Relationship marketing is based on building mutually satisfying long-term relations with profitable customers rather than opting for short-term, ‘one-time profitable’ transactions. In relationship marketing, the company creates a marketing network, which consists of the company, and it’s supporting stakeholders, namely, customers, employees, suppliers, distributors, retailers, ad agencies and others with whom the company has built a mutually profitable business relationship.
How the Business Environment is Changing?
We are operating in a most dynamic business environment today, one that is changing radically as a result of major radical societal forces, such as technological advances, globalization and deregulation, which have created new behaviours and challenges:
Customers increasingly expect higher quality and service along with some customisation. They are also showing greater awareness and price-sensitivity in their search for value.
Brand manufacturers are facing intense competition from domestic and foreign brands and rising promotion costs coupled with shrinking profit margins.
Giant retailers are growing powerful and killing store-based retailers. They are marketing an ‘experience’ rather than a product assortment.
Company Responses and Adjustment
Highly respected companies are adapting to the fresh challenges by:
Reengineering the business process.
Outsourcing from more competitive and cost effective sources.
Attracting customers more effectively through e-commerce
Benchmarking their activities, performances and cost structure.
Building global network
Becoming more market-driven
Marketers are also switching to new concepts such as:
Customer relationship marketing
Customer lifetime value
Customer sharel Target marketing
Integrated marketing communications

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