Business to business marketing : an empirical investigation into strategic management theories with reference to a portfolio of customer relationships in the services sector

• Main Author: Eng, Teck Y.
• Published: University of Manchester 1999
• Subjects: 658.8
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.488174

The development of business-to-business marketing from the early interaction approach to the network approach is now a growing body of literature where establishing and managing longer term relationships with customers are critical to organisational success. An important managerial aspect of this development is the strategic management of a company's relationships with its customers, which is concerned with a portfolio of customer relationships. However, from a review of the literature, existing customer portfolio models are mostly conceptual and little empirical work has explored the customer portfolio concept in a service business. For example, previous empirical studies have mainly ignored countervailing customer portfolio dimensions, focused on suppliers of manufactured goods and limited to the study of a single company. Also, while past customer portfolio theories have introduced numerous portfolio dimensions, they have largely neglected or focused very narrowly on issues concerning their conceptual adequacy as for strategy development. Yet strategic choices and resource allocation decisions are based upon the theory underlying a customer portfolio dimension. The thesis draws on the theory of strategy, arguing that current product, business and customer portfolio models are predominantly inclined towards the industrial organisational (10) approach to strategy formulation - without much attention paid to the alternative theory of strategy, the resource-based view (RBV). In response to these gaps in the literature, this study attempts to investigate the validity of some of the numerous existing customer portfolio dimensions by trying to apply them in real organisational settings, namely in the context of two financial services and one IT systems and services companies in the U. K. Using the case study method, the customer portfolio dimensions specified in this study were applied in three companies. The research data were primarily derived through in-depth interviews with senior executives. These qualitative data were supported by multiple sources of research evidence: strategic documents, customer account reports and database, and internal market research surveys. Quantitative data from the ratings of the variables studied were also elicited. Each of the three case studies was analysed singly and the results of each case were compared with those predicted by each customer portfolio model. The results from the three cases were then cross-analysed in an attempt to identify threats to validity and, to help establish converging lines of inquiry. The study observes that there are limits to the extent of the generalisability of the theories investigated in the context of a service business. The findings identified the implications of the normative customer portfolio theories for practice, indicating that an individual dimension of a particular theory cannot be treated in isolation to other portfolio dimensions. In this instance, existing customer portfolio theories which suggest different portfolio dimensions for the analysis of customers whilst neglecting other theories could result in a potentially narrow view of strategic management of supplier-customer relationships. The strategic variables applied for competitive positioning of customers from existing customer portfolio theories have been shown to be inadequate and could be better accounted for together with the resource-based perspective. The research therefore proposed by means of both theoretical reasoning and empirical evidence -a three dimensional analysis as the appropriate model for strategic choices and advice on improving customer portfolio management.