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Introduction:

Relationship marketing and customer relationship management have taken a central position in marketingstrategy in the past two decades. A confluence of factors, including the transition to service-basedeconomies; advances in communication, logistics, and computing technologies; increased globalcompetition;

and faster product commodization have enhanced the salience of “relationship

based loyalty”

to sellers

compared with other marketing mix factors.Moreover, some of these trends are simultaneously increasing customers

’

desire for the uniquecharacteristics found in relationship-based exchanges (e.g., reduced perceived risk, higher trust, enhancedcooperation, and greater flexibility). Thus, in many situations, both sellers and customers are becomingmore interested in conducting business transactions embedded within relationships.For Dell, to use relationship marketing in their business, the primary question is, how relationshipmarketing must be implemented to improve customer loyalty. One of the loyalty program is setting upDell 24/7 Call centre to continuously engage with customers through multiple channels. However, movingcustomer call centers offshore provides significant cost savings but also can seriously degrade customerrelationships.

Dell‟s well

documented experience.

Relationship Marketing Fundamentals:

Throughout the 1980s and 90s, traditional-based thinking came under increasing criticism. By the late1990s there was talk of the decline and even death of marketing as a subject(Brady and Davis, 1993;Doyle, 1995; Kashani, 1996; Gordon, 1998). While this might seem a little overdramatic, there is no doubtthat for many, a rethink was needed, as even the Chartered Institute of

Marketing admitted that: „the old

ways of marketing have become increasingly expensive, wasteful and ineff

icient‟.

So why, after so manyyears, was traditional marketing suddenly in the spotlight amid claims that it was failing? Basically, therewere four main strands: changing

market dynamics; an inflexible „tool box approach‟; the narrow scope of

traditional marketing and the stagnation of marketing as a subject area.Moreover, no one knows who (or how old) the next Highly Influential Customer will be, but Dell can stillthrive in a marketing environment in which companies like Dell have less control. They can do so bycreating a sound relationship marketing approach that builds trust throughout the relationship lifecyclethrough relevant and increasingly targeted communications, experiences and improvements. Peppersexplain

, “Relationship marketing can enable

Dell to cultivate that trust through supporters and advocateswho have their own interest in

Dell‟s continued success.”

The fundamentals of relationship marketingremain the same, whether new tactics involve messages dispensed over smart phones, on Facebook or intoregulatory mailings or billing statements. Paul Erickson,

Digital Cement‟s Vice President, Strategic

Growth, says the crucial elements of this approach include: Fig-1

Fundamentals of Relationship Marketing:

Source:

Relationship Marketing 3.0. (2009).

Thriving in Marketing’s New Ecosystem.

Available:http://www.digitalcement.com/CRM/pdf%5Cdigitalcementwp_092409_final.pdf. Last accessed 20 April 2012.

Relationship marketing investments should be allocated primarily to social and structural programs ratherthan financial programs. Social programs appear to generate the highest returns. Relationship marketingprograms aimed at increasing communication the amount, the frequency, and the quality are especiallyeffective early in the lifecycle, because communication is a strong driver of relationship quality and futurerelationship growth or relational velocity. Structural programs, such as electronic order-processinginterface, customized packaging, and other policy or procedural changes, also enhance relationshipsbetween the customer and the selling firm. Structural relationship marketing programs should target high-volume, existing, or growing customers, because a larger sales volume supports implementation costs andoften provides more value to customers with high-frequency interaction. In contrast, firms shouldminimize their proactive use of financial Relationship Marketing programs (e.g., price reductions, rebates,discounts) and instead consider these programs only as price/volume discounts or competitive responses.Most financial programs simply cannot generate positive short-term returns or build long- returns.Further to that, fundamentals of relationship marketing put massive importance on lifecycle. This requirescontinues influence over the customer and clients alike. Influence markets are important to anorganization in terms of relationship marketing as members of this market include bodies that directlyimpact on the organization. It is therefore essential that organizations

identify the main influencers to its‟markets „in order to protect and progress core business‟

(Cranfield School of Management 2000, p.23).T

his section will attempt to identify the influencers, and determine how these relationships‟ are exploited

by Dell. To ascertain the factors that affect Dell and the way that Dell conducts itself in the Influencemarket and the Referral Market was difficult as there was limited information to be found in terms of these markets. However, the relationships that are conducted in the Influence and Referral market aremore rather implied in the sense that Dell relies on partnerships and its reputation to corner these markets.In terms of the Influence market it could be said that governments, and the computer industry, are themain factors affecting this market for Dell. For instance governments both national and international affectthe influence through legislation affecting employment, interest rates, tax, and on monopoly laws. Thesefactors affect how Dell as a company expands and conducts its business on a national and global scale.However, evidence from Dell website, it is clear that Dell is in close partnership with the U.S.government, through developing defence systems with the military and supplying the U.S. governmentwith computers. It could be said that this partnership allows Dell a certain amount of room to maneuver inthe U.S. to expand its market share.