Relationship Marketing

Schneider (1980) pointed out that for many years now the term marketing meant only assembling and attracting the customers. It did not focus on retaining them. However, researchers Thorsten, Dwayne and Kevin (2002) contended that even though more than twenty years have passed since Berry (1983) first mentioned the concept of relationship marketing, it is still continuing in the present trend and accepted by majority of the people.

However the studies of Bazerman (2003) contended that management researchers have traditionally viewed customers primarily as recipients of firm output that create revenue for the firm. In contrast, researchers studying services management have claimed that customers can also be viewed as participants in the firms internal processes, and should be managed as valuable human resources of the firm. Emphasising on customer participation, Claycomb et al (2001) argue that the participation of customers in firms virtual human resource base involves the actions and resources supplied by customers for service production and/or delivery. When the firm can engage its customers to participate proactively as partial contributors of labor, such involvement may transform value chain activities of the firm building stronger relationships.

Similarly the studies of Dagger and Ward (2005) also argued that the people who were involved in business in earlier times knew the technique of influencing the customers by developing a good relationship with them. Nevertheless, how to build a relationship, comprehending its concepts, as well as studying the nature of the relationship etc has not been developed much. Previous studies such as that of Gronroos (1994), Roberts et al (2003), Berry (1983) and Brodie et al (1997) relationship marketing is considered to be the best strategy in order to attract the customers and retain them. In spite of this, research has not focused on testing the theory of relationship marketing on which this concept is based. However the most recent research such as that of Diehl, Kent, and Guion (2010) who emphasised on relationship marketing revealed that it is more effective to build healthy and productive relationships between specific target groups of individuals as compared to developing a relationship with an extensive network of people belonging to any community.

Thus, the present research argues that relationship marketing denotes one-to-one communication to influence the customers and win their hearts. This assumption becomes important because the focus of the study is also to inquire into the impact that firms can make on their customers by building effective relationships.

Justification to the assumption of the researcher as stated above can be found in the research of Berry (1983) who pointed out that relationship orientation concentrates on the approach of attracting the customers and then retaining them by building a relationship with them over a period of time. Furthermore, Bove and Johnson (2000) also observed that this strategy requires that relationships are strengthened when customers make frequent visits to the stores and interacts and communicates with the store personnel and service providers for a long period of time and the customers perceive the importance of the relationship.

In furtherance to the above stated discussion emphasising on the importance that relationship marketing has gained in the past decades Halbesleben and Buckley, (2004) state that while the idea of engaging customers in the firm processes was first asserted by Barnard (1938) more than 60 years ago, it has gained particular significance over the last two decades with the advancement in network technologies for customer relationship management (CRM). CRM has sparked an ongoing theoretical debate in services industry research over the contingencies when customer participation in the service production and delivery increases service-system efficiency. Also, the CRM practice has produced the influx of automatic teller machines (ATMs), self-service gas stations, and self-scanning check-outs in grocery and mass-merchandise stores, which all involve customer participation in the service transaction.