The changing importance of Guanxi in relational marketing in China: insights from Chinese traditional culture context.

• Author: Haibo, Liu

1. INTRODUCTION

   With the rapid development of economy, China is speaking louder in the world market than ever before, and many foreign investors are focusing on China. An increasing number of literature appeared in how to carry out Guanxi business in China. China's Guanxi caused great concern in foreign investors, and even once was called the business strategy (Pearce and Robinson, 2000). China's Guanxi not only has impact on China's commercial life, but also has affected the social life in China (Ambramson and Ai, 1999; Standifird and Marshal 2000;Hans Jansson, Martin and Joachim 2007). Appropriate coordination of Guanxi in Chinese business is an important factor, and it can bring a wide range of interests, including access to scarce resources and administrative maze to find a shortcut to provide ways of coping with the uncertainty of insurance when problems arise (Fan, 2002).

   The establishment of Chinese Guanxi network can be divided into two ways roughly: one is to invest on Guanxi. The process of establishing Guanxi is in fact a process of investment in human capital. In Schultz and Romer and others' discussion, the human capital is the most important factor in economic development. The ultimate goal of the investment in relationship is to establish and develop relationship in industrial markets, and use these relationships for their own services (Zhiqiang Dong, 2000). The establishment and development of relations is just like creating a brand, once owned, it will have spill effect obviously. The other is to make full use of Guanxi. Foreign companies build and expand relationships by relying on Chinese people (Joachim, Ramstroam,2008). Also they make painstaking efforts to establish contact with Chinese government officials. To gain business success, it is very important for foreign companies to keep good relations with the Chinese government employees in a way (Luo, 2008).

   However, we have found the following limitations in the existing literature: first, more research efforts have tended to compare the practice of Guanxi in China with relationships developed in the west. They only emphasize the superficial interpersonal relationships, but pay little attention to the essence of Chinese traditional culture (Drothy, Bradley and Cheng Luwang,2010); Second, with more and more complete Chinese laws and the monitor systems, the force from the pure La Guanxi has been weakened; Third, the function of Guanxi is too exaggerative to do anything Without Guanxi (John Pearce,2000; Lee,Ellis 2000). This paper is to research from the core values of traditional Chinese culture on the relational marketing under the cultural background with unique Chinese characteristics. The next section briefly summarizes the theoretical foundations and relational marketing. Some of the key underlying principles and values from Chinese Guanxi marketing have been overemphasized. In view of Chinese traditional culture, relational marketing in China may account for renew orientations not only working simultaneously but also synergistically. The paper concludes with implications for future theory building and marketing practice.

2. LITERATURE REVIEW

   The research on relational marketing has gone through four stages: the first stage is the enlightenment of relational marketing; the second is the complete opposite situation between relational marketing and transaction marketing; the third is that relational marketing is valued dialectically; and the fourth is the compatibility of relational marketing and transaction marketing. Relational marketing was set forward by Berry in 1983. From then on, many scholars have been studying from different perspectives on relational marketing. One of the representative study is Noordin School, in view of the service marketing research, they study on how business processes reengineering, implementation of internal marketing to external customers with good service and value; the other is IMP School(Industrial Marketing and Purchasing Group), which focuses on the research of relationships and network industry market, While social exchange school studies from the perspective of social exchange business with customers, suppliers, competitors and other relations.

   Relational marketing focuses on long-term relationship. It processes relationships oriented approach, and 4Cs as the theoretical paradigm to build sustainable competitive advantages of enterprises. The core of relational marketing is to create, maintain and enhance the relationship (Berry,1983).

   With relational marketing studied further, relational marketing extends to all supply chain in which the core business is the center to gain competitive network advantages. They give the definition of relational marketing from the perspective of competitive network (Gummesson, 1994; peter, Lee and Humphreys, 2007). Compared with the lonely struggle of the enterprise, the enterprise network can get more external resources, such as capital, technology, information and market opportunities by the relationship between enterprise networks and interaction with the rest of the members (Batt and Purchase, 2004).

   Although relational marketing and transaction marketing are two seemingly contradictory marketing paradigms, both apply to different types of transactions and the environment. They are not mutually exclusive, but can co-exist and be integrated. In fact, relational marketing and transaction methods are not two extremes (Coviello, 2002). Chris Styles, * Tim Ambler(2003)points that the methods of transaction and relationship are both important means to enhance marketing effectively. And in...