used in this paper as independent variables. For the purpose of this paper, reliability and validity testing of these constructs are presented in Table I and the constructs of business performance presented in Table II. The stated hypotheses regarding the impact of the relationship marketing constructs on business performance were tested using multiple regressions following the guidelines established by Hair et al. (1995). Prior to testing the actual hypotheses, correlations between the two constructs of RMO and business performance were derived. The RMO items were factor analyzed into four factors. The four composite

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Item Bonding My enterprise achievement builds on our reliance on each other We keep in touch constantly We work in close cooperation We both try very hard to establish a long-term relationship Percentage of variance explained 21.6 Empathy We know how each other feels We always see things from each others view We care about each others feelings Percentage of various explained 16.6 Reciprocity If anyone helps my company to solve difculties, I feel responsible to repay his/her kindness We always regard never forget a good turn as our business motto We keep our promises Percentage of variance explained 14.6 Trust He/she is trustworthy on important things I trust him/her We trust each other According to our past business relationship, I think he/she is a trustworthy person Percentage of variance explained 22.5 Alpha coefcient of the whole scale

Total sample Cronbach alpha (a) 0.852

Item-to-total correlation 0.617 0.728 0.717 0.731

0.764 0.546 0.599 0.649 0.779 0.650 0.748 0.649 0.908 0.818 0.839 0.769 0.748 0.903

Table I. Scale descriptions of the RMO scale

Sources: Developed for this research based on Callaghan (1995); Yau (1998) and Yau et al. (2000)

Item (1) Sales growth (2) Customer retention (3) Return on investment (4) Market share (5) Getting important and valuable information (6) Ability to obtain loans (7) Ability to obtain better terms for loans (8) Ability to obtain government approval (9) Shorten the time for government approval (10) Contact with important persons (11) Ability to secure local resources (12) Motivating employees Alpha coefcient of the whole scale

Total sample Cronbach alpha (a)

Item-to-total correlation 0.617 0.594 0.629 0.685 0.588 0.668 0.695 0.710 0.719 0.647 0.686 0.527

Relationship marketing: a Thai case 261

0.9117

Sources: Developed for this research based on Slater and Narver (1994) and Yau et al. (2000)

Table II. Scale descriptions for current business performance

variables in the regression were the sums of the concept measures. The rst regression analysis was then performed on business performance, where the expectation was that the relationship orientation variables would be shown to be important. Results in Table III show there is no signicant correlation between bonding, empathy and reciprocity on business performance. However, there was a signicant correlation (0.004; p , 0.05) between the trust construct and performance, suggesting some support for at least one relationship. A further Pearson correlation analysis was conducted by obtaining partial correlation coefcients, controlled for years of respondent professional sales experience. As was the case in Table IV, the correlation matrix (Pearson correlation) analysis in table IV indicated that only the trust construct produced a partial
Unstandardised coefcients (B) 3.879 1.322 2.860 2 6.308 0.220 Standardised coefcients (b) 0.012 0.028 2 0.070 0.239

Model Constant Bonding Empathy Reciprocity Trust

t-values 6.233 * 0.117 0.302 20.742 2.890 * *

Sig. 0.000 0.907 0.763 0.459 0.004

Adjusted R 2 0.035 Table III. Construct correlation matrix: multiple regression equation with performance

Note: Signicant at *0.000 and * *0.004

Bonding Performance 0.047

Empathy 0.069

Reciprocity 20.011

Trust 0.237 *

Notes: Pearson correlation; *signicant (one-tailed) at 0.002

Table IV. Correlation matrix between each independent variable and dependent variable

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correlation coefcient (0.002; p , 0.025) signicantly related to performance. The individual hypotheses were then tested using a multiple regression model (Hair et al., 1995) with performance as the dependent variable. The results obtained using actual performance only partially supported the stated hypotheses in their proposition that a signicant relationship exists between the relationship marketing constructs and performance. Only one of the four constructs was found to be signicant in the prediction model. Stepwise regression was used to reduce the 14 independent variables (from the four groups of bonding, empathy, reciprocity, and trust) and to run the equation with performance as the dependent variable. Two models were derived from this method. In the rst step (Table V), only one independent variable, I think he/she is a trustworthy person (or trust) entered the equation. Results of stepwise regression analysis for the 14 independent variables with performance as the criterion variable showed that only one independent variable was signicant in the nal regression with an adjusted R 2 of 0.058. In the second step (Table VI), two independent variables, According to our past business relationships, I think he/she is a trustworthy person (or trust) and We keep our promise (or reciprocity) entered the equation. The results from the second stepwise regression analysis show that the two independent variables above were signicant in the nal regression with an adjusted R 2 of 0.084. The regression equation of this model was as follows: performance 4.608 0.209 (trust) 2 0.137 (reciprocity) of which reciprocity has a partial negative correlation, and all independent variables including constant are signicant at p , 0.05. This result shows that According to our past business relationships, I think he/she is a trustworthy person (or trust) was the most signicant variable related to performance.

Model I Constant A

Unstandardised coefcient (B) 3.927 0.184

Standardised coefcient (b) 0.253

t-values 13.071 * 3.230 * *

F-values 10.433 * * *

Adjusted R 2 0.058

Table V. Stepwise analysis of coefcient

Notes: Predictors: (constant), A, according to our past business relationship; I think he/she is a trustworthy person; signicant at *0.000; * *0.002; * * *0.002

Model 2 Constant A B

Unstandardised coefcient (B) 4.608 0.209 2 0.137

Standardised coefcient (b) 0.288 20.182

t-values 11.027 * 3.652 * * 22.310 * * *

F-values 8.034 * * * *

Adjusted R 2 0.084

Table VI. Stepwise analysis of coefcient

Notes: Predictors: (constant), A, according to our past business relationship, I think he/she is a trustworthy person; B, we keep our promises. Signicant at *0.000; * *0.000; * * *0.022; * * * *0.000

Stage 2 The aim of this stage is to determine the reactions of sales managers to these ndings, and also to assess the extent of similarities and differences between sales managers and sales agents in the Thai steel pipe industry. Sales managers have a different role and responsibility to sales agents. Sales managers have responsibility for recruiting, selecting; compensation, training, and evaluation, so these activities should be examined as to how they might make a positive impact on sales agents customer-oriented behaviors. Therefore, this paper employed the qualitative technique of in-depth interviews, due to their advantage in discovering new ideas or variables to be used in the Thai context (Zikmund, 1997). Interviews were also chosen for logistic and time related reasons as sales managers, due to their tight schedules, were more easily accessed individually. The in-depth interview was used to obtain respondents attitudes in relation to the impact of relationship marketing on business performance and to develop hypotheses for future conclusive studies (Kinnear and Taylor, 1996), all of which are relevant to the exploratory stage of this study. In addition, these interviews were likely to be perceived by sales managers as an opportunity to evaluate their companys performance with a view to enhancing future performance and gaining competitive advantage. Respondents were drawn from the same 30 companies which provided the salespeople sample. Each company was asked to nominate the appropriate manager to participate in the interviews. Each selected rm received a letter of invitation by regular mail or email. Follow-up telephone calls were then made to request interviews. In order to ensure that correct subjects were approached, a cross-reference check was conducted. Each subject was then invited and asked to participate voluntarily. All sales managers who work for the 30 Thai Board-of-investment subject rms were eligible to be interviewed. In response to the letter of invitation, 15 sales managers or marketing managers agreed to participate. The remaining 15 candidates either refused to participate or were unable to be contacted. A total of 15 interviews were successfully conducted, representing a response rate of 50 percent. Each interview lasted about 45 minutes and was conducted in the participants ofce (Kinnear and Taylor, 1996). Guidelines for the interviews were based on the objectives of the exploratory research and are included in the Appendix. These guidelines were composed of open-ended questions designed to motivate thought and were kept relatively precise (Kinnear and Taylor, 1996). Interviews began with questions regarding participants personal background in order to establish rapport. Then, a general discussion on the impact of relationship marketing on business performance across the steel pipe industry in Thailand was held. Sales managers were then presented with the results of the survey of 166 salespeople indicating that trust was the only variable that was signicantly related to performance. Sales managers were asked whether they agreed with the quantitative ndings, and their reasons why. This was followed by a discussion of their perception of the major obstacles to their salespeople adopting a relationship marketing approach to their work, how they might overcome these obstacles, and their view on the training needs of salespeople in terms of relationship marketing. The interviews nished with a discussion of strategies to enhance relationship marketing and nal comments.

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Results It is interesting to examine the discrepancies between the views of sales managers compared with those of sales staff. The ndings showed that these managers held the view that all four variables, bonding, empathy, reciprocity, and trust, inuence business performance. For example, eight sales managers commented that buyers willingness to buy the product from sellers is inuenced by the image of the seller. Five of sales managers were of the view that time is the key facilitator in developing long-term relationships. Three sales managers pointed out that information and business exchange is a key element and the personal connection between salesperson and customer is the most important factor. All 15 sales managers disagreed with the results of salespeople that trust is the only the variable that is signicantly related to performance. The view of the sales managers was that the relationship involved in marketing was more complex and their reasons can be considered in the context of all four of the original variables trust, bonding, empathy and reciprocity. Table VII analyzes their responses in this framework. The sales managers also believed that another two factors time and information/business exchange were key elements in creating and maintaining mutual empathy, reciprocity, trust, and bonding that then relate to business performance. The processes to build trust and information ow take time. The literature notes that, although trust is a key construct in modeling relationship marketing (Morgan and Hunt, 1994), trust has also been linked to components of the other three dimensions (bonding, reciprocity, and empathy) leading to cooperation (Anderson and Narus, 1990; Morgan and Hunt, 1994), communication (Bialaszewski and Giallourakis, 1985; Anderson and Narus, 1990; Mohr and Nevin, 1990) and bargaining (Schurr and Ozanne, 1985). On the basis of the opinions of the sales managers expressed in this paper, their views can be represented in the following model as Figure 3. Discussion In this paper, 15 sales managers from steel pipe companies operating in Thailand were interviewed concerning the impact of four independent variables bonding, empathy, reciprocity, and trust on business performance. The ndings showed that these managers held the view that all four of these variables inuence business performance. These ndings can be compared to the views of 166 salespeople from steel pipe rms in Thailand surveyed in the rst stage of this research, which showed that in
Reasons 1. All four variables are related to the companys image and lead to positive business performance 2. All four variables require time to develop a mature relationship between company representatives and customers 3. All four variables are developed through the personal connection between customers and company representatives Source: Field data No. of respondents 8 5 2 Percentages (%) 53 33 14

Table VII. Reasons sales managers gave for all four variables impacting on performance

Bonding

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1. Image 2. Time 3. Information and business exchange

Empathy Business performance Reciprocity

Trust Source: The perception by sales managers of steel pipe industry in Thailand

Figure 3. Model of relationship marketing in the steel pipe industry in Thailand

their view trust was the only one of the four variables that inuenced business performance. Sales managers may not necessarily have the same opinions. This needs to be empirically established. They may have different views about relationship marketing due to different roles and responsibilities. All sales managers held the view that, where the price between competitors is equal, the image of the company or seller is a key factor in determining whether or not a customer will purchase a product. Image can be interpreted as a potential partners trustworthiness in delivering promises. A further area for research resulting from this paper would be further exploration of the reasons why sales managers and salespeople hold these differing views on the variables that impact on business performance. Conclusion Objective 1 sought to study the key success factors of relationship marketing of Thai manufacturing rms. Despite the existence of an extensive eld of literature on relationship marketing, there has been little attention given to dening its purpose or characteristics. This research paper attempts to provide readers with a holistic and consolidated view of relationship marketing, and a critical insight into both the conceptual and empirical literature on this subject. It compared and contrasted a number of relationship marketing models, and identies common themes between them. It also provides more review studies on the effects of relationship marketing on the business performance of rms across a range of industries. The last part of this paper considers the key success factors that contribute to relationship marketing based on a construct originally proposed by Callaghan et al. (1995). These factors are bonding, empathy, reciprocity and trust. This construct has been adopted as the theoretical framework for this research. The quantitative ndings in the rst stage indicated that from the perspective of Thai industrial sales people, the key success factor of relationship marketing was trust. However, the results of the in-depth interviews with sales managers in the stage 2 did not support the views of the salespeople. They endorsed four variables: bonding,

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empathy, reciprocity, and trust, as affecting the success of relationship marketing in Thailand. Objective 2 sought to verify empirically the impact of relationship marketing on the business performance of rms in the Thai manufacturing sector. The second objective builds on the ndings of objective 1 and considers the application of the key success factors identied in the Callaghan model to relationship marketing and their impacts on business performance within the steel pipe industry in Thailand. This research involved a mail survey of 166 salespeople from 30 steel pipe rms in Thailand. Results indicated that relationship marketing is perceived as an important factor in enhancing business performance. Yet, using multiple regression, trust was shown to be the only variable that was seen to be signicantly related to performance. The remaining independent variables of bonding, empathy and reciprocity were not found to be signicantly related to performance from the viewpoint of salespeople surveyed. The reasons might be the different role and duty of salespeople from sales managers. Objective 3 sought to conrm the model of relationship marketing in the view of sales managers. Supplementary data on relationship marketing was gathered from 15 sales managers. Results indicated some differences in the perceptions of sales managers and salespeople in regard to the factors that contribute to an organizations performance. Whereas salespeople held the view that trust was the only signicant factor contributing to performance, sales managers endorsed all four variables in the Callaghan model as impacting on performance. Sales managers also commented that the image of a company, the degree of information exchange, and time are key factors that contribute to the building of bonding, empathy, reciprocity and trust, which in turn contribute to performance. Managerial implications This paper extends the growing body of literature that identies relationship marketing as providing meaningful antecedent variables to develop and sustain buyer-seller relationships and improves business performance. From the standpoint of practical implications for the sales manager, these results could provide potentially important direction. The trust dimension was signicantly related to performance which suggests that providing the necessary training in, and monitoring of, such behaviors may be a key component in developing a successful sales organization. In managing a sales organization, this nding may provide support for the efcacy of training and development in attempts to improve productivity. This positive effect manifests itself in increased levels of customer trust in satisfaction with; and intentions of doing continued business with that salesperson. The relative ease in addressing trust issues in a training and development context, as opposed to bonding, empathy and reciprocity in buyer-seller interactions, does suggest that focusing on fostering a customer orientation within a sales organization may have more immediate and tangible results while using fewer resources. The main reason for the differences in views between sales managers and sales staff may be that they perform different roles in the company. The sales managers role is to evaluate and control the salespeople in developing and maintaining effective customer relationships. Asking the salesperson to adapt their behavior to incorporate relationship concepts can only work when those concepts inform the entire marketing process.

On their own, salespeople can achieve a great deal but they cannot promote what is not there. Any encouragement of relationship building must include sales management, marketing and operations management for real success. All the aspects of sales management: recruitment, training, remuneration and sales planning, need to promote the image of the company and information exchange to enhance the buyer-seller relationships in Thailand. The conclusion of previous studied found that signicant relationships were sought between bonding, empathy, reciprocity and trust as independent variables, with performance as the dependent variables (Callaghan et al., 1995; Gronroos, 1989; Houston et al., 1992). For this research we found that both the multiple regression analysis equation and the correlation matrix (Pearson correlation) show that trust is the only variable that was signicantly related to performance; the remaining independent variables were not signicantly related to performance. Limitations and future research While this research has extended previous studies and used a rigorous methodology, some limitations exist. First, the model used in the measurement of relationship marketing program were largely adapted from relationship marketing theory outside Thailand, therefore, further validation is required. Second, the sampling frame used in this paper was salespeople and sales managers from one industry, steel pipes. Therefore, results can be generalized only for the steel pipe industry, but may not be for generalized across other industries and other developing country contexts. Third, it should be acknowledged that the scope of this paper makes it difcult to draw any formal causal attributions related to bonding, empathy and reciprocity and these ndings should not be interpreted as discounting important components of the relationship marketing. Finally, it should be noted that the original questionnaire was administered in Thai. The questions used were translated from the original and back again to ensure that they approach the intended meaning as closely as possible. However, some subtleties will always remain difcult to translate. The above outlined limitations do not however minimize the signicance of the results and the ndings of this research. Instead, they are addressed for the improvement of and to further research in this area. This research has provided opportunities for future research. Future research could consider conducting investigations among other stakeholders such as customers, shareholders and government. Do those groups respond differently to salespeople and sales managers of this research? Further studies of different relationship marketing programs could show another interesting aspect for future investigation. Finally, in relation to the model proposed in this research, future research could be extended to different relationship marketing programs and strategies across different industries. Do salespeople and sales managers feel the same way as these research ndings indicate? Future investigation could examine whether or not resultant patterns in other countries particularly in other emerging markets correspond with those of Thailand. Do Asian and western salespeople and sales managers feel the same way as these research ndings indicate?

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Opportunistic behaviors 1. Agree 2. Neutral 3. Disagree . Tension and frustration 1. Agree 2. Neutral 3. Disagree (3) To what extent are how to overcome the obstacles to building a relationship marketing approach? . Adaptation in sales 1. Agree 2. Neutral 3. Disagree . Communication sufciency 1. Agree 2. Neutral 3. Disagree . Passion 1. Agree 2. Neutral 3. Disagree . Trust 1. Agree 2. Neutral 3. Disagree . Service quality 1. Agree 2. Neutral 3. Disagree . Cooperation 1. Agree 2. Neutral 3. Disagree . Knowledge 1. Agree 2. Neutral 3. Disagree . Evaluation and control 1. Agree 2. Neutral 3. Disagree . Commitment 1. Agree 2. Neutral 3. Disagree . Continuous improvement 1. Agree 2. Neutral 3. Disagree . Customer orientation strategy 1. Agree 2. Neutral 3. Disagree (4) To what extent is training of sales agents in relationship marketing necessary in order to enhance business performance? . Inter-personal skill 1. Agree 2. Neutral 3. Disagree . Communication skill 1. Agree 2. Neutral 3. Disagree . Problem solving skill 1. Agree 2. Neutral 3. Disagree . Presentation skill 1. Agree 2. Neutral 3. Disagree . Project planning or scheduling skill 1. Agree 2. Neutral 3. Disagree . Technical or industrial knowledge 1. Agree 2. Neutral 3. Disagree . Teamwork skill 1. Agree 2. Neutral 3. Disagree
.

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Creative thinking skill 1. Agree 2. Neutral Leadership skill 1. Agree 2. Neutral

3. Disagree 3. Disagree

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About the authors Apisit Chattananon is a lecturer in marketing at the Faculty of Oriental Medicine, Rangsit University, Thailand and is a vice president of the Marketing Association of Thailand. He received his doctorate from the University of Southern Queensland, Australia in 2004. His research interests include societal marketing, relationship marketing and corporate image management Apisit Chattananon is the corresponding author and can be contacted at: apisitc@communicationandmore.com Jirasek Trimetsoontorn is an Assistant Professor of Marketing in the Faculty of Industrial Education, King Mongkuts Institute of Technology. He received his doctorate from the University of South Australia in 2003. He has taught at both undergraduate and postgraduate levels using a variety of modes and is actively supervising several research students. His research areas include relationship marketing, consumer behavior, corporate image management and services marketing.

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