RELATIONSHIP MARKETING THROUGH CROSS-SELLING: DIVERSIFICATION AND

CUSTOMER BASES

Yildirim Kadak PhD Candidate, MBS, BA (Hons)

www.ykadak.com

Justification for the Research

Paradigm shift from transactional to relationship marketing

The shift of focus from product branding to corporate branding.

Multimarket Competition (Multipoint Competition)

Cross-selling has received limited attention in the academic literature. Most of the literature focuses on methodology for identifying common acquisition patterns of products bought by customers based on their usage or ownership data

CONTRIBUTION TO KNOWLEDGE

This research will test: The role cross-selling has in customer loyalty (attitudinal and

behavioural loyalty) The role of corporate branding has in cross-selling and its

effect on loyalty (attitudinal and behavioral loyalty).If the A Priori Model is confirmed the numerical justifications will be supported because it will mean both corporate branding and cross-selling play a major role in diversification and multipoint competition.

Methodology

Two philosophical perspectives that are mainly focused on are Positivism and Phenomenology.

Realism is about the mechanisms of how the world functions, while positivism is an epistemology that prescribes the examination of it. Scientific realists maintain that unobservable constructs have existence; additionally, it is these unobservable mechanisms that frequently offer rationalisation for observable phenomena.

Realism

As a result, for the realist researcher, constructs such as culture, the organization, and corporate planning exist and act quite independently of the observer. The analysis of natural phenomena is possible. Thus, understanding is improved through induction wherein findings increase the knowledge about the pertinent phenomena. Therefore, recognised paradigms are reflections of the world. The more the paradigms match with the facts the more reliable they are believed to be.

Structural Equation Modeling

Structural Equation Modelling is in line with the realism perspective. When complex phenomena have been adequately identified to permit generalisation to a population instead of to a theory, then Structural Equation Modelling can be used as a method. The reason for this is that it models compositions with intricate co-dependencies and it unambiguously permits multi-item scales and constructs. It is for this reason that Structural Equation Modelling is the proposed method to be used in this research.

Sustaining long-lasting relationships with customers

Attracting new customers should not be the main concern for most companies

The focus is on cultivating and retaining current customers

RELATIONSHIP MARKETING

LOYALTYIT IS PROPOSED THAT RETENTION RATE SHOWS THE LIKELIHOOD OF A

CUSTOMER REMAINING LOYAL TO A SUPPLIER.

Despite over three decades of research The loyalty phenomenon has not been conceptually elucidated

LOYALTY

BEHAVIOURAL LOYALTY ATTITUDINAL LOYALTY

Recency Frequency Monetary Value

Attitudes are quantified through surveys where customers declare their purchase goals.

Attitudinal loyalty can be used as an antecedent of behavioural loyalty

ATTITUDINAL AND BEHAVIOURAL LOYALTYThere is the need to study the relationship between behaviour and attitude since the

discourse in the literature is mainly conceptual

COGNITIVE DISSONANCE THEORYThe evaluation process from pre-purchases to post purchases is the main concern of much consumer research.

Cognitive Dissonance Theory indicates that customers look for congruent relationships in attitudes and behaviours. Inconsistency is supposed to create mental pressure. Consequently customers discard selecting substitutes or evidence that can be inconsistent with their present conviction.

H1 Behavioural loyalty has a positive effect on attitudinal loyalty

TRUSTTRUST IS NEEDED IN UNCERTAINTY

CUSTOMERS TRY TO DECREASE RISK AND AMBIGUITY WHEN BUYING GOODS THROUGH MENTAL HEURISTICS

TRUST IS AN EFFICIENT HEURISTIC THAT CAN REDUCE UNCERTAINTY

A STUDY FOUND A POSITIVE EFFECT ON TRUST ON CROSS-BUYING INTENTIONS AND CROSS-BUYING

H2 TRUST HAS A POSITIVE EFFECT ON CROSS-BUYINGH3 TRUST HAS A POSITIVE EFFECT ON ATTITUDINAL LOYALTYH4 TRUST HAS A POSITIVE EFFECT ON BEHAVIOURAL LOYALTY

SATISFATION

Conventionally satisfied customers were seen less price sensitive and as those who buy additional products and services. Positive effect of customer satisfaction on cross-buying has been supported.

H6 Satisfaction has a positive effect on cross-buying

COMMITMENTEven though the literature acknowledged satisfaction’s importance the progression from a satisfied customer to a relational partner is not fully comprehended.

Concomitantly, a rational antecedent of loyalty is commitment since it is the degree to which a customer wishes to remain in a continuous relationship. Commitment can be divided into two forms:

Calculative commitment: is the determination to remain in the relationship considering switching costs and shortage in options. An example can be customers being loyal to a company though he/she as low satisfaction levels.

H7 Calculative Commitment has a positive effect on behavioural loyalty.

Affective commitment: is warmer because of mutuality or connection customer has with a firm that result in stronger degree if trust and devotion. Therefore emotive commitment means stronger degree of trust and devotion. Affective commitment is considered as a bond that matures over time and through various involvements. H8 Affective commitment has a positive affect on trustH9 Affective commitment has a positive effect on attitudinal loyalty.

Affective commitment instead of previous experiences with the firm affects satisfaction. H10 Affective commitment has a positive effect on satisfaction

CROSS-SELLING Firms sell more than one product or service to increase the value of the

relationships. The more a customer bought from a company the more loyal that customer is.

H11 Cross-selling has a positive effect on attitudinal loyaltyH12 Cross-selling has a positive effect on behavioural loyalty.

CORPORATE IMAGEWhen it is about the corporate brand perceived by customers is usually referred to as image. It is

about perceptions, beliefs and attitudes customers have about a company.

THE SHIFT TO CORPORATE BRANDING Products are swiftly imitated and standardised These occurrences require the positioning of the entire

organisation , then, the corporate images stand out as the main differentiation strategy.

H13 Customers will more likely to cross-buy unrelated products if the corporate brand is strong

IMAGE AND PERSONALITY Studies theorise image as the customer’s psychological

depiction of a company and emphasise it mainly as a personal character. Given that customers’ perceptions of a corporation’s image influence their loyalty, companies focus more on the image than the tangible product.

Image is about positioning the selling proposition in the minds of customers.

H14 A positive image strengthens attitudinal loyalty. H15 A positive image strengthens behavioural loyalty

A PRIORI MODEL

CORPORATE STRATEGYCross-selling and Synergy

MULTIPOINT COMPETITIONThe acknowledgement of involving multimarket contact with

diversification is relatively new. The two are theoretically always together. Multi-market analysis installs a dynamic dimension.

MULTIPOINT COMPETITIONUsually companies in multimarket settings have complementary productions or distributions. Operations characteristically exhibit

“product extensions” or “market extensions”. These fusions through internal growth or mergers enable the firm to utilise its

marketing links. Diversified firms usually have products in the same distribution outlets.

DIVERSIFICATION AND MULTIPOINT COMPETITION, THEORETICAL

IMPLICATIONS

Summary of Progress to Date

Introduction chapter complete Literature Review complete Methodology chapter in progress Questionnaire design in progress