Transactions vs. relationships: What should the company emphasize?

Gila E. Fruchter, Simon P. Sigué

Research output: Contribution to journalJournal Articlepeer-review

38 Citations (Scopus)

Abstract

The relevance of transactional and relational marketing variables in relational exchanges is now well established in the marketing literature. However, the knowledge about their relative effectiveness and their optimal mix over time remains very sparse. An analytical model is proposed to help determine optimal decision rules for transactional and relational marketing efforts. Some of the main results are as follows: (a) If the seller benefits from the interaction between the transactional marketing effort and buyer's commitment, then the seller's optimal decision rules change over time and depend on the level of the partners' commitment, (b) Otherwise, the seller's optimal decision rules for the two types of marketing are constant over time, (c) The seller should allocate more resources to relational marketing at the beginning of a relational exchange and, later on, should allocate more resources to transactional marketing.

Original languageEnglish
Pages (from-to)18-36
Number of pages19
JournalJournal of Service Research
Volume8
Issue number1
DOIs
Publication statusPublished - Aug. 2005

Keywords

  • Commitment
  • Opportunism
  • Optimal control
  • Relational exchange
  • Relational marketing effort
  • Transactional marketing effort
  • Trust

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