Perceptions of relationship marketing among
account managers of commercial banks in a Chinese
environment
Stella Lai Man So
Associate Professor of Marketing, Chinese University of Hong Kong, Hong Kong
Mark W. Speece
Associate Professor of Marketing, Nanyang Technological University, Singapore
Introduction
In the increasingly competitive global
financial world, relationship marketing has
been advocated as an excellent way for banks
to establish a unique long-term relationship
with their customers. Most of the core
product/service in commercial banking is
fairly generic, and it is difficult for most banks
to compete purely on this core service. Thus,
recognition of the importance of relationship
marketing has grown in recent years. Perrien
et al. (1992) suggested that strong competitive
pressure has forced financial institutions to
revise their marketing strategies and to stress
long-lasting relationship with customers. Most
banks have tried to differentiate from other
banks by offering supporting services, which
is a first step toward relationship marketing.
Many banks would also claim to have
implemented relationship marketing more
fully by developing closer and closer relations
with their clients.
This is certainly the case in Hong Kong,
one of the largest financial centers in the
world. The Hong Kong government
terminated its moratorium on the issue of
bank licenses in 1978. Since then, banking in
Hong Kong has become highly competitive
(Sheedy, 1997). To deal with this increased
competition, many Hong Kong banks have
adopted elements of relationship marketing
(Chan and Ma, 1990; Sheedy, 1997). After the
onset of Asia's economic crisis, this heavy
competition has been coupled with
slackening demand for commercial banking
services as most companies have cut back on
borrowing, and most banks have cut back on
lending. Retaining quality customers has
become even more important, and Hong
Kong banks have intensified their efforts at
customer relations (Leung, 1997; de Rosario,
1998; 1999; AsiaWeek, 1999).
Morris et al. (1998) show that although
relationship marketing is widely used, actual
practice diverges across companies, and from
the concepts discussed in the literature.
According to them, companies which claim
to use relationship marketing do not always
show the degree of commitment which the
literature might suggest. Sheedy (1997)
indicates that in banking, relationship
marketing has certainly not always been
implemented very carefully. This would
suggest that there is still a need to better
understand relationship marketing.
Furthermore, there is little agreement on
exactly what constitutes relationship
marketing (e.g. Tyler and Stanley, 1999).
These authors specifically call for more
extensive research aimed at understanding
relationships, and also note that the specifics
of relationships would be context driven.
Since banks nearly always say they use
relationship marketing (if the extensive
discussion of relationship banking in the
literature is a guide), it would be useful to
understand exactly what banks themselves
think relationship marketing is. More
specifically, what do account managers, who
are in the front lines of implementing
relationship marketing (Sheedy, 1997), think it
is? This question is complicated by the issue
that many banks operate globally. Banks from
different cultural areas likely have different
corporate cultures, which may well mean that
thinking about relationship marketing would
vary. Seal (1998), for example, suggests this in
citing other work showing that Japanese and
Western non-bank firms may implement
relationships differently.
In Chinese cultures, guanxi (personal
connections) is very important (e.g. Davies et
al., 1995; Luo, 1997b; Tong and Yong, 1998),
and may have a strong influence on how
relationship marketing is practiced.
However, just as Western relationship
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[ 315 ]
International Journal of Bank
Marketing
18/7 [
2000
] 315±327
# MCB University Press
[
ISSN 0265-2323
]
Keywords
Banking, Relationship marketing,
Hong Kong, Corporate culture
Abstract
Relationship marketing is widely
regarded as effective in
developing competitive
advantage. But views on exactly
what activities constitute
relationship marketing may differ
in various cultural settings. In-
depth interviews with account
managers in commercial banks in
Hong Kong yielded a list of
activities considered critical to
building relationships. In a
following survey, account
managers in Asian banks rated the
importance of the various social
activities higher than did account
managers in Western banks,
although all respondents were
ethnic Chinese. The Western
banks rated business activities
more important than did the Asian
banks. Factor analysis shows that
managers in Western banks
perceive dimensions of business
activities consistent with recent
thinking about relationship
marketing. Respondents in the
Asian banks do not view social
activities and business activities
to be distinct, nor do they
distinguish strongly differentiated
dimensions of business activity
elements.