Developing Buyer-Seller Relationships Author(s): F. Robert Dwyer, Paul H. Schurr, Sejo Oh Source: The Journal of Marketing, Vol.

51, No. 2 (Apr., 1987), pp. 11-27 Published by: American Marketing Association Stable URL: http://www.jstor.org/stable/1251126 . Accessed: 17/06/2011 16:28
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F. Robert Dwyer, Paul H. Schurr, & Sejo Oh

Buyer-Seller Developing Relationships

Marketingtheory and practice have focused persistently on exchange between buyers and sellers. Unfortunately, most of the research and too many of the marketing strategies treat buyer-seller exchanges as discrete events, not as ongoing relationships. The authors describe a framework for developing buyerseller relationships that affords a vantage point for formulating marketing strategy and for stimulating new research directions.

cludes that ". . . the primary focus of marketing is

UMMARIZING15 years of debate on the conceptual domain of marketing,Hunt (1983a) con-

the exchangerelationship" 9; also see Ferber1970; (p. Kotler 1972; Kotler and Levy 1969; Kotler and Zaltman 1971; Luck 1969, 1974). The relative permanence of that view has been institutedby the recent theoreticaladvancesit has fostered. Examplesinclude Frazier's (1983a) framework for interorganizational exchange, Bagozzi's (1975, 1979) developing theory of exchange, and Weitz's (1981) contingency model of selling. Exchange also occupies a central role in the unfolding political economy framework(Achrol, Reve, and Ster 1983; Amdt 1983; Stern and Reve 1980) and a host of more specialized empirical studies.

Each of the works cited relies on the notion of exchange for four key conceptualbenefits. First, ex-

and of Professor Marketing SejoOhis a is F.Robert Dwyer Associate Paul of in student marketing, doctoral University Cincinnati. H.Schurr Alof State of Professor Marketing, University NewYork, is Associate for and Brunner theJMreviewers helpthank The bany. authors Chuck was for Partial drafts. on fulcomments previous funding thisresearch of of Administration, University Cinby provided theCollege Business cinnati.

change serves as a focal event between two or more frame parties.Second, exchangeprovidesan important of referencefor identifying the social network of individuals and institutions that participatein its formation and execution. Third, it affords the opportunityto examinethe domainof objectsor psychicentities thatget transferred. Finally, and most important,as a critical event in the marketplaceit allows the careful conditionsand processesfor buyerstudyof antecedent seller exchange. Despite the importancegenerally ascribed to the idea of exchange, marketingresearchhas largely neglected the relationshipaspect of buyer-sellerbehavior while tending to study transactions as discrete events. The lack of attentionto antecedentconditions and processes for buyer-sellerexchange relationships is a seriousomission in the developmentof marketing knowledge. Ongoing buyer-sellerrelationshipstake many different forms. Ardt (1979) noted the tendency of organizationalexchange to be circumscribedby longterm associations, contractual relations, and joint ownership. Dubbing these phenomena "domesticated markets," he argued that within such ongoing relaare tions "transactions planned and administeredinstead of being conductedon an ad hoc basis" (p. 70). Arndtcorrectlyemphasizedthe prominenceof ex-

Vol. 51 (April 1987), 11-27.

Journalof Marketing

/ Relationships 11 Buyer-Seller Developing

change relationships in industrial and institutional markets, but the notion of relationshipmanagement may also apply to consumer markets. Ardt's extenconsive list of relationalbonds in business marketing trasts with his seemingly perfunctoryillustrationsof
consumer relations: ". .. consumer cooperative societies in Great Britain and Scandinavia, . . . book

tions are characterizedby very limited communications and narrowcontent. The identity of parties to a transactionmust be ignored or relations creep in. A one-time purchaseof unbranded gasoline out-of-town station paid for with cash approxat an independent imates a discrete transaction. Relational Exchange It is the departurefrom the anchor point of discreteness that underlies a strong customer franchise (or, from a buyer's standpoint, a reliable team of suppliers). We posit that a strong customerfranchise (or supplierbase) depends on the natureof the relational contractbetween a buyer and seller. Macneil (1978, 1980) differentiatesdiscrete transactionsfrom relationalcontracts,relationalexchange, along several key dimensions. Most importantis the over time; each fact thatrelationalexchangetranspires viewed in terms of its history and must be transaction its anticipatedfuture. The basis for future collaboration may be supportedby implicit and explicit assumptions, trust, and planning. Relational exchange can participants be expected to derive complex, personal, noneconomicsatisfactionsand engage in social exchange. Because duties and performanceare relatively complex and occur over an extended time period, the partiesmay direct much effort toward carefully defining and measuringthe items of exchange. Thirdpartiesmay be called in to adjudicate,and other customizedmechanismsfor collaboratingand resolving conflict may be designed. of Table 1 summarizesMacneil's characterization of exchange discrete and relationalpolar archetypes on 12 contractualdimensions. Consistent with the precedingdiscussion, for example, a consumermight buy peaches at farmers' marketor a grocer may buy bags in quantity from any of several sources. The productscan be easily evaluated, paid for with cash, and carted away. There is no prolonged negotiation, paying cash for the goods consummatesthe transactions, and the mutual dependence situation quickly ends. All situationaland process characteristicsapproximatea discrete transaction. Table 1 suggests that relationalaspects startto appearwhen the buyerpays by check or the seller schedules delivery for next week. That is, dependence is prolonged, performanceis less obvious, uncertainty leads to deeper communication,the rudimentsof cooperativeplanning and anticipationof conflict arise, and expectations of trustworthiness may be cued by characteristics. personal Thougha detailedreview of Macneil's dimensions is beyond the scope of our article, Table 1 serves two importantpurposes. First, it dramatizesthe multidimensionality of exchange. Within marketing, our eventual needs for theory and practice may require

or recordclubs, season tickets for sportsand the arts, and, in a way, subscriptionsto newspapersand magazines, and credit cards" (p. 71). Let us take note of other pervasive consumer behaviors: frequent flyer programs,churchand professionalclub memberships, personal service patronage(lawyers, barbers, physicians), and the implicit bonds thatunderliebrandloyalty. Thus, both business marketing and consumer that to benefitfromattention conditions foster marketing relationalbonds leading to reliable repeatbusiness.

Objectives
Our principalgoal is to outline a frameworkfor developing buyer-seller relationships. First we briefly contrastdiscrete and relational exchange using concepts from modem contractlaw. Because the contract law conception of discrete exchange is an idealized fiction, we suggest problemareas and issues where it seems judicious either to overlook or underscorerelational dimensions. We rely on Macneil's (1980) provocativework to suggest what relationalproperties in exchange.Then, may be of consequence buyer-seller after brief conjectureabout the benefits and costs of relationalexchange, we propose a five-phase model by which relationshipsare formed. Utilizing the work of Scanzoni (1979), Thibaut and Kelley (1959), and otherexchange theorists, we emphasizehypothesized transitionsand key distinctions between phases. Finally, we pivot on the frameworkto propose a marketing researchagenda and outline threekey facets of managingbuyer-sellerrelationships.

Discrete and Relational Exchange

Discrete Transactions
The idea of a discretetransactionis the foundationon which concepts of relationshipare built. Accordingto Macneil(1980, p. 60), the archetypeof discretetransaction is manifested by money on one side and an easily measuredcommodity on the other.
Discreteness is the separating of a transaction from all else between the participantsat the same time and before and after. Its [pure form], never achieved in life, occurs when there is nothing else between the parties, never has been, and never will be.

Notice that the concept of discrete transactionspecifically excludes relationalelements. Discrete transac-

12 / Journal Marketing, 1987 of April

TABLE 1 A Comparison of Discrete Transactions and Relational Exchange' Contractual Elements Discrete Transactions Relational Exchange Situational characteristics Timing of exchange (commencement, duration, and termination of exchange) Number of parties (entities taking part in some aspect of the exchange process) Obligations (three aspects: sources of content, sources of obligation, and specificity) Distinct beginning, short duration, and sharp ending by performance Two parties Content comes from offers and simple claims, obligations come from beliefs and customs (external enforcement), standardized obligations Conflicts of interest (goals) and little unity are expected, but no future trouble is anticipated because cash payment upon instantaneous performance precludes future interdependence Minimal personal relationships; ritual-likecommunications predominate Governed by social norms, rules, etiquette, and prospects for selfgain Complete transferability; it matters not who fulfills contractual obligation No joint efforts Commencement traces to previous agreements; exchange is longer in duration, reflecting an ongoing process Often more than two parties involved in the process and governance of exchange Content and sources of obligations are promises made in the relation plus customs and laws; obligations are customized, detailed, and administered within the relation Anticipated conflicts of interest and future trouble are counterbalanced by trust and efforts at unity

Expectations for relations (especially concerned with conflicts of interest, the prospects of unity, and potential trouble)

Process characteristics Primarypersonal relations (social interaction and communication)

Contractualsolidarity (regulation of exchange behavior to ensure performance) Transferability(the ability to transfer rights, obligations, and satisfactions to other parties) Cooperation (especially joint efforts at performance and planning) Planning (the process and mechanisms for coping with change and conflicts)

Primaryfocus on the substance of exchange; no future is anticipated

Measurement and specificity (calculation and reckoning of exchange) Power (the ability to impose one's will on others)

Little attention to measurement and specifications; performance is obvious Power may be exercised when promises are made until promises are executed Sharp division of benefits and burdens into parcels; exclusive allocation to parties

Division of benefits and burdens (the extent of sharing of benefits and burdens) from Macneil (1978,1980). 'Adapted

Important personal, noneconomic satisfactions derived; both formal and informal communications are used Increased emphasis on legal and self-regulation; psychological satisfactions cause internal adjustments Limited transferability; exchange is heavily dependent on the identity of the parties Joint efforts related to both performance and planning over time; adjustment over time is endemic Significant focus on the process of exchange; detailed planning for the future exchange within new environments and to satisfy changing goals; tacit and explicit assumptions abound Significant attention to measuring, specifying, and quantifying all aspects of performance, including psychic and future benefits Increased interdependence increases the importance of judicious application of power in the exchange Likely to include some sharing of benefits and burdens and adjustments to both shared and parceled benefits and burdens over time

/ Relationships 13 Buyer-Seller Developing

fewer than 12 dimensions, but clearly the limited focus of past research(on power, personalrelations)reflects less than full considerationof the propertiesof of exchange. Thus, the characterization polar transactional archetypeson 12 dimensions prompts us to forms. of consider sweepingarrays diversetransactional the Second,Table 1 shouldunderscore need to make "practical"distinctions between discrete and relational exchange-especially in the presentembryonic stages of inquiry. As our simple examples of the farmers'marketand cash-and-carry grocerybag transactions establish, the notion of instantaneous exchange between anonymouspartnerswho will never interactin the futureis an abstractedmodel that does not exist in the real world. Even the simplest model of discrete exchange must postulate what Macneil (1980) calls a "social matrix":an effective means of communication,a system of orderto precludekilling and stealing, a currency, and a mechanism for enforcement of promises. Hence, some elements of a "relationship"in a contract law sense underlie all transactions. This argumentdoes not mean we should discard the concept of discrete exchange. Indeed, Goldberg (1979) suggests that treating exchange as a discrete directs attentionto three importantissues: transaction (1) how do economic actors make choices from an arrayof alternatives,(2) what marketoutcomes will resultfrom the simultaneouschoices of individualactors, and (3) how do outcomes dependon the structure of alternatives(competition)?It "is an extremely useful analytic constructand should properlybe viewed
as a special case-a

ting. In fact, researchanalyzing the interpersonalattraction and the interdependence relationships between husbandsand wives provides an apt framework for describingthe evolution of buyer-sellerrelations. As McCall (1966, p. 197-8) points out:
Marriage [is a] restrictive trade agreement. The two individuals agree to exchange only with one another, at least until such time as the balance of trade becomes unfavorable in terms of broader market considerations.

many contexts explicit recognition of relational elements adds heat but sheds no light" (p. 95).

subclass of exchange. . . . [I]n

RelationalMarketing: The Marriageof Buyer and Seller

To the extent that relationalexchange contributesto productdifferentationand creates barriersto switching, it can provide a competitive advantage(Day and Wensley 1983). Despite this potential, sellers commonly fail to see the necessity of managing their relationshipswith customers. Noting that exchange activity typically intensifies subsequentto the initial sale in financial services, consultancy, maintenance/repair/operating (MRO) supply systems, and capital goods industries,Levitt (1983, p. 111) states that
Then the .. thesalemerelyconsummates courtship. is the marriage begins. How good the marriage deis pends on how well the relationship managedby the seller.

Within the husband-wiferelationshipthe benefits of companionship,intimacy, procreationand parenting, personalgrowth, sharedhousehold maintenance, and social supportare only one side of the ledger. On the otherside marriagetypically forecloses social and sexual options, brings expanded responsibility, demandscare and nurturance,and can entail costly dissolution. Buyer-seller relations involve analogous benefits and costs. The former include reduced uncertainty, manageddependence (Spekman, Strauss, and Smith 1985), exchange efficiency, and social satisfactions from the association. Foremost is the possibility of significantgains in joint-and consequently individual-payoffs as a result of effective communication and collaborationto attaingoals. The buyer's perception of the effectivenessof the exchangerelation,then, is a significant mobility barrierand a potential competitiveadvantagefor the seller thatinsulatesthe latter from price competition. costs It is possible, however,thatreal or anticipated outweigh the benefits of relational exchange. Maintenance of the association requiresresources. Parties with highly divergent goals may spend considerable economic and psychic resources in conflict and haggling processes. More importantmay be the opportunity costs of foregone exchange with alternative that fabricator ties up 25% of next A partners. titanium year's shop capacity at a 20% marginmay lock itself out of anotherlarge job yielding a 25% margin. Alternatively, a consumer who opens a checking account but ordersonly a small quantityof checks may to be hedging againstthe possibility of an opportunity bankelsewhere for reducedcharges or expanded service.

Though asymmetrical in his assignment of responsibilityfor relationshipmanagementto the seller (only one "spouse"), Levitt's marriageanalogy is fit-

Jackson(1985) has given principalattentionto industrialmarketingsituationslike the latterexample in which the buyer incurs high switching costs. She focuses on switching costs related more to the technoof logical and usage characteristics the product(e.g., and communicationsystems requiringoncomputers going service or technical extension) than to the performancelevel of the exchange partner.Among other of factors,we suggestthatthe buyer'santicipation high costs gives rise to the buyer's interest in switching maintaininga quality relationship.

of 14 / Journal Marketing, 1987 April

Figure 1 goes fartherto delineatethe realm of possibilities of dyadic motivations for relational exchange. Framed in the exchange theory language of Thibautand Kelley (1959), the axes define each party's motivationalinvestmentin (the expected net benefits from) a relationship.The model has been developed recently in considerabledetail in the analysis of marketingchannel member relations (Anderson and Narus 1984). Thibautand Kelley theorize that a party assesses the overall costs and rewardsfrom the total association againstthe level of outcomesavailablefrom outsidethe association.They use the terms alternatives "comparisonlevel" (CL) and "comparisonlevel for alternatives"(CLai), respectively, to denote the two bases for evaluating relationship outcomes. For example, for the Metro Theater's season ticket holder, CL includes certainty of priority seating for the full arrayof plays, perhapsa discountfrom the single show rate, an efficient purchase process, plus a possible deepening identity with the playhouse and resultant prestige in the "arts community." The seller's CL comprisesthe dependable, certain ticket revenue, efficiently generatedby season ticket sales, and especially renewals. By highlighting the mutual motivational investments of the parties, Figure 1 reveals that Levitt's (1983) discussion of seller-managedrelations covers only one of several exchange forms. This fact should not denigratethe significance of seller-managedrelationalexchanges. Rather, by illuminatingsituations

1 FIGURE The HypothesizedRealmof Buyer-Seller

Relationships
Seler's motivational investmentin relationship

of buyer-supportedrelationships and bilateral relationship maintenance, Figure 1 suggests contingent sellerroles. Toyotasharesits production scheduleswith suppliersand has carefully knit the Toyota City manufacturingcomplex. Similarly, NASA and a homeownerexemplify buyer-managed exchange as they orchestratecontractorperformancein rocket assembly andmajorremodeling,respectively. Seller attemptsat leadershiproles in these associations seem unnecessary and ill advised. Also, bilateralrelationshipmaintenance seems the essence of Shapiro's (1985) "strabetween buyer and seller, and is tegic partnership" illustratedby industrialjoint ventures. Finally, Figure 1 allows transactionsdevoid of significantrelationalelements. In these instances for either or both of the parties, CL and CLai are approximately equal. Exchangestill may occur, but when one party'saccess to alternatives (CLat)is greaterthan the other's, one of two possible situations of asymmetric power obtains (cf. Dwyer and Walker 1981). For completeness we depict the realm of "no exthat change."Thereare no concessionsor inducements one partyis willing to offer thatwill providesufficient satisfactions for the other to motivate exchange (Alderson 1965, p. 84). As a map of exchange possibilities, Figure 1 provides a good representationof the topography. It is not a road map, however, in that it offers little detail on the routes to the northeastquadrant.Obviously, many of the costs and benefits from buyer-sellerrelations cannotbe assessed on an a priori basis. Using the marriageanalogy once more, we need to consider how practically discrete transactions(casual dating) might progress into more durable associations supportedby sharedgoals, planning, and commitmentto the relationship.

The Relationship Development Process

Relationships evolve through five general phases identified as (1) awareness, (2) exploration, (3) expansion, (4) commitment, and (5) dissolution (cf. Scanzoni 1979). Each phase representsa major transition in how parties regardone another.
'"^ Buyer-maintained relation

Buyer's market

No Exchange

SeUer's market

Phase I. Awareness Awareness refers to party A's recognition that party B is a feasible exchangepartner.Situationalproximity between the parties facilitates awareness. Just as a family is more likely to be acquaintedwith adjacent neighborsthan with those down the street, buyers are apt to become aware of local merchantsand brands advertisedin frequentlyviewed media. Interactionbetween parties has not transpiredin phase 1. Though there may be "positioning" and

/ 15 Relationships Developing Buyer-Seller

by "posturing" the partiesto enhance each one's own attractivenessto a specific (or general) other, these actions are unilateral.Any type of bilateral interaction-even tacit coordination(Schelling1960)-marks the beginning of the next phase of possible relationship development.

* Other'sattitudesimilarityas a reinforcementof own competence, e.g., builds identitybonds with -sales representative prospect and Communication bargaining. Bargainingis defined as the process whereby in the face of resistance parties rearrangetheir mutual distributionsof obligations, benefits, and burdens. Perceived willingness to negotiate may be a significant aspect of attraction which, by itself, signals that the potential exchange partnersees possible value in an exchange relationrelationalconsequenceswhen ship. Thereare dramatic the partiesactually bargain.
A significant indicator of development or progressive change in any association is found at the point where partnersperceive that the potential rewards are great enough to take the trouble, go to the bother, and expend the psychic and physical energies necessary to negotiate (Scanzoni 1979, p. 72).

Phase II.Exploration
Explorationrefers to the search and trial phase in relational exchange. In this phase potential exchange partnersfirst consider obligations, benefits and burdens, and the possibility of exchange. Trial purchases may take place. The explorationphase may be very brief, or it may include an extended period of testing and evaluation. Seller S may give buyer B due considerationin promotionsand store placement;B may attendto S's ads and linger at the display. This evaluation may result in a trial purchase, but the exploratoryrelationshipis veryfragile in the sense that minmakefor simple and interdependence imal investment termination.The explorationphase is conceptualized in five subprocesses (cf. Scanzoni 1979): (1) attraction, (2) communicationand bargaining, (3) development and exercise of power, (4) norm development, and (5) expectationdevelopment. Attraction. Attractionis the initiating process of the explorationphase. It results from the degree to which buyer and seller achieve-in their interaction with each other-a reward-costoutcome in excess of some minimum level (CLa,t)(Secord and Backman 1974). Rewardsare derived from the tangible and intangible gratifications of association; costs include economic (money, inconvenience) or social deterrents. The interpersonalattraction literaturehas given principalattentionto rewards.They may be rooted in perceivedsimilarityof beliefs, values, or personality. resources, includingmoney, inAlso, complementary formation,services, legitimacy, and status, encourage favorable perceptionsof benefits and burdens. Recognizing both contingent and noncontingentreward sources(John 1984; Lusch and Brown 1982), Lott and Lott (1974) catalog several types of rewardsthat may lead to attraction. * Rewardsdirectly provided by other, e.g., -customer provides payment -seller's productdelivers functionalbenefits * Characteristics other as a source of reward, of e.g., -sports prowess of alma mater sparks alumni pride
-"we were the first . .. McDonnell Douglas"

-"an official sponsor of the 1984 Olympics"

Withindevelopingrelationsthereis often some reluctanceto engage in bargaining.Initially, partiestalk aroundthe issues, hinting at their preferencesor stating them offhandedlywhile evidencing interestin the other's goals (Leigh and Rethans 1984; Pruitt 1981). Through questions and answers, buyers and sellers develop a process of turn taking, making interaction easier (Knapp 1978; LaFranceand Mayo 1978). To know each other very well, they may try to reveal specific informationaboutthemselves, their needs, or their resources. If the relationshipis to survive this (Cozby stage, intimatedisclosuremust be reciprocated Davis and Skinner 1974). Later, when the par1973; ties are both projecting their association into the future, there may be a lesser need for strict-reciprocity accountingin that the futureholds ample opportunity for and expectationsof balancing. Now we risk diluting the contended significance of bargainingand communicationin relationshipdevelopment. We note that the behaviors describedexchange-seem thoughtypicalin business-to-business of characteristic only a portion of consumer transacgoods tions, namelythose involvinghigh priceddurable and complex services (cf. Dwyer 1984, p. 680). On the surface, administeredpricing and mass merchandising for low priced items seem to preclude explicit bargaining.We emphasize, however, that uncertainty and the "stakes"of the exchange have importanteffects on the extent and natureof bargaining.That is, a consumer may explicitly negotiate a quantity discount on doughnutswhen setting up an after-church breakfastreception (high stakes); a single roll (low stakes)will probablyinvolve no haggling-unless the baker attempts to sell an unfamiliar variety (uncertainty) when sold out of the consumer's favorite. There are obvious selling efficiencies from ad-

of 16 / Journal Marketing, 1987 April

ministeredpricing. Also, administered pricing is useful for managing the aspirationsof millions of consumerslinked to the bargaining"stance"of the seller (see Raiffa 1982, p. 13). Thus, for good reason communicationis less than complete in this setting. Bargaining and efforts at coordinationare largely tacit (Alderson 1957, p. 130; Schelling 1960). Sellers interact with "representatives" the market constituof ency when they enlist focus group participantsand surveyrespondents.Furthermore, purchasepostponement, stockpiling,and the like are subtleforms of tacit for bargaining low pricedconsumablegoods thathave dramaticconsequenceswhen summedacross millions of households. The rare instancesof explicit bargaining-as in suggestions, complaints, and redress requests-should be especially highly regardedby sellers; they reflect consumer goals, priorities, and relationalinvolvement with the brandor store. Finally, we emphasize that negotiation, by itself, does not lead to an enduringrelationship. It is possible for haggling to transpirein what is practicallya discretetransaction,such as an estate sale or flea market. In such cases, neitherpartyexpects a futurewith the other (Weitz 1981), and the style and tone of their negotiationstrategiesreflect this fact (Raiffa 1982). We therefore propose that, though it is possible for buyers and sellers to bargainover terms to what is essentially a discrete contract, a relationshipseems unlikely to form without bilateral communicationof wants, issues, inputs, and priorities.Especially as the partiesthemselves change over time and their respective environmentsexert variable demands, it is inevitablethatthe valuationof outcomesin the buyer-seller associationfluctuates. By looking for or grantingaccommodationwithin a currentratherthan a new exchange association, the buyer and seller verify their mutualinvestmentin the relationship. Power and justice. Though convenient for discussion, separatingthe adjoiningprocesses of bargaining and power is impossible in reality. With a richer tradition in marketingthan the former, power is conceived as the abilityto achieveintendedeffects or goals (Dahl 1957). Party A's power over B is determined by B's dependence on A for valued resources. B's dependenceon A is high when there are limited alternativesources of those valued resources (Emerson 1962; Thibaut and Kelley 1959). Thus, concessions are grantedor obtained as a result of power brought to bear in bargaining. Resourcesmediatedby A on which B is dependent can take many forms (cf. French and Raven 1959), but for our purposes it is useful to conceive of their applicationas "just"or "unjust"sanctions. Exercise of an unjustpower source would control or influence the action of B to promoteA's own goals withoutB's

consent, against B's will, or without B's understanding (Buckley 1967; Raven and Kruglanski1970). Exercise of a just power source, in contrast,implies voluntarycomplianceand behaviorsfor the promotionof collective goals.1 Thus, when A attemptsto dominate or coerce B into some behaviorwithoutprovidingsufficient rewards-direct or indirect(Lusch and Brown 1982)-to lead B to perceive that compliance is worthwhile,B may elect to terminatethe association. With minimal interdependencies this stage, breakat off is fairly easy. If, however, A's power exercise is perceived as "just," and B complies, the association passes from one "whereindividualisticinterestsare of primeconcernto one where [joint] interestsare taking on importance"(Scanzoni 1979, p. 75). Indeed, the successful exercise of power may be a crucial distinctionfor locating a relationshipon a continuumbetween the exploratoryand expansion phases. The following examples clarify this point. As deregulationintensified competition in financial services in the early 1980s, many banksincreased their efforts to segment markets and partition operating costs. The result was a diversity of approaches to encouragesmall depositorsto use automatictellers insteadof expensive bank personnel. Some banks imposed up to $1 chargesfor teller-assistedwithdrawals fromsmall accounts.Othersemphasizededucationand prize incentives for using automatictellers. Applying the relationshipdevelopment framework, we would predict poor account retention by the former approach.No matterwhat explanationof economic realities is used to supportthe program,its coercive, selfserving flavor jeopardizes its legitimacy. In contrast, the education/rewardapproachaddressesjoint goals. of In turn, it expands the interdependence the parties as the bankhas a more profitablemarketsegment and accountholdershave made relationaltransaction-specific investmentsby learningto use the automatictellers. Norm development.The norms and standardsof conduct that mark a relationalcontract take form in the exploration phase of relationship development. Norms provide "guidelinesfor the initial probes that potentialexchange partnersmay make towards each other" (Scanzoni 1979, p. 68). Norms are "expected of patterns behavior"(Lipset 1975, p. 173). By adopting norms and establishing standards of conduct, emerging exchange partnersstart setting the ground rules for futureexchange.
and "nonlegitimate" 'Buckley(1967) uses the terms "legitimate" Our powerwherewe use "just"and "unjust." choice of terminology to is intended avoid confusionwith Frenchand Raven's (1959) taxlegitimate,etc.), whichhas onomyof powersources(expert,referent, in been used frequently sales andchannelsresearch(cf. Gaski 1986; 1979). SpiroandPerreault

/ Relationships 17 Buyer-Seller Developing

The concept of norms that exist "priorto, and are brought into the social [exchange]" (Ekeh 1974, p. 45) is illustratedin the script theoreticwork of Leigh andRethans(1984). More than40% of the purchasing agents in their sample described the following expected activities in a "post quotationnegotiationprocess": (1) salespersonarrivalat purchasingagent's office, (2) exchangegreeting/smalltalk, (3) buyer opens negotiationon price, (4) salesperson response, . . . (7) exchange of partingcomments. Such generalized expectationsguide perceptionsof social exchange and exert powerful influences on behavior. Once partiescome togetherand begin to exchange rewards,they often establish norms that did not exist prior to the interaction.Thus, "spontaneousconsensus" (Fox 1974) may support initial exchange between customerand barber,but at the same time the experiencewill shape expectationsfor the next transaction (Brickman1974). Very much in harmonywith our notion of "just"power, Fox (1974) indicates that persons "who share common goals are capable of allocating roles among themselves in the light of what they perceive as 'functionalnecessities'" (p. 86). Expectations development. Relational expectations concern conflicts of interest and the prospects for unity and trouble. These expectations may either enhanceor diminishcontractualsolidarity. Trustis an importantconcept in understandingexpectations for cooperationand planningin a relationalcontract. Golembiewski and McConkie (1975) go furtherto sugthereis no othersingle variablewhich gest that"perhaps and intergroup so thoroughlyinfluences interpersonal behavior"(p. 131). Trust is a concept only recently broughtinto the focus of buyer-sellerinteractionresearch.Schurrand Ozanne(1985) rely on Blau (1964) and Rotter(1967) to define trust as "the belief that a party's word or promise is reliable and a party will fulfill his/her obligations in an exchange relationship" (p. 940). In a simulationof industrialpurchasing, Schurrand Ozanne found that buyers' expectations about trust and bargainingstance significantly affected attitudes and behavior toward their current supplier.Low truststimulatedless favorableattitudes, communications, and bargaining behavior with respect to the currentsupplier. Pruitt(1981, p. 101) believes trustand a desire to coordinatewith anotherparty are closely related. He with a trusted suggeststhata partydesiringcoordination other is likely to take high-risk coordinative behaviors. Examplesof high-riskmoves include (1) a large concession that seeks reciprocation,(2) a proposalfor action, compromise,(3) a unilateraltension-reduction and (4) candid statements about one's motives and
priorities.

include buyers' maintenanceof good credit standing and sellers' use of implicit stimulantsof trust (e.g., brand names, trademarks,logos) and explicit guarantees (Schurr and Ozanne 1985). However, direct experienceis likely to be the principalbasis for judgin ing trustworthiness the exploratoryphase. It is a key facet of Swan's (Swan and Nolan 1985; Swan, Trawick, and Silva 1985) conceptual frameworkfor the salesperson'sdevelopmentof customer trust. In summary, the five subprocesses are important aspects of the explorationphase because they enable each party to gauge and test the goal compatibility, integrity, and performanceof the other. Phase lIM. Expansion refers to the continualincrease in benefits Expansion obtainedby exchange partnersand to their increasing The five subprocessesintroducedin interdependence. the explorationphase also operate in the expansion phase. The critical distinctionis that the rudimentsof trust and joint satisfactions established in the exploration stage now lead to increasedrisk taking within the dyad. Consequently, the range and depth of mutual dependenceincrease. "[T]he association has developed or evolved significantly from one characterized by probing, testing examination, and so on, to of one characterized continual enlargement the kinds by one another,and thus of rewardsthat partnerssupply increasedinterdependence" (Scanzoni 1979, p. 791). Frazier(1983a,b) has framed the expansion process as a consequenceof each party'ssatisfactionwith the other's role performanceand its associated rewards.That is, exchange outcomes in the exploratory phase provide a test of the other's ability and willingness to deliver satisfaction (Blau 1964). When a partyfulfills perceivedexchange obligationsin an exto emplaryfashion, thatparty'sattractiveness the other increases (Thibautand Kelley 1959). Hence motivation to maintainthe relationshipincreases, especially becausehigh-level outcomes reduce the numberof alternativesan exchange partnermight use as a replacement (Frazier 1983b, p. 159). The resulting perceptions of goal congruenceand cooperativenesslead to interactionsbeyond those strictly requiredat the outset. The intensivebusiness growth strategiesof market penetrationand product development (Ansoff 1957) dependon the process of expansion. For example, Citibankused newspaperads and mail directed toward currentloan customersto attractapplicantsfor an innovative second mortgageproductin Baltimore. The programbuilt Citibankmarketpresence in an historically weak area and, more importantly,enabled Citibankto use the process for "upselling."That is, applicants increased their loan amounts and purchased other financial services after discussions with a Citi-

Examplesof sustainedmeasuresto engender trust

18 / Journal Marketing, 1987 of April

bankloan officer (Advertising Age 1986). In a similar, buyer-managed expansion Procter & Gamble has deepenedits relationshipwith a telemarketingdistributorto (1) sell diapersto parentsof premature infants, (2) serve incontinent adults, and (3) most recently, identify key decision makers at prospective accounts for institutionalcooking oils.

Phase IV. Commitment

Commitmentrefers to an implicit or explicit pledge of relationalcontinuitybetween exchange partners.At this most advancedphase of buyer-sellerinterdependence the exchange partnershave achieved a level of satisfactionfrom the exchange process that virtually precludesother primaryexchange partnerswho could provide similar benefits. The participantshave not ceased attending to alternatives, but maintain their awarenessof alternativeswithout "constantand frenetictesting"(Scanzoni1979, p. 87). Customer(seller) loyalty is achieved. Typically the notion of commitmentconnotes solidarityand cohesion, but these synonyms are vague. We need to considerthreemeasurablecriteriaof commitment(Scanzoni 1979): inputs, durability,and consistency. Inputs. The first criterion of commitment is that the partiesprovide relatively high levels of inputs to the association (Blau 1964). Significant economic, communication,and/or emotional resources may be exchanged. Durability. Second, there should be some duraover time. Accordingto Macneil bilityof the association (1980, p. 95), "organicsolidarityconsists of a common belief in effectiveness of futureexchange." A perseveringrelationshipitself may or may not have content stability, dependingon the environmental adjustmentsrequired and the willingness of the to (Scanzoni1979). participants make such adjustments Durabilitypresumes the parties can discern the bento efits attributable the exchange relation and anticipate an environmentthat will abet continuedeffective exchange. Given these expectations, the parties can bond themselves in such a way as to encourage their in continued investment the relation.Williamson(1983) in this vein that exchange of "hostages" (biargues lateral exchange of transaction-specific human or physical assets) communicatescredibility of commitment to the relationship,and thus supportsexpanded alliance and exchange. The predominantproblem in franchisingillustratesthis point.
Franchiseesinvest in the franchisor'sinventories, traintheirdealers Franchisors signs, andpromotion. andprovidespecializedknowledgeon businesstechniques.Neitherpartywouldincurthesecosts without at least some expectationthat the relationshipwill continuelong enough for him to recouphis expenditures(Goldberg1979, p. 99).

The expectationsof franchiseecontinuationderive from nonrefundablefranchise fees, covenants not to compete, and anticipated relocation expenses from sites. Royalties based on a percentfranchisor-owned age of gross receipts reflect a sharing formula that in makestermination a "hot"marketless attractivefor a franchisorthan would a flat rate for all franchisee services. In consumer markets, similar investments seem evident in securitydeposits, delayed rebates, cumulativepurchasecredits, and the like. Consistency. The third aspect of commitment is the consistency with which the inputs are made to the association.In termsof the other'sexpectations,when a party'sinputlevels fluctuatethe otherpartywill have difficultypredictingthe outcomes from exchange. Inconsistency on the part of the former reflects low commitmentand leads to a reduced reliance by the latter on the outcomes of the exchange. A key distinction of the commitmentphase is that the parties purposefullyengage resources to maintain the relationship. Indeed, Levinger and Snoek (1972) analogize thatjust as physical-chemicalbonds tend toward entropy,social bonds tend to weaken and dissolve unless actively maintained. Many forces can strain a relationship, including increasedcosts of transaction,decreasedobstacles associatedwith interactingwith an alternativeexchange needs and changingpersonalor organizational partner, resultingin diminishedvaluationof rewards. In contrast, pressure to adjust rather than dissolve a relationshipis fueled by the ongoing benefits accruingto These benefitsincludethe certaintyfrom each partner. mutually anticipatedroles and goals, the efficiency stemming from ameliorationor role or identity bargaining (McCall and Simmons 1966), and the confidence in exchangeeffectivenessthatcomes from trust. Phase V. Dissolution The possibility of withdrawalor disengagement has our been implicitthroughout relationship development Thatis, not every dyadic linkageof which framework. the buyeror selleris awareentersthe exploration phase, andnot every relationprobedand tested in exploration enters expansion or becomes soldered by commitment. To this point we have merely relied on the basic exchange theory calculus (Emerson 1962; Raven and Kruglanski1970; Thibautand Kelley 1959; Figure 1) to explain breakup.This model is a powerful analytical perspective, but it leaves unexplained the processes of dissolution. occur after parties have reached the status of high interdependencecharacteristicof the expansion and commitment phases. Termination of personal relationships is a significant source of psychological, emotional,and physical stress (cf. Bloom, Asher, and
Such processes have great consequence when they

/ Relationships 19 Buyer-Seller Developing

White 1978; Hill, Rubin, and Peplau 1976). From anecdotal evidence, the dissolution of commercial relationships extracts parallel tolls. Consider the trauma of Coca-Cola's attempted discontinuation of "old" Coke, Kodak's costly exit from instant photography, and the lengthy process of antitrustlitigation that often ends distribution channel relationships (e.g., Monsanto Co. v. Spray-Rite Service Corp. 1984). Unfortunately, little is known about disengagement. There are probably several trajectories for dissolution and we risk oversimplification by devoting four stages to relationship development while consolidating termination into a single phase. Though some scholars have found it useful to conceive of dissolution as the reverse of relationship formation (cf. Altman and Taylor 1973; Miller and Parks 1982), we think it productive to depart from such reasoning. Figure 1 and our framework emphasize bilateral (though not necessarily equal) efforts for relationship development; dissolution, in contrast, is more easily initiated unilaterally. Furthermore, the accumulating evidence seems to contradict the reversal hypothesis. Much of the empirical work has been conducted Baxter (1979, 1983; Baxter and Philpott 1982), poby sitioned within a four-stage conceptual framework from Duck (1982). This model posits that dissolution begins with an intrapsychic stage in which one party privately evaluates his or her dissatisfactions with the other party, concluding that costs of continuation or modification outweigh benefits. Subsequently, the relationship enters an interactive phase in which the parties negotiate their unbonding. Dissolution then is presented publicly in the social phase. Finally, "grave dressing," social and psychological recovery from the breakup, concludes the process-though neither party returns to their prerelationship state. Emphasizing the interactive phase in her studies, Baxter (1985) identifies two key dimensions of strategies for disengagement: directness and other-orientation. Direct strategies explicitly state to the other party one's desire to leave a relationship; indirect strategies try to accomplish breakup without an explicit statement of the aim. "Other-orientation captures the degree to which the disengager attempts to avoid hurting the other party in the break-up" (p. 247). The parsimony of Baxter's distinctions makes them a promising starting point for examining dissolution of buyerseller relationships. of the Model Advantages and Disadvantages We argue that marketing research has largely neglected relational elements of buyer-seller exchange. Macneil's (1980) depiction of contrasting features of discrete and relational exchange leads to our conception of dyadic motivations for alternative exchange forms, Figure 1. To account for interactive processes

that might diminish or magnify mutual motivationsperceptions of costs and benefits from sustained exchange-we propose a framework for relationship development. Figure 2 is a skeletal summary of the model that highlights primary transitions and phase characteristics. Awareness is a unilateral, pre-exchange process. Mutual considerations and dyadic interactions initiate the exploration phase, which is basically a testing period for the relationship. Repeated exchange may reflect an extended testing period. The exchange association is easily terminated at this stage. However, if the parties effectively communicate, negotiate roles that reflect "just" inputs from the parties, and form expectations for promising future interactions, the association enters the expansion stage. The five subprocesses support a new trajectory of deepening interdependence in the expansion phase. The commitment phase then supports high levels of mutual dependence by circumscribing the exchange relation with value structures and contractual mechanisms that ensure its durability. Disengagement from the highly interdependent phases of expansion and commitment is not a reversal of the process. It may be complex and costly. It is a poorly understood strategic marketing process. We caution that the model is built primarily on conceptual foundations and empirical evidence from exchange theory and its offspring-marital theory, bargaining theory, and power theory. Much remains to be done in distinguishing commercial, work, and romantic relations. Also, the model is presented abstractly. It lacks conceptual detail and obvious ways to operationalize key variables. In this abstract form, however, the framework has advantages. We attempt to offer a model that has sufficient generality to cover both interfirm and consumer relationships. Though the emphasis of moder contract law seems to be on interfirm behaviors, the process model has its roots in interpersonal phenomena. Multiparty decision making and higher stakes distinguish interfirm from consumer relationship development, but similar factors may come into play in certain consumer buying situations and seem easily accommodated by the framework. Thus, we contend that the model supports the "logic of discovery" (Hunt 1983b, p. 21-5) by suggesting ideas and categories for grouping phenomena. Like the buying center concept, the model affords a framework for unifying and extending our understanding. To illustrate we pose directions for research and managerial efforts.

Research Directions
Transitions Initial research efforts should confront the basic premise of the relationship development framework, grad-

of 20 / Journal Marketing, 1987 April

FIGURE2 The Relationship Development Relationship phase 1. Awareness

Process Phase

1. Uni pote EnablingSubprocesses for Deepening Dependence _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

2. Exploration

2. Dya grad depe testi of th sim

3. Expansion

3. A su exer of E fact perf inte grat the rath par

I

2
o

4. Commitment
I

4. Con shar sust Mu & co con 0

4O

0
:0
I.

Seller's dependence on buyer

Buyer's dependence on seller

m,

ual expansion of interdependence.With an historical emphasis on transactionsas discrete events, marketing has made significantprogresstowardunderstanding the transitionfrom awarenessto exploration.This progress is well illustratedin Smith and Swinyard's (1982) review and integrationof informationresponse models. Importantly,in their integrated model they note the significantrole of behavioralexperiencewith the productin the formation of higher order beliefs and affect. We know relatively little, however, about the importantprobing and testing processes of the exploration phase. Do the parties apply hypothesis testing heuristics?If so, what are the origins of their expecof affectthe "power" the tests? Do tations? the "stakes" What is the latitude of "just"power exercise across power sources and exchange partners? If a relationshipsurvives the explorationand expansionstages, the transitionto commitmentrequires high levels of goal congruenceor "airtight"enforcement mechanisms (hostages or other sanctions). Because inherentlyimperfecthumaninformationprocessing transpiresin complex and uncertainenvironments, it may be impossible to engineer fully selfenforcing mechanisms to support the deepening interdependenciesof commitment. Thus, relationship evaluation in the antecedent phases may emphasize attributedmotives over quality role performance. Negative transitions, relationshipterminationsor rollbacks,merit careful study also. Especially for the commitmentphase, the maritalmetaphorand the evidence offered by Baxter (1985) compel us to frame as disengagement somethingotherthanthe reversalof development. Uncoupling from this stage of high interdependencetends to render transaction-specific investmentsobsolete or leave deep sentimentalscars levels. Even relational thatmay block out intermediate in bilateralagreementsfor "fadingaway" or "pseudodeescalation"the parties "maintainthe pretense of a meanwhileintendingtotal nonrelationship, continuing contact with one another"(Baxter 1985, p. 248). The transitionfrom the expansion back to the exploratoryphase may be less dramatic. Scaling back may not make relationshipinvestments totally obsolete or leave deep scars. Perhapsneitherparty wishes to foreclose the possibility of deeper interdependence in the future, though the currentsituation warrantsa winding down. Obviously, when parties hold different perceptionsof the status of the relationship,disengagementmay be troublesome. A distributorwho has built his business on a particularequipment line direct sales efforts as a negsees the manufacturer's ative transitionthat obviates any state of high dependence in the future.Meanwhile,the manufacturer may have intended the move merely to complement the

distributor network, anticipatingan expandedproduct line in the next decade. to Finally, it is important note that a great number of enduringexchange situationsmay compress explorationand expansion phases. Jackson's (1985) "lostby for-good"categoryof exchange, characterized high buyer switching costs, is illustrative.Reasoning principally from Williamson's (1975) transaction cost economics, she proposesthat factors tending to impel also favor relationalexchange over reinternalization currentspot contracting.Briefly, such factors include of frequentinteractions,auditability/certainty perforthe high degree to which durable transmance, and action-specificinvestmentsare required.In such cases we might expect extended negotiations between the parties and relatively high reliance on reputationsof trustworthiness, contingentclaims contracts,and thirdpartymediationalmechanisms. Negotiation The second item on the researchagenda is the study of buyer-seller interactionsas bargainingprocesses. Negotiation provides an excellent frameworkfor research on relationalexchange because its rich traditions address importantantecedent conditions, communications,and power structures affecting exchange partnerswho must divide benefits and burdens, resolve conflicts, plan, and exercise power. Arndt (1979) amplified Johnston and Bonoma's re(1977) designationof negotiationas a fundamental have been given of Negotiations sponsibility marketing. little attention in the marketingliterature,but some progress has been made (cf. Clopton 1984; Dwyer 1984; Schurrand Ozanne 1985). These studies have been of a transactional (tactical)natureand more must be done to study what Arndthas called "contractual" and "structural" negotiations. The former cover the terms of exchange over a period of time; the latter and applyto the "formandintensityof long-term deeply committing interorganizationalrelations" (p. 73). Again, we posit the possibility of more subtle, perhaps tacit, parallelforms in consumer relations. The negotiationlaboratory may be a suitablestarting point for developmentand evaluationof measures of key constructsin the framework.Within the controlled environment,measures can be efficiently administeredand tested for their sensitivity to experiof mentalmanipulations dependence,role performance, and communication.Three constructsseem critical at of the present stage of our understanding the process of relationshipdevelopment:trust, commitment, and disengagement. Trust. As a pivotal facet of expectations development, trust deserves priority attention. Its role is

of 22 / Journal Marketing, 1987 April

perhaps best summarized by Sullivan and Peterson one another,then there will be ways by which the two parties can work out difficulties such as power conflict, low profitability, and so forth." We offer this logic in our discussion of transitionsto commitment. That is, it might be impossible to cover all contingencies in a formalcontractfor sustainedcooperation, but if the partners have trustit may be unnecessaryto cover all contingencies. Recent work on trust in marketing (Schurr and Ozanne1985;Swan andNolan 1985) has only scratched the surfaceof its rich conceptualand empirical foundationsin interpersonal small group research(cf. and Worchel 1979; Zand 1972). As an outcome measure of dyadicinteraction,the trustscale developed by Sullivan et al. (1981; Sullivan and Peterson 1982) has shown reliability and nomological validity. Its application to buyer-seller relations, especially interfirm relations (trust as an organizational, vis-d-vis personal, facet), warrantscareful evaluation. Finally, trust in the relationship development frameworkprovides a vantage point for unifying the researchtraditionson marketingchannel power and conflict (cf. Gaski 1984; John 1984). Much of the channelswork is repletewith implicitreferenceto trust as an aspect of expert and referent power, cooperation, and the reliability of threats and promises. Indeed, John's article seems key for wedding the institutionaleconomists' concernwith marketfailure from and opportunism the social psychologists'concernwith ineffective group performancedue to lack of cooperationand risking (trust). The formerresearchersreas gardopportunism an inherenthumancharacteristic thatsurfaceswheneverit is uncheckedby competitive or structures governancemodes fitting the complexity and uncertaintyin the environment. The latter emphasize social learning as a route to trust, expanded and group/system effectiveness. interdependence, Commitmentrepresentsthe highest Commitment. of relational bondingand has been definedclearly stage in terms of three measurabledimensions: inputs, durability,and consistency. Seemingly, these facets can be applied with great versatilityto the study of interfirm and consumerrelations. Relatively auditableand trackableoperationalizations provide criteriaand systhat tem statusmeasures makepossiblethe carefulstudy of relationship processes such as conflict management, joint decision making/coordination, and system adaptation.Comparativeanalysis across power systems, lifestyle segments, and producttechnologies likewise is supported. Dissolution. Our discussion of disengagement processes is the most speculative. Though we ac(1982, p. 30): ". .. where the parties have trust in

knowledgethe streamof researchon micro aspects of consumer satisfaction/dissatisfaction Oliver 1980), (cf. therehas been no systematic study of the uncoupling of parties from highly evolved relationships. Anecarena dotally,the lure of trebledamagesin the antitrust seems to prompt many acrimonious interfirm separationsthat might otherwise have been avoided or resolved peacefully via negotiation or contract arbitration (Goldberg1979). In the Baxter(1985) framework, antitrustdisengagement is direct and not other-directed. In contrast,GM and Toyota have prearranged terminationfor their Nova joint venture; it is direct andother-directed. this a fruitfultaxonomicscheme Is for evaluatingconsumerand interfirm What breakups? other environmentalstructuressupportor discourage dissolution? Again, Macneil (1980, 1978) and the marriagemetaphor(Scanzoni 1982) are suggestive. Exploratory,inductive work that classifies many relationshipdissolutions seems potentiallyproductive for evaluatingthe efficiency and effectiveness of the processes. We anticipate that dyadic perceptions of the process may not be congruentand that, in the face of resistance,one party's other-directed efforts at dissolution may revert to self-defense. Decision Models There are significant differences in the managerial evaluationof discrete and relationaltransactions.Essentially, evaluationof the formerworks from a stimulus-response model (Arndt 1979; Johnston and Bonoma 1977) and that of the latter from a capital budgetingmodel (Day and Wensley 1983). Customer as offset costs can be considered investments acquisition by discounted "lifetime" customer valuation of benefits and burdens(Jackson 1985). Marketsegmentation then is based more explicitly on responsepatterns and other relational considerations. We call on the power of advancedmathematicalmodels to structure this complexity in relationshipmarketing. Morrisonet al.'s (1982) model of retail customer behaviorat Merrill Lynch illustratesthe researchdirection we are affirming. More specifically, we see great promise from enhancements to their model, namely a customergrouping algorithm, an expanded transitionmatrix, and response functions for different marketing inputs. The last would model the marketing impacton the transitionprobabilitiesfor programming the groups between each phase of relationshipdevelopment.

Applying the Framework

Even in its propositionalform the model makes two contributionsto managerial action. First, it affords compelling post hoc explanations for the success or

/ Relationships 23 Developing Buyer-Seller

failure of many currentmarketingpractices. Second, it stimulatesthinking in new directions of marketing programming. The brief sections that follow are richer in prothanprogramgeneration.Modest ingramaffirmation novationsseem more in tune with the embryoniccharacterof our model. Nevertheless,we see greatpromise in creative imitation of some of the relational marketing practices exemplified in our three groups of managerial issues: performance metering, conflict management,and erecting exit barriers.

Conflict Management Our model of relationshipdevelopment highlights a process of ever-expandinginterdependencybetween buyer and seller. Indeed, each party's gratifications from the other's role performanceand increasing reliance on role expectationssecure the partiesin a web of interdependencies.Conflict-divergence of goals and role preferences (Pondy 1967)-is predictable within the relationshipjust as periods of resource scarcity, misperceptions, and changing values and concepts of fair play are inevitable (cf. Ster and Gorman1969; Thomas 1976). Consistentwith the managerialcharge for performancemeteringis our second managerialconcern, the role of buyer-sellerconflict. The destrucconstructive tive consequences of conflict seem well catalogued: hostility, bitterness, strikes, violence, polarizationof third parties, and isolationism. However, total suppressionof conflict means a relationshiphas lost its vitality or parties are separatingbefore fully exploring the promise of their continued association (Hirshman1970). We emphasize here the purported functional benefits of conflict (cf. Assael 1969; Rosenberg1974), which include(1) more frequentand effective communicationsbetween the partiesand the establishmentof outlets to express grievances, (2) a critical review of past actions, (3) a more equitable of distribution system resources, (4) a more balanced power distributionin the relationship, and (5) stanof dardization modes of conflict resolution. These are hardlypioneeringideas, yet the current state of affairsdoes not appearto yield this full spectrumof benefits. A nationalsurveyhas shown thatthe majorityof dissatisfiedconsumerswho enlist the help of governmentagencies have made unsuccessful attempts to obtain redress from the seller (Harris and Associates 1977). In part, buyerredressattemptswith the seller fail because buyers and sellers have incongruentnorms of redress (Dwyer and Doroff 1981). Relationshipmarketingdemandsthe establishmentof mutuallyaccepted redress norms. Further,Weick (1979) has suggested that the customer service departmentin some organizationshas evolved into being primarilya buffer to insulate managementfrom bad news from customers. In contrast, the possibilities for preservingand deepening the relationshipby wholesome redress proceduresand outcomes ought to fuel significant conflict management profitabilityof cusactivity. Trackingthe "back-end" tomers for whom they have quickly resolved complaints versus that of customers who have not complained, Omaha Steaks-a purveyorof choice meats throughthe mail-finds the former are more profitable (Kesler 1985). Thus, customer access to stan-

PerformanceMetering
Withinany sustainedassociationit is incumbentupon the parties to appraise their current satisfaction and signal each other of changingoutcome priorities,role requirements,and growth opportunities.Two fundamental managerialtactics offer sensible approaches. First, the seller can improve the conduits of communicationfromcustomers. Warrantycards, demonstrationsand exhibitions, the retailer's customer service desk, and productuse (e.g., recipe) contests are standardin this effort. Toll-free hotlines and salesperson followup are less common essentials of this (Petersand Austin 1985). marketing aspectof relational The second approachis to obtain, unobtrusively, high-quality informationon customer priorities and satisfactions within the exchange association. For meaningful relational marketing the seller needs to know whetherpurchasesare intensifying or waning, expandingor contracting.Further,to the extent possible, the seller will want to anticipateeach customer's changing lifestyle, or business emphasis, and consequentshifts to new productsand services. Low cost databasesare making it operationallypossible to track an increasingproportionof such behaviors unobtrusively on an industrial account and household creditcard level. Rebaterequests,couponredemptions, and registrationdata are rich with relapurchases, tional marketingpotential. When these data are combined with other data bases (e.g., Simmons and PRIZM)for media and lifestyle profiles, a new level of buyer-sellerintimacyis opened-even for products historically mass marketed. They afford improved efficiency from accountclusteringand promarketing gram targeting, plus better and expanded customer service and satisfaction. AT&T has taken this approachfor targetingnew programsof packagedlongdistance services and networking opportunities for owners of personal computers. In contrast, a packhas aged goods marketer coded and storedcorrespon8 million brandusers, but has initiatedno dence from
analysis or followup relationship marketing since the

initial response to each letter.

of 24 / Journal Marketing, 1987 April

dardized procedures that reflect informed consideration of customer redress norms deserves highest priority. Exit Barriers Relational marketing requires an exchange structure that makes termination of the association unattractive. Consistent delivery of economic and psychosocial benefits in each transaction is critical but, as further motivation for the parties to resolve conflict to maintain their relationship, it may be helpful to create structural disincentives for relational dissolution. Exit barriers seem less common in consumer markets than in industrial and organizational markets. Still, the prevalence of exit barriers in consumer relations and their strategic utility compel recognition. Consider the following examples. * Frequent flier programs effectively maintain relational bonds when "bonus miles" are awarded in proportion to the flier's number of alternative carriers to each destination. * Delayed rebates support ongoing exchange, such as accumulated proof of purchase seals used as currency in a manufacturer's gift catalogue. * Rental deposits are essentially performance bonds. * A consumer durable goods "investment" ties the customer to frequent repurchase of specific consumable supplies. We believe there are many additional opportunities for implementing and tuning these practices. In

particular, status rewards or social recognition for relational longevity offer promise. Like the Gallon Donor in blood marketing or the President's Council in fund raising, there could be value in recognizing 5-, 10-, and 25-year subscribersto Time or three-time Buick buyers. In comparison, dissolution is encouraged by record clubs that reward termination (not loyalty) with attractive (re)enrollment offers.

Conclusion
Prompted by Amdt's (1979) and Macneil's (1980) contrasts of discrete and relational exchange, our principal goal is to develop a framework for developing buyer-seller relationships. We emphasize three importantcaveats. First, though all transactionshave some relational properties, it makes sense to consider many exchanges as "practically discrete." Second, there are bilateral sets of costs and benefits to relational exchange; a durable association is not necessarily desirable. Third, because the model's eclectic conceptual and empirical origins are not proximal to marketing, it is highly propositional. The marital metaphor seems parsimonious and generative. For example, it directs research attention to the inherently dyadic process of power and bargaining, flags trust as a pivotal specific expectancy, and underscores our ignorance about disengagement. Practically, the model affirms and suggests several avenues for relational marketing conduct. We are hard pressed to identify anything more central to marketing.

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