A measure and initial test of managers' perceptions of relationship ...

J. of the Acad. Mark. Sci. (2007) 35:382–397 DOI 10.1007/s11747-007-0046-0

A measure and initial test of managers’ perceptions of relationship marketing in inter-organizational exchanges Regina C. McNally & Abbie Griffin

Published online: 2 June 2007 # Academy of Marketing Science 2007

Abstract This manuscript develops a new measure of how managers perceive relationship marketing and provides an initial test of its utility. The analysis reveals that relationship marketing is a second-order factor consisting of four dimensions: an ongoing bonding process, mutual value creation, a cooperative atmosphere, and information technology use. This second-order, four-factor model is useful in understanding the association between managers’ perceptions of what constitutes relationship marketing and their perceptions of its institutionalization (i.e., adoption as a standard practice). The survey data that are used to develop the relationship marketing scale were obtained from two independent samples of marketers, purchasers, and engineers. Because these professions are involved in inter-organizational exchange relationships, they are the most likely respondents within firms to be knowledgeable about relationship marketing. The scale development sample of 33 engineers, 36 marketers and 18 purchasing agents is derived from multiple industries, while the utility test sample of 61 engineers, 22 marketers and 33 purchasing agents is

R. C. McNally (*) Department of Marketing & Supply Chain Management, Michigan State University, N370 North Business Complex, East Lansing, MI 48824-1122, USA e-mail: [email protected] A. Griffin Royal L. Garff Presidential Chair in Marketing David Eccles School of Business, University of Utah, 1645 Campus Center Dr., Room 107, Salt Lake City, UT 84112, USA e-mail: [email protected]

taken from firm members in the automotive and earth moving equipment industries. Keywords Marketing . CRM . Relationship marketing This research strives to develop a parsimonious, multidimensional measure of managers’ perceptions of relationship marketing in general. The measure applies in the context of inter-organizational exchange relationships. We also provide an initial test of the measure’s utility. A potentially problematic issue associated with relationship marketing is the advent of the concept of customer relationship management (CRM), which often refers to relationship building and maintenance with customers. Do these terms mean the same thing to managers, or do they refer to different aspects of exchange with customers? To date, little discussion of the differences and similarities between terms has taken place. Furthermore, no research has been conducted to see if marketers view these constructs similarly. This research addresses this gap by measuring and comparing marketers’ perceptions of the terms relationship marketing and relationship management. An area of discussion is to which specific exchange partners the term relationship marketing applies. Some researchers equate relationship marketing exclusively with customer exchanges (e.g., Parvatiyar and Sheth 2000), while others broaden its applicability to other exchange relationships, such as those with suppliers (e.g., Nevin 1995). If relationship marketing does indeed apply to other exchange relationships, then business professionals involved in those relationships (e.g., purchasers, design engineers) also may be knowledgeable about relationship marketing. However, they are more likely to employ the term “relationship management” to identify the idea of building and maintaining exchange relationships (Brennan

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and Turnbull 1999). This research also investigates whether professionals outside of marketing perceive relationship management similarly to marketers’ perceptions of relationship marketing. This paper proceeds by first conceptualizing relationship marketing as a second-order construct. Next, scale development is discussed, including item sources and the two samples providing data to evaluate the perceived structure of the relationship marketing construct. The confirmatory factor analysis results from the first (scale development) sample are presented, supporting a second-order structure and revealing four first-order dimensions of relationship marketing: an ongoing bonding process, mutual value creation, a cooperative atmosphere, and information technology use. The generalizability and utility of this secondorder, multi-factor conceptualization is investigated in a second sample consisting of respondents from the earthmoving and automotive industries from the same three functional groups used in scale development. A utility test evaluates the association of managers’ perceptions of relationship marketing institutionalization and the secondorder factor structure of relationship marketing.

Conceptualizations of relationship marketing Buyer–customer interactions lie on a continuum between transactional exchange and relationship marketing. Transactional exchange is the arms-length selling and buying of goods where the identity of the exchange partners is irrelevant (Dwyer et al. 1987). Price is the primary marketing variable impacting transactions. The other end of the continuum is anchored by relationship marketing, which Morgan and Hunt (1994, p.22) define as “marketing activities directed toward establishing, developing, and maintaining successful relational exchanges.” Parvatiyar and Sheth (2000, p. 9) consider relationship marketing to be “the ongoing process of engaging in cooperative and collaborative activities and programs with immediate and end-use customers to create or enhance mutual economic value at reduced cost.” Consistent to both definitions is that relationship marketing encompasses more than simply initiating relationships. Relationship marketing is an ongoing process that also encompasses the outcome of relational exchange through development and maintenance activities and programs. Despite academic agreement regarding relationship marketing’s definition, managers are confused regarding its implementation (Fournier et al. 1998). Confusion reigns both in terms of the general dimensions of the actions that need to be taken to move toward relationship marketing as well as what the specific attributes are that make up the more general dimensions. Four general dimensions and a

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number of very specific attributes have been identified in the marketing literature. While many sellers in business-to-business markets exhibit positive attitudes toward relationship marketing, often the motivation is more for seller gain than for mutual benefit (Morris et al. 1998). They implement aspects of relationship marketing to guarantee future revenue streams by locking customers into exchange agreements through integrated processes and nonretrievable investments. In pursuing customer-retention profit advantages (Reichheld 1996) associated with relationship marketing, marketers often forget that relationship marketing success hinges on its adoption by both parties (Fournier et al. 1998). This oversight may lead marketers to inundate customers with unwanted information in the name of creating a “relationship.” Because minimal consideration is given to the need for mutual benefits, the long-term result can be lost customers as they find other partners who do provide mutual long-term benefits. The increased collaboration required to develop truly close exchange relationships is resource-intensive and incurs opportunity costs (Dwyer et al. 1987). Therefore, relationships should be formed only with a select group of customers and other exchange partners. In businessto-business contexts, customers should have similar business philosophies, equivalent dependence/power levels, and provide an enhanced technological edge (Anderson and Narus 1991). Close supplier relationships should be developed only with partners that add value to the product the buyer is producing (Wilson 1995). In general, close relationships should be formed only with firms that “can do an outstanding job for your customer and dovetail neatly into your operation” (Avedisian 1998, p. 57). Exchanges that do not fit into these guidelines should be pursued via transactional marketing, focusing on acquiring new customers who care primarily about the immediate attraction of the offer (Jackson 1985). Our view of relationship marketing draws conceptually from both Parvatiyar and Sheth (2000) and Morgan and Hunt (1994). To them, relationship marketing is the ongoing process of engaging in cooperative and collaborative activities and programs with exchange partners to create or enhance mutual economic value at reduced cost. Rather than focusing solely on immediate and end-use customers, all exchange partners are considered potential relationship marketing targets. This choice is supported by other marketing researchers who suggest that relationship marketing activities can target non-customer exchange partners, such as suppliers and competitors, when they can enhance customer value (e.g., Nevin 1995). The literature thus suggests that implementing a relationship marketing program contains several components. First is the importance of an ongoing process. Relationships

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occur over time and require joint effort to maintain and enhance. This joint effort may involve investments to integrate processes and systems, creating structural bonds (Wilson 1995). The ongoing nature of the joint effort also results in personal relationships between firm members, creating social bonds. These bonds are the cement of the relationship, strengthening it and supporting the ongoing and evolving nature of this type of exchange. Engaging in bonding activities and making investments over time is done so that both firms achieve economic value. Sharing information and working together are important aspects of the relationship marketing definition that reduce the potential for the one-sided lock-in problem described earlier. Both firms improve effectiveness and efficiency as information is shared and they work together to respond to opportunities. Information sharing improves understanding of customer needs and competitor strategies. Working together allows offerings to be adjusted to increase customer satisfaction and retention by capitalizing on each firm’s strengths and resources. Crucial to relationship marketing is that the exchanging firms share equitably in the increased profits. Finally, from the literature above, the spirit in which the ongoing process occurs is important in implementing relationship marketing. The interaction between the members of the exchanging firms should be cooperative and collaborative. Opportunistic behavior, such as providing false information or threatening legal action, reduces the firms’ joint abilities to deliver well-positioned products and services to the market faster and more efficiently than the competition. The mere threat of opportunistic behavior can create a defensive atmosphere (Jap and Anderson 2003), which limits the exchange partners’ ability to achieve the economic benefits associated with relationship marketing. In addition to bonding and investments over time to receive economic value, the relationship marketing definition identifies working together in an atmosphere of cooperation and collaboration as also necessary. Another term describing relationship development and maintenance is customer relationship management (CRM). Like relationship marketing, CRM also means different things to different people (Paas and Kuijlen 2001; Winer 2001). One definition of CRM is a “process that addresses all aspects of identifying customers, creating customer knowledge, building customer relationships, and shaping their perceptions of the organization and its products” (Srivastava et al. 1999, p. 169). In this broad definition, relationship marketing is the third step of building customer relationships (Zinkhan 2002). Some CRM proponents focus exclusively on information technology, regarding CRM as application software that supports data warehousing, data mining and modeling, and customer communication management (Paas and Kuijlen

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2001). A customer database or information file often is the foundation for any customer relationship management activity. Databases enable tracking and analyzing customer behavior one customer at a time, providing precise understanding of the profit implications of marketing program alternatives. Within this information technologybased view of CRM, relationship marketing is a middle step where managers use customer service, customization, and loyalty programs to develop and enhance relationships with customers (Winer 2001). Despite these differing definitions, CRM and relationship marketing are used interchangeably in the marketing literature to refer to building and maintaining quality relationships with targeted customers (e.g., Parvatiyar and Sheth 2000). However, the information technology-based view of CRM does suggest a fourth dimension in the relationship marketing conceptualization. Information technology is necessary to enhance mutual value through improved customer offerings at lower cost to the firms. Our ingoing hypothesis is that managers see no difference between relationship marketing and customer relationship management. They both refer to the same concept of building and maintaining cooperative, integrated relationships with targeted exchange partners. We later test the validity of this hypothesis. Overall then, the relationship marketing literature suggests that the concept is multi-dimensional, incorporating the three general dimensions of: an ongoing bonding process, mutual economic value, and cooperation and collaboration. The CRM literature suggests a fourth dimension having to do with information technology, which this paradigm sees as a necessary enabler to forming successful relationships. Any measure of relationship marketing should therefore include multiple dimensions to represent the full conceptual space of the definition. We conceptualize relationship marketing as a second-order factor because the four dimensions are all necessary for a complete and successful implementation of the definition. In addition to identifying overarching dimensions of relationship marketing, researchers have devoted considerable attention to identifying specific attributes or features of relationship marketing. Some of the attributes identified are incorporated directly into the dimensions of the concept as identified earlier (e.g., cooperation and collaboration), but many are not. Lambe et al. (2000) summarize attributes that academic researchers have identified as potentially important: 1. Commitment—“an implicit or explicit pledge of relational continuity between exchange partners” (Dwyer et al. 1987, p. 19); 2. Trust—the “belief that one relationship partner will act in the best interests of the other” (Wilson 1995, p. 337);

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3. Communication—“the formal as well as informal sharing of meaningful and timely information between firms” (Anderson and Narus 1990, p. 44); 4. Cooperation—proactive coordinated actions intended to achieve outcomes that either benefit both parties or that will be reciprocated in the future (Wilson 1995); 5. Mutual goals—“the degree to which partners share goals that can only be accomplished through joint action and the maintenance of the relationship” (Wilson 1995, p. 338); 6. Relational norms—“expectations about behavior that are at least partially shared by a group of decision makers” (Lambe et al. 2000, p. 220); 7. Interdependence—the recognition by both partners in an exchange relationship that the relationship provides benefits greater than either partner could attain alone or than are possible from other business alternatives (Lambe et al. 2000); 8. Social bonds—“the degree of mutual personal friendship and liking shared” by the exchange partners (Wilson 1995, p. 339); 9. Structural bonds—the combination of specific investments and poor alternatives create impediments to relationship termination (Wilson 1995); 10. Adaptations—altering processes or the products/services exchanged to accommodate the other party (Lambe et al. 2000); and 11. Performance satisfaction—“the degree to which the business transaction meets the business performance expectations of the partner” (Wilson 1995, p. 338). Given the complexity of relationship marketing’s academic definition and conceptualization, the overlap between relationship marketing and CRM, and the extensive list of identified attributes, the conceptual and definitional confusion among managers is not surprising. The problem is that if a firm implements only a portion of the attribute list or only one of the definitional dimensions, they may not reap all the benefits of relational exchange. But, which individual attributes are key and how do they fit with the expected dimensions of relationship marketing? A priori, it is not clear where in the overall conceptual structure of relationship marketing some of these attributes should be placed. This research investigates the structure and nature of the attributes identified as being associated with relationship marketing, and then reports on an industry-specific test of the resulting scale’s generalizability and utility.

Scale development We followed the steps advocated by Churchill (1979) in developing a comprehensive scale. After specifying the

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construct domain (described previously), we developed a comprehensive list of initial items through reviewing the literature. Items were pretested for relevance, face validity, interpretation, and readability with marketing academics and business managers. We then collected responses from a heterogeneous sample of business professionals (marketers, purchasers, and mechanical engineers), and performed exploratory and confirmatory factor analyses on the data. The construct’s structure was evaluated and the scale’s utility was tested on responses from a second, homogeneous sample of marketers, purchasers, and mechanical engineers. The survey instrument used in the utility test also included items measuring relationship marketing institutionalization in the respondent’s profession, allowing evaluation of the new scale’s validity in a nomological network. These steps are described in more detail in the following paragraphs. The literature review incorporated both academic and popular management sources due to our goal to assess managerial perceptions of relationship marketing in general. To capture the full conceptual space, we developed a comprehensive list of 54 items and asked respondents to identify the extent to which the items relate to their perception of relationship marketing in general (rather than as practiced at their firm). The appendix lists the items and their sources. The items were pretested by both academics and business managers. Two business professionals read the questionnaire aloud and described their understanding of each item, resulting in minor phrasing changes to some items. Next, two academics familiar with relationship marketing research reviewed the items to ensure adequate coverage of the construct domain, resulting in minor changes to some item phrasings. The questionnaire also was modified such that, rather than defining relationship marketing, respondents were asked to provide their own definition, and then to respond to the items based on their definition. For the final pretest, 14 members of an executive MBA program at a large midwestern university and six members of a professional association reviewed the survey. No concerns were raised at this stage, so no further changes were made. The data used to evaluate relationship marketing were collected from members of three professions typically involved in inter-organizational exchange relationships: marketers/product managers, purchasers/supply managers, and mechanical engineers/designers. Because these professions are involved in inter-organizational exchange relationships, they are the most likely respondents within firms to be knowledgeable about relationship marketing. The scale development sample was drawn from lists of marketers, purchasers, and mechanical design engineers purchased

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from Best Mailing Lists, Inc. As generalizability was desired, we used a heterogeneous sample from a broad set of industries. Four random samples of 200 individuals each were created: three samples for relationship management and one sample from the list of marketers for relationship marketing. The survey was mailed in mid-September, 2001. A second survey was mailed in early November 2001, and a reminder postcard followed the second mailing around 10 days later. Table 1 provides respondent information. The response rate for the total sample was 11.8%. Such a low response rate is not unexpected, as survey response rates in general are decreasing (Javis 2002). The response rate was further diminished by the September 11th, 2001 tragedy that disrupted business activity, and the anthrax mail scares that made many unwilling to open mail from unknown or unexpected sources. Responses to the question ‘what do you think the term relationship marketing [relationship management] means?’ yielded themes consistent with the literature review. Fortythree of the 87 respondents provided a description, including 15 marketers, 19 engineers, and 9 purchasers. The attribute identified most frequently (10 respondents) was mutual benefits, as in the following marketer response: Realizing how important mutually beneficial relationships are to being successful and actively taking steps to nurture and manage those relationships. Six respondents identified specific benefits in the form of better outcomes, including “effectiveness and productivity” (a marketer), “promotes opportunities and growth for both parties while insuring marketing competitiveness” (a purchaser), and “allow the best outcome possible i.e., allow better services” (engineer response). Six respondents identified trust and personal relationships in their definitions, making these attributes as

noteworthy to respondents as achieving better outcomes. A marketer’s definition exemplifies this: ... decisions are made based on a friendship or other similar association (probably built on trust). Another attribute was communication/information sharing (5 respondents). One purchaser’s definition consisted simply of “sharing of information.” One marketer suggested information sharing is necessary to achieve mutual benefits, while another suggests information sharing via “relational databases” will “improve target market identification, promotion, and customer service.” But there may be a limit to information sharing: a purchaser suggests that information sharing should occur “only to the point that it benefits both parties.” Other attributes mentioned include shared goals/expectations (4 respondents), extended timeframes (3 respondents), customized solutions (2 respondents), partnerships (2 respondents), and a positive atmosphere (2 respondents) in the form of “a good rapport with customers and/or vendors” (marketer response) or an “amicable settling of difference” (purchaser response). Finally, some respondents’ descriptions identified variations in the groups targeted for relationship marketing. Specifically, eight identified customers as the target, five identified both customers and suppliers (or in the words of a purchaser “all the interactions ... along the supply chain”), and one marketer even identified employees as relationship marketing targets. These differences regarding relationship marketing’s target mirror the academic literature discussion. The responses across professions were pooled for analysis because the covariance matrices are equivalent (Box’s M test insignificant at p>0.05). To identify the factor structure, exploratory factor analysis of the pooled responses was conducted. The analysis results in 13 factors

Table 1 Scale development sample response rates Measure

Profession

Sample size

Undeliverable

Number of responses

Response rate (%)

Relationship management

Engineering Marketing Purchasing

200 200 201 601 200 801

14 20 11 45 18 63

33 15 18 66 21 87

17.74 8.11 9.47 11.87 11.54 11.78

200 400 201 801

14 38 11 63

33 36 18 87

17.74 9.95 9.47 11.78

Sub-total Relationship marketing TOTAL Response Rates by Profession Profession Engineers Marketers Purchasers TOTAL

Marketing

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with eigenvalues larger than 1, but only the first five factors each account for more than 5% of the variance in the data, and together account for more than 51% of the variance in the data set. Given the objective of achieving parsimonious dimensionality and the expectation of approximately four factors from the definition of relationship marketing, a second EFA extracting only five factors was conducted. One cross-loading item was deleted from further analysis. The second-order 5-factor structure was analyzed further via confirmatory factor analysis (CFA) using EQS Version 6.1 for Windows (Bentler and Wu 1995) to ensure the constructs exhibit acceptable reliability levels and discriminant validity. Because the data are negatively (left) skewed and leptokurtic (peaked), which can distort fit statistics, responses were squared to improve distributional normality. Specific items were evaluated in terms of the item’s error variance, Lagrangian multiplier (LM) test (i.e., modification indices), and residual covariation (Anderson and Gerbing 1988). The initial model was modified by changing parameters to load items on different factors (as suggested by the LM tests) and by deleting cross-loading items. Construct reliability was evaluated by examining the parameter estimates, their associated t values, and the average variance extracted (Fornell and Larcker 1981). We assessed construct discriminant validity by verifying that the latent variable correlations differed significantly from 1, which resulted in two factors being collapsed into a single factor due to high correlation. Model fits were evaluated using the comparative fit index (CFI) and the root mean square error of approximation (RMSEA) because of their robustness, stability, and lack of sensitivity to sample size (Fan et al. 1999). The model Chi-Square goodnessof-fit, degrees of freedom (df), and p-statistic are reported, along with the Satorra–Bentler (S–B) fit statistics, which employ a correction factor for kurtosis that improves fit statistic reliability (Hu et al. 1992). The first order factor means, standard deviations, and correlations are reported in Table 2. CFA statistics for the second-order four-factor relationship marketing model are presented in Table 3. The model fits the data reasonably well: CFI=0.912; RMSEA=0.065; and χ2 =201.54, df=148, p0.05 Not tested

Both models Both models, l set to 1 for identification

p>0.05 Not tested

Both Both Both Both

p>0.05 p>0.05 p>0.05 p>0.05

models models models models

Not tested p>0.05 p>0.05 Not tested

Model Fit: χ2 (250)=337.24, p0.01; S–B CFI=0.939; S–B RMSEA=0.045

Social bonds occur through the integration processes of implementing multiple communication channels between firms (i.e., contacts between the firm at multiple levels) and ensuring the established processes continue through low employee turnover (i.e., employee retention programs). Low antagonism can enhance social bonding and support ongoing exchanges. Mutual value creation is a second dimension of the relationship marketing definition. This factor emphasizes not only exchange partner information collection but also relationship enhancement based on the collected information. Acquiring new customers can cost five times more than retaining existing customers; a 5% increase in

customer retention can have a substantial positive impact on firm profits (Reichheld 1996). Relationship marketing emphasizes the importance of customer retention by creating value for both parties to the exchange. The managers in these samples acknowledge the importance of engaging in profitable exchange relationships, as well as the need to collect and analyze data to enhance them. The items in the third factor that load equally include commitment, mutual adaptations, communication, and cooperation. In the scale development sample the items of satisfaction, internal coordination, and joint planning also load, and joint problem solving loads on this factor in the utility test sample. Given the strength of the cooperation

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Figure 1 Full structural equation model of profession institutionalization and relationship marketing. Model fit: χ2 (167)= 210.54, p>0.01; CFI=0.942; RMSEA=0.048; Satorra– Bentler Scaled (S–B) χ2 (167)= 204.28, p>0.01; S–B CFI= 0.939; S–B RMSEA=0.045.

0.35 Relationship Marketing

0.90

Relationship Marketing Profession Institutionalization

0.38 Use of Information Technology

Ongoing Bonding Process 0.76

Mutual Value Creation

item loading, and its importance as one of the three definitional dimensions of relationship marketing, this factor is named cooperative atmosphere. The last factor common to both analyses is that of information technology use. As suggested in the CRM literature, respondents perceive that specialized investments in information technology in support of exchange partners play an important role in successfully implementing relationship marketing. Information technology both increases effectiveness and enhances efficiency (Sisodia and Wolfe 2000). Effectiveness increases as the information technology enables sophisticated data analysis while simultaneously allowing individual attention to each exchange partner in the database, enabling customized offerings in terms of both the product/service and the relationship. Efficiencies from IT use accrue through both scale economies (larger numbers of customers) and scope economies (multiple offerings to individual customers). This factor emphasizes the need for specialized technology investments to manage exchange relationships, and so is differentiated from the ongoing bonding process factor that focuses more on integration of general business processes across firms. Earlier we discussed the confusion that exists among managers regarding the implementation of relationship marketing. Our research addresses this confusion by answering the question, “What does relationship marketing look like?” The higher-order, multi-dimensional structure resulting from our analysis reveals the complex nature of relationship marketing. To yield the benefits of relational exchange, managers should engage in relationship marketing activities only with exchange partners who will integrate business processes and supporting CRM software

0.79

Cooperative Atmosphere

in a cooperative atmosphere to create mutual value. The value of this measure is that it identifies the specific attributes that stand out among managers as being necessary in relationship marketing implementation.

Limitations Our attempt to replicate the results from the scale development sample data resulted in a measurement model that differed somewhat from the original. The inconsistency across models, as well as the low item loadings and factor variance extracted for the ongoing bonding process factor could result from the question and item phrasing. While our intention was to identify how managers perceive relationship marketing in general, subjects may have responded based on the specific implementation at their firm. Pretesting and concept descriptions provided by the scale development sample suggest that the majority of respondents answered based on their general perceptions, but the data do not provide conclusive evidence. This distinction is important because data focused on specific implementations limits our ability to capture the entire conceptual space of relationship marketing. The problems associated with incomplete implementation, as highlighted in the literature review, would exacerbate this problem. Further research should employ instructions that clarify the intended generality, and evaluate the stability of the second-order factor structure in other research contexts. In addition, the resulting model consists of factors that have a small number of items. In particular, information technology use has only two items. This small number of items may increase estimation difficulties in other samples.

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A larger number of measures is preferable for robust measures. Therefore, an opportunity exists for further development of this measure to increase reliability and robustness, with particular emphasis on the factors of ongoing bonding process and information technology use. Future research should include additional items and investigate improved phrasing. Acknowledgements The authors thank participants at the 6th Research Conference on Relationship Marketing and Customer Relationship Management, Lisa Scheer, Roger Calantone, Madhu Viswanathan, Bill Qualls, Debra Zahay, George Zinkhan, and two anonymous reviewers for helpful comments on earlier drafts of this article.

Appendix: Survey Items For surveys sent to purchasers and engineers, relationship management was substituted for relationship marketing, and the appropriate profession was substituted for marketers. Relationship Marketing Survey Items for Utility Test (Item sources in parentheses) Relationship marketing is associated with (1=not at all; 4=somewhat; 7=very much): RM1 Analyzing the exchange partner data that we collect (McCann 1997). RM2 Evaluating our exchange partners’ profitability from the relationship (Anderson and Narus 1991; Schultz 2000). RM3 Integration of our exchange partners’ information systems with ours (Day 2000). RM4 Senior management commitment to the relationship at both firms (Morris et al. 1998). RM5 Tracking the lifetime value that the exchange partner provides to us (Shani and Chalasani 1993). RM6 Personal relationships between people at both firms (Dwyer et al. 1987; Lambe et al. 2000). RM7 Low antagonism between our exchange partners and us (Brennan and Turnbull 1999). RM8 Installing new information technology to support our suppliers (Schultz 2000). RM9 Shared goals between our exchange partners and us (Dwyer et al. 1987; Lambe et al. 2000). RM10 Joint problem solving (Day 2000). RM11 Contacts between the firms at multiple organizational levels (Day 2000). RM12 Higher satisfaction for us (Dwyer et al. 1987; Lambe et al. 2000). RM13 Commitment between our exchange partners and us (Dwyer et al. 1987; Lambe et al. 2000; Morgan and Hunt 1994). RM14 Using specialized software to manage the relationship (Sisodia and Wolfe 2000).

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RM15 Agreement between our exchange partners and us about how to behave (Dwyer et al. 1987; Lambe et al. 2000). RM16 Both our exchange partners and us adapt to support the relationship (Dwyer et al. 1987; Lambe et al. 2000). RM17 Communication between our exchange partners and us (Lambe et al. 2000; Morgan and Hunt 1994). RM18 Locking us into the relationship (Lambe et al 2000; Morris et al. 1998). RM19 Higher satisfaction for our exchange partners (Dwyer et al. 1987; Lambe et al. 2000). RM20 Employee retention programs at both firms (Day 2000). RM21 Trust between our exchange partners and us (Dwyer et al. 1987; Lambe et al. 2000; Morgan and Hunt 1994). RM22 Evaluating our profitability resulting from the relationship (Anderson and Narus 1991; Parvatiyar and Sheth 2000; Schultz 2000). RM23 Expectations of future exchanges (Dwyer et al. 1987; Morris et al. 1998). RM24 Using exchange partner data analysis results to enhance our relationships (McCann 1997). RM25 Equal power levels between our exchange partners and us (Brennan and Turnbull 1999; Anderson and Narus 1991). RM26 Coordination among all the different functional groups (e.g., purchasing, engineering, etc.) that interact with our exchange partners (Day 2000; Jackson 1985). RM27 Installing new information technology to support our customers (Schultz 2000). RM28 Cooperation between our exchange partners and us (Dwyer et al. 1987; Lambe et al. 2000; Morgan and Hunt 1994; Parvatiyar and Sheth 2000). RM29 Integration of our exchange partners’ processes with ours (Day 2000). RM30 Joint planning between our exchange partners and us (Dwyer et al. 1987; Lambe et al. 2000). Bold item numbers indicate items remaining in the final relationship marketing measure. The following items also were used in the scale development survey. 31. Forming relationships with specific suppliers/customers only (Anderson and Narus 1991; Wilson 1995). 32. Differentiating our purchasing/marketing programs to fit different groups of suppliers/customers (Anderson and Narus 1991; Morris et al. 1998). 33. Involving people from other, appropriate departments in the supply process when necessary (Jackson 1985). 34. Compensating our employees for supporting close relationships (Harrison 2000). 35. Collecting data about suppliers, customers, and competitors (McCann 1997).

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36. Using written agreements to document our relationships (Patterson 1996). 37. Having regular, documented status meetings with customers/suppliers (Patterson 1996). 38. Evaluating our companies’ satisfaction with the relationship (Anderson and Narus 1991; Schultz 2000). 39. Evaluating our supplier’s/customer’s satisfaction with the relationship (Anderson and Narus 1991; Schultz 2000). 40. Using single-sourcing of suppliers (Barnes 1994). 41. Automatically rolling over supply agreements (where they exist) (Barnes 1994). 42. Reduced uncertainty for both us and our suppliers/ customers (Morgan and Hunt 1994). 43. Locking our suppliers/customers into the relationship (Morris et al. 1998; Lambe et al. 2000). 44. Preference for certain suppliers/customers over others (Morris et al. 1998). 45. Reductions in our purchasing/selling costs (Barnes 1994). 46. More profit for us (Anderson and Narus 1991; Parvatiyar and Sheth 2000). 47. More profit for our suppliers/customers (Anderson and Narus 1991; Parvatiyar and Sheth 2000). 48. Interdependence between our suppliers/customers and us (Dwyer et al. 1987; Lambe et al. 2000). 49. Both firms rely increasingly on ethical behavior for the supply process (Gundlach and Murphy 1993). 50. Using supplier/customer retention or loyalty programs (Morris et al. 1998). 51. Specific investments to the relationship made by both firms (Morris et al. 1998). 52. Extensive sharing of proprietary information (Day 2000). 53. A philosophy that influences all interactions with our suppliers/customers (Day 2000). 54. Applies only when suppliers/customers also want a relationship (Anderson and Narus 1991). Profession Institutionalization Items (Adapted from Kostova and Roth 2002). Among people who work in marketing (1=strongly disagree; 4=neither agree nor disagree; 7=strongly agree): PI1 There is a very strong message among marketers that you can’t stay in business nowadays if you do not adopt relationship marketing. PI2 Relationship marketing is at the heart of who marketers are. PI3 Marketers know a great deal about relationship marketing. PI4 It is expected that marketers would implement relationship marketing. PI5 Most successful marketers are implementing relationship marketing programs. PI6 There is a lot of talk about relationship marketing going on in the marketing media.

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PI7 Marketers would implement relationship marketing even if not required by exchange partners. PI8 In this environment, relationship marketing is a moral obligation. PI9 Marketers care a great deal about relationship marketing.

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