East meets West: Toward a theoretical model linking guanxi and relationship marketing Ahmed S. Shaalan a,b , Jon Reast c, ⁎, Debra Johnson a , Marwa E. Tourky d,b a Hull University Business School, United Kingdom b Tanta University, Egypt c University of Bradford, United Kingdom d University of Exeter, United Kingdom abstract article info Article history: Received 1 October 2011 Received in revised form 1 December 2012 Accepted 1 March 2013 Available online 18 June 2013 Keywords: Relationship marketing Guanxi Relationship investment Retention Theoretical model This conceptual study critically examines the separate concepts of guanxi and relationship marketing, explores the differences between the two approaches, and proposes innovative linkages between them. Chinese guanxi develops relationships at the inter-personal level, whereas relationship marketing develops relationships at the inter-organizational level. Both concepts are well known, but a dearth of critical comparison remains in academic literature, even though evidence suggests that managers can use the linkages between the approaches to improve customer recruitment and retention. Through a critical review and synthesis of prior research on guanxi and relationship marketing, this study proposes a novel theoretical model that links guanxi and relation- ship marketing and develops theoretical and managerial implications of such linkages. As such, this study offers new and valuable insights and benefits for Asian firms, which employ only guanxi-type relationships. © 2013 Elsevier Inc. All rights reserved. 1. Introduction Establishing strong and quality relationships with customers is important for firms, especially those in complex and highly competitive markets (Ndubisi & Wah, 2005). This study examines the differences and possible linkages between two important approaches to building relationships: guanxi and relationship marketing. Guanxi-type relation- ships work at the inter-personal level (Fan, 2002; Wang, 2007), where- as relationship marketing operates at the inter-organizational level (Gummesson, 1996; Morgan & Hunt, 1994). The Chinese term guanxi refers to inter-personal connections that have significant impacts and powerful implications in most aspects of relationships (Fan, 2002). According to prior research, guanxi is one of the most important success factors when conducting business in China because having the right guanxi can bring many benefits (Fan, 2002; Yeung & Tung, 1996). Relationship marketing derives from the fields of services and business-to-business marketing and challenges the traditional market- ing approach based largely on transactions and the marketing mix (Berry, 2002; Grönroos, 1994). Accordingly, relationship marketing is an alternative marketing approach that can absorb the dynamics and interactions in customer relationships (Grönroos, 1994). Ambler (1994) and Björkman and Kock (1995) use the terms guanxi and “relationship marketing” interchangeably; that is, they assume that guanxi represents a Chinese version of relationship marketing. However, Fan (2002) asserts that this assumption is a misunderstanding of guanxi and that many fundamental differences exist between the two ap- proaches. In addition, although previous research explores relationship marketing and guanxi extensively and suggests the linkages between the approaches to improve customer retention as well as suggests the importance of transferring guanxi from the inter-personal level to the or- ganizational level (Flambard-Ruaud, 2005; Geddie, DeFranco, & Geddie, 2002, 2005; Zhang & Zhang, 2006), no model theoretically and practical- ly links these concepts, a gap this study aims to fill. Many potential benefits can flow from this linkage. This linkage can help firms using relationship marketing adapt to emerging market economies in Asia and solve problems, such as lack of trust. For exam- ple, firms in Asian cultures often prefer to deal with known and trusted partners (Flambard-Ruaud, 2005), and they tend to acquire knowledge of and build trusting relationships with business counterparts before engaging in business (Hutchings & Weir, 2006). In Asia, firms developing and managing business relationships place more importance on the reputation and trust of their partners than on a legally or contractually defined set of rules (Björkman & Kock, 1995). Thus, guanxi involves a kind of trust in the context of building relation- ships (Flambard-Ruaud, 2005). In addition, guanxi plays a vital role in the process of relationship marketing by, for example, enabling managers to gain access to new customers with little cost, retain current clients, and facilitate daily business operations (Dunfee & Warren, Journal of Business Research 66 (2013) 2515–2521 ⁎ Corresponding author at: Strategic Marketing, University of Bradford, School of Management, Bradford BD9 4JL, UK. Tel.: +44 1274 234357; fax: +44 1274 2344405. E-mail address: j.reast@bradford.ac.uk (J. Reast). 0148-2963/$ – see front matter © 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.jbusres.2013.05.043 Contents lists available at ScienceDirect Journal of Business Research