The marketing mix has several specific targets that can all collate together. (Jobber 2001) Suggests the strength of the four P’s approach is that it represents a memorable and practical framework for marketing decision making. This can help to keep staff motivated and moving in the same direction but to many people it oversimplifies the reality of marketing management in the 21st century. (Gronroos 2002) Such a product based strategy can lead to a seemingly strong base product well advertised not leading to short or long term profitability because it is not exactly what the customer is looking for.
In the 21st century customer expectation has become higher than ever and with more purchasing freedom of choice than ever before the job of attracting and retaining customers has become more and more difficult. There has also been a realization that (Wilson, Gilligan 1992. P.190) ‘A 5percent increase in customer retention can result in anything from a 25per-cent to a 125per-cent boost in profitability’. A marketing strategy strong in the area of customer retention has to be given serious consideration. Relationship marketing is aimed at creating long term customer and supplier relations. With this greater freedom of choice also comes a greater risk of making an incorrect purchase. (Gronroos 2000) points out that an ongoing relationship can offer customer security and a minimized purchasing risk vitally important in an ever diversifying and often confusing marketplace. A recent study recorded in (Buttle 1996) found that just a 5per-cent increase in customer retention at HSBC (large banking corporation) led to a 160per-cent increase in profitability by the fifth year. This is an acute example where relationship marketing is very likely to be the best option but it must be realized that not all such relationships are profitable in the long term. Tesco’s and Dunnes Stores for example done away with there loyalty card for customers as it was costing too much to run with little tangible long term benefits for the company. (Jobber 2001) Companies must therefore try to distinguish between profitable and non-profitable relationships as the short term costs of creating these relationships can be quite high.
