Relationship Marketing

Introduction:-

Marketing means anything that we do to satisfy our customer at a profit. The main objective of marketing is to attract and retrain customers. Simply, we say that, marketing means to attract and retain customers at a profit. So, marketing is customer based. But, the history of marketing tells that, the idea of marketing was continuously changing and it took many different forms at different ages. In these ages there many concepts related to marketing came such as production concept, product concept, selling concept, marketing concept.

Before introducing this production concept marketing activities that is selling and buying were confined to the familiar persons, which were termed as relationship marketing. As the buyer was keen to assure the quality of the products so they went to their acquainted persons and at the same time the seller also wanted their customers to come to them again and again. Hence, they established a relationship with the customers and this is known as relationship marketing.

But after introducing mass marketing the use of relationship marketing began to disappear. The new discovery in marketing system diminished the importance of relationship marketing. Due to the increase of competition in today’s business world, the importance of relationship marketing is immensely felt by the companies. Even they appoint some relationship managers to make the relationship strong. Now, to survive in the competitive market, relationship marketing can be used as an effective tool.

Relationship Marketing:-

Relationship marketing is a form of marketing that evolved from direct response marketing in the 1960s and emerged in the 1980s, in which emphasis is placed on building longer term relationships with customers rather than on individual transactions. It involves understanding the customer's needs as they go through their life cycles. It emphasizes providing a range of products or services to existing customers as they need them.

Relationship Marketing is an approach which emphasizes the continuing relationships that should exist between the organization and its customers. It emphasizes the importance of customer service and quality and of developing a series of transactions with consumers.

Transaction marketing and Relationship marketing:-

The aim of relationship marketing is to extent the buyer and seller relationship. On the other hand, transaction marketing involves a single short time exchange with a distinct beginning and ending. So in order to get a clear idea about the distinction between the two terms, some important points have been given below:

1. Transaction marketing put emphasis on short term focus, while relationship marketing on long term focus.

2. In transaction marketing the customers are prone to be more sensitive to price, whereas in relationship marketing they are less sensitive to price.

3. In transaction marketing quality of products is important; on the other hand, in relationship marketing quality of interaction is more important.

4. Transaction marketing cares for monitoring market share, but relationship marketing takes care of managing the customer base.

5.

Evolution of relationship marketing theory:-

Relationship marketing has a brief history through which it came to a being. At first, Bound Jackson applied the term relationship marketing in 1970. Then the researchers both in the USA and Europe expected the concept relationship marketing and came up with the different theories at different times. But the term relationship marketing was introduced as an influential in the business world during 70s and early 80s.

With the passes of time the concept ‘customer lifetime value’ has been discovered and it emphasis on the retaining the customers rather than attracting new customers. To maintain ‘customer lifetime value’ depends mostly on relationship marketing.

Elements of relationship marketing:-

The tools that are used for implementing relationship marketing in an organization are considered as elements of relationship marketing. These are given below:

1. Financial Bond:-

In order to retain the customers, the company often provides their customers with different financial facilities that encourage them to buy their products and these facilities helps to create a bond between them and it is termed as a financial bond. It always doesn’t serve the purpose of the company.

2. Social Bond:-

Socials bonds are some tools of relationship marketing. It plays an important role in ongoing exchange of the partners. This bond can be made strong through multilevel contacts among parties. Social bonds include these most important elements such as promise, trust and commitment.

a) Promise:-

Promise plays an important role in retaining the customers in relationship marketing. To give assurance to the customers promise must be given and at the same time it must be kept. Otherwise, the evolving relationship cannot be maintained and enhanced. Keeping promises is an important way of attaining customer satisfaction.

b) Trust:-

No relationship marketing is possible without the trust of the customers. To build good relationship with customers’ marketer need to create trust among the customer. So, their must be a belief in the other partner’s worthless. If trust is absent in relationship marketing, relationship will break.

c) Commitment:-

Another significant element of social bond is commitment. To develop mutually beneficial relationship both effective commitment and calculative commitment are prerequisite.

Activities of relationship marketing:-

To create a strong relationship marketing program a marketer should perform one or more of the following functions:

1. Social reinforcement:-

Social reinforcement is to be provided. It indicates to a customer’s esteem and affiliation needs. For example, many banks insurance companies sent calendars to their clients at New Year.

2. Reassurance:-

The second function is reassurance which involves the concepts of trustworthiness. It helps to make the relationship strong. For example, some automobile companies call their customers if their vehicles serve better or not to provide reassurance to their customers.

3. Benefit reinforcement:-

To tell a customer about a beneficial sight of a product is known as benefit reinforcement. For example, the salesman remains his customer of the standard and durability of his product.

4. Solve customer problems:-

Another function of relationship marketing is to solve customer problem. It helps to enhance the relationship among them. For example, a doctor may recommend his patient to another doctor concerned with the particular disease.

5. Customization:-

Customization is one of the functions that comprise relationship marketing. It performs to meet the need of their customers. For example, the Toyota company provides their product to the according to their wants or choice.

6. Service enhancement-

To deal with the customers in a loyal or cordial way is termed as a service enhancement. The purpose of the service enhancement is to improve the bond between them.

Relationship marketing in Bangladesh:-

In Bangladesh many organizations both service and manufacturing are applying several marketing activities as a part of their business process. But mostly they are of transaction at nature and now-a-days some of the companies in Bangladesh have started to use relationship marketing approaches in the highly competitive market. The existing relationship marketing practices in Bangladesh are Operational of Pepsodent free dental clinic, recipe competition; package “cell phone services” to the corporate clients, sending greeting cards to individual clients, volume based trade discount to the retailers, sibling plan of schools etc.

The importance of adapting relationship marketing in Bangladesh is given below:

1. Bangladesh being a small market is becoming more and more difficult to retain the customers, as more and more organizations are built and to survive in the competitive market there is no alternative to relationship marketing.

2. To convince the educated and conscious customers who are in search of better service, relationship marketing is the most effective process.

3. For fierce competition it is important for the organizations to pay more attention in creating strong relation with their customers. Because, in the competitive situation options are available to the customers. To retain the existing customers’ relationship marketing has more alternative.

4. The reason why relationship marketing is important in Bangladesh is less brand loyalty of customers. The company can make his customers brand loyal to ensure their repeat purchase.

5. Relationship marketing is important to make customers less price sensitive. As most of the buyers in Bangladesh have less purchasing power and are price sensitive buyers. So the companies should pay more importance on establishing relationship marketing.

Conclusion:-

It is considered that relationship marketing is a paradigm shifted from the conventional marketing mix approach. Now in the highly competitive market, retaining the existing customers is more important than attracting new customers. So marketers are now creating strong relationship with their clients by applying many relationship marketing tools. Relationship marketing helps to retain current customers. To survive in the competitive market especially in Bangladesh an organization will have to depend completely on relationship marketing that will certainly attain a competitive advantage over its rival.