RELATIONSHIP MARKETING T HROUGH CROSS-SELLING: DIVERSIFICATION AND CUSTOMER BASES

1. RELATIONSHIP MARKETING THROUGH CROSS-SELLING: DIVERSIFICATION AND CUSTOMER BASES

2. 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

3. 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.

4. 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.

5. 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.

6. 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.

7. RELATIONSHIP MARKETING • 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

8. 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

9. 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

10. Attitudinal and behavioural loyalty There is the need to study the relationship between behaviour and attitude since the discourse in the literature is mainly conceptual

11. COGNITIVE DISSONANCE THEORY The 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

12. TRUSTTRUST IS NEEDED IN UNCERTAINTYCUSTOMERS 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-BUYING H3 TRUST HAS A POSITIVE EFFECT ON ATTITUDINAL LOYALTY H4 TRUST HAS A POSITIVE EFFECT ON BEHAVIOURAL LOYALTY

13. SATISFATION • COMMITMENT Even 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. 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

14. 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 trust H9 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

15. 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 loyalty H12 Cross-selling has a positive effect on behavioural loyalty.

16. CORPORATE IMAGE When 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.

17. 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

18. 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 behaviouralloyalty

19. A PRIORI MODEL

20. Corporate strategy Cross-selling and Synergy

21. MulTipoint competition The acknowledgement of involving multimarket contact with diversification is relatively new. The two are theoretically always together. Multi-market analysis installs a dynamic dimension.

22. MULTIPOINT COMPETITION Usually 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.

23. DIVERSIFICATION AND MULTIPOINT COMPETITION, THEORETICAL IMPLICATIONS

25. Summary of Progress to Date • Introduction chapter complete • Literature Review complete • Methodology chapter in progress • Questionnaire design in progress