SOUTH AFRICAN AUTOMOTIVE INDUSTRY INCENTIVES

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CHAPTER 4 – RELATIONSHIP MARKETING VALUE ANTECEDENTS AND MEDIATORS

INTRODUCTION

The recent focus on relationship marketing value (Li, 2010: 313) studies aims to design specific models and frameworks revealing relational antecedents and mediators. However, consensus between authors fails to prove the definite role of antecedents and mediators in relationship marketing models (Palmatier, et al., 2006: 136). While research either focuses on relationship value antecedents, mediators or outcomes, this study aims to combine them. As relationship value is viewed as a result of relationship marketing, as discussed in the previous chapter, this chapter will review models and frameworks relating to relationship marketing and relationship value.
In this chapter, models depicting relationship value antecedents will be discussed while mediating constructs such as commitment and trust (Morgan & Hunt, 1994) are also investigated and discussed (refer to Table 4.6).
Finally, strategic approaches toward the introduction of a relationship marketing value strategy are discussed. It is very seldom found that manufacturers engage in proactive marketing, while reactive marketing may be detrimental to business (Swamidass, Baines & Darlow, 2001: 933). This scenario can also be observed in the South African automotive supply chain (Barnes, 2000a: 37). Hence, Tier 2 suppliers should consider relationship value strategies in order to satisfy the needs of their clients (Tier 1 buyers) and achieve business retention objectives. The study focus specifically on which relationship value constructs are required by the Tier 1 suppliers of the best Tier 2 supplier in the South African automotive supply chain.
The models and frameworks reviewed in this chapter all relate to the B2B market specifically and not towards the consumer industry.

ANTECEDENTS OF RELATIONSHIP MARKETING

Although relationship marketing and the perceived customer value thereof (Li, 2010: 313) is viewed as being important in the B2B environment, insufficient research is available (Payne & Holt, 2001: 160) to determine which value constructs can be viewed as antecedents of relationship marketing value.
The exchange theory forms the foundation of relationship marketing value and requires the determination of relational exchange antecedents (Dwyer, et al., 1987: 11). It is clear that a number of authors do agree that relationship marketing consists of various antecedents (Ulaga & Eggert, 2005, 2006, Morgan & Hunt, 1994; Wilson, 1995; Grönroos, 1997, 2004; Sharma, et al., 1999: 604; Palmatier, et al., 2006: 139). While some authors cannot reach agreement regarding which antecedents comprise relationship marketing value, certain constructs are viewed as being more prominent than others; however, more research is required (Dwyer, et al, 1987: 11) regarding relationship marketing value antecedents (Spiteri & Dion, 2004: 675) and the measurement thereof (Payne & Holt, 2001: 177). Literature is also inconsistent regarding which value constructs could be viewed as mediators (Palmatier, 2006: 136).
Literature regarding relationship marketing value antecedents was reviewed and the most prominent views (according to the most prominent citations) of various authors including Grönroos (1997), Sharma, et al., (1999), Hunt and Arnett (2003), Ulaga (2003), Grönroos (2004), Ulaga and Eggert (2005), Palmatier, et al., (2006), Hunt, et al., (2006), Ulaga and Eggert (2006), Eggert, et al., (2006), are discussed below:

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GRÖNROOS (1997, 2004)

Grönroos (1997, 2004) asserts that the two major antecedents of relationship marketing include interaction and communication, which result in relationship value (Figure 4.1 )
Interaction is the core and most important process for relationship marketing and includes dialogue and knowledge sharing, that is, the sharing of information that might result in the co-design of a solution (Grönroos, 2004). According to Grönroos (2004), for the supplier to be successful, it has to align resources, competencies and processes with the customer’s (the buyer in the case of this study) value-generating processes (Li, 2010: 313).
The communication process of relationship marketing includes planned messages such as mass communication, product messages such as design, service messages such as invoicing, and unplanned messages such as word of mouth, encapsulating integrated marketing communications (IMC). Communication as an antecedent is also promoted by Hunt and Arnett (2003), Eggert, et al., (2006: 21), Palmatier, et al., (2006: 137), and Hunt, et al., (2006). According to Grönroos (2004), if relationship marketing is to be successful, an integration of all marketing communications messages is needed to support the establishment, maintenance and enhancement of relationships with customers.
The “ingredients” for the interaction and communication process of the relationship marketing process comprise resources such as personnel, technologies, knowledge, and information (Grönroos, 1997). If the relationship marketing is to be successful, the supplier has to align its resources, competencies and processes with the customer’s value-generating processes (Grönroos, 2004; Li, 2010: 313).
Grönroos (2004) states that the actual product may be less important than the added value gained from relationship marketing (Li, 2010: 313). Customers not only look for goods or services, they also demand a much more holistic offering, including everything from information about the best and safest use of a product to delivering, installing, repairing, maintaining and updating solutions they have purchased.
Grönroos (1997; 2004) adds that in a transaction-oriented approach to marketing, the product is the core of the marketing mix. However, a relationship oriented or collaborative relationship offering is less reliant on the traditional marketing mix. Therefore, the traditional marketing mix approach does not necessarily apply to the B2B relationship approach (Lehtinen, 2011: 117).
In a relational context, one should go beyond the product concept in order to understand the value-creating benefits of an offering. Instead, the core benefit – the technical solution achieved by a physical good or service – is accompanied by additional services and value adds (Grönroos, 1997). In order to achieve the relational value, all strategies and resources should be aligned in order to execute the designed relationship marketing strategy (Grönroos, 1997; Swarmidass, et al., 2001), the result being that customer-perceived value follows from a successful and customer-oriented management of resources relative to the customer’s sacrifice (Grönroos, 1997). In conclusion, Grönroos (1997; 2004) claims that the core antecedents for relationship marketing are communication and interaction, which result in relationship value (Li, 2010: 313).
Sharma, et al., (1999) focus more on the antecedent’s inputs from salespeople; their view is discussed below.

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CHAPTER 1 – INTRODUCTION 
1.1 BACKGROUND
1.2 TIER 2 SUPPLIER CHALLENGES
1.3 THEORETICAL FOUNDATIONS
1.4 CONTRIBUTION OF THIS STUDY
1.5 RESEARCH SCOPE
1.6 RESEARCH METHODOLOGY
1.7 DELIMITATIONS
1.8 LIMITATIONS
1.9 ETHICS
1.10 CHAPTER OUTLINE
CHAPTER 2 – THE SOUTH AFRICAN AUTOMOTIVE LANDSCAPE 
2.1 INTRODUCTION
2.2 GLOBAL AUTOMOTIVE INDUSTRY
2.3 INTRODUCTION TO THE SOUTH AFRICAN AUTOMOTIVE INDUSTRY
2.4 SOUTH AFRICAN AUTOMOTIVE INDUSTRY INCENTIVES
2.5 AUTOMOTIVE INDUSTRY’S CONTRIBUTION TO THE SOUTH AFRICAN TRADE BALANCE
2.6 CHALLENGES FACING FOR THE SOUTH AFRICAN AUTOMOTIVE INDUSTRY
2.7 RELATIONSHIP VALUE IN THE SOUTH AFRICAN AUTOMOTIVE INDUSTRY PURCHASING ARENA
2.8 CONCLUSION
CHAPTER 3 – LITERATURE REVIEW 
3.1 INTRODUCTION
3.2 THEORETICAL PERSPECTIVES ON VALUE
3.3 RELATIONSHIP MARKETING AND THE VALUE THEREOF
3.4 RELATIONSHIP VALUE AND RETENTION
3.5 OBJECTIVES OF THIS STUDY
3.6 CONCLUSION
CHAPTER 4 – RELATIONSHIP MARKETING VALUE ANTECEDENTS AND MEDIATORS 
4.1 INTRODUCTION
4.2 ANTECEDENTS OF RELATIONSHIP MARKETING
4.3 MEDIATORS OF RELATIONSHIP MARKETING VALUE
4.4 RELATIONSHIP MARKETING VALUE: STRATEGIC APPROACHES
4.5 RESEARCH APPROACH
4.6 CONTRIBUTION OF THIS STUDY
4.7 CONCLUSION
CHAPTER 5 – RESEARCH METHODOLOGY 
5.1 INTRODUCTION
5.2 RESEARCH SCOPE
5.3 RESEARCH APPROACH
5.4 METHODOLOGY
5.5 QUESTIONNAIRE
5.6 BENCHMARK
5.7 SAMPLING FRAME
5.8 TIMELINE
5.9 VALIDITY
5.10 RELIABILITY
5.11 LIMITATIONS
5.12 DELIMITATIONS
5.13 ETHICAL CONSIDERATIONS
5.14 CONCLUSION
CHAPTER 6 – FINDINGS 
6.1 INTRODUCTION
6.2 RESPONDENT PROFILES
6.3 DESCRIPTIVE FINDINGS – VALUE CONSTRUCTS
6.4 DESCRIPTIVE FINDINGS – TRUST, COMMITMENT AND RELATIONSHIP VALUE
6.5 DESCRIPTIVE FINDINGS – BBBEE, MIDP, PRICE
6.6 ANALYSIS
6.7 “GOODNESS OF FIT” OF THE SEM
6.8 CONCLUSION
CHAPTER 7 – CONCLUSIONS AND RECOMMENDATIONS 
7.1 INTRODUCTION
7.2 PRIMARY RESEARCH OBJECTIVE
7.3 SECONDARY RESEARCH OBJECTIVES
7.4 RELATIONSHIP MARKETING VALUE CONSTRUCTS WITH WEAK SIGNIFICANCE
7.5 RECOMMENDATIONS
7.6 CLOSING REMARKS
7.7 LIMITATIONS
7.8 FUTURE RESEARCH
REFERENCES
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