Relationship Marketing –Undergraduate Module
Some scholars regard Relationship Marketing as old wine in a new bottle, while others proponents regard it as a different approach representing a paradigm shift. Discuss.
Relationship Marketing (RM) attempts to involve and integrate customers, suppliers and other infrastructural partners into a firm's developmental and marketing activities (McKenna 1991; Shani and Chalasani 1991). Such involvement results in close interactive relationships with suppliers, customers or other value chain partners of the firm. Interactive relationships between marketing actors are inherent as compared to the arm's length relationships implied under the transactional orientation (Parvatiyar, Sheth and Whittington 1992).According to these and other authorities, this makes RM diverge from common transactional marketing which seems to put focus on transactions rather than relationships.
However, the fact that RM still has almost everything to do with customary marketing has made some authors believe that it is old wine in new bottle. Sheth, Gardener and Garrett (1988) believe that marketing as a discipline got organized around the institutional school of thought, and its main concerns centered on the functions performed by wholesalers and retailers as marketing institutions. This is the same with RM and as such they do not see much of a paradigm shift. This paper seeks to examine these varying ideas from numerous biographers.
Evolution of RM
Already in 1980, B. Schneider wrote: “What is surprising is that researchers and businessmen have concentrated far more on how to attract customers to products and services than on retaining customers”. In 1983 Levitt wrote: “In a great and increasing proportion of transactions, the relationship actually intensifies subsequent to the sale. This becomes a central factor in the buyer's choice of the seller the next time.” Before this, some signs of RM had been identified as early as pre-industrialization stage. Four observations from various authors have shown that RM is a refreshed and self expanded concept to marketing.
Relationship marketing has caught the fancy of scholars in many parts of the world, including North America, Europe, Australia and Asia, as is evident from the participation in some of the recent conferences held on this subject(Sheth and Parvatiyar 1994);
(ii) its scope is wide enough to cover the entire spectrum of marketing’s sub disciplines, including channels, business-to-business marketing, services marketing, marketing research, customer behavior, marketing communication, marketing strategy, international marketing and direct marketing; (iii) like other sciences, marketing is an evolving discipline, and has developed a system of extension, revision and updating its fundamental knowledge (Bass 1993)
(iv) scholars who at one time were leading proponents of the exchange paradigm, such as Bagozzi (1974), are now intrigued by the relational aspects of marketing (Bagozzi 1994; Morgan and Hunt 1994).
All this is evidence that RM is an innovative theory that stems out of the marketing discipline. However some authorities do not see RM evolution from the same angle. As in the pre-industrial era (characterized by direct marketing practices of agricultural and artifact producers) once again direct marketing, albeit in a different form, is becoming popular, and consequently so is the relationship orientation of marketers.( Kotler (1972) As such RM can be viewed as old wine in a new bottle.
Berry and Parasuraman (1991) defined RM as attracting, developing and retaining customer relationships. According to Gronroos (1990) RM is to establish nurture, maintain and enhance relationships with customers and other parties at a profit so that objectives of the parties can be achieved. In 1995 he redefined RM as developing, maintaining, enhancing, and retaining and sometimes...
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