What Is Relationship Marketing

What Is Relationship Marketing

WHAT IS RELATIONSHIP MARKETING

"Relationship marketing is the ongoing process of identifying and creating new values with individual customers and then sharing the benefits from this over a lifetime of association. It involves the understanding, focusing

and management of ongoing collaboration between suppliers and selected customers for mutual value creation and sharing through independence

and organizational alignment."

(Gordon, Ian. 1998:9)

The reason behind choosing this definition for the relationship marketing is, this definition is trying to cover almost the maximum essence and meaning of relationship marketing. Gordon has presented it in very simple words. According to him the relationship marketing is an ongoing process in which an organisation identifies its customers and creates a relationship with them not only to gain profits but to share the benefits together (organization and customers), and he also mentions that it is an lifetime association between them. In the second part of the definition, he includes the content of the relationship marketing i.e. understanding, focusing

and management of the collaboration between the supplier and the selected customers. These are the key words of the definition which tells the content of the relationship marketing. In the first part of the definition Gordon used one of the most typical word i.e. lifetime, it tells about relationship marketing is a long term relationship process. So for building lifetime relationship with customers, organisations need to have bonding more tightly with the customers.

"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."

Source: wikipedia website

This also a good definition of relationship marketing, it tells about the evolution of the relationship marketing in 1960's and about its emergence in 1980's. If go through the common things within both the definition, both the definition tells that it's a long term relationship between the customers and the suppliers. One of the most important content of this definition is understanding the customer needs and providing products and services to the customers according to their need. Now after we get to know, what is relationship marketing, if we are moving to the process of relationship marketing.

According to Adrian Payne (1995) "relationship marketing is a move from functionally based marketing to cross functionally based marketing and an approach which addresses a total of six key markets." In contrast, relationship marketing is cross-functional marketing. It is organized around processes that involve all aspects of the organization. In fact, some commentators prefer to call relationship marketing "relationship management" in recognition of the fact that it involves much more than that which is normally included in marketing.

The six markets model

Adrian Payne (1995) from Cranfield University goes further. He identifies six markets which he claims are central to relationship marketing. They are: internal markets, supplier markets, recruitment markets, referral markets, influence markets, and customer markets.

At times Payne sub-divides customer markets into existing customers and potential customer, yielding seven rather than six markets. He claims that each market will require its own strategies and recommends separate marketing mixes for each of the seven.

Referral marketing is developing and implementing a marketing plan to stimulate referrals. Although it may take months before you see the effect of referral marketing, this is often the most effective part of an overall marketing plan and the best use of resources.

For the recruitment market he says nowadays capital or raw material is no longer a threat for the organizations, it is the lack of skillful employees is a threat. The requirement is high but no availability and still there is a high percentage of unemployment rates.

Internal marketing is something very interesting