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Relationship marketing in relation to a case study.

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Relationship Marketing In Relation To a Case Study Introduction 1.0 Relationship marketing has become a 'hot' topic between marketers over the last decade as organisations are realising the importance of research into various concepts and ideas that have the potential to provide a sound culture in which the organisation can become more successful. Being a modern concept, writers are keen to put across many ideas which can be put into practice in various industries today. This paper will endeavour to extract key arguments and will illustrate how and when such ideas have come around. It shall examine the effect that relationship marketing has on organisations today, making a specific observation towards one company in the UK. Various authors have, over the last ten years or so, produced many definitions for relationship marketing. Morgan and Hunt (1994) define the concept: "relationship marketing refers to all marketing activities directed towards establishing, developing and maintaining successful relations exchanges". This paper will examine both business-to-business (inter-firm) relationships together with customer relationships in various situations and industries. Corporate goals of the company will be one area of focus as companies are gradually altering business objectives from more traditional 'profit only' philosophies. Customer retention, maintenance and enhancement will provide key focus for this paper as will advantages and disadvantages, in a bid to make generalised and specific conclusions regarding the impact of relationship marketing and its potential impact on businesses and consumers. Literature Review 2.0 It important to note that different forms of relationships occur with regard to business to customer and business to business (inter-firm) relationships. Effectively the inter-firm relationships are an integral part of the firms' productivity. Exchange between two different organisations is known to support the governance theory where co-operation is a basis of such relationships. "Resource analysis of co-operation is a function of necessity to exchange needed resources" (O'Toole & Donaldson, 2000). Nevertheless the motives behind co-operation in the marketplace can vary significantly in terms of its purpose and effect. ...read more.


3.1 One reason for this need for such improvements comes from the high investment that UK operators poured into 3G, or 3rd Generation, purchasing of licenses over the last three years. 3G is a new, faster (near Broadband speed) method of communication that could see the end of current network speeds. It is a theory that allows for internet-like access, including many additional features such as picture and video viewing, together with more efficient connectivity with personal computers. A total of �22bn was invested in the UK (Telegraph, Jan 2002), and all operators are desperate to recoup this investment as quickly as possible. All operators are making concerted efforts to encourage consumers to use data facilities, additional text services such as picture messages and updates to offer alternative revenue to relieve the need to rely on voice revenue alone. If they can continue to stay profitable until 3G is up and running they should, in theory, be able to recoup initial 3G investment through new contracts and increased mobile use. 3.2 T-Mobile sees Relationship Marketing improvement as a direct method of retaining current customers and making them more profitable. Marilyn Gerson, of T-Mobile Customer Relationship Marketing (CRM) Department explains that "a close relationship between the company and customer is now a hot topic at T-Mobile, as more and more of the business becomes customer conscious" (19th March) She explains that a company called Round was brought into produce a CRM strategy that would result in a more competitive company that would able to interact with customers in a more efficient manner, in a bid to make them more profitable. Jamie Clyde at Round explains the key model that represents the company's view on CRM in any organization: "Our model encourages businesses to move from the traditional product focus or product centric views towards customer centricity, where the customer is the focus of every member in the business". ...read more.


A more in-depth study of personal customer attention may even lead T-Mobile to the conclusion that such personal interaction may be the differentiator that could allow the company to take real advantage of the previously mention concepts and ideals. 5.2 Essentially one has to ask if whether or not CRM systems resolve company problems with regard to the increased efforts of becoming more profitable whilst trying to sustain unique customer links. In highly competitive and saturated markets CRM systems, in most cases, do appear to be a vital element of retaining customer relationships. This is evident in the mobile phone telecommunications sector whereby the overriding factor and mission of such firms veers towards 'hanging on to their customers' whilst trying to attract new members even though this maybe more costly in the long-term. T-Mobile must press ahead with keeping their existing customers before attempting to attain new customers. Therefore their main objective or focal point of increased sales and profitability could rest with the concept of maintaining current customer relationships and inevitably their inter-firm relationships. 5.3 Business is not static, it shall always be a place of change, and it is the job of firms within any industry to adapt to the new environment whilst keeping corporate objectives in mind. Relationship marketing is a response to a change in many of today's industries. T-Mobile are aware of this change and have proactively dealt with the task in hand. From initial inspection it would appear to be a positive step towards maximum profitability, the difference is that this goal may seem further away than previously. Relationship marketing is a diversion that a firm can take on the way towards their corporate goals, it is not an alternative and rewards are there to be had, is it suits the firm, the stakeholders and the industry. It may be a modern concept but the literature provides an overwhelming bias towards this theory being a successful tool which a firm can utilise to gain a competitive advantage, so long as the competition has not taken the same approach. ...read more.

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