The relative influence of economic and relational direct marketing communications on buying behavior in business-to-business markets

TY - JOUR

T1 - The relative influence of economic and relational direct marketing communications on buying behavior in business-to-business markets

AU - Kim, Kihyun Hannah

AU - Kumar, V.

N1 - Funding Information: *Kihyun Hannah Kim is Assistant Professor of Marketing, Rutgers University (email: kh.kim@business.rutgers.edu). V. Kumar (VK) (corresponding author) is Regents’ Professor, Richard and Susan Lenny Distinguished Chair, and Professor of Marketing, Executive Director of the Center for Excellence in Brand and Customer Management (CEBCM), and Director of the Ph.D. Program in Marketing, J. Mack Robinson School of Business, Georgia State University (email: vk@gsu.edu). VK has also been honored as Chang Jiang Scholar, Huazhong University of Science and Technology, China; Senior Fellow, Indian School of Business, India; and Fellow, Hagler Institute for Advanced Study, Texas A&M University. The authors thank the JMR review team for valuable guidance during the revision process. They acknowledge financial support from the Institute for Study of Business Markets, Pennsylvania State University. They thank Alok Saboo, Yi Zhao, and Andrew Petersen for their valuable comments; participants of the ISMS 38th Marketing Science Conference and the audiences in more than ten universities worldwide for providing valuable suggestions on the study; and Renu for copy editing previous versions of the manuscript. Coeditor: Rajdeep Grewal; Associate Editor: Peter Verhoef. Publisher Copyright: © 2018, American Marketing Association.

PY - 2018/2

Y1 - 2018/2

N2 - Business-to-business firms spend significant resources in direct marketing to manage close relationships with their customers. Nevertheless, there is limited understanding of how the effectiveness of direct marketing communications varies by value propositions. Typically, direct marketing efforts are geared toward explicitly featuring economic or relational values. To implement an effective communication strategy catering to customers' preferences, firms should understand how customers consistently evaluate these organizational marketing communications, which ultimately affect their buying behaviors. Therefore, the authors analyze marketing messages and employ content analysis to capture the two distinct types of direct marketing communications. Using data from a Fortune 500 business-to-business service firm and a robust econometric model, they find that the (1) effects of economic and relational marketing communication on customer purchase behaviors interplay and vary over time, (2) latent stock of direct marketing communication affects customer purchase behaviors, and (3) evolution of customers' perceived importance can be recovered using transaction data. Overall, the authors provide a marketing resource reallocation strategy that enables marketers to customize marketing communications and improve a firm's financial performance.

AB - Business-to-business firms spend significant resources in direct marketing to manage close relationships with their customers. Nevertheless, there is limited understanding of how the effectiveness of direct marketing communications varies by value propositions. Typically, direct marketing efforts are geared toward explicitly featuring economic or relational values. To implement an effective communication strategy catering to customers' preferences, firms should understand how customers consistently evaluate these organizational marketing communications, which ultimately affect their buying behaviors. Therefore, the authors analyze marketing messages and employ content analysis to capture the two distinct types of direct marketing communications. Using data from a Fortune 500 business-to-business service firm and a robust econometric model, they find that the (1) effects of economic and relational marketing communication on customer purchase behaviors interplay and vary over time, (2) latent stock of direct marketing communication affects customer purchase behaviors, and (3) evolution of customers' perceived importance can be recovered using transaction data. Overall, the authors provide a marketing resource reallocation strategy that enables marketers to customize marketing communications and improve a firm's financial performance.

KW - Business to business

KW - Customer relationship management

KW - Direct marketing communication

KW - Marketing strategy

KW - State-space model

UR - http://www.scopus.com/inward/record.url?scp=85045916319&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85045916319&partnerID=8YFLogxK

U2 - https://doi.org/10.1509/jmr.16.0283

DO - https://doi.org/10.1509/jmr.16.0283

M3 - Article

SN - 0022-2437

VL - 55

SP - 48

EP - 68

JO - Journal of Marketing Research

JF - Journal of Marketing Research

IS - 1

ER -