The marketing and general business literature's have successfully argued that
relationship marketing
(RM) is critically important in business-to-business selling. The objective
of this thesis is to quantify the
effect of RM on the producing firm. The most notable economic effect is reflected
in the sales volume,
which is determined by two factors: the number of buyers, and the buying rate.
Accordingly, we have
formulated an aggregate-level (to determine the number of buyers) and an individual-level
(to study the
buying rate) model. To analyze effectiveness of RM, we developed an aggregate-level
model of
repeat-buying (that is, of the joint presence of diffusion and repeat-purchasing
effects) that incorporates
marketing control variables such as advertising, promotions, and pricing. The
model departs from the
extant literature in yet another significant way: as a result of the personal
selling process, the innovation
and imitation roles of the potential buyers are observable (sales representatives
deduce and report on
the past action of buyers, their standing in the community, etc.). This factor
is in contrast with the
traditional Bass model of diffusion, where these roles are observationally inseparable.
Accordingly, we
develop an extension of the Bass diffusion model and repeat-purchase that explicitly
incorporates the
observability of the aforementioned roles, and the marketing control variables.
The model is validated
empirically on a data set from the pharmaceutical industry.
Social
Systems Simulation Group
P.O. Box 6904 San Diego, CA 92166-0904 Roland Werner, Principal Phone/FAX (619) 660-1603 |