HITEC University Taxila Cantt

Thesis Description

Submitted To:

Muhammad Umar Kundi

Submitted By:

Muhammad Umar Kundi

Reg #:

07-HITEC-BBA-12

Dated:

01/13/2011

Department of Management Sciences

 Departement of Management Sciences

Topic: Relationship Marketing

Introduction:

Relationship Marketing was first defined as a form of marketing, developed from direct response
marketing campaigns which put emphasis on customer retention and satisfaction, rather than a
prevailing focus on sales transactions.

Relationship Marketing refers to a long-term and mutually beneficial arrangement where both
the buyer and seller have an interest in providing a more adequate exchange. This approach tries
to excel the simple purchase-exchange process with a customer to make more meaningful and
richer contact by providing a more complete, personalized purchase, and uses the experience to
create stronger ties.

Relationship Marketing differs from other forms of marketing in the way that it recognizes the
long term value of customer relationships and extends communication beyond indiscreet
advertising and sales promotional messages.

According to Liam Alvey, relationship marketing can be applied when there are competitive
product substitutes for customers to choose from; and when there is an ongoing and periodic
desire for the product or service. (Berry, Leonard (1983). Relationship Marketing. American
Marketing Association, Chicago. Page . 146. ISBN 0877571619)

Fornell and Wernerfelt used the term "defensive marketing" to describe attempts to reduce
customer turnover and increase customer loyalty. This customer-retention approach was
compared with "offensive marketing" which involved gaining new customers and increasing
customers' purchase frequency. Defensive marketing focused on reducing or managing the
dissatisfaction of customers, while offensive marketing focused on "rescuing" dissatisfied
customers from your competition and generating new customers. There are two components to
defensive marketing: increasing customer satisfaction and increasing switching barriers.
(Fornell, C. and Wernerfelt, B. (1987) "Defensive marketing strategy by customer complaint
management : a theoretical analysis", Journal of Marketing Research, November, 1987, pp 337-
346 ).

With the growth of the internet and mobile platforms, Relationship Marketing has constant rate
to evolve and move forward as technology opens more shared and social communication
channels. This includes tools for managing relationships with customers that go further than
simple demographic and customer service data. Relationship Marketing covers inbound
Marketing efforts, PR, Social Media and Application Development.

Like customer relationship management, (CRM), Relationship Marketing is a generally

recognized, widely-implemented strategy for managing and development of a company’s
interactions with clients and sales forecasts. It also includes using technology to organize,
coordinate business processes, (principally sales and marketing activities), and most importantly,
mechanize those marketing and communication activities on concrete marketing systems that
could run in autopilot. The overall goals are to find, attract and win new clients, raise and retain

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 Departement of Management Sciences

those the company already has, attract former clients back into the fold, and reduce the costs of
marketing and client service. Once simply a label for a category of software tools, today, it
generally stands for a company-wide business strategy acceptance all client-facing departments
and even beyond. When an implementation is effective, people, processes, and technology work
in collaboration to increase profitability, and reduce operational costs.

Scope:
Relationship marketing has also been strongly influenced by reengineering. According to
reengineering theory, organizations should be structured according to complete tasks and
processes rather than functions. This means that the cross-functional teams should be responsible
for a whole process, from beginning to end, other than having the work go from one functional
department to another.

Traditional marketing uses the functional department approach. The heritage of this can still be
seen in the traditional four P's of the marketing mix. Pricing, product management, promotion,
and placement.

According to Gordon (1999), the marketing mix approach is too limited to provide a usable
framework for assessing and developing customer relationships in many industries and should be
replaced by the relationship marketing alternative model where the focus is on customers,
relationships and interaction over time, rather than markets and products.

Martin Christopher, Adrian Payne, and David Ballantyne at the Cranfield School of Management
claim that relationship marketing has the potential to forge a new synthesis between quality
management, customer service management, and marketing. They see marketing and customer
service as inseparable. . (Relationship Marketing. Butterworth-Heinemann, Oxford. 1991. p. 264.
ISBN 0750648392)