34 SAJEMS NS Vol 2 (1999) No I Effectiveness on The Influence of Marketing Building Long-Term Relationships in Environment a Sport F J Herbst and A N Schreuder Department of Marketing and Communication Management, University of Pretoria ABSTRACT The providers of professional sport are influenced by the ever-changing nature of sport as a fonn of entertainment and its subsequent effect on relationship building in the new millennium. The continuous aim of building relationships of high quality in a lucrative business field can only be achieved by means of effective marketing. In order to ensure marketing effectiveness, the quality of the relationship with spectators is a crucial success factor, influenced by the length of the relationship, value for money and the propensity to leave. An empirical study was undertaken in a sporting environment which investigated the quality of the clients' (season ticket holders') current relationship with the service provider (sporting union). An exposition is also given of the methods and procedures used in the study. JEL M 31 "The heart and soul of relationship marketing is marketing to the customers after they have become customers" (Berry, ]994). 1 INTRODUCTION Research in relationship marketing to date concentrated on business-to-business (BTB) marketing research and little attention was given to business-to-consumer (BTC) marketing research. Relationship marketing has yet to progress beyond topics for articles and speeches with little real action (Pruden, 1995), This view is supported by Perrien (1995) and Paley (1996) who believe that the implementation of relationship marketing within organisations, including service organisations, has R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . SAJEMS NS Vol 2 (1999) No 1 35 yet to be tackled. There is a need for a model that conceptually incorporates the relationship factors that are unique in BTC marketing. An attempt was made by Morgan and Hunt (1994), with their Commitment-Trust Theory of Relationship Marketing, which was based on research conducted in the automobile tyre retailer industry. The KMV model focuses on the relationship commitment and trust of only one party in the relational exchange. The aim of the current study is to investigate relationship marketing in general and not to direct the study at a specific industry. The empirical research was conducted on the relationship marketing of a major sport union in South Africa. There is a lack of consensus on the correct terminology with regards to sport (singular) or sports (plural) marketing. In this study the term "sport marketing" is preferred based on Mullin, Hardy and Sutton (1993) who argue that "sports marketing" tends to characterise the industry as a mass of uncoordinated segments without commonality. The singular form is therefore preferred because all sport segments should be regarded as a homogeneous entity. 2 KEY CONCEPTS OF THE STUDY It is essential to define and explain the two key concepts used in this study before the research design and methodology are discussed. • Relationship marketing Many relationship marketing definitions are provided in services marketing, industrial marketing, bank marketing, advertising and business strategy. The understanding of relationship marketing requires a clear understanding of the difference between discrete transactions and relational exchanges. Morgan and Hunt (1994) propose that " .... relationship marketing refers to all marketing activities directed toward establishing, developing and maintaining successful relational exchanges." R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . 36 SAJEMS NS Vol 2 (1999) No 1 • Relationship quality Relationship quality is described by Bejou, Wray and Ingram (1996) as an important component of relationship marketing. Morgan and Hunt (1994) identifY five major antecedents of relationship quality. These are: (i) relationship termination costs, (ii) relationship benefits, (iii) shared values, (iv) opportunistic behaviour and (v) communication. Parasuraman, Zeithaml and Berry (1994) describe relationship quality as the difference between perceived relational benefits and perceived relationship sacrifice, and perceived episode benefits and perceived episode sacrifice, within the parameters of 'tolerance zones. ' 3 OBJECTIVES OF THE STUDY The primary objective was to determine the influence of the qualitative outcomes of relationship commitment and trust on the relationship quality between a service provider and a client. The secondary objectives were: (i) To compile a client profile to enable the service provider to direct its marketing strategy and to ensure the effectiveness of a future relationship marketing strategy. Oi) To identifY the gaps in the current relationship marketing strategy based on the client's perception of the service provider in order to enhance the effectiveness of a future relationship marketing strategy. 4 RESEARCH DESIGN AND METHODOLOGY The total project was divided into two distinct phases - a pavilion survey (phase 1) and a mail survey (phase 2). The pavilion survey was used as a pretesting phase for the mail survey questionnaire. 4.1 Questionnaire design The questionnaire included specific relationship marketing questions representing the quality ofthe relationship between the client and the service provider, value for R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . SAJEMS NS Vol 2 (1999) No 1 37 money, propensity to leave and recommendation of the service provider to potential clients. The main body of the questionnaire included 48 individual statements divided into eight categories. The statements were measured in terms of both importance and perception of performance. Both importance and perception of performance measures were done on a five point scale. The questionnaire layout was carefully planned to accommodate the mail collection methodology used and was pretested during a pilot study before it was sent to the respondents in the sample. 4.2 Data collection A probability sampling design (simple random sample) was used to draw a sample of 2000 units from the customer database (a sample frame of 3500) of the service provider. The sample units were randomly selected and thereafter the self- administered questionnaires were distributed by maiL 4.3 Data processing Factor analysis, cross tabulation and item reliability were executed and an analysis of variance was done by means of ANOV A by using CSS Statistic a computer software. 5 RESEARCH HYPOTHESES The following hypotheses were formulated and tested: HI The relationship quality of spectators that had a long relationship with the service provider is significantly higher than the relationship quality of spectators that have recently engaged in a relationship with the service provider. H1 The relationship quality of spectators who regard their season tickets as good value for money is significantly higher than the relationship quality of spectators regarding their season tickets as less value for money. R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . 38 SAJEMS NS Vol 2 (1999) No I H3 The relationship quality of spectators who are willing to continue their current relationship is significantly higher than the relationship quality of spectators who are not willing to continue their current relationship with the service provider. H4 The relationship quality of spectators who are willing to recommend the service provider to potential spectators is significantly higher than the relationship quality of spectators who are not willing to recommend the service provider to potential supporters. H5 The relationship quality of spectators with a high perception of marketing effectiveness is significantly higher than the relationship quality of spectators with a low perception of marketing effectiveness. H6 The relationship quality of spectators with a strong perception of image is significantly higher than the relationship quality of spectators with a low perception of image. H7 The relationship quality of spectators with a positive perception of media relationships is significantly higher than the relationship quality of spectators with a negative perception of media relationships. 6 FINDINGS 6.1 Response rate The effective response rate of the mail survey sent to spectators (season ticket holders) was 25.50%. 6.2 Descriptive statistics on relationsbip quality The descriptive statistics indicate the sample size, mean, standard deviation, two-top box score in Table I, the mean values in Table 2. The two-top box score is an indication of the percentage of respondents who have chosen scale values 9 and 10. Frequency distribution results in Table 3 is based on a 5 point scale and indicate the percentages of the responses on each scale item. R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . SAJEMS NS Vol 2 (1999) No I 39 Table 1: Descriptive statistics ·N Mean Standard Two-top deviation box score 484 2.28 11.60% 484 6.72 2.27 19.90% 484 6.70 2.12 18.70% 484 6.67 2.24 18.20% • N = sample size .. The range of scale from 0 - 10 where 0 very poor and 10 = excellent 6.3 Marketing effectiveness measurement Marketing effectiveness was measured on a 5-point Likert scale for both importance and perception of performance. Figure 1: XY Plot of Marketing Effectiveness 4100 3.900 3100 3.500 3,300 '" c:: 3100 g Q. ~ 2900 III Il. :2.100 2500 .40 .9 Quadrant I Quadrant III 41 • 2._1 Quadrant II • 36 10 • .38 : 130 • 2. i" r21 • 46 16 • I 25. 3 yearsl VFM [Category I: 0 - 6] VFM [Category 2: 7 - 10] PTL [Category I: 0 6] PTL [Category 2: 7 - 10] WTR [Category 1: 0 - 6] WTR [Category 2: 7 - 101 MEFF [Category I: 1 - 3] MEFF [Category 2: 4 - 5] Image [Category I: I - 3] Image [Category 2: 4 - 5] COMM [Category 1: 1 3] COMM [Category 2: 4 - 5] >I< LOT= Length * PTL = Propensity to leave * MEFF = Marketin effectiveness Dependent Mean p-value Relationship 5.32 0.0001 quality 7.21 Relationship 5,17 0.0001 quality 6,95 Relationship 4,89 0.0001 quality 7,03 Relationship 4,92 0.0001 quality 7,08 Relationship 5,66 0.0001 quality 6,56 Relationship 5,49 0.0001 quality 7,10 Relationship 5,77 0.0001 quality 6,92 * VFM = Value money * WTR = Willingness to recommend * COMM = Communication All hypotheses were accepted based on the differences in the mean values of the different categories and are statistically significant based on the p-value for each ANOV A result. 7 CONCLUSION The findings of the empirical study can be regarded as valid and reliable based on the research results. The overall reliability for the evaluation of the data set is a reliability coefficient of 0.9512 and the scientific execution of the methodology increased the validity of the results. Based on the validity and reliability results of this study, the following major conclusions are drawn: R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . SAJEMS NS Vol 2 (1999) No 1 51 • Relationship quality is influenced by the duration a spectator is engaged in the relationship with a service provider. The longer the· relationship a spectator has with a service provider the higher the quality of the current relationship. • The quality of the relationship is influenced by the spectator's perceived value for money based on his experience of the service provided to him by the service provider. The higher the perceived value for money the higher the quality of the current relationship. • Propensity of a spectator not to leave or not to terminate the current relationship with a service provider influences the relationship quality between a service provider and a client. The higher the quality of the relationship the lower the propensity to leave and to terminate a current relationship with a service provider. • Willingness of a spectator to recommend his current service provider to a potential client influences the quality of the current relationship between a service provider and a spectator. The higher the quality of the current relationship the higher the Willingness of a spectator will be to recommend the service provider to a potential spectator or spectators. • The quality of the current relationship between a service provider and a spectator is influenced by a spectator's perception on the marketing effectiveness of a service provider. The higher the spectator's perception of marketing effectiveness the higher the quality of the current relationship with a service provider. 8 RECOMMENDATIONS FOR FUTURE RESEARCH Recommendations for future research are divided into recommendations based on the literature review and recommendations based on the empirical research. • Recommendations based on the literature review Firstly, more literature is needed on marketing and relationship marketing focusing on sport. R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . 52 SAJEMS NS Vol 2 (1999) No 1 Secondly, more literature is needed on relationship marketing in a business-to- consumer (BTC) environment. • Recommendations based on the empirical research Firstly, to develop a relationship quality model by applying the RELQUAL model (Ewing, 1996) specifically on rugby and on professional sport unions in general and to compare the findings across different sport unions and administrations. Secondly, to develop a marketing mix specifically for rugby and professional sport unions in general. Thirdly, to determine the effect of a winning team on the marketing effectiveness, on short and long term relationship quality with a sport union and to investigate the effect that a winning team has on the relationship quality of the stakeholders and spectators. Fourthly, to develop a marketing orientation for management of sport unions, officials and players. REFERENCES I. BERRY, R. (1994), "Laying Foundation for Future Sales", Trusts & Estates, 95(5):58. 2. BEJOU, D., WRAY, B. & INGRAM, T.N. (1996), "Determinants of Relationship Quality: An Artificial Neural Network Analysis", Journal of Business Research, 36(2):137-143. 3. GRUEN, T.W. (1995), "The Outcome Set of Relationship Marketing in Consumer markets", International Business Review, 4(4):447-469. 4. MORGAN, R.M. and HUNT, S.B. (1994), "The Commitment-Trust Theory of Relationship Marketing", Journal of Marketing, 58:20-38. 5. MULLIN, BJ., HARDY, S. & SUTTON, W. (1993), Sport Marketing. Human Kinetics. 6. PALEY N. MAR (1996), "Romancing Your Customers", Sales & Marketing 7. PARASURAMAN A., ZEITHAML, V. & BERRY, L.L. (1994), "Reassess- ment of Expectations as a Comparison Standard in Measuring Service Quality: Implications for Future Research", Journal of Marketing, 58:111- 124. R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) . SAJEMS NS Vol 2 (1999) No 1 53 8. PERRIEN, J. & RICHARD, L. (1995) "The Meaning of Relationship Marketing", Industrial Marketing Management, 24(1 ):37-43. 9. PRUDEN, D. (1995) "Retention Marketing Gains Spotlight", Brandweek. 36(6): 15. R ep ro du ce d by S ab in et G at ew ay u nd er li ce nc e gr an te d by th e P ub lis he r (d at ed 2 00 9) .