Marketing Management: Relationship Marketing Analysis

This report delves into the core concepts of relationship marketing, emphasizing its significance in both business-to-business (B2B) and business-to-consumer (B2C) contexts. It explores the evolution of marketing from transactional approaches to a focus on long-term customer engagement, loyalty, and retention. The report outlines various strategies adopted for building and maintaining strong customer relationships, including networking, client events, and consistent follow-up. It highlights the crucial steps involved in customer retention, such as valuation, retention measurement, and addressing reasons for customer defection. Furthermore, the report details the structure of relationship marketing, including its objectives, instruments, and defining constructs like trust, commitment, and communication. It also examines relationship marketing models, like the customer model and the six markets model, to understand stakeholder characteristics and market dynamics. The report concludes by underscoring the benefits of relationship marketing, such as cost efficiency, increased profitability, and innovation, emphasizing its role in driving organizational performance and achieving customer satisfaction.

Marketing Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
STRATEGIES ADOPTED FOR THE RELATIONSHIP MARKETING......................................1
STEPS TO RETAIN THE CUSTOMERS......................................................................................3
STRUCTURE OF RELATIONSHIP MARKETING.....................................................................3
RELATIONSHIP MARKETING MODELS..................................................................................5
RELATIONSHIP MARKETING IN THE CONTEXT OF THE BUSINESS MARKETING......6
RELATIONSHIP MARKETING IN THE CONTEXT OF CONSUMER MARKETING............7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

Relationship marketing has become increasingly important in business and consumer
marketing contexts. Discuss what we mean by relationship marketing and why it is risen in
importance.
INTRODUCTION
Marketing is an organizational function and the set of operations adopted by a business
unit with the purpose of selling and delivering the services and products to the customers. The
important aspect of the marketing is managing the customer relationships. It benefits the
stakeholders and organization with significant optimal returns. This form of marketing refers to
the Relationship marketing which emphasize on the customer loyalty and retention with long
term engagement in contrast to the traditional approach which focus on the sales transaction and
consumer acquisition. Relationship marketing today is the principal business driver which
generate benefits to both the parties the business unit and the consumer by building the strong
and enduring relational bonds (Hult. and et.al, 2004). Relational constructs proves to be more
worthwhile in improving performances in the context of services and product offerings.
Relationship marketing is the facet of the customer relationship management. The
reinforcement of bonds between the trader and the customer represents the paradigm shift in
marketing. Constructing strong bonds depends on the effectual relationship marketing programs
and the other crucial elements of the organization. Relationship marketing has the potential
overlapping with the other marketing dimensions such as the business marketing i.e. B2B
marketing and the consumer marketing i.e. B2C marketing. Relationship marketing refers to the
marketing practice of selling goods to the mediator’s business units rather that directly appealing
the consumers whereas Consumer marketing refers to direct response marketing campaigns to
the buyers (Richards and Jones, 2008).
STRATEGIES ADOPTED FOR THE RELATIONSHIP MARKETING
The relationship building investments are done to target the optimal returns. The relationship
building is the dynamic process which undergoes many stages of evolution. The success depends
upon the perspective of the implementer and the models used to derive the locus of benefits. In
order to discrete the relational transactions following ways are incorporated:
 Networking: The long term strategy of networking to widen the customer base brings
tremendous results to the business. Building the inter-firm and interpersonal helps in
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developing the frameworks for the wide range of relational constructs. Through various
means of networking consumers- producer can be build strong. The key components in
strengthening the networking are the great content which easily captures the attention,
marketing tools which brings the traffic and addressing the calls to the actions to bring
the results. Networking can be enhanced by sourcing the target rich environment which
optimizes the time, linking in online marketing such as social media marketing to cover
the wider stream of targets, good follow up after meeting the clients.
 Introductions: It is the immediate precursor of constructing relationship.
 Client’s events: To get linked to the swathe of the customers and the clients, hosting the
clients events deepen the company's relationships with the clients (Hult. and et.al, 2004).
 Clients follow-up: To enlarge the customer base, the continuous rational follow-up of
customer is must for the discrete relationship between customer and business man.
Following the customers to know their concerns and preferences. Offering benefits and
the product line to the customers that fulfills their desires and rewarding the loyal
customers is the positive steps in building strong relationship with the customers.
Acknowledging the customers for being with them brings the long lasting impact.
 Build a strong brand identity: To capture the attention of the large number of people, the
fundamental requirement is building the organization which the customers identify for
the products and the services offered. The organization with attractive features such as
the creative logo, winning slogan and the unique theme make the long lasting impact.
 High quality websites: This is the very impact-full and effectual means to stay in contact
with the customers. The website with user friendly interface and easily navigable content
proves very helpful for the new and existing customers (Cova. and Salle, 2008).
 Client communication: The prerequisite for the strong building of the relationships.
Keeping the customer's perception and preferences as the core of the business is the
crucial factor. Valuing and respecting the customers increases their confidence and
loyalty for the products and services of the business. By endowing the customers with the
valuable in formations, offers, new product offering and news about the events keeps the
customers in continuous reach and makes the business unit easy accessible and affable
for the clients.
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STEPS TO RETAIN THE CUSTOMERS Customer valuation: The customer valuation refers to the evaluation of the customer base
and accordingly categorizes them to make the different and suitable strategies to deepen
the relationship. It is the indispensable step to further proceed in the process (Vargo and
Lusch, 2008). With customer valuation entrepreneur better understands the preferences
and choices of the customers. Retention measurement: This is the empirical way to test the brand establishment in the
market place (Hult and et.al, 2004). In this customer base in calculated in the beginning
of the year and then the specified target is set to achieve by the year end. For instance, if
the retention rate of any customer increases up-to 80-90%, the customer is likely to
remain with the firm's association for about 5-10 years. This method includes certain
criteria and is measured with different market segments and products. Reasons for defection: The very crucial step in retaining the customers and also widening
the customer base. The analysis of the customer's feedback and the immediate addressal
of the grievances is very important. By listening the customer's complaints and
requirements and identifying the root causes, this issue can be resolved.
 Develop and implement a corrective plan: The plan includes the removal of the
obligations and the defections. This is done by adopting the proper and suitable corrective
measures. Flaws can be removed by training the employees for better service, the impact-
full endorsement by the marketing management, making the required adjustments in the
company's policies and strategies (Kotler, P. and et.al, 2014).
STRUCTURE OF RELATIONSHIP MARKETING
Objectives:
 To increase the customer satisfaction level by providing the better services and products.
 To satiate the customers by knowing their needs and preferences and addressing the
same.
 To broaden the customer base by direct campaigning or through referrals.
 With the continuous follow-up and acknowledging the customer's needs and
requirements, retain the customers with the organization for the longer duration of time. To win the customer's loyalty by serving with the better products and services.
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Instruments
 Through direct response marketing campaign.
 By database marketing that is the directly consolidating, collecting consumer data in the
personalized way (Berry and Linoff, 2004).
 Overseeing all the activities in order to meet the desired level of excellence by planning
and assuring the quality of the organization through the process total quality management
(Grönroos, 2011).
 Services marketing: Through properly endorsing the products and services to capture the
attention of the wider stream of people by using the various means such as the viral and
digital marketing, word to mouth marketing and other effectual means. Customer partnering: The most effective instrument is the customer partnering. Through
networking and communication with the clients relationships marketing can be executed.
Defining constructs
There are certain parameters which critically assess the degree of the relationship marketing
done by the organization. Some deciding parameters are:
 Trust and commitment of the organization towards the customers.
 Cooperation offered by the organization to the clients.
 The degree of communication and contact maintained by the employees in order to make
the clients attached to the firm (Richards and Jones, 2008).
 The manner in which the disputes and conflicts are handled. The degree in which the organization avail the opportunities available to the organization
in order to achieve the target and accomplish the goals.
Benefits of Relationship marketing
Building the intangible customer assets brings the lucrative results to the organization.
The benefits are availed by both the party’s business units and the consumer. The following are
the ways in which this managerial relevant application helps in procuring the performance
objectives:
 The cost and resources incur building the relationships and acquisition of the customers
in the beginning only.
 The switching rate of the long term customers is very low with the increment in yearly
purchasing rate. Their elasticity of demand with respect to the price of the long term
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customers is very low (Kanagal, 2015). Their tendency to get affected by the increase or
other fluctuations in prices is very low leading the stable unit sales volume of the
business unit.
 Profitability: Long term customers also escalate the selling of the supplementary products
of the organization. It increases the profitability of the organization by widening the sales
of the product line.
 Increment in the regular customers tends to increase the free word of mouth promotion.
The positive feedback of the satisfied customers and their appraisal increases the
customer base and sales revenue.
 The larger stream of regular customer increases the job satisfaction of the employees. The
consistent placement of order and increased involvement initiate the personalized service
from the employees (Chan, He and Wang. 2012).
 Innovation: Organizations realizes the importance of the inculcation of customer’s ideas
in building the strategies. Customers are asked to share the ideas and views and discuss
the utilities. The sharing of the ideas and the insights brings innovation in the working of
the organization.
RELATIONSHIP MARKETING MODELS
To develop the relationship marketing, certain models are used by the organization.
Using these models helps the organization to interface the customers with them for longer
period.
1. Costumer Model: The marketeers who have the more inclination towards the customer
data oriented marketing often refers the customer modeling. With the evaluation of
certain parameters and based on that data the analysts infer some results and outcomes in
regard to the preferences and the choices of the existing customers. This is highly
research based model which require very precise and practical approach. With the help of
behavioral and demographic characteristics, analysts predict the trend and intensity of
purchasing (Jüttner, Christopher and Baker, 2007).
2. 6 Market model: the model helps the organization to understand the characteristics of the
stakeholders and the domain of the key market in order to maintain and build the strong
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relationship with the internal and external environment. There are 6 markets enlisted
where there is immense opportunity to derive the relational constructs.
 Customer market: This market includes the customers, retailers and intermediaries. It
directly influences the market. The prime goal of the organization is creating the brand
loyal customers.
 Employees market: In order to add values to the organization, the organization seeks
highly skilled, productive and innovative employees. Such people affect the profitability
in the very effective way. Organization attracts right employees.
 Influencer market: It includes the financial analysts, shareholders and the government
which analyzes the financial status of the organization and according project the future
possibilities and suggests the strategies for enhancing the efficiency and makes the
financial position at better ground (Wymer, Knowles and Gomes, 2006).
 Referral markets: This market includes the existing satisfied customers who recommend
the products of the organization to the persons in their vicinity. It helps in increasing the
customer base. It is enhanced with the multiplier effect.
 Suppliers markets: This market includes the logistic department and the supply chain of
the raw material. The good relation with them boosts the profitability of the organization.
The organization develops the good strategic alliance with the suppliers in order to make
the operational functioning in smooth manner.
 Internal market: This refers to the internal departments and the staffing. The healthy and
productive relationship with them reflects and supports the organizational long term goals
and also helps in resolving the conflicts and differences easily (Liu, Kasturiratne and
Moizer, 2012).
RELATIONSHIP MARKETING IN THE CONTEXT OF THE BUSINESS
MARKETING
This refers to the inter-firm marketing that is the marketing through the firm to firm
relationships. This involves the multilevel interactions between different firms. Inter-firm
relationships also refer the B2B marketing. The B2B means that the situation when the business
unit makes the commercial interactions with the other organization working in the same field. In
this the business source raw materials or intermediate goods from other operations. Relationship
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marketing endows the greater amount of benefits through this method. The dimensions on which
it is measured are the relationship breadth, relationship quality, relationship composition.
Relationship breadth: It refers the number of inter-organizational relationships. The greater
number enhances the number of opportunities. It is the relationship composition. Though the
limited preference and empirical importance is given to the relationship composition but it plays
the significant role in the seller's outcome (Zablah, Bellenger and Johnston, 2004).
Relationship quality: The degree of effectiveness of the relationship and the characteristics of the
relationship bonds represents the relationship quality. The relational bonds between the exchange
parties hold certain parameters and characteristics on which the quality is judged such as the
trust, reciprocity norms, and exchange efficiency.
Relationship strength: It is the quality of the inter-organizational relationship to withstand the
stress and conflicts arise between two parties. It is referred to the delivery performance,
commitments, relational motivation and resiliency in the relationships (Vargo and Lusch, 2004).
Relationship in the context of business marketing considerable affects the profitability of
the organization. The greater strength of the inter-firm relationship improves the efficiency of the
organization. With the improvement in the fulfillment of the operational needs brings the
positive results to the organization.
RELATIONSHIP MARKETING IN THE CONTEXT OF CONSUMER
MARKETING
Relationship marketing in the context of consumer marketing refers to the marketing
done on the basis of the B2C marketing that is the direct campaigning to the consumers. It refers
to the interpersonal relationship marketing which depends on the commitment and trust on the
either side. There are many components of the relationship in the context of consumer marketing.
The prerequisite in this context in knowing the customer by using various sales analytic. This
data helps in reaping the significant benefits to the organizational sales and also proves beneficial
for the customer service departments (Wilson and Gilligan, 2012). The analysis is done on the
basis of seeking the information from the customers, financial records and the annual reports and
the external databases.
The components that are needed to be considered are as follows:
 Marketing objective
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 focus
 Domain
 prerequisites
 functionality
 Transaction facilitators
The relationship in the context of consumer marketing can be judged on the basis of two factors:
consumer gratitude and the Consumer norms of reciprocity (Cravens and Piercy, 2008).
Consumer gratitude: The gratefulness of the consumers in response to the services offered by the
organization boost the satisfaction and the confidence of the organization and also builds the
better relationship.
CONCLUSION
The report made in regard with the growing importance of the relationship marketing in
context with the business marketing and the consumer marketing, it can be concluded that the
relationship marketing brought the paradigm shift in the marketing. This imparts the effectual
influence on the profitability of the organization. It largely boosts the customer base and
maximizes the sales. With the various means adopted such as the networking, increasing
communication and intimacy with the customers, improving the strategic alliances with the
vertically integrated partners, inculcation the right employees in the organization boosts the
efficiency level of the organization. The relational constructs has been proved to be the source of
bringing the lucrative results and hence need be promoted to the great extent. Knowing the
customers better makes the relationship longer and trickles down with significant benefits.
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REFERENCES
Books
Berry, M. J. and Linoff, G. S., 2004. Data mining techniques: for marketing, sales, and customer
relationship management. John Wiley & Sons.
Cravens, D. and Piercy, N. F., 2008. Strategic marketing. McGraw-Hill Irwin.
Grönroos, C., 2007. Service management and marketing: customer management in service
competition. John Wiley & Sons.
Kotler, P., Keller, K. L., Ancarani, F. and Costabile, M., 2014. Marketing management 14/e.
Pearson.
Wilson, R. M. and Gilligan, C., 2012. Strategic marketing management. Routledge.
Wymer, W., Knowles, P. and Gomes, R., 2006. Nonprofit marketing: Marketing management for
charitable and nongovernmental organizations. Sage Publications.
Journals
Chan, H. K., He, H. and Wang, W. Y. 2012. Green marketing and its impact on supply chain
management in industrial markets. Industrial Marketing Management. 41(4). pp557-562.
Cova, B. and Salle, R., 2008. Marketing solutions in accordance with the SD logic: Co-creating
value with customer network actors. Industrial marketing management, 37(3). pp270-
277.
Grönroos, C., 2011. A service perspective on business relationships: The value creation,
interaction and marketing interface. Industrial Marketing Management. 40(2). pp240-
247.
Hult, G. T. M. and et.al., 2004. Innovativeness: Its antecedents and impact on business
performance. Industrial marketing management. 33(5). pp429-438.
Jüttner, U., Christopher, M. and Baker, S., 2007. Demand chain management-integrating
marketing and supply chain management. Industrial marketing management. 36(3).
pp377-392.
Liu, S., Kasturiratne, D. and Moizer, J., 2012. A hub-and-spoke model for multi-dimensional
integration of green marketing and sustainable supply chain management. Industrial
Marketing Management. 41(4). pp581-588.
Richards, K. A and Jones, E., 2008. Customer relationship management: Finding value drivers.
Industrial marketing management. 37(2). pp120-130.
Richards, K. A. and Jones, E., 2008. Customer relationship management: Finding value drivers.
Industrial marketing management. 37(2). pp120-130.
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Vargo, S. L. and Lusch, R. F., 2004. Evolving to a new dominant logic for marketing. Journal of
marketing. 68(1). pp1-17.
Vargo, S. L. and Lusch, R. F., 2008. From goods to service (s): Divergences and convergences of
logics. Industrial Marketing Management. 37(3). pp254-259.
Zablah, A. R., Bellenger, D. N. and Johnston, W. J., 2004. An evaluation of divergent
perspectives on customer relationship management: Towards a common understanding of
an emerging phenomenon. Industrial marketing management. 33(6). pp475-489.
Online
Kanagal, N., 2015. Role of Relationship Marketing in Competitive Marketing Strategy. [Online].
Available through:<http://www.aabri.com/manuscripts/09204.pdf>. [Accessed on 27th
November].
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