Adapting marketing strategies: Relationships pay off 55% more in emerging markets than in the United States

CHICAGO, Sept. 10, 2014 /PRNewswire-USNewswire/ -- According to a new marketing study, a brilliant marketing strategy in one country could be a non-starter in another; culture determines the difference.

The research, which includes a meta-analysis of nearly 50,000 relationships across 170 studies, 36 countries and 6 continents, provides compelling cross-country insights into the most effective relationship marketing strategies as well as where customer relationships pay off the most (and least).

For example, while many companies believe rewards programs help build loyalty, the researchers find the effectiveness of certain reward strategies is contingent upon a country's culture. Take Gazprom, a major Russian fuel company; it rewards its customers with points delivered in a tiered, status-based system that highlights membership level (silver, gold, etc.), consistent with Russian culture that emphasizes social status. Alternatively, Shell in the U.S. similarly rewards fuel consumers but does not highlight status, consistent with the U.S.'s more egalitarian cultural values. Moreover, while status-based rewards programs may work in Russia, rewards programs in general do not, partly due to a cultural tendency to avoid unfamiliar giveaways.

The analysis, which appears in the September issue of the American Marketing Association's Journal of Marketing, also highlights the effect of relationship marketing on performance (sales growth and market share). On average, building strong relationships is far more effective outside the United States, exemplified among BRIC nations (Brazil, Russia, India, China) where relationship marketing is 28%, 20%, 71%, and 100% more effective, respectively. But, what strategies work best at building those relationships?

For managers launching on-the-ground relationship marketing initiatives, the co-authors created benchmark comparisons across the 25 largest countries and six continents that provide insights into the most effective strategies by country. The strategies evaluated were those involving communication, seller expertise, dependence, investments, and length of relationship.

As international marketing behemoths increasingly tread foreign markets (e.g., Starbucks in India), authors' findings should prove a useful roadmap. The research was conducted by Assistant Professors Stephen A. Samaha at California State University Northridge and Joshua T. Beck at University of Cincinnati and Professor Rob Palmatier from the University of Washington's Foster School of Business.

About the AMA

About the American Marketing Association:
The American Marketing Association (AMA) is the professional association for individuals and organizations who are leading the practice, teaching, and development of marketing worldwide. Learn more at marketingpower.com.

Contact: Christopher Bartone – 312.542.9029 – [email protected]

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SOURCE American Marketing Association

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