Guanxi vs. relationship marketing

Guanxi vs. relationship marketing: Exploring underlying differences

Cheng Lu Wang *

Department of Marketing and International Business, University of New Haven, West Haven, CT 06516, United States

Received 5 April 2004; received in revised form 6 April 2005; accepted 3 August 2005

Available online 5 October 2005

Abstract

The present paper attempts to explore the underlying mechanism between Western relationship marketing and Chinese guanxi by examining

the construct equivalence of the two concepts. First, it distinguishes guanxi from relationship marketing in terms of the personal and particularistic

nature of the relation. Second, it differentiates trust from xinyong, its counterpart in Chinese, based on a comparison of their roles in relationship

building and maintenance. Third, it discusses the unique meaning of renqing, which is proposed as an underlying mechanism that guides behavior

norms in guanxi and a mediator between trust or xinyong and long-term orientation. Finally, it concludes by discussing the managerial

implications for international marketers who wish to succeed in the Chinese business market and the importance of adapting Western relationship

marketing principles to guanxi marketing.

D 2005 Elsevier Inc. All rights reserved.

Keywords: Guanxi; Relationship marketing; Trust; Renqing; China

1. Introduction

Since the 1990s, relationship marketing has attracted much

attention from academics and practitioners, especially in the

business-to-business marketing (Dwyer, Schurr & Oh, 1987;

Ganesan, 1994; Morgan & Hunt, 1994; Sharma & Pillai, 2003;

Sheth & Shah, 2003). In contrast to transactional marketing,

relationship marketing focuses more on establishing, developing

and maintaining successful relational exchanges and good

customer relationship (Berry & Parasuraman, 1991). In rela￾tional exchange, the choice behavior is constrained through the

trust and commitment that develop between the two parties

(Morgan & Hunt, 1994). Parallel to this shift in the marketing

paradigm, there is a growing research interest in guanxi, which

has been considered the Chinese version of relationship

marketing or business networking (Ambler, 1994; Davies,

Leung, Luk, & Wong, 1995; Lovett, Simmons, & Kali, 1999).

Although some relationship marketing principles are regarded as

a key determinant for a successful business in China, the

uniqueness of Chinese culture makes the direct transfer of

Western relationship marketing principles into China or other

Asian societies questionable. It has long been suggested that

‘‘there is ... a need for more fundamental research in

international marketing in order to adapt establishment market￾ing concepts to the realities of the international marketplace ...

This is essentially a question of external validity and research

should be encouraged to determine which marketing principles

can be universally applied and which are basically ethnocentric’’

(Cunningham & Green, 1984, p. 9). To examine the construct

equivalence of key concepts when making cross-cultural

comparisons of guanxi with relationship marketing, some

related Chinese terms are defined here:

Guanxi It is composed of two Chinese characters, guan (gate)

and xi (connection). One must pass the gate to get

connected to networks. As such, guanxi generally

refers to relationships or social connections based on

mutual interests and benefits (Yang, 1994). It is a

special type of relationship that bonds the exchange

partners through reciprocal obligations to obtain

resources through a continual cooperation and

exchange of favors (Chen, 1995; Davies, 1995).

Xinyong While the term can be directly translated as ‘‘credit’’

(the word ‘‘credit card’’ in Chinese is xinyong ka), its

meaning is closer to the Western version ‘‘trust.’’

Trust, in Chinese business relations, is more based on

0019-8501/$ - see front matter D 2005 Elsevier Inc. All rights reserved.

doi:10.1016/j.indmarman.2005.08.002

* Tel.: +1 203 932 7209.

E-mail address: [email protected].

Industrial Marketing Management 36 (2007) 81 – 86