There have been Pragmatic shift from traditional marketing to a relationship Marketing approach(Gummesson 2002). Traditional marketing differ from the relationship marketing approach to how business market to consumers. The shift to relationship marketing has been highlight by series of different factors that have affected the methods used by services providers to keep loyal customers of value through methods of customer retention. Business are not the only ones that benefit from a relationship marketing practices. Customers benefit from the satisfaction they are receiving value and their needs are met or exceeded. Loyalty is embraced through incentives, trust, promotions, social, and pricing strategies designed to keep customers by practicing relationship marketing.
Marketing principals known as the four p’s of marketing product, place, price, promotion were introduced by Neil Bordan 1950s(Borden)(Goronroos 97). The four p’s is essentially a list of four categories which are valid components of marketing but the problem with lists they are too narrowly focused and are manly suitable for mass marketing approach to marketing (Goronroos 97). Evert Gummesson through his research compiled a list known as the 30Rs approach to relationship marketing. Marketing is very broad concept and to simplify marketing to four variables such as the 4ps of marketing does not cover all aspects of marketing (Gummesson 1997, 2011).
Relationships in marketing can compared as marriage between service provider and customer. Relationship marketing is not really a new concept the idea of a business gaining loyalty by meeting the needs and wants of a customer go back as far as the ancient traders)(Berry 1995; Gummesson 2002). Relationship marketing is the process of creating value with individuals over lifetime of association(Hollensen 2003). What this means that customer service relationships with service providers continue long after the first initial service encounter by continuing to build a one on one relationship with service providers and customer.
By retaining a loyal customer by satisficing their needs creates certainly in a business in know the fact they have a regular income and over time loyal customer spend more than one off customers. It has be linked to many studies that the longer a relationship a customer has with a service provider the greater the profit can be obtained from a customer. Long term customers are cheaper to keep because marketing budget do not need to spend finding new customers (Gummesson 2002).
Relationship marketing focuses on customer retention by generating loyally among companies and customers. Traditional marketing focus more on attracting new customers (Hollensen 2003, p.9). Traditional marketing principles are still relevant today because businesses will always need to attract new customers no relationship last for ever, people move on, have changes in tastes that effect their needs and wants.
When markets reach...