Unit 13: Understanding Relationship Marketing

By: Michaela Louise Burnett

Tutor: Barry Forrester

Understanding Relationship Marketing


Submission Date: June 2008

Terms of Reference

  • Set By:  Barry Forrester

  • Produced by BTEC NATIONAL to help us understand the different aspects of setting up your own business, and the different aspects of relationship marketing within an organisation and how this helps achieve business strategic aims and objectives through providing excellent customer service and retaining customers. So in the future, I will have the knowledge to be able to set up my own business if I wish to and understand the importance of building good customer relationships.

  • Date Due In:  June 2008


I produced this assignment by investigating relationship marketing within a selected business and describing how this could be applied to the organisation. I did this by exploring different loyalty methods that can be used to help attract and retain customers and how effective they were.  This report is word-processed using Microsoft word and will be produced in a report format.




-Describing and applying relationship marketing to a selected business (P1)

-Identifying and describing customer service functions (P2)

-Analysing relationship marketing activities and strategies (M1)


-Different methods used to attract and retain customers (P3)

-Description of quality systems operative (P4)

-Analyses of the effectiveness of different methods (M2)


-Evaluation on the contribution of relationship marketing activities (D1)

  • Bibliography

Michaela Louise Burnett



-Describing and applying relationship marketing to a selected business (P1)

Date: 9 April 2008

Report on: Relationship marketing applied to a selected business.


This report is being produced to help further my understanding of relationship marketing within a selected organisation. This section will cover the different aspects of relationship marketing and how it is used to help build on going customer relationships to help generate on going sales. This will be based around the HSBC banking and financial services organisation. This document will be word processed using Microsoft word with the use of library and internet resources to help research the information needed to complete this assignment.


Marketing is the build up to a sale, and how it is going to communicate one marketing campaign to its audience. However relationship marketing suggests that the business is focused on the life time value of a customer, not just the sale, so helps to build an on going relationship with its customers to get repeated sale transactions, by retaining their custom over their life time. This can be done in a number of ways for example; through excellent customer service, loyalty schemes, promotions etc. These different customer service functions will be looked at in more detail through out the assignment.

There is a range of relationships in relationship marketing and it is different to the concept of the 4Ps in the marketing mix (product, price, place, promotion) as these only targets the 1st transaction.  Also the 4Ps looks at the price it should be at, the place were to sell it etc to help generate a one off sale. Relationship marketing looks at the different aspects e.g. how to improve service to get the customer back etc to get future sale transactions from them so it is on going.

Relationship marketing doesn’t just target the buyer it also targets the decision making unit to see who is involved in the influence of a sale. It makes sure the business has relationships with the decider and the gate keeper, so they have a good experience and will continue to buy from them as they will think it is working well and will increase their frequency, so their customer life time value increases, so overall how much they spend with the company increases.

HSBC is one of the largest banking and financial services organisations in the world. It is an international network that comprises over 10,000 offices in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.

With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by around 200,000 shareholders in some 100 countries and territories. The shares are traded on the New York Stock Exchange in the form of American Depositary Receipts.

HSBC can use relationship marketing to help attract existing customers to new products and to attract and retain new/existing customers to the business. It helps them to decide if they are interested in the customer life time value and helps them make decisions as to how long a customer will be with them to how much they are likely to spend with the company over time.

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Customer life time value is how much the customer is worth to the business and how much the business should spend on keeping them as a customer. It is calculated by looking at what a customer buys and how long they have been a customer with the business. If HSBC is interested in customer life time value then they will want to know how much they are likely to spend with them overall. This is done by:

Average transaction value


Annual frequency


Life time of customer

This is why relationship marketing is so important to ...

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