Relationship Marketing: A Literature Review


By

Kunal Gaurav
Research Scholar
Icfai Institute for Management Teachers
Hyderabad
 


In the last two decades, Practitioners and Academics have focused ever more on how firms relate to their markets. This has resulted in the emergence of a sub discipline of marketing referred to as Relationship Marketing. Morgan and Hunt (1994) defined Relationship marketing as the marketing activities directed toward establishing, developing, and maintaining successful relational exchanges.  The separation of the producers from the users was a natural outcome of the industrial era. On the one hand, mass production enforced producers to sell their product & services through middlemen, and on the other, industrial organizations, due to specialization of corporate functions, created specialist purchasing departments and buyer professionals, thus separating the users from the producers. However, today's technological advancements that allow producers to interact directly with large numbers of buyers, and because of a variety of organizational development processes, such as empowerment and total quality management programs, direct interface between producers and customers is possible  in both consumer and industrial markets.   Relationship marketing attempts to involve and integrate customers, suppliers and other infrastructural partners into a firm's developmental and marketing activities (McKenna 1991; Shani and Chalasani 1991). Wilson (1995) summarized different relationship variables that affects the relationship of firm with different stakeholders, those variables are Commitment, Trust, Cooperation, Mutual Goals, Interdependence and Power, Performance Satisfaction, Structural Bonds, Comparison Level of Alternatives, Adaptation, Non-retrievable Investments, Shared Technology, and Social Bonds. Morgan and Hunt (1994), while discussing relationship variables focused more on commitment and trust as a major variable affecting relationship between different parties involved in marketing transaction & exchange.

The Nordic School emphasized on marketing as a cross functional process. For maintaining relationships marketing function should be carried out by all employees and departments, it is no more concentrated in marketing department as a specialist function (Gronroos, 1989). International Marketing & Purchasing (IMP) group looks at B2B markets. In industrial marketing, relationships are built over time with increasing experience, reduction of uncertainty, greater commitment in each others (Ford, 1980). Anglo Australian school of thought believes in quality and service of marketing with focus on delivering customer value. Customer judges the value of the product or service from benefits perceived from it compared with its cost of ownership. The better value delivered by the firm, better is the customer relationship (Christopher, 1996). Whatever school you follow it is the customer retention which is the base of relationship marketing (Rosenberg & Cazepiel, 1984). CRM is the new-fangled sprouting issue in relationship marketing with focus on cooperative and collaborative relationship between a company and its customers. "Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer. It involves integration of marketing, sales, customer service and supply chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value" (Sheth & Parvatiyar, 2001). CRM represents the marriage between the customer orientation and the emerging information technology to produce a memorable relationship experience to the marketers as well as to the customers (Agrawal, 2003). CRM can be considered as a tool for delivering marketing dream to enjoy long term relationship with customers, especially with the profitable ones (Pearson, 1995). Finally it can be said that CRM is not the end, it's a means to ensure long term success of marketing effort.
 


Kunal Gaurav
Research Scholar
Icfai Institute for Management Teachers
Hyderabad
 

Source: E-mail May 8, 2007

       

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