Services and Relationship Marketing - Essay Example

? Service Marketing Table of Contents Introduction 3 The Origin of Service Marketing 4 Concept Relationship Marketing 4 Elements of Relationship Marketing 6 Relationship Marketing Approaches used in Services Marketing 7 Benefits of Relationship Approaches 9 Conclusion 9 Bibliography: 11 Introduction Service marketing is a sub field in marketing that entails the sales of fast moving consumer goods and services marketing. It typically refers to both the business to consumer (B2C) and business to business (B2B) services (Baron et al 2010). Moreover, it involves the marketing of services such as telecommunication, car rental services, air travel, health services, and professional services among others. In essence, services are the economic activities that are given out by one party to another (Bateson 2011). Also services are more widely denoted as economic facilitators that create added value and provide benefits of consumers, customers or organizations. Never the less, there has been a continuous debate on the difference between services for goods. Classical economists argue that goods are value objects, which rights of ownership could be well-known and or exchanged. Services are within and around people while the people are the consumers to the services. The expansion of services economy has broadly being recognized and has increasingly contributed towards the development of economy in various regions all over the world (Buttle 1996). It has continually accounted for most of the new employment opportunities in developed countries. Needless to mention, that the dominance of services sectors are not restricted to highly developed nations with services in companies such as tourism industries contributing profoundly to the economy of developing countries (Boone and Kurtz 2010) According to Baron et al 2010, various definitions and scopes on the concept service have been used by several people and entities all over the world. First, a service could be argued to be an act that is in the form of behavior that could mean giving advice. Second, service could be denoted as a product support or an activity that is customer oriented, which takes place at the point of delivery, for instance, repair services (Egan 2008). Additionally, services could be seen as peripheral activities designed to boost the delivery of a core product, for instance, provision of a courtesy car. Service as an organization involves the entire business or not-for- profit structure that resides within the service sector (Buttle 1996). The Origin of Service Marketing Service marketing was founded upon the basic concepts of marketing. Its advancement over the years has been associated with the philosophy of customer orientation. A marketing orientation is bound to position the customer at the middle of the purposes and activity. Numerous organizations and companies have manifested philosophy, which argue that customers are the kings and that everything that is done in organizations or companies is inclusive of customers’ preference (Machtynger et al 200). Essentially, philosophy in marketing orientation concentrates more on ensuring that customers are well looked after, and that they are fully satisfied in the context of competitive assistance whereas at the same time ensuring that the assistance remains money-making. Customer reaching philosophy has dictated marketing activity throughout its history (Egan 2008). Concept Relationship Marketing Relationship marketing is the process in which relational exchanges are acknowledged, developed, sustained and terminated with the purpose of boosting performance. Relationship marketing has been perceived as a new phenomenon in the province of marketing (Baron et al 2010). The initiation of mass marketing and mass production has surrounded the idea of Relationship Marketing for a period of time. There has been stern competition, erosion of brand loyalty, unethical wars on prices in various organizations and companies. Moreover, relationship marketing has continually put emphasis on the expectation of customers in the market (Buttle 1996). However, the approach of relationship marketing is still ambiguous to many practitioners. In essence, marketing entails the delivery of customer satisfaction at a profit, a situation that denotes that marketing is customer oriented. Hence, the concept Relationship marketing ha been borrowed from the relationship between the buyer and seller. Initially, if marketing was bound to take place, then the deal was sealed only through the act of relationship between the buyer and seller. Basically, the process of attracting and retaining the customers is the Concept of relationship marketing (Kotler and Keller 2009). Relationship marketing has enormously been used by B-to-B marketers. The marketers or sales persons have continually maintained and developed close relationships with their customers or clientele. Companies and organizations have built in slots and appointed numerous relationship managers in a bid to ensure that their valued customers are well taken care of. Hence, there is the need of recognizing the importance of continuous relationship in building customer loyalty. Additionally, relationship with a customer can be divided into two distinct parts. The first one is to attract the customer followed by creating a relationship with a particular customer in order to achieve the economic goal of marketing especially as a marketer (Luther 2001). According to ancient philosophers, relationship marketing is the philosophy of doing business that entails strategic orientation focusing on keeping and improving current customers and compared to acquiring new customers. The philosophy basically assumes that consumers’ find it more convenient for them to have a continuous relationship with an organization than to switch continuously among providers in searching for valued products (Kotler and Keller 2009). Thus the overall intention guaranteed by relationship marketing is to assist and uphold long term relationships with customers, which leads to changed focal points and modification of the marketing management process. This ensures that there is exceptional relationship with customers, a situation that cannot be copied by other players in the market and hence providing sustainable competitive advantages. Elements of Relationship Marketing Luther 2001 argues that, relationship marketing has various elements that serve as operational tools that are used for implementation in organizations or companies. These elements include financial bonds, social bonds and structural bonds. Financial bonds Financial bond in relationship marketing involves fastening the customers through financial incentives that might be in lower prices to larger volumes of purchases or lower prices for customers who have worked with the company or organization for a long period of time. For instance, long distance telephone companies globally have taken upon themselves to give financial bonds to their customers through the provision of volume discounts, and other worth incentives so as to retain the market and continually build a loyal base of customer. Regrettably, these financial bonds do not necessarily provide long term returns to organizations especially if it is no put to work with other relationship strategies as they do not serve to differentiate the organization from its main competitors (Shimpss 2008). Social bonds Social bonds are more personal than organizational because they are forms of dynamic processes which act as central roles through the fostering of symbiotic adaptation. They act as time and energy investments that produce positive interpersonal relationships between partners ranging from formal contacts: organization to informal contacts; personal. This social bond is strengthened through commitment, promise and trust. Promise entails meeting the needs of the customers while trust leads to both affective and calculative commitment (Shimpss 2008). Structural bonds Structural bonds are expanded when two organizations or companies adjust each other economically or technically. This is so when two parties familiarize themselves to each other by making joint investments in the product or process development. There must be mutual agreement between the two organizations in order to achieve their expected goal in the marketing platform (Shimpss 2008). Relationship Marketing Approaches used in Services Marketing Relationship marketing primarily aims at building closer relationships with customers in order to overcome challenges such as obtaining global competitive advantage, dealing with rapid changes in technology and reducing time to market new products. Relationship marketing is vital in accordance to the pros and cons involved in the engagement and sustainability of exchange relationships (Doyle 2008) Through relationship marketing, there are more returns for companies or organizations that engage themselves with existing customers and increase the loyalty of the customers than it is to make an effort of attracting new customers. Hence, relationship marketing emphasize that exchange relationships are ongoing over the lifetime of the relationship. Relationship marketing has been used by competitive marketing as a functional way of enlarging business performance. According to Gilmore 2003,relationship marketing is characterized as the identification, establishment, maintenance, and enlargement, modification, and execution of relationships with customers, a situation that results to value for customers and profit for the organization by various relational exchanges that have both past and the future. The increase in competition and price pressures and understanding of how to establish and sustainability of buyers and sellers relationship has increasingly become paramount other marketers (Doyle 2008). Essentially, competitive marketing has three levels of relationship marketing. The first level of relationship marketing entails incentives on prices that make safe customer loyalty. The second level of relationship marketing focuses on the social aspects of relationship, which is communication with consumers or giving reference to their names while transacting business. The third level of relationship marketing relates to contribution in structural solutions towards challenges being experienced by the customers. Hartline and Ferrell 2010 noted that brand loyalty is mostly related to the first two levels of relationship. Moreover, the mounting interest in mass customization has concentrated on the role on relationships. Those proposing the concept of mass customization emphasize on the importance of applying experiential perspective of consumer behavior, with the notion that companies need to understand the complex, subjectivity involved in consumption, and should develop unique formulations of products which satisfy each individual needs. On the other hand, brand loyalty is used to survey the dependability of consumers because it is easier to collect and is obtained in fewer amounts. The behavioral data can involve purchase frequency, purchase size, or wallet. Although, it is cumbersome to differentiate between spurious loyalty and true loyalty, spurious loyalty involves a situation where the customer migrate to alternatives at first available chance while true loyalty is a situation where the customer may not take other options at all (Chaston 1999). Customers too have the privilege to benefit from relationship marketing especially through reduction of risk and social advantages. These benefits ate most in three categories: confidence, social and special treatments. They appear to desire certain marketing ways from suppliers (Kinley et al 2010). Once the customers are in a relationship with an organization or company, they are willing to do without other options and limit their choices. Numerous motivations come from the effectiveness in decision making, reduced information processing, of perceived risks reduction associated with future decisions. Relationship marketing allows service providers to be more reactive to the needs of the customers, hence offering more value to their customers. Benefits of Relationship Approaches According to Thomas 2009, there are numerous benefits that have been brought about by relationship marketing even if it has been termed as one of the expensive alternatives to companies or organizations that have continually practiced mass marketing due to high investment demands. The latest development in technology in data ware housing and data mining have made it possible for companies to continually hold a one on one relationship with the customers. In essence, the companies or organisation are in a position to contact customers’ in a simpler way as compared to the past (Kotler 2003). Customer loyalty gives indications that customers are dedicated to the various services that are being guaranteed by particular organizations or companies. The increase in competition has created pressure on retailers to concurrently control the cost and improve customer service. The goal of relationship marketing is to ensure that customers are satisfied by the services that the organization is offering and that the organization has induced consumers to choose specific options for those that are accessible (Thomas 2009). Conclusion Service marketing has been a wakeup call for most companies and organizations especially with the inclusion of relationship marketing. Relationship marketing has been considered as a modification from the ancient way of marketing. It is through this method of marketing that the retention of the customer is of more importance as compared to attracting new ones. The marketers concentrate more in developing strong and lasting relationships through the use of different relationship marketing tools. Bibliography: Bateson,J., 2011.Services marketing : concepts, strategies, & cases. 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