Journal <if Marketing Marupmmt, 1997, 13, 501-522

Nicole E. CovieUo^,

f of Management,university of Calgary,2500 University Dr NW,Calgary, AB, Canada,and ^Department ofMarkettns, untversitv ofAuckland, Auckland, NewZealand, and School ofBusiness and EconomicsWtljna Launer Umuersity,Waterloo, Ontario,Canada

UnderstandingContemporary Marketing:Development of aClassification Schetuefhg , p ^ Relationship Marketing has been used in a multitude ofways to describe and define marketing in the contemporaryenvironment. This has led to the term being loosely defined andapplied in the literature, resulting in fhistration for both researchers

j . . -n ^ , r • , • i • , r

jjna practitioners. I nerejore, a classification scheme is dei'elopedjromanalysis of the extant literature, and used to systematically examinethe meaning of marketing across twelve dimensions which reflectissues related to marketing practice. From this scheme, the authorsidentify two 'perspectives' of marketing, which encompass fourdistinguishable 'types' of marketing. Implications for future researchin the area are discussed.

Introduction

In the last decade, there has been considerable discussion in the marketing literatureabout how to describe and define marketing in the contemporary environment. Formany, the commonly accepted view of marketing has been that offered by theAmerican Marketing Association (AMA) (1985), which defines marketing to be:

".. .the process of planning and executing the conception,pricing, promotion, and distribution of ideas, goods, andservices to create exchange, and satisfy individual andorganisational objectives".

At the same time, however, certain academics have long argued that tills view ofnwrketing is outdated, and only relevant to certain types of firms and markets (e.g.Hakansson 1982; Berry 1983; Ford 1984, 1990; Gummesson 1987, 1994; Gronroos1989, 1994). Further, they argue that the "4P" perspective offered by the AMA isoverly clinical and based solely on short-term economic transactions in amonopolistic environment dominated by large mvdtirwtional firms (see Gronroos1994). As noted by Moller (1992) in his review and critique of marketing traditions,the AMA view seems to presume "primarily a stimuius-response relationshipbetween the firm and its customers", where the customer markets are comprised ofpassive, indepiendent actors.

Such criticisms have led to the suggestion that a "new paradigm" is moreuniversally relevant, whereby Marketing per se is focused on facilitating andmaintaining relationships over time. Gionroos (1990) defines the purpose ofmarketing in this new context:

0267-257X/97/060501 + 22 $12.00/0 ©1997 The Dryden Press

502 Nicole E. Covielh et al.

"to establish, maintain, and enhance relationships withcustomers and other partnere, at a profit, so tiiat theobjectives of the partners involved are met. This isachieved by a mutual exchange and fulfilment ofpromises".

This "new paradigm" is commonly referred to as Relationship Marketing, andwidespread interest in the concept has led to an increase in conceptual and en\piricalresearch debating the topic, and a number of important books (e.g. Gronroos 1990;Christopher et al. 1991; Houston et al. 1992; Gummesson 1995). A number ofrespected journals have devoted a "special issue" to Relationship Marketing per se, andnot surprisingly, reviews of the history and evolution of Relationship Marketing arenow published (Gronroos 1994; Sheth and Parvatiyar 1995; Aijo 1996). Unfortu-nately, the precise meaning of this concept is not always clear in the literature (Fisk1994; Iacobucd 1994; Peterson 1995; Blois 1996; Lehtinen 1996).

At the broadest level. Relationship Marketing may incorporate everything fromdatabase management to personalised service, loyalt}' programmes, brand loyalty,internal marketing, personal/social relationships, and strategic alliances (Kotler1992; Gummesson 1994; Morgan and Hunt 1994). Defined as such, the term becomesa "catch-all" phrase, perhaps best summarised by Gummesson (1994) as anapproach which is based on the concepts of relationships, interactions, andnetworks.

Unfortunately, such a broad definition seems to have had two effects: (i) it has ledto the term Relationship Marketing being applied rather loosely, with the result thatthe term has become a popularised buzzword (see Nevin 1995); and (ii) it has alsogiven rise to a multitude of narrow, convenient interpretations of the term, wherebyRelationship Marketing has been defined to fit the specific needs of the researcher. Forexample, some areas of the literature discuss Relationship Marketing at a tactical level,with one interpretation presenting it as a manifestation of database marketing; atechnology-based tool for firms to acquire and manage customers (Copulsky andWolf 1990; Shani and Chalasani 1993; Peppers and Rogers 1995). A second tacticalinterpretation uses Relationship Marketing to describe the use of electronic media toactively interact with the customer (Blattberg and Deighton 1991; Fuhrman 1991). Athird tactical interpretation suggests Relationship Marketing is a form of multi-levelmarketing or pyramid selling (Fogg 1995; Croft and Woodruffe 1996).

At a more strategic level. Relationship Marketing is said to focus on the ongoingcollaborative relationships between a business and its customers, with emphasis oncustomer retention (Parvatiyar and Sheth 1994; Sheth 1995). Notably, RelatimshipMarketing in this context excludes non-customer relationships with suppliers orother partners, or non-business/social relationships. Not surprisingly, a fifthinterpretation of Relationship Marketing then extends the focus beyond customerretention to view the concept as a form of "ciistomer partnering", where the buyeris "...involved in the design and development of the seller's product or serviceofferings" (Magrath and Hardy 1994), or where "working relationships" areestablished with customer firms in a co-operative manner (Anderson and Narus1990). This perspective focuses on co-operative jsersonal relationships as the coreelement of marketing.

These varied interpretations and multiple uses of the term Relationship Marketingare perhaps not surprising given flie complexity of relationships themselves

Vuderstandittg Contemporary Marketing: Depelopment of a Clasiijication Scheme 503

(Gummesson 1994). However, they have led to the term being both over-used andcarelessly iised in the literature, resulting in frustration for academics andpractitioners.

To complicate matters, concepts associated with research on interactions andnetworks are also common in the literature, yet are often labelled as RelationshipMarketing (e.g. Gronroos 1990, 1994; Webster 1992; Morgan and Hiont 1994). This isin spite of the fact that significant bodies of research have been developed in eacharea. For example, research from the IMP Group has led to the development of theInteraction Approach, which focuses on individuals in dyadic buyer-seller relation-ships (Hakansson 1982; Ford 1990). In this context, marketing is seen as aninterpersonal and social process, based on ongoing contact, mutual goals, trust, andcommitment (Hakansson 1982; Ford 1984; Wiison and Mummalaneru 1986; Wilsonand Jantrania 1994). The Network perspective on the other hand, focuses on thetotality of relationships in a market/industry, and not the individual or dyad (Easton1995). As described by Gummesson (1994), marketing in this context involves ".. .thecreation, utilisation, and maintenance of [a] network [of relationships betweenfirms]".

Each of these schools of research reflects an additional factor which furthercomplicates efforts to understand marketing: they focus on different levels ofrelational exchange and iinits of analysis. While there are many types and levels ofrelationships which could be examined in the context of marketing. TransactionMarketing (i.e. the AMA view) tends to focus on the exchange process betweengroups ol customers in the market and the organisafion supplying products andservices. Alternatively, the other schools focus specifically on relationships with asptecific end-user, or between individuals or firms, or among groups of firms.

Finally, efforts to understand the nature of marketing in the contemporaryenvironment are complicated by the common argument that certain types ofmarketing are appropriate to consumer goods firms, while others are moreappropriate to service or industrial goods companies. This view is conceptualised ina continuum by Gronroos (1990), who argues that the more traditional "marketingmix" perspective of marketing is "not geared to the current market situation" ofservice industries and manufacturers of industrial goods and equipment, and is"...therefore misleading." (Gronroos 1995). Although Gronroos does recogruse thatmarketing mix variables can be useful for such firms, Easton (1992) states that mostoi^anisational markets "reject" the micro-economic model of marketing, where thefirm "sets the mix parameters and the faceless market responds." Furthermore,Easton (1995) argues that the "interorganisational network paradigms" lie outside"tradifior«l marketing territory" since the central nofion is that of exchangerelationships (as opposed to transactiors).

This notion that the Interacticm and Network approaches to marketing are thedomain of industrial and service firms is also reflected in recent work (Hakanssonand Snehota 1995; Rajala et al. 1995; Low 1996), in spite of the fact that when dealingwith the external market, all types of firms (regardless of industry) may have contactwith customers, individuate, and other businesses, through exchange relationships.Similarly, all firms may have contact and perhaps relationships with buyers in themarket, be they intennediaries or end-users (ranging from those in the mass market,to specifically identified individuals, to organisational buyers or teams of buyers).Thus, firms and/or individuals may interact and develop exchange relatiorwhips

504 Nicok E. Covidlo et al.

with other firms and/or individuals, and such exchange relationships may be moretransactional, or more relationship in nature.

To summarise, efforts to understand marketing in the contemporary environmentare complicated by: (i) the variety of terms used to describe and define marketing;(ii) the differing units of analysis emphasised by each of the differing schools ofresearch in the area; and (iii) the view that some types of marketing are moreappropriate to certain industries than others.

Research Purpose

Given the above, the purpose of this paper is to review the broad literature basediscussing Relationship Marketing per se, and develop a simple classification schemewhich helps to identify and distinguish various types of marketing that may berelevant to contemporary business practice. Rather thiin focus on the shortcomingsof the extant literature, this paper seeks to:

(1) integrate both the normative and positive literatures, in an effort to develop aconceptual framework that can be used for future investigation of marketingpractice;

(2) synthesise the Scandinavian-based European school of marketing thought withthat of the North American school, recognising that each has developed its ownemphasis and traditions over time (Halinen 1995; Wensley 1995; Wilson andMoUer 1991); and

(3) focus on issues relevant to the practice of marketing (rather than the theory ofmarketing).

The paper proceeds with the development of the classification scheme, which isthen used to identify four distinct, yet related, types of marketing. The paperconcludes with a discussion of key findings and research implications.

A Classification Scheme

To begin, the classification scheme was developed by identifying the themes anddimensions of marketing most commonly discussed in the literature. This involvedsearching for common denominators acrcss the various streams of researchassociated with the services, channels, interaction, and network literature. Of note,this examination of the literature recogrdsed that even if previous researchesfocused on similar issues, they may not have used common construct definitions(Wilson and Moller 1991).

In the same way the various views of marketing may or may not share certainconstructs, there is little agreement on the conceptual language to be used (Halinen1995). Therefore, an effort was made to avoid language such as that found in thenetwork literature which is "diffuse and contradictory, hence difficult to learn"(Easton 1992). Rather, the classification scheme employs terms which are concise.

Understanding Contemporary Marketing: Development of a Classifiattion Scheme 505

understandable, and able to be communicated to academics and practitioners aUke.Also, the classification scheme should have the potential to be operationalised, thusrequiring simplicity in structure.

Through content analysis of how previous researchers have defined and usedterms associated with marketing, three common themes were identified through tiieliterature: (i) exchange; (ii) relationships; and (iii) managerial issues. Interestingly,the "exchange" and "relationship" dimensions were often discussed concurrently(especially in recent literature). Thus, this research will focus on onjy two themes:

(1) relational exchange; and(2) management issues.

Within these two themes, twelve dimensions relative to marketing practice wereidentified. While each of the twelve dimensions can be foxmd throughout theliterature, there is no common classification scheme integrating them with thethemes of relational exchange and marmgement, for the purpose of understandingmarketing in the contemporary environment.

Furthermore, the paper adopts the perspective of the practitioner so far aspossible, whereby the practitioner may be an individual, groups of individuals,parts of firms, firms, or groups of firms. In this manner, we follow the definition ofan "actor" as offered by Hakansson and Johanson (1992), and focus on parties whichperform activities and/or control resources, develop relationships with each otherthrough an exchange process, are goal oriented, and have differential knowledgeabout activities, resources, and other actors in their "network". As a result,understanding marketing from the themes of both relational exchange andmanagement (how practitioners perform marketing activities and/or controlresources) is relevant. This is supported by Houston et al. (1992).

Each theme emd its related dimensions will now be discussed in greater detail.

Relational Exchange Dimensions

The exchange concept has traditionally been seen as the core or hub of the marketingdiscipline (Alderson 1957; Bagozzi 1975; Hunt 1976; Kotler 1984; Houston et al. 1992).However, more recent views of marketing (Sheth et al. 1988; Gronroos 1995) arguethat the concept of economic exchange is too narrow a urut of analysis and reflectsa perspective of marketing that has emerged from the functionalist school of thought(Parvatiyar and Sheth 1994). Both Gronroos (1995) and Parvatiyar and Sheth (1994)argue that current marketing practice suggests that interactions n\ay or may notinclude "exchange", and rather, seek to attain mutual benefit through sharedactivities. As a result, they argue that economic exchange per se should not be thefundamental unit of analysis in marketing. However, Implicit in the argument thatparties seek to "attain mutual benefit" through association, is the fact thatknowledge, experience, and perhaps financial resources may well be exchanged inthe activity of sharing. As summarised by Houston et al. (1992), each party to anexchange both gives and receives "value"; value which can take different forms,including for example, shared experiences.

506 Nicote E. CovieUo et al.

Thus, as implied by Wensley (1995) "exchange" is a process central to marketing,but will vary in its breadth, depending on which perspective of marketing isexamined. For example, exchange may involve a single, isolated economictransaction, or it may encompass on-going relationships with a technical, knowl-edge, plarming, or legal component (Easton 1992). Exchange might also be social innature, and involve a personal, interaction-based process of social bonding, based onmutual goals, adaptation, trust and commitment (Ford 1984; Ballantyne 1995), or"exchange relationships" connecting firms in a network structure (Easton 1992;1995). Following from this, the concept of relational exchange is used in this researchto encompass both transactional and relational properties, and as a result, providesthe first area of analysis.

Analysis of the literature leads to the identification of seven relational exchangedimensions. They are: the focus of the relational exchange, the parties involved inthe relational exchange, the communication pattern between parties and their typeof contact, the duration and nature (formality) of the relational exchange, and thebalance of power in terms of who controls the relational exchange process and thelevel of interdependence between parties. Table 1 lists these dimensions, togetherwith their meanings derived from the literature analysis, and authors which havediscussed these dimensions in the context of marketing.

Of note, these seven relational exchange diniensions are drawn from bothconceptual and empirical work used (for example) to describe characteristics ofexchange relationships (e.g. Houston et al. 1992), describe the underlying constructsof buyer-seller relationships (e.g. Wilson and MoUer 1991), describe the structuraland process characteristics of inter-firm relationships (e.g. Easton 1992; Hakanssonand Snehota 1995), distinguish between various "relationship marketing" mecha-nisms (e.g. Joshi 1995) and so on. However, most of this literature approachesconstruct definition from the (>erspective of the researcher. In the current paper, theauthors take the perspective of the practitioner, and in an effort to summarize awide-ranging set of constructs across multiple perspectives of marketing, havechosen the seven dimensions of exchange most clearly in the domain of thepractitioner.

Managerial Dimensions

While the relational exchange perspective is fundamental to ttie marketingdiscipline. Ambler (1994) argues that to understand the marketing process, the focusshould be on "...how managers use their time, energies, and enthusiasms, as well asthe available financial resources." This is supported by Houston et al. (1992). Thus,the second area of arwlysis is related to managerial issu^.

Analysis of the literature identifies five common management dimensions: theintent of managerial decisions, the focus of managerial decision-making, the types ofmarketing investment made by the firm, ttie organisational level at which marketingdecisiorw are made and implemented, and the managerial plarming time frame.Table 2 lists these dimensions, together with their meanings and authors which havediscussed these dimensions in the context of marketing.

Understanding Contemporary Marketing: Development of a Classification Scheme 507

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Understanding Contemporary Marketing: Development of a Classijiattion Scheme 509

Analysing the Relational Bxcbange aod Managerial Dimensions ofMarketing

Following identification of the seven relational exchange and five managerialdimensions, the source literature was re-analysed to: (i) more clearly define eachdimension in the context of marketing practice; and (ii) identify and distinguishdifferent types of marketing which might emerge.

The analysis did not seek to place distinct boundaries between various types ofmarketing, nor did it imply they were independent and mutually exclusive. Rather,the analysis attempted to highlight the similarities and differences between eachtype of marketing, as determined by the relational exchange and managementdimensions derived from the marketing literature. More importantly, emphasis wasplaced on identifying dimensions relevant to actual marketing practice, rather thanreplicating all the constructs underlying the nature of relationships per se (see Wilsonand Moller 1991; Wilson 1995).

Identifying Four Types of Marketing

FoUovring from analysis of Tables 1 and 2, two general marketing perspectives wereidentified, encompassing four distinct types of niarketing (see Tables 3 and 4). Theseare:

(1) Transactional Marketing- Transaction Marketing

(2) Relational Marketing- Database Marketing- Interaction Marketing- Network Marketing

Each will be discussed below.

Transaction Marketing

Transaction Marketing involves a firm attracting and satisfying potential buyers bymanaging the elements in the marketing mix (AMA 1985). Table 3 shows t h iapproach involves creating discrete economic trareactions. While these singletransactions may continue over time, they are generally treated in isolation, at arm'slength, and largely in the context of a formal, impersonal process. Following fromthis, buyers in the market are passive in the relationship, and the seller activelymanages the exchange, including communication "to" buyers in the mass market.

At a managerial level. Table 4 shows that the Transaction Marketing approach isagain reflected in the AMA definition of marketing, and involves four operationalfunctions (product development, pricing, promotion, and distribution). In this typeof marketing, n\anagers focus on marketing a product/brand to an identified groupof customers. Marketing activities are usually relegated to functional marketingareas, and managers focus on developing internal capabilities related to the 4Ps.

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Co-ordination with other functions in the firm is limited, and the planning horizonfor this type of marketing is generally short term.

Although Iacobucci (1994) notes the AMA approach to marketing involvesproperties of exchange, and is therefore a relationship concept, the above analysisshows it is not truly based on relationships or interaction between parties.

Database Marketing

Analysis of Tables 3 and 4 identifies Database Marketing to be a form of RelationalMarketing, involving an information and technology-based tool used by marketers.In this type of marketing, the focus is still on the market transaction, but nowinvolves both economic and information exchange. This view is similar to Peppersand Rogers (1995), who define this type of marketing as "one-to-one" marketingwhich uses:

"advanced information technology to give an enterprisethe ability to develop relationships with individualcustomers...(via) individually addressable and inter-active media."

In this definition, the marketer relies on information technology (possibly in theform of a database or the Internet) to form a tjfpe of relationship, thus allowing firmsto compete in a manner different from "mass marketing" (as seen in TransactionMarketing). More specifically, the intent is to retain customers over time. This isreflected in the process outlined by Copulsky and Wolf (1990) where the firm seeksto:

"(1) identify and build a database of current andpotential customers...(2) deliver differentiated messagesto these people through established and new mediachannels based on the consumers characteristics andpreferences, and (3) track each relationship to monitorthe cost of acquiring the consumer and the life-tin:\e valueof his purchases."

According to both of these definitions. Database Marketing is basically a tool ortechnique used by businesses to develop and manage long-term relationshipsbetween the company and its targeted customers.

Table 3 shows that while the intent of Database Marketing is to facilitate andmaintain long-term customer retention, communication patterns are generallydriven and managed by the seller, and therefore asymmetrical (similar toTransaction Marketing). Marketing is still "to" the customer, rather ttian "with" thecustomer (Pepper and Rogers 1995). Relationships per se are not close, and arefacilitated and "personalised" through the use of technology. They do not generallyinvolve on-going interpersonal commimication and interaction between individuals,and exchange is discrete, albeit over time.

Table 4 highlights that managerial investment for Database Marketing is in thetool/technique, and supporting technology and information. That is, it is an interrmland controllable marketing asset to be managed by specialist marketers. In this type

Understanding Contemporary Marketing: Development of a Classijication Scheme 513

of marketing, the marwgerial focus widens to include both the product/brand andspecifically targeted customers.

OveraU, the analysis supports Iacobucci's (1994) view that this a "more intense" or"closer" form of Transaction Marketing. As a result, it may best be considered a".. .communication process [used] to enhance a seller's offering" (Perrien and Ricard1995).

Interaction Marketing

Analysis of Table 3 shows while Database Marketing involves a certain form ofrelafionship that is personalised yet distant, Interacfion Marketing imphes face-to-face interacfion within relafionships, and is reflected in the work of servicemarketing researchers (e.g. Berry 1983; Gronroos and Gununesson 1985), and theIndustrial Marketing and Purchasing group (e.g. Hakansson 1982; Ford 1990).

As identified by Cunningham and TumbuU (1982), this type of marketing occursat the individual level, where "personal contacts are made, bargaining andinformation exchange carried out, and individual relafionships established."According to Webster (1992):'

"...the focus shifts from products and finrs as units, topeople, organisafions, and the social processes that bindactors together in ongoing relationships."

Thus, Interaction Marketing is a process involving individuals which inifiate andhandle complex, personal interactions (Dwyer et al. 1987). The relationship is basedon social exchange, involving for example, trust, mutual orientadon, dependence,satisfaction, commitment, and adaptafion (Ford 1984; Wilson and Mummalaneni1986; Gronroos 1990; Easton 1992; Wilson and Jantrania 1994).

Given the above, one unit of analysis in Interaction Marketing is the relafionshipitself. A second is "people" in an interacfive, dyadic relationship, and a third is theinteraction between "people" and various technologies and systems. At the sametime, the relafionships established between individuals are done in the context oftheir orgcinisation, thus providing a fourth (interfirm) imit of analysis. As suggestedby Johanson and Mattsson (1987), such interfirm relafionships are characterised cis:

"(1) having a mutual orlentafion, and (2) arising throughexchange processes and social exchange, with an adapta-fion process."

These exchange relationships can occur in both a formal and informal nwnner, withthe parties being mutually active and adaptive. Thus, Interaction Marketing isdearly different from the tool/technique of Database Marketing.

At a managerial level. Table 4 shows that Interacfion Marketing is truly "with" thecustomer, as the individual and firm invests resources to develop a mutually

'Webster uses this descriptiim in the context of what he terms "Relationship Marketing " However, asnoted in the previous discussion, that label has been applied broadly, and in this case, the author's feelWebster's description is more appropriate to the term "Interaction Marketing."

514 Nicole E. CovuUo et al.

beneficial and personal, interactive relationship. ^ At the same time, the interaction-based relationship (in this context) is different from a simple long-term relationshipin that: (i) it involves negotiation and therefore joint planning; (ii) the focus ofexchange is expanded to include continuous value creation for all parties involved;and (iii) it involves reciprocal rather than sequential interdependence (foshi 1995).Interaction Marketing is not the responsibility of a specialist marketer per se (as inDatabase Marketing), nor is the practitioner necessarily in the position of "seller".Rather, Interaction Marketing can involve a number of individuals across functionsand levels in the firm, including Business and General Managers (HaUen 1986;Gummesson 1994), and encompasses both marketing and purchasing activities.Thus, the managerial focus and activities involved with Interaction Marketing differmarkedly from those of Transaction and Database marketing.

Network Marketing

As discussed by Sharma (1993) and Anderson et al. (1994), dyadic analysis providesonly a partial perspective to the understanding of relationships. Thus, discussionnow shifts from dyadic relationships in Interaction Marketing, to the totcJity ofrelationships in a market or industry (Easton 1995). In this perspective, multiple,networked relationships between firms are the focus of Network Marketing,' withspecific interest in the "connectedness" of these relationships (Anderson et al.1994).

By definition, a network involves "firms engaged in production, distribution anduse of goods and services" (Johanson and Mattsson 1988). In this context,co-ordination occurs through interaction between firms in the network, andexchange relationships are established between firms.* Each firm has directrelationships with customers, distributors, suppliers etc, as well as various indirectrelationships (e.g. Johanson and Hallen 1989). Thus, a business network is basicallya set of connected relationships (Anderson, Hakansson and Johanson 1994),implying relationships between firms (Hakansson and Johanson 1993). This viewencompasses the role of both the individual and the firm, as relationships andnetworks "emerge through interaction between managers at different managementlevels" (fohanson and Hallen 1989). Because the relationshipis are part of a larger net,they can range from close (interpersonal) to distant (impersonal), and have varyinglevels of fHJwer and dependence, as well as degrees of communication (see Table 3).It is these relationships that are established through Interaction Marketing, althoughthe focal interest in Network Marketing is on the network (Anderson et al. 1994),rather than the dyadic relationship.

Marketing in this context then becomes tiie "creation, utilisation, and maintenanceof [the] network" (Gummesson 1994). Although Gronroos (1994) believes the role

'Recent work by Low (19%) however, recognises that not all relationships are entered into on a long-termbasis, nor shoi^d they be, given short-term opportunistic behaviour is both accepted and encouraged,under certain conditions.*Io understand the network however, the dyadic relationships formiiig the network structure must firstbe understood (Easton 1992; Anderson, Hakansson, and lohanson 1994; Cravens and Piercy 1994).*While the term "ccwwdination" implies a positive, co-operative, mutually beneficial system, interactionin the network can also involve conffict, competition, collusion, or simple co-existence (Easton and Araujo

Understanding Contemporary Marketing: Development of a ClassifiaUion Scheme 515

and form of marketing in networks is not very clear, Cunningham and Homse (1982)provide a useful view ol Network Marketing whereby:

.. .all marketing activities may be seen as either providingthe right circumstances for relafionships to be establishedor developed, or to influence directly the nature andcharacteristics of individual relationships."

^More specifically, Johanson and Mattsson (1985) define such marketing toinvolve:

"...those activities that serve to establish, maintain,develop, and sometimes break relationships, to deter-mine the exchange condifions, and to handle the actualexchange."

Based on these definitions. Table 4 shows that Network Marketing occurs acrossorganisations, where firms commit resources to develop positions in a network ofrelationships Qohanson and Mattsson 1985, 1988). This is generally accomplishedthrough business and social transactions overtime, as a result of developing andmaintaining relationships. Furthermore, Network Marketing may be conducted at ageneral management level {Groonroos 1994) or by "part-time" marketers from otherfunctional areas in the organisafion (Gunvmesson 1994), or even outside theorganisation. As a result, it may be more strategic in orientation, as compared withTransaction and Database marketing.

Conclusions and Implications

Current marketing literature has moved beyond "4P" or Trimsaction Marketing toinclude other types of marketing loosely termed Relationship Marketing. This paperhelps to summarise and synthesise this literature by developing a simpleclassification scheme which identifies four distinct yet related types of marketing, inthe context of marketing practice.

These types of marketing may be generally classified into two perspectives: (i)Transacfional; and (ii) Relational marketing, with the latter encompassing Database,Interaction, and Network marketing. Within this framework. Network Marketingemerges as a holistic view of Interaction Marketing, with interaction-basedrelationships characteristic of both. Network and Interaction Marketing differ fromthe tool/technique of Database Marketing, which is a "closer form" of TransactionMarketing. Each type of marketing has imique characteristics which may be more orless appropriate/applicable in different types of industry and marketenvironments.

Overall, the classificafion scheme provides common reference points for discus-sion, research, and understanding of marketing practice. It offers a S)mthesis of thenormative and positive marketing literatures in a unique context, and includes theperspectives of both the European and North American schook of research.

The framework is also xmique in that it provides a strong conceptual base forexamining both Transacfional and Relational marketing pracfices in the context of a

•'The term "individual" in this context refers to unique or separate reladonships, rather than a person.

516 Nicole E. Coviello et al.

consistent framework. This differs from much of the literature which focuses on (forexample) one type of Relational marketing, arguing that companies in industrial orservice sectors practice inherently different types of marketing than do consumerpackaged goods firms, given their involvement in complex network relationshipswith customers, suppliers, and other organisations (Groimxis 1990, 1995; Easton1992; Hakarwson and Snehota 1995; Rajala et al 1995). Does this mean that consumerpackaged good and consumer durable firms have no such relationships? And thatsuch companies do not practice Interaction or Network marketing? Similarly, doesthis mean that industrial good or service firms do not practice Transactionmarketing? To help answer these questions, the classification scheme offered in thispaper provides a basis for rigorous cross-sectoral investigation.

Finally, Sheth (1995), Gronroos (1994), and Kotier (1992), state that the concept ofRelationship Marketing offers a "new paradigm". However, unless the phrase is usedloosely, a paradigm shift implies that a change has occurred, to one ",. .whose worldview replaces that of an existing world, and whose underlying assumptions replacethose of an existing research model" (Fisk 1994). On a practical level, the paradigmshift argument implies that not only has the practice of marketing changed, but thatTransactional marketing has been subsumed by the Relational perspective. Might itnot be possible however, that all four types of marketing are practised simultane-ously? If this is so, then the two general perspectives are not mutually exclusive, andare all part of the same paradigm; a paradigm which allows for Transactional andRelational marketing to coexist. Again, this question might be addressed byemploying the classification scheme offered in this paper as a conceptual basis forempirical investigation.

E>rawing from the above, future research should first ensure the frameworkprovides a useful means of understanding and distinguishing between the differenttypes of contemporary marketing pracfice. Such research should also seek to identifyother types of marketing that have emerged in practice, but are not fully captured inthe literature.

Following this, researchers could empirically examine current marketing practicesin the context of the classification scheme. In particular, it would be of interest toexamine whether or not thene are types of industries and firms where oneperspective of marketing is more dominant than the other, and the conditions imderwhich this occurs. Similarly:

(1) What types of industries and firms are domiruted by one "t)'pe" of marketing,in terms of actual marketing practice (as per Grom-oos 1990,1995; Easton 1992;Hakansson and Snehota 1995)?

(2) What types of industries and firms emphasise nuxre than one "type" ofmarketing, in terms of actual marketing practice?

(3) What types of industries and firms practice all four "types" of marketingsimultaneously? How, when, and why are these "types" of marketing bakncedin practice?

From this base, researchers might begin to be able to empirically address thequestion of whether or not contemporary marketing practice supports the nofion ofa "paradigm shift" from Transactional to Relational nnarkedng.

To address these issues, futiae research should capture a variety of industry andfirm types, and provide as holistic a view as possible. For example, firms should be

Understanditig Contemporary Marketing: Development of a Classification Scheme 517

selected from across the consumer packaged good, consumer durable, industrialgood, and service sectors (as per Gronroos 1990). They might also reflectorganisations of varying:

— Size (small vs large);— markets served (domestic vs international);— Ownership (locally-founded/owned vs multinational); and— Technology base (high vs low technology).

Methodologically, all of the above investigations would benefit from applying acombined qualitative and quantitative approach (e.g. case and survey research), asthis would provide breadth and depth to the findings.

Overall, our understanding of marketing in the contemporary environmentrequires a pragmatic, practitioner-oriented approach. As suggested by Easton (1995),researchers need to ".. .try to understand rather n:\ore about how marketing systemswork, including how and why marketing managers make decisions, before wepresimie to prescribe."

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