Relationship Marketing: A Business Necessity


By

Mohammad Rizwan Alam
Sr. Lecturer
Preston University
Ajman UAE
 


The duo of the caption metaphorically cohabits like rose and fragrance. No wonder, the intimacy between marketing and relationship is immune to infidelity. Its age is nothing short of exchange itself. Taxonomically, this comes in many popular names, such as, relationship management, database marketing, customer relationship management, one-to-one marketing, direct marketing, micromarketing, etc. This continued to subserviently influence transaction all through industrial revolution , World War, IT revolution, globalization and, lately social media age. But, the same has embarked on marketing discipline and practice  at a much faster pace since the 1970s. Last decade has witnessed paradigmatic shift in orientation from traditional to relational marketing in most of the markets. Consequently, this has been on the marketing vanguard transcending from backyard so much so that  all marketers, especially those from blue chip firms  are strategizing it at par with customer centricity, customer equity, return on investment, competitive intelligence, and so on.

Berry and Leonard (1995) define RM as "Relationship marketing is attracting, maintaining and--in multi-service organizations--enhancing customer relationships", while Kotler is of the view that "RM involves using methods and tactics to develop long term relationship with customers in order to retain them". Kanagal broadly defines it as "marketing activities directed towards establishing, developing, and maintaining successful relationships", while Vavra narrowly puts it as "marketing tactics used for customer bonding and staying in touch after the sales is made". The core theme of all relationship marketing perspectives and definitions is its focus on cooperative and collaborative relationship between the firm and its customers, and/or other marketing actors (Sheth and Pravitiya, 1999). RM can span and play its role well above and beyond the 4 'P's of McCarthy (1960), or 7 'P' s and the 4 'C's of Lauterborn (1993). Internally, too, RM is highly needed to build and foster amiable relations among employees all across the organizational hierarchy. The result is even better when it is aligned and synchronized with CRM  (Customer Relationship Management) package. As the experts agree, happy employees often make customers happy. The effort of a firm in this perspective should be meeting or even exceeding the expectation of the customer. Just core products and service may engage in trial purchase, but to induce repeat purchase, RM is an absolute must. RM is undeniably potent enough to convert an stranger into an advocate. Relational approach, at best, virtually hypnotizes the customer to make a trust based blind deal with the supplier.  It is one of the cheapest marketing tools to create and keep customers in the long run. The extent to which RM is employed depends on the degree of competition as well. For instance, After Du's entry, Etislat has been more RM oriented on its home turf.

The DNA of RM is socio-psychological dyad. And the key ingredients of RM are trust, commitment, partnership, empathy, attitudinal commonality, perceptual proximity, love, association, cultural cluster, value systems, demographic homogeneity, and so on. These elements make up social exchange which holistically influences discrete exchange process often resulting in relatively increased monetary value to the firm. Therefore, both supplement each other. The wider adoption of RM in recent time is arguably attributed to dog-eat-dog competition corresponding to Porter's model (1983), product parity, rise of buyers market, globalization, increased use of social media like Facebook, Myspace, e-commerce, etc. The philosophy and practice of RM can be employed in any market: business-to-business, business-to- customer and so on. Take Proctor and Gamble and Nissan Motors, for instance, that work in the B2B environment harmoniously with their respective distributors- Transmed and Arabian Automobiles in the UAE,  while Carrefour and Spinney's, as retailers offer relational approach in the B2C environment respectively. This approach of marketing is essentially soft and inconspicuous in nature as against traditionally puffed advertisement with oft-repeated omissions and commissions. This soft approach can be through novelty articles, souvenirs, sponsorship, celebrity endorsement, charity work, and so on. Recent time has witnessed massive use of handheld gadgets, social media, e-business. Marketers have got to set the stage wherever customers flock en mass. This is exactly where social media is offering fast emerging  and promising platform of using relational marketing. Of late, sophisticated electronic customer relationship management (eCRM) is a proven enabler and galvanizer of relationship marketing. Francis Buttler emphasizes the increased role of CRM helping build relationship, loyalty, and profitability.

We come across myriads of relational "touch points" or "moment of truth" unleashed by all sized companies - small business units to Global Fortune 500 companies. The announcement of Azim Premji, India's richest Muslim industrialist to establish a model school in all the districts of India fully funded by his company, Wipro Group is a brilliant move to uplift the society. He surely deserves the highest civilian awards. Its resultant is to leverage RM as well. Kingfisher deploys magnetic airhostesses to hook the customers repeatedly. Boundary spanners like bell boys, guest service officers, waiters, among others, are trained to offer excellent hospitality to the visitors at the iconic hotel, Burj Al Arab in UAE. Akio Toyoda mitigated the anger of millions of the recalled car owners and affected parties in the wake of software debacle worldwide almost two years ago. Why to go farther, take up any saloon, we usually visit a particular saloon for not only getting hair cut but also special treatment even if we have to pay little extra bucks. This is evident that good number of the customers look for the products which satisfy the need being at or above the middle order of the Maslow's hierarchy of the needs. The underlying meaning of the words of Nicholas Johnson, "It used to be that people needed products to survive. Now products need people to survive." is so apt here. 

In today's competitive climate, the companies must  incorporate RM into the blue print of  marketing strategy. Design, development, and deliveries of RM should be documented, cross-channelized, motioned, and analyzed against the benchmark. A minimum budget should be kept aside which is meant for RM activities along with the quarterly and annual goals. A holistic and wholesome culture of oneness from multitude, mutual trust, commitment, belongingness, and democratic management  should be fostered within the organization. Having done this, it's positive vive exudes and helps build better relationship marketing in the market as well. This demystifies that better relationship outside the company is the function of internal relationship, also known as internal marketing. The management should not desert RM to ABC (Achievement By Chance) consequently brawny RM will be bony. Rather it must be part of Japanese success mantra, MBO (Management By Objective), which must be strategically constituent of business goal. Besides, businesses, these days, are undoubtedly fast paced. And technological obsolesces  is like a change in season. The firms must revisit and add or update the technology needed. This may include mobile phone and computer, or tool kit. Business house in this regard should not use the syndrome," Penny wise, Ponds foolish." rather it should practice  the dictum, " A stitch in time saves nine". A word of caution-RM should not be overdone or else it may undermine the organic growth of a firm.

In conclusion, one thing is for sure, that is if sales is business, and if sale is driven by marketing, then RM is today's inescapable necessity. RM is no more a myth today. It helps the businesses acquire new accounts and keeps them profitably. It spawns brand value, customer loyalty, and growth. It is still not matured. Therefore, the organization, which has already heavily used is enjoying first mover advantage and, those who are the followers, are still better off as this brings in competitive edge to the company.

References:

1. Berry, Leonard L. (1995): "Relationship Marketing of Services - Growing Interest, Emerging Perspectives", Journal of the Academy of Marketing Science, 23(4), 236-245.

2. Kanagal, N. (2002): "Role of Relationship Marketing in Competitive Marketing Strategy", Journal of Management and Marketing Research.

3. Sheth J. and Pravitiya, A. (1999): "The domain and conceptual foundations of relationship marketing" Sage publication, USA

4.  www.wikipedia.

5. www.hbr.com

6. www.scholar.google.com
 


Mohammad Rizwan Alam
Sr. Lecturer
Preston University
Ajman UAE
 

Source: E-mail January 28, 2012

          

Articles No. 1-99 / Articles No. 100-199 / Articles No. 200-299 / Articles No. 300-399 / Articles No. 400-499/ Articles No. 500-599
Articles No. 600-699 / Articles No. 700-799 / Articles No. 800-899 / Articles No. 900-1000 / Articles No. 1001-1100
Articles No. 1101-1200 / Articles No. 1201-1300 / Articles No. 1301-1400 / Articles No. 1401 Onward
Faculty Column Main Page