Download Pre- Industrialization marketing practices were highly individualized

RELATIONSHIP MARKETING: A CONTEMPORARY EVALUATION
Abstract of the Paper to be presented at the Conference Global Competition
and Competitiveness of Indian Corporates at the Indian Institute of Management,
Kohzikode, May 18-19, 2007.
Miss Caren Laveena Crasta (Author for Correspondence)
Lecturer, MBA
Aloysius Institute of Business Administration
St. Aloysius College
Mangalore – 575001
Mangalore, DK, Karnataka, India
Phone: (0824) 2214569(R)
E-mail ID: [email protected]
AND
Mr. Sunil D’souza
Lecturer, MBA
Aloysius Institute of Business Administration
St. Aloysius College
Mangalore – 575001
Mangalore, DK, Karnataka, India
Phone: 9986 965275
E-mail ID: [email protected]
RELATIONSHIP MARKETING: A CONTEMPORARY EVALUATION
Caren Laveena Crasta, Aloysius Institute of Business Administration, Mangalore
[email protected]
Sunil D’souza, Aloysius Institute of Business Administration, Mangalore
[email protected]
Abstract: Trade is not a recent phenomenon though it has brought about a radical change in
every country. In the early times, trade has been taking place to gratify the requirements of the
individuals. The increasing demand for the goods and services brought about the industrial
revolution. Later to reach the target customers and bring awareness about the products the
companies had to enforce some strategies so that the customers would be aware of the
company’s products and could reach them. Thus, marketing concept came into existence. In the
past few years the marketing concept has seen a drastic change. A change in the marketing
structure has thus strengthened the relationship between the buyer and the seller. Globalization
has also contributed to embrace various relationship marketing strategies. This paper tries to
highlight the contemporary evaluation to provide a platform for the customer centre philosophy
and the application of relationship marketing at present and in future. The paper also stresses
upon bridging the gap between pre- industrialization and post-industrialization marketing
practices. Pre- Industrialization marketing practices were highly individualized, relationship –
oriented and customized since the customer needs were considered while producing the goods
and services. Hence, it did not require push of marketing activities. At the beginning of
industrialization, the companies in order to enjoy the benefits of economies of large scale
produced goods and services on a larger scale. As a result inventories were pilled up and this led
to the concept of aggressive selling. Selling, as it matured, distanced the manufactures from their
customers. With passage of time this situation polarized customers and manufactures. Customers
and manufactures in industrialization era were acting in isolation, as there was no match between
customer demand and manufacture’s in those days were producing what best they could and
customers were left with no option but to buy those offerings. In the later part of the
industrialization era, certain important
developments occurred, one being the marketer’s
realization that repeat purchase by customers was critical, making it necessary to build brand
loyalty. The other significant change was development of administered vertical marketing
systems, whereby marketers not only gained control over channels of distribution but developed
effective barriers for their competitors. This reduced the gap between the producers and
customers. However, the emphasis remained on discrete transaction. Some firms not content
with discrete transaction began developing long term contracts through suppliers and services,
creating on going interactive relationships among themselves. The relationship marketing
observers, researchers and businessmen, have concentrated far more on how to attract customers
to products and services than on how to retain customer. In practice, relationship marketing
originated in industrial and B 2 B markets where long-term contracts have been quite common
for many years. Relationship marketing applied when there are alternatives choose from ;when
customer selection decision and when there is an ongoing and periodic desire for the product or
service. The term “defensive marketing” is an attempt to reduce customer turnover and increase
customer loyalty. This customer –retention approach was contrasted with offensive marketing
which involved obtaining new customer and increasing customer’s purchase frequency. Further,
defensive marketing focused on reducing or managing the dissatisfaction of customers, while
offensive marketing focused liberating dissatisfied customer from completion and generating
new customers. Traditional marketing originated in 1960s and 1970 as companies fond it
difficult to sell consumer products. Its consumer market origins molded traditional marketing
into system suitable for selling relatively low –value products to masses customers. Over the
decades, attempts have been made to broaden the scope of marketing into relationship marketing,
Customer relationship management etc. The CRM, software that allows tracking and analysis of
each customer preferences, activities, tastes likes ,dislikes ,and complaints .Today this has
become powerful marketing strategy for companies. Relationship marketing environment and
business organization changed radically toward the end twentieth Century. Markets became more
global and technologically sophisticated; and with intense competition and demanding
consumers .companies placed greater emphasis on service (Boride 1999).Relationship marketing
was now advocated as the appropriate paradigm for all business for all business (Christopher
1991).It was argued that traditional marketing with its 4 P s frame work is simple for today’s
competitive environment ,but that relationship marketing ,in contrast seeks to improve business
performance by manse of relationships ,networks and interaction. It is clear that relationship
marketing moved from transaction to integrate marketing by providing more value to customer.
Recent studies claim that, it has potential to forge new synthesis between quality management,
customer service management. It involves the application of the marketing philosophy to all
parts of the organization .It is true that, relationship marketing is a more pure form of marketing
than traditional marketing. However, transactional marketing is most appropriate when
marketing relatively low value consumer products, when the product is a commodity, when
switching costs are low, when consumers prefer single transaction to relationships, and customer
involvement in production low.
This table highlights the Pre and Post Industrialization Era

Production Era
Prior to 1920s
Production orientation
Business success often defined solely in terms of production victories

Sales Era
Prior to 1950s
Customers resist nonessential goods and services
Personal selling and advertising’s task is to convince them to buy

Marketing Era
Since 1950s Marketing Concept Emerges
Satisfying customer needs

Relationship Era
Began in 1990s
Carried customer orientation even further
Focuses on establishing and maintaining relationships with both
customers and suppliers
Involves long–term, value–added relationships

Customer relationship management
The combination of strategies and tools that drive relationship
programs, re-orientating the entire organization to a concentrated
focus on satisfying customers
Keywords: Industrialization, Customer Relationship Management (CRM), Customer Retention,
Integration.