The field of relationship marketing can be viewed as a
sub-area of market focused management. At the most simple level, relationship
marketing strategy prescribes that it is more effective to invest in long-term
customer interactions than to rely on a series of potentially unrelated,
one-time exchanges. There are multiple stakeholders to consider and
organisations must make certain that value is provided for all members of a
Relationship management can be defined as am approach
to establish, maintain and enhance long-term associations with customers and
other stakeholders (Koiranen 1995 add). A key
assumption is that all parties will be able to meet their objectives through
the relationship. Relationship marketing is an attractive concept because it
links together many seemingly unrelated stands of marketing thought. Some of
these stands include: customer relationship management, sales management,
strategic thinking, legal relationships, promotional strategy, database
marketing, B2C marketing, B2B marketing and affinity marketing. Each of these approaches
has the potential to offer valuable benefits to both buyers and sellers.
However, Relationship marketing is hard to implement in practice.
Advantages and disadvantages with Relationship
Relationship management makes a lot of sense. It seems
much more efficient to establish long term relationship with someone than to
pursue individual potentially unrelated exchanges.
Relationship management seems like a promising way to
create competitive advantage. By exchanging information and forging (synonym) a partnership with the customer, the seller
has an opportunity to form a close bond with the customers. This close bond can
be potentially advantageous to both parties and the strategy work best when
both buyers and sellers are interested in achieving benefits over the long-run
(Ganesan, 1994 – add source in Reference list).
There are important differences between B2B and B2C
marketing (Zinkhan and Cheng 1992 add to reference list).
By nature, business customers have more motivations to create a partnership
with the seller. The individual consumer can offer money, positive word of
mouth and loyalty overtime. In addition to these aspects, a business
organisation can offer such items as profit sharing.
Since b2b marketing often involves purchase volumes
that are quite large, it is feasible for the seller to invest considerable
resources to customize the product or service. In exchange, the customer is
willing to cooperate in forging a true relationship. Source
relationship marketing: theory and implementation.
Buyers form judgements about the value of marketing
offers and make their buying decision based on these judgements. Satisfaction
with a purchase depends on the products performance relative to the
expectations. Expectations are based on the customers past buying experiences.
Although a customer-centred firm seeks to deliver high customer satisfaction
relative to competitors, it doesn’t attempt to maximize customers’
satisfaction. In addition to customers, the company has many stakeholders including
employees, dealers, suppliers and stockholders. Spending more to increase
customer satisfaction might divert funds from increasing the satisfaction of
these other partners. Hence it should focus on satisfying both.
In industrial marketing, Jackson refers to
relationship management oriented toward strong lasting relationship with
According to the paper, relationship management refers
to all marketing activities directed towards establishing, developing and
maintaining successful relational exchanges