Introduction
“In the early 1990s the concept of relationship marketing was formally introduced into the field of service marketing” (Viswanathan April, 2008). “Customer Relationship Marketing is a practice that encompasses all marketing activities directed toward establishing, developing, and maintaining successful customer relationships” (CRM Today 2001-2008). “The concept of relationship marketing was first introduced by Franklin Berry (1983) in a service context to describe a long-term approach to marketing” (Smitha March 28, 2005).
It emphasizes the significance of customer value and the quality and of improving a series of transactions with customers. Relationship marketing nowadays has become one of the essential tools to maintain the successive and effective marketing strategy. Relationship marketing is to customize the marketing channels to establish the effective and more meaningful relationships. “Relationship marketing acts as a supplementary tool enabling consumers to maintain cognitive consistency and psychological comfort” (Riley and Francesca; de Chernatony June 2000).
Literature Review
(Hedaaa, 1, and Ritter October 2005)
The authors show the relationships with customers in the study. The relationships with customers are referred to as inter-organizational relationships that were described as a growing theme in marketing in the study. The authors identified five different orientations and the logic of a buyer–supplier relationship in each of these waves. They argued for a dyadic vision of direction. They also argued for establishing the supplier orientation matching to the buyer orientation.
(Grönroos 1994)
The author discusses the nature of the marketing mix management that was claimed for modern research. He also clarified the negative consequences of the dominating marketing paradigm of the marketing mix management that is happening at present time. The author has given an example of industrial marketing and services marketing as well as customer relationship economics. After all, he shortly commented on the possibility of developing a general marketing theory based on the relationship building and management approach.
(Zinkhan 2002)
The author studied on the theory and implementation of the relationship marketing. It is very essential element for the development of theory. The study also brought the harmonization between the theory of relationship marketing and implementation of the relationship marketing.
How does it Deal with the Customers
“The relationship marketing strategy of the future is one that builds a desire” (Gabay, n.d.). The company tends to focus on the most profitable customers, channels and products. The target of the relationship marketing is to build a strong marketing network and this is to be called as the asset for the company. The distributors, suppliers, customers, employees, retailers, wholesalers, agencies and others so on are involved in this network. Usually “relationship marketing has the aim of building mutually satisfying long-term relations with key parties-customers, suppliers, distributors-in order to earn and retain their business” (Kotler 2003:16). Relationship marketing is different from the other forms of marketing as it deals directly with the individuals who matter most.
“Suggests relationship marketing, based on relationship building and management, as one emerging new marketing paradigm of the future” (Grönroos 1994). Relationship marketing is about understanding how to create and nurture a relationship with customers. “It ensures the better relationship with the customers and with the other suppliers, distributors, stakeholders of the organization” (Smitha March 28, 2005). When relationship marketing is followed by the organizations then it ensures the lower cost for acquiring new customers. Price sensitivity is also a crucial factor and because of relationship marketing the customer becomes fewer price sensitive. The companies always try to keep good relationship with these parties. High-quality products or services are offered to the other parties at the fair price. Relationship marketing helps to establish strong economic, practical and social ties among the parties. With the help of maintaining the relationship marketing some transaction costs and time can be reduced effectively. It can be stated that build the better network and profit will follow.
Others Factors to Consider
“Marketing is shifting from a push to pull model and consumers are taking more control over what they view and how they view it” (Webtrend 2008). Relationship marketing does not deal only with the customer but also with the some other parties. Relationship marketing is used to maintain the network with the customers, employees, distributors, suppliers, agencies and so like others. The organizations always consider who will be available, economic, reliable and fast when they need their response.
The question is how much important is to maintain the relationship marketing. Is it really necessary? How much important it is from the company’s point of view or whether the company would be relationship marketing oriented. This question arises, because the relationship marketing may not be effective in every situation, but would be extremely effective in the right situation. It means that the right decision at right time in right way needs to be implemented. The company needs to evaluate both the advantages and disadvantages of being relationship marketing oriented. But when, how and why the organization will be relationship marketing oriented. “According to Leonard Berry relationship marketing can be applied: when there are alternatives to choose from; when the customer makes the selection decision; and when there is an ongoing and periodic desire for the product or service” (Wikipedia April 2008). There are some situations when the relationship marketing is more appropriate such as greater value of products or services, products category, non-generic products, high switching cost, customers high expectation, customers involvement in production phase and so others.
Traditional Marketing vs. Relationship Marketing
It is said that relationship marketing is the pure form of marketing than the traditional marketing. The organization should always focus on completing the tasks and objectives rather than go for functions. It seems that many organizations focus on attracting new customers by spending a lot of money on advertising rather than satisfying the previous customer. As for it the organizations suffer from profitability and fail to cultivate a loyal customer base. The relationship marketing focuses to retain the current customer rather than getting the new customers. “It reminds us the customers are important long-term assets that must be valued not harvested” (Roger). Knowledge on relationship marketing, particularly as it applies to consumer relationships, is still in its early stages of development” (Kristof and Gaby 2001). The perception is a vital element because the need and want of a customer are based on the perception and these are customer’s individual choice. It reminds that every customer is special and equal and should be treated as in order to make a strong relationship and retain customer. The success of a company depends on maintaining the customer-company relationship.
Assessment for the Relationship Marketing
The main assessment for relationship marketing-oriented is to focus on providing value to the customers. It is not needed to mention that the customer is the key of all marketing activities. Relationship marketing allows buyers and sellers to work together (Lizabedh). The customer always considers themselves significant and as the target element. They know which company is reliable in order to fulfill their needs, wants and demands. The company, who more can fulfill these needs, wants and demands, the more they can fulfill their objectives. Some argue that relationship marketing is more effective than the marketing mix-4Ps. Most times the customers take the products or services on the basis of good relation with the company or for the positive consideration towards that company. It’s happened because of only the relationship marketing with the customer. Again, the distributors are also same important to retain the successful business. The favorable relationship with the distributors reduces a large portion of expense.
Because there is a high switching cost regarding diversify the distributor and so as to the suppliers and agencies of the organization. Industrial products are the area where the reason for relationship marketing arises. When the demand is related with industrial products then the relationship marketing is to be applied. As there are a number of parties involved in the production, distribution, supply of the products or services, the necessity of relationship marketing is very much essential. Moreover due to globalization and various types of rules & regulations and also the increase of competition, relationship marketing is considering as a vital element for any type of financial organization.
Customer, as well as supplier, distributors, employees retention, is the function of relationship marketing. The increase of competition affects the financial organization to be relationship marketing oriented. To maintain the relationship marketing, some certain degree of trust is required between the existing actors in this network. There are differences in how the relationship marketing can be adapted on the basis of the country origin or the cultural/subcultural differences. If these are dealt with efficiently then it makes the certainty of long time profitable relationship. It adds value and creates the more participation opportunities for the customers. The organization needs to evaluate who is the most (whether customer or distributor or supplier) fit to apply a relational approach. It is very interesting to know that there would be no relationship with the company unless the customer is agreed (Salen and Elofsson December 2005).
The company is to be relationship marketing-oriented when they get the positive feedback from the customers, distributors, suppliers, agencies and so from the others networks. It means their strategy is working well and they must need to retain this positive step. Only relationship-building can ensure the continuity of the company’s effort. The customer is involved in the production phase when they are contributing with important information and they give ideas and solutions for better products or services. Besides this, customers beef against the company makes aware of any forthcoming problems.
There are some factors that work against the relationship which the organization must have to remember and consider sincerely. These factors may be boring or curiosity that can divert the customer towards the other competitor’s product or services. If the customers become bored then they will look for new products or services. The same would be occurred regarding curiosity. When the customers feel any type of interest that means the curiosity then they will search for other possible alternatives to satisfy their needs. The company has to take decisions carefully and consciously regarding the selection and evaluation of the profitable customers or whether it is distributor, supplier or employees. There are some customers who always look for some special offer to utilize and it has been seen that whenever the offer is expired then they incurred to the other product or services. These types of customer are not easy to retain the relationship especially the long term relationship. It can be said that Relationship must be the bridge between the customers and the company, for any type of organization whether it is small, medium or large.
Marketing is frequently changing the total environment day by day. Various types of tools, techniques, approaches, plan and strategy in marketing sector are changing rapidly. Besides these the internal marketing is developing very effectively. “For most businesses the cost of acquiring a new customer is much higher than the cost of selling more to existing customers” (Soffront 2001-2008). So it gets an important attention to improve more the relationship with the customers. Notably, it has been observed that when a customer is treated and becomes satisfied then he or she spread out the positive information about the organization. It is the blessing for any type of organization. There is no doubt, Customer satisfaction is both goal and marketing strategy for any type of company. If the customers are pleased with the quality of the product or services provided by the organization then he brings more customers by positive word of mouth publicity. Satisfaction is the key element of success and it is the function of expectation and perceived performance. The customers become dissatisfied when the performance falls short of expectation. If the customers satisfaction is equal to the expectation then it is called the “at least satisfaction” and if it more then the customers become delighted. But if somehow it is less than the expectation then the customer divert to other competitor product or services. (Bhaskar and Kumar April 2005). It should be reminded that there are some assumptions that show the link between customers’ satisfaction and customer loyalty or retention.
The first assumption is that most of the customers have the incentive or don’t like to go for searching alternatives products or services, if they are satisfied with their expectation. They generally like to get the product or services repeatedly from the same firm or company. The second assumption is, there is a high switching cost involved in the additional or alternative search for the product. The highly satisfied customer might incur into the “sunk cost” in dealing with current product or services. The next assumption is that, the customers who are highly satisfied, they are less likely to be influenced by the price and other facilities offered by the competitors and are less likely to switch. The final is that, highly satisfied customer build a strong, structural and reliable ties with the company or its product or services. As for this it is more agonizing and the customer refuses to take the competitor’s offers (Gopalkrishnan).
“Relationship marketing has become a fundamental concept within modern marketing thought” (Stavros, 2005). But it is very surprising to know that most of the organizations try to concentrate and spend more time how to attract customer towards their product or services than retaining customers. But it should be stated that it is much expensive and also time consumable. Most of the cases the company fail to reach their destination using this method. It is not said that the company will not go for searching its new customers. It would be better to make the maximum effort to keep the existing customer. It is strongly recommended that the organization should be relationship marketing oriented. Fornell and Wernerfelt used the term Relationship marketing as the “defensive marketing” that means to reduce the customer turnover and increase the customers’ loyalty. The opposition concept of “defensive marketing” is “offensive marketing” that is to focus more on getting new customers and liberating dissatisfied customers from the competition (Fornell and Wernerfelt 1987).
Recommendation for Successful Relationship Marketing
“The importance of one-to-relationship marketing cannot be overstated” (Creativision 1998-1999). It should be mentioned that most of the organization run their business by maintaining the relationship marketing network. They know that all of their success is dependent on the positive feedback from the customers’ or the suppliers or the distributors. “Relationship marketing is often represented as a developmental process, the aim of which is to increase customer loyalty and improve the relationship customers have with an organization (Gale Oct 2005). There are six types of customers such as prospect, customer, client, supporter, loyal customer and partner. The organizational effort would be always to capture the maximum number of partner-customer as possible. If the organization can fulfill the needs of the customer then there is no doubt that the customer loyalty will be increased. Customer loyalty is a vital issue that ensures the higher level of customer satisfaction. Through the relationship marketing the possible transaction cost can be reduced. Besides this another thing should be recommended that if the relationship is built strongly among the networks then there would be a certainty of long-term profit. Long-term profit can not be avoided by any organization. The relationship marketing improves the awareness and increases the interactions within the organization.
“The field of relationship marketing can be viewed as a sub-area” (Zinkhan 2002). Relationship marketing is not applicable for all types of organizations. The size and standing of the organization should be considered. It is also important to analyze the base of the customers and products. There are some customers who buy the product as an on-off transaction rather than continuous process. To make the customer relationship it is needed to build a long-term commitment. “Multidisciplinary approaches to understanding relationship marketing strategies for goods and services as applied to many different industries” (Bejou 2008).
The company should focus on the scope and field of relationship marketing. As it earlier mentions that the base of the product and services is very much important to be relationship marketing oriented. Recognition the customers every level is a vital issue to implement the relationship marketing strategy. Every “information about the customer should be stored in the database” (Khalid 2004) as the part of relationship marketing. The customers’ attitudes towards the buying decision, their social status, their needs, wants and different types of interaction within different stages should be considered very clearly. As it is known that the purchasing habits of the customer are different for everyone. So, different types of habits should be treated in a right way. Hence, the previous data also need to up-date and out-of-date information needs to be erased. Ranking the customer in relation to the value to the company is to be considered to be relationship marketing oriented. There are some customers who buy regularly or produce a standard amount the profits. There are also some customers who buy occasionally and they are important to the competitors.
The Scope of Relationship Marketing
“Relationship marketing (RM) has emerged as one of the dominant mantras in business strategy circles, though RM investigations often yield mixed results” (Palmatier et. al. 2008). Relationship marketing occurs between the suppliers and the company. Suppliers are very much important because to maintain the supply chain management and it lubricates the total relationship marketing activities. Skilled people are the key resources for business organizations. The employees are also the considerable factors for build up the relationship marketing network. In the internal market in an organization, both a supplier and a customer formulate internal marketing programs.
To make the relationship network more strong, the following recommendations should be followed:-
- Firstly, the company needs to identify those buyers, who spend more than the average. And also identify are they really loyal to the company. If they are then continue it, but if not then some ways have to find out to make them loyal. To do this the company should make such a situation so that the customer can get the positive idea about the company.
- Secondly, the loyal customers should be treated very carefully. It needs to remind that they are the base for the organization and they provide a strong and reliable potential too.
- Thirdly, the organization should identify the group of new customers, who are likely to present better promises than the others do. There are some customers who do not buy the company’s product for a price discount. The responsibility of the company is to find out these customers and to know why they buy the product.
- Fourthly, the customers’ needs and wants are changing day by day whether it is loyal or not. The company should find out such change of needs and wants, and should gear itself up to suit the advantage. and
- Fifthly, the organization needs to identify who are the key customers.
Limitation
It requires a lot of time to develop the relationship and it is also difficult to develop a list of conduct. There is some blame against the customer relationship marketing because of the lack in customers’ behavior. One kind of blame is that the customer has the absence of willingness to pay more for better quality of products or services. According to Gronross there are four reasons behind the customers’ negative attitude towards the paying more for an improved relationship (Gronross 1994). These reasons are:-
There may be the absence of knowledge in suppliers’ mind about how the customer can be benefited from the improved services or products. From the customers point of view they can not realize why they should pay more.
Customers can not measure how the improved product or services they are paying for will have the long-term positive effect.
Regarding the relationship marketing the customer does not get the product or services what they are actually looking for. Most of the cases the offered products or services are not customer-oriented enough.
The customer does not want any extra offer, but they want the core service.
Case study: Fly Emirates
“On 25th October 1985, Emirates flew its first routes out of Dubai with just two aircraft—a leased Boeing 737 and Airbus 300 B4” The Emirates Story. (2008) at the beginning the goal of this company was “in quality, not in quantity” same as now. Emirates are one of the fastest-growing airlines who serve magnificent services to its customer. But how it makes possible them to serve like this. The reason behind this is that, there is a good relationship marketing practice in the area of customer service of this company.
Tim Clark, President Emirates Airline said: “Strong and steady demand for Emirates’ passenger and cargo services has motivated us to increase our flights to Perth. It signals our commitment and confidence in the growth of the Australian, particularly the Western Australian, market. Emirates’ additional services are widely expected to bring greater access and facilitate more traffic flows between Western Australia and key markets in Europe and the Middle East.” (Emirates Sky Cargo)
In 2006 FIFA World Cup the billions of people recognize the fly emirates airline across the world. More than three million people in attendance, billions of TV viewers were tuning in to the total 64 matches and the world cup become a major marketing success for the emirates.
What’s the Reason Behind their Success?
They know how to manage and make the customers happy. The customers are pleased with the service they are providing. It is all about relationship marketing they are using. Now they are evolved into globally influential travel and tourism known the world for their commitment.
Hi Friends,
“I would like to share my experience with Emirates Airline and should say that I will recommend it to anyone who wants to enjoy their flights.
I am a frequent flyer (both for Business and Personal purposes) and tried Emirates 3 years back on recommendation from my friends and soon realized that flying can be fun. I booked my tickets from their website and did get a good rate for the time since it was only weeks before my Trip.
I had an option for choosing my in-flight seats to food and found that very interesting. It also gave me an option to send the tickets to my home else to pick them up from the airline office. In case you picked up the flight tickets from the counter in the airport you can pay it over the counter and this can be useful for people who is not comfortable using credit cards over internet.
The interesting fact was that since I was flying to Dubai for some business purposes had some excess luggage. I was expecting an excess charge and was taking out my wallet to pay for it since I was 10 kg over limit but to my surprise the check-in agent labeled the luggage as heavy and put it through with a smile. I clarified with the agent where I have to pay my charges and she said to me I don’t have to pay any extras. I was really happy about this since in past I always had to pay excess charges and I was used to it. This was the first time that any airline has waved off my charges without any questions in past 6 years of flying.
I boarded the airline and was greeted by smiling faces which raised my morale since they were really friendly and helpful. I soon realized that all Emirates aircraft are equipped with a personal entertainment system in all classes. On emirates B777 and A330 aircraft, passengers are provided with up to 18 TV channels and 22 audio channels.
If you are traveling in First or Business Class you are inferring a big treat since you will be offered their film library, with up to 50 titles to ensure there’s always a favorite to watch on your in-seat personal video player. Plus all many other facilities. I had a great and relaxing flight. I am not surprised that they have received 250 awards for excellence since they have started providing flight services. I have been flying them since and have found their service wonderful. The timing of flights is excellent and have never come across a delayed flight from emirates. They always reach the destination at least 15 to 30 minutes than suggested time and this have helped them to make sure that they can be on time even at busy airports like Heathrow.
I have flown emirates at least 25 times in last 3 years and have been satisfied with their service. After initially registering with their website they always make sure that I am provided with my choice of food and seats. I never had to request anything after the registration. The best part is that when you are in the counter they address you by your surname and this is a wonderful Ice breaker tool. I have traveled in all their classes and have found that in every class you get a very fair treatment and staff are really helpful. I have seen so many different airlines….. (to name one is B A) who have 3 sets of behavior towards customers in 3 classes and I hated that service.
I would like to quote one example where I was traveling from India (Cochin Airport) Via Dubai to London and was traveling in economy class. Once checked in the lady with a smile said to me that they would like to offer me a upgrade me to Business class till Dubai Since I fly with them frequently. She also mentioned that she will send a message to Dubai Office to Upgrade me from Dubai to London in Business class. She requested me to go into the Dubai office at the airport. Well, I had a lot of shopping to finish and only had an hour of stopover and really forgot all about this visit to upgrade.
I went into board the flight and when I presented my boarding pass the agent said to me that they have received message to upgrade me to business class from Cochin. I had a guilty smile on my face and said to agent that it is true and actually my fault since I was suppose to go to the main office for it and didn’t have time. Agent replied with a smile that it is ok sir I will put it through now. Man I was really impressed about it and thanked him and enjoyed that flight to max in business class in economy fair.
This is what I call service and will recommend them to anyone anytime.
One thing I would like to point out is please do your research before you book the flights as in fares since you will find sometimes killer deals only with some travel agents depending on your luck on internet and local travel agent. If something I will change with Emirates is that to make sure that always their personal rates for fares are cheaper than their agents which will make sense to me. Since I think that Airlines should be able to offer better rates for their airline than any of their agents other than that everything is great.
Hope this review will encourage you to fly with Emirates and experience their service.
Thank you.
Reference
(Some of the information about in-flight facilities and awards is taken from Emirates Website to explain it better. Please refer to Link below for any further information.)
Link: Fly Emirates: Sky is No Limit. A review by November 8181 on Emirates Airlines, UAE. (May 15 2005). Ciao GmbH.
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