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Impact of Relationship Marketing and Perceived Service Quality On Customer Loyalty: An Agenda For Inquiry
Impact of Relationship Marketing and Perceived Service Quality On Customer Loyalty: An Agenda For Inquiry
Impact of Relationship Marketing and Perceived Service Quality On Customer Loyalty: An Agenda For Inquiry
ISSN 2277 5846I THE INTERNATIONAL JOURNAL OF MANAGEMENT ISSN 2277 - 5846 2277 - 5846
Impact Of Relationship Marketing And Perceived Service Quality On Customer Loyalty: An Agenda For Inquiry
Kunal Gaurav Associate Professor (Marketing) ICBM - School Of Business Excellence, Hyderabad, AP, India Kaleem Mohammad Khan Professor (Marketing) Department Of Business Administration Aligarh Muslim University, Aligarh, UP, India
Abstract: With growing number of firms offering wide range of choices across the industry made todays market more competitive than ever before. Fueled with globalization & liberalization, the entry of multinationals encouraged the firms to move from sellers driven marketing to buyers driven marketing approach. At this backdrop, Relationship Marketing has emerged as one of the most powerful marketing tools to cultivate customer loyalty, interaction and long-term engagement. At the same time, research has also revealed that the customers always desire for high quality service irrespective of the kind of the service. The focus of this study is to present a conceptual model for empirical investigation to understand the impact of relationship marketing and perceived service quality on customer loyalty. Key words: Relationship Marketing, Perceived Service Quality, Customer Loyalty, Conceptual Model 1.Prologue We are living in the world of globalization that is characterized by cutthroat competition across the industry. Todays consu mers became more powerful than ever before as all the firms in the same industry are trying to attract the same customers in various ways, even while offering similar products and services. At the same time, marketing professionals realized the strong need to retain existing customers apart from attracting new ones in order to gain sustainable competitive advantage over their competitors. Winning firms, irrespective of the nature of their business or size, have one thing in common; the loyalty of their customers. The challenge for todays organizations is not attain first position, but to be there for long time. If this is the goal of t he organization, it should focus not simply to attract new troop of customers but to acquire customer loyalty; their patronage both for present and future. It is natural for any business to loose 15-20% of its customers every year. Vilfredo Pareto (18481923), a French-born Italian economist argued that a business derives 80% of its income from 20% of its customers (also known as the 80:20 rule). Reichheld & Sasser (1990) claimed that Companies can boost profits by almost 100% by retaining just 5% more of their customers. As a customer continues his relationshi p with the company, it will certainly lead to profit rise. According to Reichheld (2003) Loyalty is the willingness of someone-a customer, an employee, a friend-to make an investment or personal sacrifice in order to strengthen a relationship. Loyal cust omers not only come for repeat purchases, they do talk good about company to their family and friends. Reichheld (1993) believed that the customers who buy because of a personal referral are more loyal than the customers who buy because of an advertisement. Recommendation made by an existing customer is one of the best indicators of customer loyalty. The tendency of loyal customers to bring in new customers at no charge to the company-is particularly beneficial as a company grows, especially if it operates in a mature industry. Customers recommendation leads to increase in firms overall profit as it reduce the cost of attracting and retaining customers. Over past two and half decades, marketing has witnessed dramatic shift in marketing philosophies. The literature revealed that the marketing has moved from transaction marketing to relationship marketing (Lindgreen, 2001). At one hand transaction marketing approach is based upon the concept of exchange (Bagozzi, 1974); at another hand relationship marketi ng is to identify
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This study will certainly strengthen the existing body of knowledge by providing some empirically tested insight. At the same time, results of the study will help service providers to design their offering in such a way that ensure high level of loyalty among customers. 4. References 1. Alrubaiee, Laith and Al-Nazer, Nahla (2010), Investigate the Impact of Relationship Marketing Orientation on Customer Loyalty: The Customer's Perspective, International Journal of Marketing Studies, Vol. 2, No. 1, pp. 155 174. 2. Andaleeb, Syed Saad and Basu, Amiya K. (1994), Technical complexity and consumer knowledge as moderators of service quality evaluation in Automobile Service Industry, Journal of Retailing, Vol. 70, No. 4, pp. 367 381. 3. Backman, Sheila J. and Veldkamp, Chris (1995), Examination of the relationship between service quality and user loyalty, Journal of Park and Recreation Administration, Vol. 13, No.2, pp. 29 -41. 4. Bagozzi, R.P. (1974), Marketing as an organized behavioral system of exchanges, Journal of Marketing, Vol. 38, October, pp. 77-81. 5. Berry, L.L, Parasuraman, A & Zeithaml, V.A (1988), The service quality puzzle, Business Horizon, Vol. 31, No.5, pp. 35-43. 6. Bloemer, Jose, Ruyter, Ko de and Peeters, Pascal (1998), Investigating drivers of bank loyalty: the complex relationship between image, service quality and satisfaction, International Journal of Bank Marketing, Vol. 16, No.7, pp. 276286. 7. Bloemer, Josee Ruyter, Ko de and Wetzels, Martin (1999), Linking perceived service quality and service loyalty; a multi-dimensional perspective European Journal of Marketing, Vol. 33, No. 11/12, 1999, pp. 1082 -1106. 8. Caruana, Albert (2002), Service loyalty the effects of service quality and the mediating role of customer satisfaction, European journal of marketing, Vol. 36, No. 7/8, pp. 811-828. 9. Dick, A. and Basu, K. (1994), Customer loyalty: toward an integrated conceptual framework, Journal of Marketing Science, Vol. 22, No. 2, pp. 99-113. 10. Dean, Alison M. (2002), Service quality in call centers: implications for customer loyalty, Managing Service Quality, Vol. 12, No.6, pp. 414-423. 11. Ehigie, Benjamin Osayawe (2006), Correlates of customer loyalty to their bank: a case study in Nigeria, International Journal of Bank Marketing, Vol. 24, No. 7, pp. 494-508.
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