Value Creation in Relationships

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E-Commerce

In a supplier-customer dyad, relationship quality is concerned with two main factors; salesperson characteristics and behavior. Although, in a B2C e-commerce situation, there is no physical salesperson, losing the element of direct interaction. Instead, companies have to utilize highly functional and appealing websites as a medium for building and maintaining online relationships with customers (Zhang et al., 2011). In order to be competitive and maintain relationships online, it is important for an e-commerce business to provide a website that the customer find easy to use as well as trustworthy. This is due to the significantly small switching costs between different websites for the customer (Anderson & Srinivasan, 2003). Khalifa and Liu (2007), further motivated this by saying that when a customer is satisfied with a certain online website, they are more likely to return to the same website.
When companies try to establish a highly functional and appealing website, it is beneficial if the information is easily accessible and that the website is visually pleasing and easily navigated (Cyr, 2008). The information aspect can be explained as elements on the website that provides the customer with information regarding the product and services offered by the company. To further explain, in this scenario information could be product reviews or shipping information. Providing accurate information on the website is a vital part of establishing trust (Garrett, 2011; Wang & Emurian, 2005; Zhang et al., 2011). The information provided on the website is of no use if it is not easily accessible (McKinney, Yoon, Zahedi, 2006). If the customer effectively can navigate the website and easily find the information he is searching, the company establishes trust and satisfaction (Cyr, 2008; Zhang et al., 2011). The user expects that a website is easily navigated, and that all information needed is accessible (Yoon, 2002; Cyr, 2008).
In contrast, Zhang et al., (2011), claims that although website usability is important, what can be considered to have more impact on the online relationship quality is the perceived quality created by company expertise. Furthermore, Koufaris and Hampton-Sosa, (2004), have indicated in their research that a company’s perceived willingness to customize and adapt their products and services significantly increased the initial customer trust. Despite the fact that initial trust is immensely important in a supplier/consumer relationship, previous research suggests that a relationship can be characterized of high quality if preceding interactions have occurred, and more interactions are expected to take place (Zhang et al., 2011). In order for a favorable relationship to take place, the customer have to feel satisfied and be able to trust in the supplier (Zhang et al., 2011; Grönroos, 1997; Gummesson, 1994).
A common struggle for businesses that operate within the e-commerce sector is to create enough perceived customer value in order for them to continue the relationship and return, instead of switching to another company (Anderson & Srinivasan, 2003). This is due to the many competitors and minimal switching costs facing the consumer. This has caused a change in e-commerce marketing strategy making companies focus more on relationship building and maintaining customers as a sustainable competitive advantage (Cyr, 2008; Ray, Kim, & Morris, 2012; Grönroos 2007). Furthermore, a pivotal reason for companies to focus on this is that it is five to seven times cheaper to retain an existing customer than to acquire new ones, making it more profitable for companies to focus on customer relationships (Doyle & Stern, 2006; Grönroos, 1994).

 Traditional Approach to Marketing

Traditionally, the favorable approach to marketing was a Mass Marketing approach which was derived from the marketing mix and incorporated un-personalized advertisement for general product offerings (Grönroos, 1997). The commonly used tools of one’s marketing mix were the 4P’s: Product, Price, Promotion and Place, and personal interactions between a company and a customer were not frequent and were only available where mass marketing was inappropriate, as it often is in high-involvement purchase product categories such as car sales, insurances or houses (Gummesson, 1987). Mass marketing is a part of Transaction Marketing which has its focus on the quantity of customers that can be reached. Kumar, Bohling and Ladda (2003), states that Transaction Marketing emphasizes the exchange of a product/service for money. The focus is placed upon a short-term interaction between seller and buyer.
A definition of Transaction Marketing provided by Grönroos (1997), further describes the idea of a strategy purely focused on the transaction. Grönroos (1997) states that Transaction Marketing only incorporates the core product and its attributes such as the firm or its brand image, into the marketing strategy. These are the only variables that connects the buyer to the seller.

1. Introduction
1.1 Background
1.2 Problem Discussion
1.3 Purpose
1.4 Definitions
1.5 Thesis Outline.
2. Literature Review
2.1 E-Commerce
2.2 Value Creation in Relationships
2.3 Value Co-Creation .
3. Methodology 
3.1 Research Philosophy .
3.2 Research Approach.
3.3 Research Purpose
3.4 Research Strategy
3.5 Literature Review
3.6 Primary Data Collection Techniques
3.7 Data Analysis
3.8 Limitations of Methodology
4. Empirical Findings
4.1 Company X Outlin
4.2 Interview Finding
5. Analysis
6. Conclusion
Reference

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Value Co-Creation in E-Commerce