CHAPTER 3
Relationship marketing
LISA O’MALLEY and CAROLINE TYNAN
Introduction
Marketing as a body of knowledge and an
academic discipline owes a great deal to what
Bartels (1976) calls the period of re-conceptual-
ization, where the marketing concept and the
mix management paradigm (4Ps), introduced
in the 1950s and 1960s, defined the nature and
content of marketing management. This
approach focused predominantly on the mar-
keting of products to large homogeneous
consumer markets (as existed in the USA).
Underpinning this approach are assumptions
from micro-economics that markets are effi-
cient, buyers and sellers are anonymous, pre-
vious and future transactions are irrelevant,
and that the price and quality function contains
all of the information needed for consumers to
make a rational decision (Easton and Araujo,
1994). However, even within this transactional
approach to marketing, it is obvious that these
assumptions are questionable given the increas-
ing importance of marketing communications,
branding and relationships in consumers’ deci-
sion making in the last 50 years.
The mix management approach focuses on
the sale of products to consumers. However, a
great deal of marketing occurs in situations
other than this, for example when the object of
exchange is a service rather than a product and
when the buyer is a company rather than an
individual consumer. The mix management
paradigm had very little to offer in situations
other than mass consumer product markets,
and therefore new approaches sensitive to
specific contexts and cultures needed to be
developed (see Shostack, 1977; Håkansson,
1982; Gummesson, 1987). This resulted in a new
approach to marketing, based on the creation
and maintenance of relationships, becoming
popular. This approach, known as relationship
marketing, is the focus of this chapter.
The purpose of this chapter then is to begin
to describe how the rich body of knowledge
that is relationship marketing has come into
being, what its major underpinning theories
are, what defining moments occurred, and
what might shape its future. The chapter begins
by defining what is commonly understood by
relationship marketing. Next, a brief review is
offered of the development of relationship
marketing in the key areas of services market-
ing, business-to-business and consumer mar-
keting. In a chapter such as this, only a brief
overview of the field can be offered and, thus,
readers are directed towards the seminal works
in each area. Because implementation is con-
sidered to be a particularly problematic aspect
of relationship marketing, specific attention is