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How relationship building efforts works in the presence of mediator

Raashid Javed (Corresponding author) Student at Dept. of Management sciences

The Islamia University of Bahawalpur, Pakistan

Tel: 0092-334-7670222 Email: Rashid.javed01@gmail.com

Mudasra Amjad

Student at Dept. of Management sciences

The Islamia University of Bahawalpur, Pakistan

Tel: 0092-344-7160043 Email: Mudasraamjad@gmail.com

Aqsa Chanda

Student at Dept. of Management sciences

The Islamia University of Bahawalpur, Pakistan

Tel: 0092-300-6797342 Email: Aqsachanda@yahoo.com

Hira Munir

Student at Dept. of Management sciences

The Islamia University of Bahawalpur, Pakistan

Tel: 0092-335-3166660 Email: Hira.ch91@gmail.com

Saba Sattar

Lecturer at Dept. of Management sciences

The Islamia University of Bahawalpur, Pakistan

Email: Sabasattar24@yahoo.com

ABSTRACT: Relationship marketing and customer relationship management have taken a central position in marketing strategy in the past two decades. Most theories of relationship marketing emphasize the role of trust and commitment on customer purchase intention however a recent meta-analysis indicates that other mediating mechanisms are at work. This research is in addition to trust & commitment, which other mediators generate positive word of mouth & results in increased customer purchase intention. In research self- administered 250 questionnaires with seven points likert scale was developed & distributed among five big cities of Pakistan e.g. Multan, Lahore, Islamabad, Faisalabad & Karachi. Data was collected from consumers of five telecom operators e.g. Telenor, Mobilink, Warid, Ufone & Zong. For analysis of ten hypotheses of this paper Regression analysis and ANOVA technique are used. As probability systematic sampling technique is used for data collection there is no risk associated with sampling & data collection. As a result we propose that gratitude is an important missing mediator in the extant of RM model. We proposes to develop & validate a theoretical framework that integrates gratitude in RM network parallel to trust & commitment which results in positive word of mouth & increased purchase intention. This study is limited to telecom sector only, it’s a cross sectional study. This research is valid for the culture & economic set up of Pakistan.

KEYWORDS: Relationship building efforts, Pakistan telecom sector, Relationship management, Model of relationship management, five telecom operators.

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1.0 INTRODUCTION

In worldwide economy telecommunication gained high importance. It also influenced our lives as individuals, business in terms of efficiency, customer services & on every country’s competitiveness as a profitable economy. Telecom industry body, the GSM association, has announced that by 2010 mobile network will cover 90% of the world’s population. The total number of mobile connections is now equivalent to almost a third of estimate world population of 6.5 billion. Pakistan telecommunication sector has emerged as one of the fastest growing sectors of the economy ever since the sector was opened to private concerns. The telecommunication sector of Pakistan was awarded the status of industry in 2005. In 2007 the sector grew by
80 percent while average growth rate in last four years has been more than 100 percent.
Pakistan’s telecom market hosts some of the world’s largest & most experienced telecom companies including Orascom (Mobilink), Telenor (Norway), Warid Telecom (Abu Dhabi Group), China Mobile (Zong) & Etisalat (UAE based company). Some of the stats by PTA annual report (2011) shows that telecom sector of Pakistan plays an important role in growth of Pakistani economy. Telecom sector contributed over Rs. 116.9
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billion to the national exchequer. GST/FED collections spiked from the sector by 20% to Rs. 52.6 billion. Total telecom revenues swelled to an all-time high Rs. 362 billion during the year. Cellular income which constitutes major chunk of the telecom revenues was boosted by 11% to Rs. 262 billion from Rs. 236 billion. This phenomenal growth in telecom sector directly benefits the consumers as well in the form of network expansion, increased scope of services, merger of industries& more available telecom operators to choose as a service provider.
This sector is very dynamic & in the state of hyper competition. Every service provider is offering multiple packages, lower call rates, internet services, financial service, sms packages & many more. The project of 3G licensing is one of the most important telecom prospects in Pakistan. To keep the customer with the firm, telecom service providers are focusing on customer relationship marketing to get the customer trust, win the customer commitment & increase customer’s purchase intention. This is the only way through which a company can gain competitive advantage & can ensure its survival &growth. There are a lot of studies under taken by researchers to indicate the role of trust & commitment in relationship marketing to increase customer purchase intention & word of mouth. In Pakistan no such research was under taken to address the role of trust & commitment on increase purchase intention & word of mouth communication. So this study, while keeping in minds the immense effort of telecom sector to increase the purchase intention& maximize the benefits of PWOM.is to find the impact of trust, commitment & other missing mediators on PWOM & purchase intention in relationship marketing.

1.2 Statement of the Problem

In addition to trust & commitment, which other mediators generate positive word of mouth & results in increased customer purchase intention?

1.3 OBJECTIVES OF THE STUDY

Most theories of relationship marketing emphasize the role of trust and commitment on customer purchase intention however a recent meta-analysis indicates that other mediating mechanisms are at work. So literature suggests that gratitude represents a likely candidate for the “missing mediator” uncovered in a recent meta-analysis (Palmatier et al. 2006). In addition, gratitude may provide an explanation of the direct effect of relationship investments on purchase intention in the extant commitment–trust RM model. Overall, the research demonstrates that gratitude plays an important role in understanding how relationship marketing investments generates feelings of gratitude which develop trust & commitment, generates positive WOM & ultimately results in increased customer purchase intention.

1.4 HYPOTHESIS

This study proposed following hypothesis to be tested:

H1: RM Programs have a significant positive affect on customer gratitude.

H2: Value based RM Investment has a significant positive affect on customer gratitude. H3: Value based RM Investment has a significant positive affect on trust & commitment. H4: RM Programs have a significant positive affect on trust & commitment.

H5: Customer gratitude has a significant effect on trust & commitment.

H6: Trust & commitment have significant positive affect on positive word of mouth

H7: Customer gratitude has a significant positive affect on positive WOM

H8: Trust & commitment have significant positive affect on customer purchase intention. H9: Customer gratitude has a significant positive affect on positive purchase intention H10: Positive WOM has a significant positive affect on customer purchase intention

2.0 LITERATURE REVIEW

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2.1 RELATIONSHIP MARKETING INVESTMENT

The phenomenon of Relationship marketing (RM), both in business & academic field progressed significantly high in recent years (Srinivasan and Moorman2005) & is defined by Morgan and Hunt ,(1994 :22) “all marketing activities directed towards establishing, developing, and maintaining successful relational exchanges” Sheth and Parvatiyar,( 2000:9) defines relationship marketing as “the ongoing process of engaging in cooperative and collaborative activities and programs with immediate and end-user customers to create or enhance mutual economic value at reduced cost”. (Bagozzi 1995; McKenna 1991: DeWulf, Odekerken- Schröder, and Iacobucci 2001) American Marketing Association in September 2004, published a novel definition of marketing as “marketing is an organizational function & set of process for creating, communicating & delivering value to customers & for managing customer relationships in ways that benefit the organization & its stake holders”.
There are three levels of RM. The 1stlevel focused on attracting customers to turn them into constant
customers with the help of price strategy. The 2nd level focused on providing individualized services. Services
at this level are provided to consumers with the help of customized communication approach. The people who are focused by relationship marketing at this level are those who are 1st time shoppers, who later on converted into repurchases. Companies that understood the significance of RM develops relational interactions with consumers. The 3rd level includes long-lasting exchanges between consumers & companies, through which companies offer differentiated, personalized services & benefits to consumers (Berry and Parasuraman, 1991).

2.2 RELATIONSHIP MARKETING PROGRAMS

Relationship marketing programs can be classified as social, structural & financial programs. (Gwinner et al,
1998). Social relationship marketing programs include struggles to develop a customized relationship with every customer along with special treatment with the help of some investment in form of meals & special occasion celebrations. Gwinner et al, 1998 Structural relationship marketing efforts usually requires flexibility in the systems & it’s difficult to provide all type of structural benefits to customers. Financial RM programs includes direct monetary benefits for past or future customers’ loyalty e.g. trade discounts, incentives & other cost saving benefits e.g. free delivery, security waiver for postpaid connection in telecom etc. (Gwinner et al,
1998). Social RM is defined as the development of affection and friendship by sales agent through communicating & interacting with consumers to boost long lasting relationships (Berry and Parasuraman,
1991; Gronroos, 1994). Thurau, Th, He, et al., (2002). Sellers while building the relationship with customers have two way interactions in form of give & take from both sides. Both parties give favors to each other for the fulfillment of their own needs. So it arise the feeling of gratitude in consumers & the desire to reciprocate the received benefits (Chris and Graham, 2007).

2.3 GRATITUDE &RM

Morales, (2005) demonstrated that feeling of gratitude stimulate the customers to compensate the company for the benevolent behavior. The received benefits made the consumer feel indebted & obliged to do something for the well-being of the firm (Dawson, 1988). A study by Houston and Gassenheimer (1987) suggests that reciprocal behavior turns transactional exchange into relational exchange. However, all these studies neglect the affective & behavior role of gratitude in relationship marketing. McAdams and Bauer (2004: 88) demonstrated that gratitude is “emotion with an attribution” as benefiting the benefactor is intentional. On the other hand, if the action to benefit the benefactor is unintentional, it will results in little gratitude (Bonnie and De Waal 2004). It involves the consumers’ emotions as well by generating feeling of gratitude (Morales 2005; Dahl, Honea, and Manchanda 2005). This results in increase buying intention from the buyer end. (Palmatier et al., 2009) suggested that consumers involved in gratitude based reciprocal
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behavior to satisfy the obligation in response of feeling of gratitude. This feeling of gratitude is developed as a result of relationship marketing investment.

2.4 TRUST & COMMITMENT

Morgan and Hunt, (1994) referred that trust & commitment are studied by many researchers in relationship marketing. Trust development is considered as an essential element in customer-seller relationship development. Gundlach et al., (1995) & it is considered as the fundamental element to develop trust in relationships. It is defined as “confidence in an exchange partner’s reliability and integrity” (Morgan and Hunt
1994, p. 23). Many researchers (Swan and Nolan, 1985; Schurr and Ozanne, 1985; Moorman et al., 1992) agreed with the stated definition of trust. Morgan and Hunt, (1994) suggested that in human relationships trust plays a very important role. Trust is also referred as emotional belief &cognitive opinion. It is risk taking or readiness to involve in above said behavior (Garbarino& Johnson, 1999). Commitment is defined as “an enduring desire to maintain a valued relationship” (Moorman, Zaltman, and Deshpandé 1992, p. 316). Dwyer et al., (1987) demonstrated that commitment is considered as a resultant of healthy relationship interactions. Many others studied the role of commitment in relationship marketing as a resultant of relationship marketing investment & its impact on relational performance (Morgan and Hunt, 1994; Baker et al., 1999; Weitz and Bradford, 1999). So customer commitment is not only the reason to be long term with seller (Hennig-Thurau and Klee, 1997; Dwyer et al., 1987), it also results in increased purchase from customers’ end (Moorman et al.,
1993; De Wulf et al., 2001; Odekerken-Schroder et al., 2003). Gerrard& Lawrence, 1997 suggested that
commitment results in positive purchase behavior & increased purchase intention .Trust also results in increased purchase intention (Long-Yi Lin, 2010). There is two type of trust personal trust that inner believe of the person and the industrial trust the trust to give permission to company to send advertising message. Overall trust has positive impact on permission (Rizwan et al,).

2.5 GRATITUDE &TRUST-COMMITMENT

Young’s (2006) suggests that trust develops customer commitment which results in increased purchase intention as a result of customer gratitude. Dunn and Schweitzer, (2005) suggested that gratitude has a considerable impact on one person’s observation about the trustworthiness of the other person, which leads to increased trust about that person. Doney and Cannon, (1997) demonstrated that gratitude drags both the parties in the cycle of reciprocity which indicates the behavior of seller toward the buyer, ultimately develops trust on the seller. Alvin Gouldner (1960) proposed that for a balanced social system there must be shared exchange benefits. Jones and George (1998) Gratitude develops positive perception between the exchange partners due to the received benefits & results in emotional attachment in terms of close ties between the exchange partners. The findings of Isabella Soscia (2007) suggested that gratitude decree increased purchase intention & positive word of mouth. This relationship marketing investment is paid off in form of increased purchase intention & positive word of mouth by the customers.

2.6 POSITIVE WORD OF MOUTH

Arndt (1967, p.1) suggested, “Informal conversation is probably the oldest mechanism by which opinions on products and brands are developed, expressed, and spread”. People who spread WOM don’t have any commercial purpose (Arndt, 1967). WOM communications are not necessarily spread through face to face. Internet helped to spread word of mouth (Buttle, 1998). Hennig-Thurau et al. (2004) suggested that internet
&its easy access to everyone make it very easy for the consumers to get information about the products/services & discuss about them. We being people trust more on the conversations by people about a product & service rather than the ads (Lake, 2009). Palmatier et al, (2006) Word of mouth recommendations is one of the indicators of loyal customers. The Bass model states hat customers are affected by two sources:
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word of mouth & media (Mahajan, Muller. and Bass 1990). In a research study Long-Yi Lin, (2010) suggested that Positive WOM impact trust & influence purchase intention positively. These findings are same as the findings of Park and Lee (2008). A lot of marketing campaigns & promotions make the media noisy hence confused the consumers to choose the appropriate product or service for them; positive WOM plays a very critical role in increasing the purchase intention in such environment (Long-Yi Lin, 2010). Sundaram et al., (1998) described four motives of positive word of mouth e.g. altruism, product involvement, self- enhancement, and helping the company.

2.7 PURCHASE INTENTION

Purchase intention is known as particular exchange behavior developed after customers’ overall assessment of the product or services. So the purchase intention is one’s assessment & attitude toward a product or service along with external stimulus (Hsu, 1987). Wagner (2004), suggests that purchase intention tells about a consumer’s effort for buying a product or availing a service. (Long-Yi Lin,2010) draws following implications about purchase intention: (1) it shows consumers’ “willingness “to buy a product.(2) it refers to consumers’ future “wants” ; (3) it represents a consumer decision for buying a product “again”. Take the example of commitment (Pritchard et al., 1999), trust (Morgan & Hunt, 1994), and satisfaction (Zeithaml, et al., 1996) all have a positive impact on consumer purchase behavior (Reichheld, 1996). These studies provide more understanding about the antecedent factors of purchase intentions.
Sirdeshmukh et al., (2002) suggested that trust establishes consumers' future behavior towards a service
provider. Spreng et al., (1995) Customer trust enhances purchase intention & consumers preferred to buy products from the firms they trust. Mariosand William (2004) researched factors affecting consumer trust on a website & found that consumer trust on a website develops through customer interaction with website. Sirdeshmukh et al, (2002) found that trust impact the future purchase intention behavior for services. So review of literature suggests that there exists relationship among the variables under study & it also supports the existence of relationship between the mentioned hypotheses in introduction.

3.0 RESEARCH METHODOLOGY

3.1 PROPOSED CONCEPTUAL FRAMEWORK

Critical analysis of literature review suggests that there exists a gap in relationship marketing to measure the relationship of customer gratitude with purchase intention & positive word of mouth. Following framework is proposed along with ten hypotheses.
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3.2 RESEARCH DESIGNING order to test the hypothesis a self-administered questionnaire with seven points

likert scale was developed & distributed among five big cities of Pakistan e.g. Multan, Lahore, Islamabad, Faisalabad & Karachi. Data was collected from consumers of five telecom operators e.g. Telenor, Mobilink, Warid, Ufone & Zong. Data was collected from the consumers who were using telecom services at least for last one year. Then 10 questionnaires for each telecom operator in each city made account of 250 questionnaires.

3.3 DATA ANALYSIS TOOLS AND TECHNIQUES

The data collected was analysed by using SPSS (Statistical Process for Social Science) software version 16 & IBM AMOS Version 19. Reliability assessment was done by using the Cronbachs’ coefficient which would be explained later for each measure, the reliability for all the items of instrument at likert scale is 96.3 %which is satisfactory for exploratory research (Nunnally & Bernstein, 1994). This value is greater than the previous study done on customer gratitude in relationship marketing (Palmatier et al. 2009). In this way the following tools have been used to analyze the data collected.
Regression Analysis to analyse the impact of value based relationship marketing investment, relationship
marketing programs, trust & commitments & customer gratitude on positive word of mouth & purchase intention.
Analysis of variance (ANOVA) to find out difference between groups e.g. City wise difference & telecom operator wise difference for variables under study.

3.4 REGRESSION ANALYSIS

Correlation found the relation among all the variables under study while linear regression in SEM helps to find out the relationship between independent & dependent variables (Daire et al.,2008). Significance level is 0.05 or below in regression analysis.

Table 6 show the regression analysis along with SEM in IBM AMOS software.

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*Significance level: 0.05

H1 is RM Programs have significant positive affect on customer gratitude. Table suggests that there is highly significant relationship between RM programs & customer gratitude with p-value <.05. Hence it supports H1. H2 is value based RM investment has a significant positive affect on customer gratitude. H2 is supported with p-value<.05. Estimated coefficients values suggests that both the independent variables have almost same impact on customer gratitude with .415 & .440 respectively. The relationship is positive for both H1 & H2.H3 is value based RM Investment has a significant positive affect on trust & commitment. Results support the H3 with p-value<.05 with positive coefficient estimate of .429. H4 is RM Programs have a significant positive affect on trust & commitment. H4 is not supported as p-value >.05. This suggests that there is no significant relationship between RM programs & trust & commitment. H5 is Customer gratitude has a significant effect on trust & commitment. Table shows that there is highly significant relationship between both the variables with p-value<.05 & a positive coefficient estimate of 0.395. Hence it supports the H5.H6 is trust & commitment have significant positive affect on positive word of mouth. Results supports H6 with p-value <.05
& positive coefficient estimate of 0.209. H7 is customer gratitude has a significant positive affect on positive WOM. Results suggests that there is a significant relationship between customer gratitude & PWOM with p- value<.05. But the coefficient estimate value of 0.482suggests that there is positive relationship between customer gratitude & PWOM & it has more effect on PWOM than trust & commitment which has coefficient estimate value of .209. H8 is Trust & commitment has significant positive affect on customer purchase intention. Trust & commitment has significant positive relationship with purchase intention with p-value <.05
& coefficient estimate of 0.736. H9 is Customer gratitude has a significant positive affect on positive purchase
intention. Table suggests that there is not significant relationship between customer gratitude & purchase intention rather there is a weak impact of customer gratitude on purchase intention with p-value= 0.165>.01. Coefficient estimates also has a very low value of .068. So H9 is not supported when the impact of customer
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gratitude is measured as a single independent variable affecting purchase intention as dependent variable. H10 is Positive WOM has a significant positive affect on customer purchase intention. There is significant relationship between PWOM & purchase intention with coefficient estimate of 0.333 & p-value<.05. Hence it supports H10. Linear regression in IBM AMOS Software helped to measure the relationship significance between the dependent & independent variables one by one. It supports H1, H2, H3, H5, H6, H7, H8, and H10
& didn’t supports H4 & H9. To find out the significance of relationship of independent variables with more than one dependent variable, multivariate analysis is conducted.

3.5 Analysis of Variance (ANOVA)

Analysis of variance is done to find out the difference among different groups for the variables under study. As there are five telecom operators in telecom sector of Pakistan so they are considered as five groups. One-way ANOVA is measured for five telecom operators. Value based RM investment has significant difference between the groups as p<.005. RM Programs, Customer Gratitude & Trust &commitment has no significant difference between the groups. PWOM & purchase intention are found to have significant difference between the groups with p<.005 as shown in the table.

Table 9.1.1, ANOVA of Variables Understudy with Telecom Operators

Least Significant Difference Test (LSD) is conducted to find the pair-wise comparisons between the groups
(telecom operators) using α = 0.05. There are five telecom operators i.e. Moblink, Warid, Telenor, Ufone &
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Zong. A pair-wise comparison of all these five operators with each other suggests that the most significant difference exist between Mobilink & Zong with significant value p=.002 <.005. The second high significant difference exists between Mobilink & Telenor with p=.027<.005. The third significant different pair is Ufone & Zong with p=.037<.005. Rest of the groups has no significant difference between the pairs p>.05. It suggests that only for the above three pairs of operators’ consumers consider the difference in value based RM efforts by these operators. Positive word of mouth also found to have a significant difference between the groups in the table of ANOVA. Pair-wise comparison suggests that consumers of Mobilink have the significant difference from Warid, Zong & Telenor with p<.005. Rest of the pair-wise comparisons are not significant p.>005.

Table 9.1.2, LSD of Variables Understudy with Telecom Operators

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To find out the city wise difference among the responses of consumers for the variables under study. ANOVA is done on all the five cities i.e. Multan, Lahore, Faisalabad, Islamabad & Karachi. All the five variables have significant difference between the groups with p<.005. Table shows that the highly significant difference among all the variables is for trust & commitment with p=.012<.005. The second lowest p value is for value based RM investment with p=.013<.005. RM programs are on third number with p=.016<.005. PWOM has the significant difference with p=.033<.005 while customer gratitude & purchase intention has the same significance level p= .039 < .005.

Table 10.1.1, ANOVA of Variables Understudy with cities under study. ANOVA

Variables Difference Sum of Squares def. Mean Square F Sig.
Value Based RM Investment
RM Programs
Customer Gratitude
Trust & commitment
PWOM
Purchase Intention
As all the variables have significant difference between the groups, table shows the multivariate analysis for the five cities. For RM investment pair-wise comparisons of the cities suggests that Lahore, Faisalabad & Islamabad, Faisalabad have the highly significant difference with p=0.00<.05. The second highest difference is for Faisalabad, Karachi with p=.02 <.05. Rest of the city wise comparison shows that there is insignificant difference between cities. It suggests that Faisalabad has the significant difference for value based RM investment. For RM programs pair-wise comparison suggests that there is highly significant difference for Lahore & Faisalabad with p=0.00<0.05. There is also a significant difference between Islamabad & Faisalabad with p=0.01<0.05. For rest of pair wise comparisons there is no significant difference exists between the cities. There is significant difference between Islamabad, Faisalabad & Lahore, Faisalabad for customer gratitude with p=0.01<0.05. Rest of the pair-wise comparisons suggests that there is no significant difference between the cities for customer gratitude. For trust & commitment, pair wise comparisons of cities suggests that there is significant difference between (Islamabad, Faisalabad), (Lahore, Faisalabad) & (Islamabad, Karachi) with p=0.00, 0.01 & 0.02 < 0.05 respectively. Rest of the cities in pair-wise comparisons have no significant difference p>0.05. For PWOM, pair-wise comparison shows that there is highly significant difference between Islamabad & Faisalabad with p=0.00 < 0.05. There is also significant difference between Multan & Islamabad
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with p=0.03 < 0.05. Rest of the pair-wise comparisons there is no significant difference between cities p> 0.05. For purchase intention there exist highly significant difference between Islamabad & Faisalabad with p=0.00 <
0.05. Multan & Islamabad also found to have significant difference with p=0.01 < 0.05. Rest of the pair-wise comparisons has no significant difference. Overall Faisalabad found to have the significant difference from other cities for all the variables under study.

Table 10.1.2, LSD of Variables Understudy with cities under study.

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*. The mean difference is significant at the 0.05 level

4.0 FINDINGS

The research question is to find out the mediator which generate positive word of mouth & increase purchase intention in addition to trust & commitment. It is also proposed that gratitude is the missing mediator in the extant of relationship marketing model proposed by Morgan Hunt, 1994. So the ultimate purpose is to develop a conceptual frame work in which customer gratitude is integrated parallel to trust & commitment which results in positive word of mouth & increased purchase intention. Prior studies suggest that RM investment & relationship marketing programs have a direct effect on customer trust & commitment. This study suggests that RM investment & relationship marketing programs generate customer gratitude in addition to trust & commitment directly. It also suggests that customer gratitude effects customer trust & commitment to generate positive word of mouth & increase purchase intention. Customer gratitude also has a direct impact on PWOM which ultimately enhance customer purchase intention. So over all, results suggest that customer gratitude act as a mediator for generating positive word of mouth & increasing purchase intention while boosting the customer trust & commitment. When the combined impact of customer trust- commitment & customer gratitude is studied it suggests that both of these variables impacts directly PWOM &
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customer purchase intention. In this way it helps to leverage the benefits of relationship marketing investment
& relationship marketing programs maximally.

5.0 CONCLUSION

Principal component factor analysis identified two factors for making relationship marketing efforts by managers & strategy makers. These are value based relationship marketing investment & RM programs. It suggests that managers & relationship marketing strategy makers can make relationship building efforts with the help of relationship marketing programs in the form of social, structural & financial programs. Linear regression with the help of IBM AMOS helped to find out the relation between each independent variable with each dependent variable one by one. It suggests that value based relationship marketing investment creates customer gratitude. Relationship marketing programs also helped to generate customer gratitude. Value based relationship marketing investment generate customer trust & commitment while relationship marketing programs are not found to have relationship with trust & commitment. Many studies previously studied the impact of customer trust & commitment on purchase intention or positive word of mouth. Some studies discussed extant trust-commitment model of relationship marketing (Morgan Hunt, 1994). Other researchers studies the role of process of reciprocation or principal of reciprocation in relationship marketing (Bagozzi 1995; De Wulf, Odekerken-Schröder, and Iacobucci 2001; Houston and Gassenheimer, 1987). Others studied the impact of customer gratitude on seller’s outcome (Palmatier et al. 2009). This study proposes & studied the impact of customer gratitude on positive word of mouth & purchase intention. It finds out the mediating role of customer gratitude in relationship marketing. With the help of the conceptual frame work this study demonstrates how relationship marketing efforts benefit sellers in the form of positive word of mouth & purchase intention. It also shows how the benefits of gratitude can be leveraged to increase sellers’ outcome in the form of profits.

6.0 MANAGERIAL IMPLICATIONS

This study also demonstrates many implications for the relationship marketing strategy makers to intrigue relationship marketing efforts in such a way, that the benefits of customer gratitude can be maximally captured. Following are the useful suggestions for managers:

• Managers should focus on value based relationship marketing investment. Only those marketing programs should be developed which are value generating for the consumers.

• To leverage the benefits of relationship marketing efforts sellers should design the programs which develop positive feeling of gratitude, perceived intent of seller & its investment in the mind of consumers

• This study also suggests that existing consumers are the asset of the firms & they brings in profits for the firms directly through repeat purchase & indirectly through bringing in new consumers through positive word of mouth referrals.

• This research is valid for the culture & economic set up of Pakistan. It can bring different & new results for different cultures, economic set up & different markets.

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