Relationship Marketing From the Consumer’S Perspective: a Comparison of Consumers in South Korea and the United States

ABSTRACT - Consumers in South Korea and the United States are compared with respect to their view of important customer-business relationships. Using a modified form of the critical incidence technique, the types of relationships preferred, the business relationships deemed most important, and the characteristics identified when describing these most important business relationships in these countries were revealed. The culture-specific view of relational exchange evident in this study provides important groundwork toward extending what we know about relationships. Most of our current knowledge appears to be highly Western-bound. Further, as we globalize, the need to understand business relationship perspectives across cultures is critical.



Citation:

Deborah F. Spake, Sharon E. Beatty, and Chang-Jo Yoo (1998) ,"Relationship Marketing From the Consumer’S Perspective: a Comparison of Consumers in South Korea and the United States", in AP - Asia Pacific Advances in Consumer Research Volume 3, eds. Kineta Hung and Kent B. Monroe, Provo, UT : Association for Consumer Research, Pages: 131-137.

Asia Pacific Advances in Consumer Research Volume 3, 1998      Pages 131-137

RELATIONSHIP MARKETING FROM THE CONSUMER’S PERSPECTIVE: A COMPARISON OF CONSUMERS IN SOUTH KOREA AND THE UNITED STATES

Deborah F. Spake, University of Alabama, U.S.A.

Sharon E. Beatty, University of Alabama, U.S.A.

Chang-Jo Yoo, Dongguk University, Korea

ABSTRACT -

Consumers in South Korea and the United States are compared with respect to their view of important customer-business relationships. Using a modified form of the critical incidence technique, the types of relationships preferred, the business relationships deemed most important, and the characteristics identified when describing these most important business relationships in these countries were revealed. The culture-specific view of relational exchange evident in this study provides important groundwork toward extending what we know about relationships. Most of our current knowledge appears to be highly Western-bound. Further, as we globalize, the need to understand business relationship perspectives across cultures is critical.

As businesses around the world embark on a global vision into the next century, the views of consumers representing diverse cultures take on increasing importance. This topic is of interest to academics and practitioners alike in that culture-specific views of relational exchange are needed to aid in the development of marketing programs and to extend what we currently know about relationships, which has been derived mostly from a Western perspective. This study presents alternative perspectives of customer-business relationships endemic to individuals engaged in relationships in two diverse cultures. By gaining a better understanding of the differeces and similarities between consumers in Eastern and Western cultures, tremendous opportunity can be realized for businesses wishing to establish relationships with customers in either of these cultures.

CULTURAL ORIENTATIONS

Marketers are often cautioned to avoid applying successful domestic strategies to business endeavors abroad (Jain 1993; Kim 1996). Instead, differences in national cultures are thought to call for differences in management practices (Newman and Nollen 1996). These same differences also apply to relationship marketing efforts. Morgan and Hunt (1994, p. 22) have defined relationship marketing as "all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges." It is likely that marketers would want to engage in these activities globally in order to increase customer retention, yet most of our current research on relationship marketing is very Western-bound. We know little about differences in this concept between Western and Eastern cultures.

Hofstede (1984) and Hofstede and Bond (1988) have identified five dimensions on which national cultures vary: power distance, uncertainty avoidance, individualism, masculinity, and long-term orientation. Although several of these variables may be of interest in regards to relational exchange, we will focus here on perhaps the most critical for relationships, i.e., individualism versus collectivism, which is defined as the extent to which identity is derived from the self versus the collectivity. In individualistic cultures, such as the United States, individuals are expected to be concerned primarily with themselves and their immediate family, whereas in collectivistic cultures, such as South Korea, individuals are expected to be primarily concerned with what is in the best interest of the group(s) to which they belong. Further, status in individualistic cultures is derived from individual accomplishment rather than group membership per se. Such divergent outlooks may well impact customer-business relationships, especially where there are high amounts of personal interaction.

Of all the countries studied by Hofstede (1984), the United States had the highest individualism index. Americans (i.e., citizens of the United States) believe that they can accomplish almost anything given enough time, money and technology (Harris and Moran 1996). As a people, Americans are goal and achievement oriented, self-reliant, work-oriented, informal, autonomous (Watkins and Liu 1996) and convenience-driven. Though they reject privileges of royalty and class, they do defer to those with power and affluence, idealizing the "self-made man" who rises from poverty and adversity to achieve success (Harris and Moran 1996).

This individualism-collectivism distinction has been shown to affect personal relationships. Unlike friendships in less individualist countries, "affective relationships are not socially predetermined, but must be acquired by each individual personally" (Hofstede 1984, p. 163). Thus, friendships are made by individuals and not prescribed by a group. Though Americans are self-reliant, Cushman (1990) suggests that individuals in Western societies such as the U.S. are "empty" due to the loss of family, community, and tradition so important to previous generations. This is in relative contrast to collectivist societies where family, community and tradition have been maintained with greater diligence and resolve. Customer-business relationships in the U. S. provide one example as to how consumers may seek to fill this void and form connections with others through non-traditional means. It has been shown that some U.S. consumers do form close relationships with businesses, such as retailers and service providers (Beatty et al. 1996; Ellis 1995; Spake et al. 1998), and even with brands (Fournier 1998).

In contrast to America, South Korea is a relationship-based society with a strog network of social ties (Kim 1996; Johnson 1990). Traditional social ties, such as those with extended family members, are stressed and "people have less of a need to make specific friendships" (Hofstede 1984, p. 163) since "one’s friends are predetermined by the social relationships into which one is born." Business relationships are often established with former schoolmates or with those who are connected in some way to the family. These close relationships may play an integral role throughout an individual’s life. However, Koreans tend to be indifferent to those they do not know well even if they engage in business with them (Kim 1996). This ingroup-outgroup perspective affects among other things, trust. Those in collectivist cultures do not "trust a 'somebody’ B one only trusts 'us’" (Hofstede 1984, p. 165).

The collectivist culture of South Korea may in part be supported because it is a small and cohesive country wherein a single language is spoken and status-consciousness is of importance. In collectivist cultures, such as South Korea, there is greater reliance on membership in groups (e.g., social classes, communities, religions, or extended families) for identity and status. People in these cultures are protected by the group and expected to act in the group’s best interests rather than their own self-interest. From this brief comparison of the two cultures, it appears that South Korean consumers may have vastly different views of customer-business relationships as compared to consumers in the United States.

THE CONSUMER PERSPECTIVE OF RELATIONSHIP MARKETING

The consumer’s perspective of customer-business relationships remains for the most part unexplored as pointed out by Bendapudi and Berry (1997), Beatty et al. (1996), Ellis (1995), and Sheth and Parvatiyar (1995). Our study has both theoretical and practical implications in that "relationship marketing is at the very core of the theory and practice of marketing" (Bagozzi 1995, p. 272) and is considered to be the cause of a paradigm shift in the discipline (Gronroos 1994). In terms of practical applications, gaining insight into the consumer’s viewpoint of customer-business relationships may offer direction to marketers for adapting their relationship marketing strategies to retain more domestic customers and adjusting their strategies to meet the same goals abroad. By business we refer to and focus on both service providers and retailers but not on brands.

In addressing these issues, we focused on the customer-business relationships considered most important to the consumer because these are the types of relationships that consumers care about, can most easily talk about, and work at retaining. Thus, studying important relationships better allows us to capture the factors relating to relationship maintenanceBan area which has received little attention in the past (Berry 1995). Furthermore, these relationships may reveal which businesses are most important to consumers, which is an important question in itself.

In an international context, we are interested in whether these factors and the most important relationships identified are similar across two diverse cultures B the United States and South Korea. While Barnes (1994) has noted that it is not evident what kinds of relationships customers want from firms, a comparison of consumers in two different cultures may reveal that what is wanted from a firm may be culture-specific. Questions which remain unanswered in this area and which this study will address include:

* What type of relationship do consumers n the U.S. and South Korea want with a business (i.e., is the relationship with an individual employee or with the company overall)?

* What are the characteristics which seem to typify these important relationships in the U.S. and South Korea?

* How are the perspectives of consumers in the U.S. (an individualistic society) different from those of consumers in South Korea (a collectivistic society)?

* Do expectations for a business relationship differ by age or gender in the U.S. and South Korea?

METHOD AND PROCEDURE

Modified Critical Incident Technique

We conducted a study of important customer-business relationships to gain an understanding of the particular characteristics ascribed to these important contact employees/businesses. The exploratory nature of the study dictated a research design, which emphasized discovery over confirmation (Deshpande 1983). Mindful of criticisms concerning qualitative techniques, such as questions of projectability, a Critical Incident Technique (CIT) was used (Bitner, Booms and Mohr 1994; Bitner, Booms and Tetreault 1990). The CIT method allows discovery-oriented research (Wells 1993) while quantitatively identifying underlying factors present in discussions of specific incidents. Thus, this technique allows for "rigor and vigor" (Bitner et al. 1990, p. 73) by combining qualitative and quantitative examinations of the data. This method is particularly well suited to research a phenomenon about which little is known (Bitner et al. 1990).

The CIT methodology involves the content analysis of stories (or descriptions) in the data analysis stage of the research. In CIT, the stories written by respondents are classified within a scheme. As a research method, it shares the advantages and disadvantages of content analysis (Kassarjian 1977; Kolbe and Burnett 1991). In addition to allowing for qualitative and quantitative analysis, the CIT method was chosen because personal contact is a better method when the research involves a lengthy questionnaire and where other methods such as mail or telephone are difficult to implement or less acceptable from a cultural perspective such as in Southeast Asia (Webster 1997).

We used a modified critical incident technique given our goals and subject matter. The traditional Critical Incident Technique as described by Flanagan (1954) was expanded from one incident to discussions of an overall relationship. The nature of customer-business relationships requires that the responses not be limited to one particular incident. Using the modified critical incident technique, we were able to identify and compare unique factors characteristic of successful business relational experiences between respondents in the United States and South Korea. Such a modified approach has been successfully used in other studies (cf. Nevins 1949; Reich 1994).

Data Collection

A convenience sample of adults was recruited by trained student interviewers in a metropolitan southern city in the United States and in Seoul, Korea. All research in South Korea was conducted by one of the co-authors who is bilingual. Translations were handled carefully and all administration procedures conformed between countries. Each interviewer was asked to recruit five, non-student respondents over the age of 21 who reported having a relationship with a business. Since multiple interviewers were used, 20% of the sample was contacted to verify their participation in the study. All those contacted verified their participation.

Respondents were asked to complete questions on a standardized form with the interviewer present. This method preservs the language of the respondent (Flanagan 1954) while allowing the benefit of in-person interviewing for clarification if needed. Respondents were provided with a long list of possible service providers and retailers with which consumers might have a customer-business relationship. This was drawn from previous research (Spake et al. 1998). The respondents were not limited to discussions of the list of businesses they were given, but were encouraged to respond based on their own experiences. The following question was asked of all respondents and each respondent was asked to write his or her own answers on the questionnaire:

* What business relationship is the most important to you? Please explain why this relationship is important to you and how you feel about this person/business. Please provide a complete and detailed description.

Classification of Characteristics

Once the data were collected, the open-ended responses were coded by multiple, trained, independent judges to enhance objectivity (Koble and Burnett 1991). Previous research (Ellis 1995; Spake et al. 1998) had revealed the following possible characteristics of important customer-business relationships in the United States: comfort, trust, friendship, mutual understanding, a feeling of importance, satisfaction, and functional benefits. The independent judges were provided clear, concise definitions and words that had been grouped in previous research (Spake et al. 1998) to form these categories. The judges were instructed to classify responses into the a priori categories and add other, additional categories, which described characteristics of important customer-business relationships as needed. Approximately 10% of the U.S. responses were used as pre-test interviews to aid in the instruction of judges and validate classification categories. These interviews were not included in the final U.S. sample. This same procedure was used with South Korean judges. Again, pre-test interviewers were not included in the final South Korean sample.

Each judge classified all responses individually. Since each consumer respondent provided a lengthy description of his or her most important relationship, multiple characteristics within individual descriptions of each relationship were common. After individual classification was achieved, the judges met as a group to reconcile any classification differences until consensus was achieved for all descriptions and classification categories. Using this process, a new category, cooperation, was created based on the responses obtained from South Korean consumers. Responses from U.S. consumers were re-checked to identify any "cooperation" items that had been previously overlooked as a category in the U.S. data and only one was noted. Examples of the type of responses that were captured in each of the categories appear in Table 1.

RESULTS

One hundred and fifty-two, non-student consumers over the age of 21 in the United States and 172 in South Korea served as the final sample. As shown in Table 2, approximately one-half of the respondents in both the United States and South Korea were between the ages of 21 to 34 and one-half were above the age of 35. In the U.S., 68% of the respondents were female, whereas 65% of South Korean respondents were male.

The interviewers collected descriptions of 324 customer-business relationships across a variety of business types. Respondents in the United States were almost equally divided between whether their relationship was with an individual employee of a firm (52%) or with the company overall (48%), in regards to their most important business relationship. South Korean respondents reported significantly more relationships with a company overall (z=5.41, p<.05) than with individual employee as shown in Table 3.

The important business relationships most frequently mentioned by Americans were physicians or other types of health care providers, banks, hair salons, and car repair shops (see Table 4). The business relationships most frequently mentioned by South Koreans were banks, physicians or other health care providers, government offices, and schools/teachers.

Eight characteristics were found to typify important customer-business relationships from the customer’s point of view: trust, functional benefits, made to feel important, liking/friendship, comfort, understanding, satisfaction, and cooperation. These characteristics all seem fairly obvious in meaning with the exception of cooperation, which needs additional clarification. Only South Korean respondents discussed cooperation as an important customer-business characteristic. After recoding our data in search of this concept, less than 1% of U.S. respondents addressed this idea. Being a collectivistic society, South Koreans tend to think of the "good of the group" over the "good of the individual." Hence, cooperation is viewed as a positive attribute and is expected in business dealings. Also, networks are important in this culture. If a person has a relationship with an employee of a firm and brings their business to that company, then at some time in the future that employee might be expected to return the favor. It is more of a reciprocal society than the United States.

As shown in Table 5, the frequency of each characteristic varied greatly by culture. The major differences we noted include Americans’ greater desire for trust, functional benefits, being made to feel important, and liking/friendship; while South Koreans valued cooperation much more than Americans. Calculations of z-scores for each characteristic by country revealed these differences to be significant as shown in Table 5. Chi-square analysis was conducted to identify significant differences based on the age or gender of the respondents by country. Characteristics did not differ by age or gender in either country. Each of these characteristics will be addressed further in the discussion section.

DISCUSSION

Data were collected among consumers in the United States and South Korea in which 324 relationships were discussed and eight unique factors were found to be characteristic of important customer-business relationships. U.S. and South Korean consumers were found to differ in a number of respects including: with whom they report having an important business relationship (an individual versus a company); the types of business relationships listed most often as important; and the characteristics of important customer-business relationships.

While U.S. consumers were equally divided as to whether they had an important relationship with an individual employee or with the company overall, South Koreans were more likely to report having a relationship with a company overall. This finding may relate to South Koreans’ higher emotional dependence on groups, organizations, and other collectivities (Hofstede 1984). Also, it may relate to U.S. consumers’ greater likelihood of forming social relationships with service or retail providers. Americans seek business relationships with those whom they like or can envision having as a friend. Americans, like those in other individualistic cultures, make friends easily and have many "shallow" relationships (Watkins and Liu 1996) including relationships with service providers. These "shallow" relationships may also assist in filling the void referred to by Cushman (1990) and may produce a higher dependence on trust. South Koreans, like those in other collectivist cultures, make friends more slowly and have a preference for fewer, but "deeper" relationships (Watkins and Liu 1996).

U.S. respondents mentioned child care and car repair as important while South Koreans did not. These differences may be due to societa differences such as women in South Korea tending not to work outside the home when their children are young, and a greater use of public transportation. Services mentioned by South Korean respondents only, such as school/teacher, does not mean that Americans do not value their children, but rather that the importance of the school/teacher relationship differs in these societies. Education is of critical importance to South Koreans because the greater the education the higher the expectation for respect, a good marriage (i.e., well respected family, well connected family, attractive partner), power, and success. School/teacher is also an important relationship because teacher evaluations are influential in college admission decisions.

The characteristics used to describe important relationships differed significantly by country. The major differences included Americans’ greater desire for trust, functional benefits, being made to feel important, and liking/friendship. For example, respondents in the United States valued trust most highly, whereas respondents in South Korea valued cooperation most highly in important business relationships. We believe these differences are due to cultural differences, as addressed in the introduction. They may also reflect the higher importance attached to having relationships with businesses versus with employees in Korea.

TABLE 1

EXAMPLES OF ITEMS CATEGORIZED

TABLE 2

SAMPLE DEMOGRAPHICS

South Koreans may implicitly trust those who are members of their ingroups, whereas Americans form many shallow relationships and must gauge trust on an individual level. Thus, trust may be more of an issue for Americans when forming relationships with service providers. Likewise, cooperation was the most frequently mentioned characteristic of important South Korean customer-business relationships. This too may be culture-related. First, South Koreans are a social people and would attain positive, emotional rewards for cooperating and gaining cooperation from those with whom they have a customer-business relationship. Second, cooperation in this culture appears to have a functional or economic role seen as a "future investment" in that the cooperating party will gain cooperation from the other party, if needed, in the future. This reciprocation may not be equal in that individuals will not keep a mental "running total" to see which party has cooperated more often. Rather, cooperation is seen as "we are in this together" for a common good.

TABLE 3

TYPE OF RELATIONSHIP

TABLE 4

MOST FREQUENTLY MENTIONED IMPORTANT BUSINESS RELATIONSHIPS

TABLE 5

CHARACTERISTICS IDENTIFIED IN MOST IMPORTANT BUSINESS RELATIONSHIP:

Americans were also more likely to refer to the functional benefits being met by the business when describing these important relationships. This may be related to the types of businesses mentioned as most important. Many of the business mentioned by U.S. respondents pertained to providers used in their daily lives (e.g., grocery store, retail store) or to their appearance (e.g., hair salon). The functional benefits provided by these firms are quickly obtained. On the other hand, the businesses listed by South Korean respondents concerned firms/services which involve greater control or power over one’s life and affairs (e.g., banking, government). The functional needs met by these businesses are often less immediate.

Being made to feel important was mentioned more often by Americans than South Koreans. As a people, Americans are individualistic and may prefer special attention as a validation of their self-worth. Further, individualism has been associated with hedonism (pleasure, security, affection) (Hofstede 1984), which reinforces the increased need to feel important.

Finally, liking was mentioned more frequently by Americans as a characteristic of important customer-business relationships. In highly individualist cultures people have a greater need for specific friendships whereas in low individualist cultures (i.e., collectivist) friendships are predetermined by stable social relationships (Hofstede 1984). Hence, the findings throughout the study support a difference in customer relationships based on a cultural explanation.

CONCLUSIONS

Implications for Managers

This study offers new insight for marketers seeking to implement relationship marketing strategies in the United States (and other individualistic countries) and South Korea (and other collectivist countries). By gaining a better understanding of the characteristics deemed important to consumers in these cultures, managers can devise offerings that provide these characteristics. Further, those businesses listed as being most important are likely to be the ones that engender the most loyalty in consumers. For example, it is not surprising that most of the businesses mentioned in both countries were service providers rather than traditional retailers. Lastly, the high percentage of respondents, especially in the U.S., who reported having a relationship with an individual as opposed to the firm overall should signal marketers of the importance of employee retention and its impact on customer retention and satisfaction.

Limitations and Implications for Research

This exploratory study deepens our understanding of customer-business relationships from the consumer’s perspective. By providing insight into relationship marketing from the consumer’s perspective, this research should assist academic researchers as they investigate differences between groups of people who desire relationships with firms. The results provide a set of characteristics of important relationships with businesses, using a modified CIT technique, in two diverse cultures. This technique appears to have been useful in providing qualitative data that could be quantified.

The findings are consistent with expectations drawn from previous cross-cultural research differentiating Eastern and Western cultures. However, there has been little effort made to articulate or study cultural differences from a relational perspective, especially focusing on a consumer view of this topic. Respondents in this study were not limited to discussions of any particular type(s) of business, yet differences among industries may exist as well as differences among firms within the same industry.

However, this study comes with the usual limitations of survey research. There are likely to be numerous measurement and non-response errors throughout the data reporting process. Most importantly, respondents were simply part of a convenience sample, thus, they are certainly not representative of all Americans and/or all South Koreans. Further, there were some differences in the composition of the two samples, which limits their comparability. Also, this study, as with all cross-cultural research has concerns in regards to appropriate translations, understanding of concepts, and other measurement concerns. Thus, the findings should simply be viewed as tentative hypotheses, albeit rather intriguing hypotheses.

Finally, the results provided here are theoretically suggestive of a number of hypotheses that could be tested in future empirical research. Some questions follow: How are relationships and interactions different in very different cultures? What are some of the root causes for these differences? How do these differences affect relationship expectations when these cultures intermingle? What are the perceptions of consumers in other parts of the world (e.g., Europe or Latin America) regarding customer-business relationships? Do those relationships deemed important by consumers vary by culture alone or does economics play a role (e.g., what are important business relationships in developing countries)? Do expectations or desires for a customer-business relationship differ by other demographic factors such as level of income, education, or status?

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Authors

Deborah F. Spake, University of Alabama, U.S.A.
Sharon E. Beatty, University of Alabama, U.S.A.
Chang-Jo Yoo, Dongguk University, Korea



Volume

AP - Asia Pacific Advances in Consumer Research Volume 3 | 1998



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