Marketing: Customer Relationship Management

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FACULTY OF COMMERCE

MARKETING DEPARTMENT

Some Scholars like John Pestrof regard R M as “old wine in a new bottle” while others regard it as a new approach representing a paradigm shift Discuss (30)

Relationship Marketing can be defined as a strategy that is used by business organisation to learn more about customer’s mood and behaviours so as to develop stronger relationship with them. Peter Druker stated that the purpose of the business is to create customers and keep them. To do that a company must do those things that make people or customers want to make business with it. Thus relationship marketing is not a short term tactic but a strategy that should be done in a vacuum. Kotler P (2000) defined Customer Relationship Marketing as a strategy to identify and attract profitable customers and retaining them by creating efficient relationships in order to guarantee a profitable growth. In this definition it is clear that relationship marketing is not all about making customers, but rather is a marketing concept that should be conducted at managerial level so that an element of mutual benefit between the customer and the organisation can result. However by maintaining and managing such a relationship, relationship marketing would have been achieves. Though the case some scholars such as John Petrof regard Relationship marketing as an “old wine in a new bottle” while others regard it as a new approach representing a paradigm shift in marketing. But to know where relationship marketing lies we need to know the evolution of it first

Evolution of relationship marketing

Relationship marketing is witnessed long back in enceinte times of barter trading. Back then traders used to personalise trade and what was practiced was customised trading. With the law of barter trading, there was supposed to be a double coincidence of wants for it to be successful which means it was the duty of a seller to look for a buyer who bears a product the seller wants and who also have a need the seller would satisfy. Thus with this double coincidence of wants an element of mutual benefit existed as well buyer seller relationship. Though, industrial revolution changed all this with many organisations turning to concentrate on mass production. In this era the sense was to produce as many the organisation can with the assumption that customers will buy whatever would be available in the market and this therefore created a transaction oriented marketing concept. In this concept, customers where ignored because traders assumed that their products and services where much good and customers will continuously by them since traders were much concerned with their product.

Today customers are back into the forefront with marketing again focusing on them customer. Customers are now bold and aggressive in their demands not only for responsive services but also for personalised and customised services. The role of marketing has changed from the basic principle of the marketing concept when all service were made to satisfy customers as they were regarded as kings to relationship marketing, that is the need for an organisation to have customers whom it calls its friend and will always be loyal with the organisation. However one question that remains is that can this change be considered a new approach in the field of marketing representing a paradigm shift or like John Petrof it is just “old wine in a new bottle.” To answer this we need to know the meaning of the phrase old wine in a new bottle.

Old wine in a new bottle

Considering Relationship marketing as, “old wine in a new bottle” simply means associating relationship marketing with long held principles of customer services. Eric Arnould, Linda Price and George Zinkan (2008) defined customer service as those activities an organization perform towards customers so as to enhance satisfaction and...
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