Relationship Marketing

Abstract.

This paper examines the nature of relationship marketing. The paper questions the mentality on relationship marketing. What can be achieved by relationship marketing and what result will be got from the relationship? The paper looks at the parties involved in the relationship and the aims of both before they enter. What links failure to relationship marketing? A case study examines how a relationship is formed? And maintained? This case study explores the reality of relationship marketing. This paper discusses the expectations and results of relationships and gives an example of a company that uses relationship marketing to its max potential.

Introduction.

Relationship marketing focus on creating profitable relationships between buyers and sellers. The relationship is based around two players, the buyer and the seller. Both enter the relationship with ambitions of receiving profit from the relationship. For this type of marketing to work it must be very personnel and therefore and individual to individual approach is generally adapted. The life cycle of the relationship depends on what each party wants to achieve from the involvement and how human nature dictates its direction. “Relationship marketing involves creating, maintaining and enhancing strong relationships with its customers and other stakeholders”. Kotler P (1999 : 483)

Mentality of Relationship marketing.

The Nature of Relationship Marketing relates to Human Nature. People need families in the same way that companies need profitable customers. Family and friends give people a boost that is required in life; Profitable customers give companies the finance to carry on in business. If the relationship between the customer and the business does not contain an agreeable mixture of respect, gratitude and contact it will perish just like that of a relationship with friends. The nature behind relationship marketing comes directly from human nature. From meeting the customer, making an impression, making the impression last, strengthening the relationship, develop trust and loyalty, and make it profitable. In order to do this the company must employ many different techniques and through out this paper one will learn how many and how. The main objective of relationship marketing is like all other types of marketing, weather it’s to make a profit, money or just a valuable relationship.

Relationship Marketing has not cropped up in the last few years , it has been around for centuries as Christian GrÐ"¶nroos informs us in his paper entitled “Relationship marketing: strategic and tactical implications”. He informs us of a Ming Hua a Chinese rice merchant who notices that what he was offering was no different to what every other rice merchant was offering. He decided to go out and seek business. Knocking on every one of his customer’s doors new and old, he carried out market research of who his customers were? How many customers he had? And how much rice they eat? Based on this information Ming Hua was able to build up a relationship with his customers on a personnel level. Ming Hua’s customers felt that Ming Hua was honorable and trustworthy and decided to stay with him when it came to getting rice. His business soon flourished and had to employ extra staff to deal with the demand. Ming Hua attained many new customers as many had heard by (invaluable) word of mouth of his excellent service and having encouraging relations with his customers. Ming Hua’s selling strategy included many tactical operations. One of which being “seek direct contacts with customers and other stakeholders (such as rice farmers);” (GrÐ"¶nroos G/ Relationship marketing: strategic and tactical implications).

Ming Hua was able to look at the other merchants and offer customers something that was no there or available. He took on a very personnel approach to the business that attracted new customers and retained the old ones. Ming Hua noticed that in order to keep his current customers a relationship would have to be built with not just trust and loyalty but with fair prices and a home delivery service which was unique at the time. Thus making him stand out from the other competitors, but Ming Hua did not relax take it for granted that customers would keep on returning to him for business. He continued his personnel approach, Knocking on every door informing his clients about new products/services that are available, answering quires that some clients may have all of which strengthening the relationship. “Consumers may be nameless to the institution, clients cannot be nameless will”. Kotler P (1999:487) Clients are served on a more one to one level, generally there is somebody assigned to them to deal with them. Whereas customers don’t really have an individual identity but more of a mass identity.

Case study.

The personnel trend to relationship marketing has changed over time despite the concepts remaining the same. The expansion of the communication market has assisted companies staying in contact with each other. Recently phone calls and meetings have been replaced by E-mails, News Letters and other non-personnel communicational commodities. This may be interpreted with a loss of individuality or trust. But it is essential that relationships move with the trend of the time with out changing the foundations to the relationship. Companies cannot allow a profitable relationship to grow old and disintegrate. “It is far less expensive to cultivate your expensive customer base and sell more services to them than it is to seek new, single transaction customers” (www.Wbc.com) . In a company that I have been working at all my life I have personally seen representatives of manufacturing Companies some very large and well established companies and some small companies who are less well known. The very large company’s representatives would be seen in the shop regularly building up a worthwhile relationship with the profitable establishment. Where as those lesser well established companies representatives would be seen infrequently and a random fax/E-mail would come through informing of the latest services/products.

Meeting with all the representatives for all the establishment, those who worked for the larger firms all had a unique approach style and all offered services/products and advantages that the other companies could not. Many of the larger firms would offer the company that I worked for holidays, tours of the factory all of which the aim was to