The Research On Network Marketing: Insights From The Practice Of Banking

One of the most significant changes in the current economic environment is organizations and individuals are increasingly embedded in various and different types of economic and social networks. Furthermore, these intertwined relationships exist at many different levels. Factors contributing to this change are systematic, such as economic globalization, the increased value of outsourcing arrangements, and the accelerated promotion of technological change (like long-range communication technology, internet technology, etc.). In response to these changes, a present organizational form of enterprises is also representative of new and different model. Instead of the traditional hierarchy model or market model, what we see is the so-called "network organization."The greater flexibility of this new model can be seen within the framework of resource allocation. Specifically, virtual enterprises, complex and sophisticated supply chain networks, strategic alliances, industry clusters, etc., are all examples. Initially this innovation was found in manufacturing, but it has gradually been extended to the sales, service, trade and other non-production areas.The difference between the network model of organizations and the traditional model is that the organization, and its relationship to its environment, has fundamentally changed. As independent economic units, the original clear boundaries of organizations or individuals now no longer exist. Many relevant resources are not in the actual enterprise, per se. The enterprise depends largely on the cooperation of organizations or individuals associated with them. This phenomenon is known as "resource dependence":enterprises give up part of the decision-making independence in exchange for long-term support from partners to gain consistent access to a variety of scarce resources vital for growth and successful competition.In this new regime, traditional marketing may face a great challenge. This may be true because of the current strategic thinking about marketing strategies is counter to the traditional functions of management. The root cause of this challenge is the markets are increasingly networked because of the changes in purchasing authorities within organizational patterns.In this study, this phenomenon is referred to as the "market network.":in a target market of certain value, because organizations or individuals, as purchasing authorities, are embedded within the network, a certain degree of connection forms between their attitudes, intentions and behavior patterns. The referred to connection, acknowledges the idea that buyers are each other's functions in decision-making. Said differently, the relationship between an enterprise and a particular buyer will be influenced by the relationship of the enterprise and other members of the network. In this network market structure, the conventional transaction marketing and relationship marketing model the original transaction with respect to marketing and the relationship of marketing models begin to lose their previous contexts. The reason is that they address the marketing phenomenon as basically a binary relationship of "one to one". In the network marketplace, the behaviors of a buyer have structure to some extent. This structure needs to be understood and communicated, but at a network's overall level, to achieve an effective result and to deliver value. This new marketing thinking is pretty new in practice and in theory, for it lacks systematic concepts and modeling. This means a new marketing paradigm will probably be developed. The purpose of this paper is to lay the foundation for future in-depth empirical studies. These studies will involve a multi-case study approach, supported by modeling of the detailed operation of network marketing in practice.This study takes China's banking sector as a source for case materials with the network marketing experience of Industrial and Commercial Bank of China (Guangdong Branch) as the specific object for analysis. We search for the systematic and theoretical explanation for various phenomenons. The reason for choosing the banking industry the industry for this case study is for the three following considerations:First, the banking sector, as the major financial services provider, often deals with large cluster networks in its marketing business. These networks include industry associations, supply chains, enterprise groups, and even individual communities. Therefore, we can collect more extensive materials by expanding the industry-base. Second, the supply materials related to the banking industry are both financial services and tangible products, such as credit cards, debit cards, etc. Consequently, the network marketing practiced by this industry is typical. Third, as the author works in a bank (a provincial bank headquarters office), the author has advantages in the collection of case materials, in interviewing relevant parties, in understanding and explaining the significance of case materials, and in ensuring the cooperation of key individuals and appropriate organizations.This study builds the central theme and always carries out the basic principle of "three-party certification," (theoretical literature, secondary data and direct observation) to draw relevant judgments and conclusions, which is a typical for case studies. Through analysis and summary of five cases, and reliance on the existing literature, this study proposed the AEM model for bank industry network marketing.In our model, we summarize the process of bank network marketing into three major phases; namely, the market network analysis, the embedded market network and the market network management. The three phases, when compared to traditional marketing, embody the proposed innovation and attempts theoretical development for new theoretical constructs. For example, in the analysis phase of the market network, we propose a "network of sub-market" concepts; on the network immersed market stage, we explore the marketing sense of "network externalities" concept; with respect to market network management, we put forward the concept of "network assets." This is distinct from the existing "one-to-one" relationship marketing model for various concepts such as brand equity, relationship assets, customer assets, etc.In conclusion, this study summarizes the network marketing model, not only providing a detailed description of banking practice, but also building a complete theory and concept of measurement construct, from the ground up. We feel strongly that this construct will open up host of new possibilities.