This document discusses relationship building and legitimacy for new ventures. It defines relationship marketing constructs like trust, satisfaction, loyalty, commitment, service quality, and communication. It explores how new ventures can build pragmatic, moral, and cognitive legitimacy through relationship marketing efforts like meeting customer needs and expectations. Relationship building helps new ventures gain acceptance and become taken for granted in their industry or field. Further research is needed on communicating relationship building and legitimacy from both company and customer perspectives.

1. Relationship building and legitimacy
of new ventures
Istvan Csaba Gergely
15/06/2012

2. 2
Contents
• Defining constructs of relationship marketing and
legitimacy
• Relationship building and legitimacy
• Limitations
• Further research

3. 3
Customer relations and relationship
marketing
• “The six most often cited defining constructs are:
▫ Trust
▫ Satisfaction
▫ Loyalty
▫ Commitment
▫ Service quality
▫ Communication” (Agariya & Singh, 2011, p.228).

4. 4
Trust
• Willingness to place yourself in a vulnerable
position, and rely on the new venture to treat you
fair and do not take advantage of you.
• Company 2, 3, 4 and 6 mention trust as a relevant
element of legitimacy communication:
“We create trust, through the people here, through
the references of people who work here...”
• Trust and legitimacy

5. 5
Satisfaction
• “Satisfaction is a response (emotional or cognitive); it
pertains to a particular focus
(expectations), product, consumption experience, etc.)
and it occurs at a particular time (after
consumption,etc)” (Giese & Cote, 2002).
• Company 1, 3, 4 and 6 mention satisfaction:
“We know if they are happy, we know if they are not
satisfied in some way and we can act on it, very fast.”
• Satisfaction and legitimacy

6. 6
Loyalty
• “Service loyalty is the degree to which a customer
exhibits repeat purchasing behavior from a service
provider, possesses a positive attitudinal disposition
toward the provider...” (Gremler & Brown, 1995)
• Company 2, 5 and 6 :
“I think our customers are extremely loyal, they have a
very good perception of who we are what we want to do.”
• Loyalty and legitimacy

7. 7
Commitment
• Commitment is “the enduring desire of a customer
to maintain and develop a relationship” (Walter &
Ritter, 2003, p. 355).
• Company 3, 4, and 6:
“All of our companies know the name of the one who is
going out to do the services. They buy them (company
3 employees) Christmas presents.”
• Commitment and legitimacy

8. 8
Service quality
• Accumulation of success and honesty
• Every company in the sample talks about service
quality and legitimacy:
“Everything from entering the shop to leaving the shop
should be as pleasant as possible, and we really put
ourselves in the customer’s place and try to talk,
communicate in the customers’ language.”
• Service quality and legitimacy

9. 9
Communication
• Clear communication
• All of the companies mention clear communication
in order to achieve legitimacy:
“Because the IT business is very blurry, they are
focused on clear communication about what is done
and what has to be done in a tongue that everybody
can understand.”
• Communication and legitimacy

10. 10
Relationship marketing
• Orientation to customer retention
• Continuous customer contact
• Focus on costumer value
• Long time scale
• High emphasis on customer service
• High commitment to meeting customer expectations
• Quality as the concern of all staff (Payne, Christopher
& Pack, 1995)

11. 11
Relationship building and legitimacy
• Pragmatic legitimacy: respond to needs, build
reputation
• Moral legitimacy: produce proper outcomes, define
goals, demonstrate success
• Cognitive legitimacy: professionalize
operations, popularize and standardize new models
(Suchman, 1995)

12. 12
Relationship building and legitimacy
• Quality of stakeholder relationships (Zott &
Huy, 2007)
• Socio- cultural resonance (Navis & Glynn 2011)
• Homophilous communication (Rogers, 2003)
• Network positioning and reliability (Lopes, Cunha &
Palma, 2009)
• Symbolic action- taken for granted understanding of
the new venture

13. 13
Limitations
• Parts and the whole concept of RM
• Customer perspective
• Not clear connection
• Trends
• Small sample, exploratory study

14. 14
Further research
• Communicating relationship building and legitimacy
• Customer perspective of relationship building and
legitimacy
• Empirical research
• Various industries and various stakeholders

15. 15
Conclusion
• Communicating the willingness of relationship
building can be legitimating
• One of the main tasks for new ventures should be
the development of excellent customer relationships
• Further research is necessary in this topic

16. 16
Bibliography
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• Gremler, D.D., & Brown, S.W. (1995). Service loyalty: its nature, importance and implications. Retrieved from:
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