Elgar original reference
Edited by Robert M. Morgan, Janet Turner Parish and George Deitz
Chapter 1: The future evolution of relationship marketing
The purpose of this chapter is to review the forces that led to the spectacular rise of relationship marketing both as a marketing practice and as a discipline. More importantly, I will suggest how relationship marketing is likely to evolve in the future. The fundamental force behind the rise of relationship marketing was the economic recession of the early 1980s caused by the first energy crisis of the 1970s (1974–78). This is often referred to as stagflation (inflation without economic growth). Both the monetary policy of high interest rates to curb inflation and the fiscal policy of wholesale deregulation of infrastructure industries such as airlines and trucking to stimulate growth during the Carter administration failed. This was followed by the Reagan administration’s focus on the global competitiveness of U.S. industries. It led to lowering the corporate tax rate and establishing the Malcolm Baldrige Quality Awards in manufacturing and services industries. The Reagan administration also allowed megamergers of directly competitive businesses. For example, General Electric (GE) was allowed to buy RCA in the consumer electronics industry, and similar mergers and acquisitions were allowed in the beer, soft drinks, aviation, and defense industries. The fundamental impact of this exogenous macro-economic reality was to shift the marketing objective from organically gaining market share to acquiring market share through mergers and acquisitions.