Introduction:

Over the last 10 to 15 years, an alternative approach has gained attention in marketing circles relationship marketing (the concentration of marketing efforts and resources on developing and maintaining long term, close relationships with customers and other stakeholders.

Some have argued that this represents a fundamental shift in thinking within the marketing subject area and reflects the evolving nature of customer needs and expectations. Others maintain that relationship marketing is nothing new, that it is merely a redressing of existing business to business and service marketing principles, and that it has always been adequately covered within traditional marketing theory. Whichever perspective is taken, there is no denying that relationship marketing is a tricky area to define, as it covers a wide range of areas, including customer relationships, supply chain relationships, customer value management, retention, and loyalty.

It could be considered that relationship marketing begins and ends with customers in which case the subject might be termed customer relationship management. However, the early proponents of relationship marketing see the concept as being much wider than just relationships with customers; they would include all the relationships which a business must manage, both internal and external, in order for it to remain competitive and meet its customers needs effectively.

Origins and Extent of Relationship Marketing

In 2004, Chairman of the World Snooker Association, Sir Rodney Walker announced that other cities would be allowed to bid to host the annual championships. At just 980 seats, there was a feeling that the venue was too small. Additionally, the Crucible itself was beginning to show its age, particularly in its backstage facilities and lack of corporate entertainment areas. International interest in the sport was growing, particularly in China, and new sponsors, 888.com, were injecting large amounts of cash into the World Championships. The players themselves were generally against a move, as many of them really liked the intimacy of the Crucible and its association with the sport. (Sheffield Theatres, 2007) Sheffield Theatres immediately joined forces with the City Council to ensure that Sheffields bid to retain the Snooker World Championships was successful. This involved commitment to refurbishing the Crucible Theatre and the development of a National Snooker Academy to be based at the Institute of Sport within the city. In the end, the partnership between Sheffield Theatres, the City Council, and local businesses was successful and Sheffield won the bid to host the contest for the next five years.

While Sheffield Theatres has been successful in raising its profile with touring companies, developing its own productions and retaining world snooker, it has to find a way of maintaining customer numbers. Like many theatres, it has long used direct mail as a means of keeping in touch with its customers, using a database of customers names and addresses built up through previous ticket orders. This can be used to notify customers of forthcoming attractions. In addition the theatre has introduced a customer membership scheme called Square Circle in an attempt to develop closer relationships with its customers by enabling them to become part of the theatres. (Sheffield Theatres, 2007)

Square Circle is a tiered benefit scheme built around different levels of membership. All levels of membership attract a number of benefits including discounts on ticket prices, priority bookings, social events, talks, and tours of the theatres. Additional benefits are available depending on the level at which a customer joins. The annual fee ranges from 10 for youngs (1826) Membership up to 150 for Prestige Membership. Young people between the ages of 11 and 17 can join the scheme for free. The whole objective is not only to reward loyal customers but to give them a sense of ownership and involvement with the theatres and their productions. . (Sheffield Theatres, 2007)

Ongoing Assessment of Dell Corp.

To understand the effectiveness of Relationship Marketing efforts, Dell should measure their relational assets on an ongoing basis. Such measures should recognize the multidimensional aspects of customer relationships (e.g., quality, breadth, composition, growth/velocity), and metrics should provide feedback to individual boundary spanners or Dell teams (e.g., input to compensation and bonuses). For inter firm relationships, suppliers of Dell should capture both the breadth (number of contacts) and composition (authority and diversity) of their customer contact portfolio and focus their efforts on any identified weaknesses. (Morgan, R. and Hunt, S, 1994)

It may seem obvious to state that Dell investments, require consistent measurement to determine their returns, but such actions remain relatively rare in relationship marketing practice. These ongoing assessments should not concentrate solely on customer perspectives, but also on the overall selling organization. For example, Dell should conduct internal audits that ensure various organizational elements such as strategy, leadership, culture, structures, and control continually and consistently align with the firms relationship marketing objectives. Firms must recognize that building and maintaining strong customer relationships are dependent on both dedicated Relationship Marketing programs as well as diverse elements. Following fig-1 explains overall characteristics of organizations. Gummessons landmark paper in 1987 presented nine issues that challenged traditional marketing thinking (see Figure 1). These issues were not so much a model of

Source: (Gummesson,1987)

Gummessons thinking was developed by others into a Relationship Marketing model consisting of four broad partnerships where exchanges take place: customer partnerships, supplier partnerships, internal partnerships, and external partnerships. Although on the surface not all of these partnerships appear to be relevant to traditional marketing, they form an important part of Relationship Marketing theory because they can impact directly upon an organizations customer orientation. In other words, these partnerships can and do affect the overall marketing effectiveness of the organization. These theories therefore take a constellation relationship approach rather than a simple linear relationship between buyer and seller. (Gummessons, 2002)

References and Bibliography:

Gummesson, E. (1987) The New Marketing - Developing Long Term Interactive Relationships, Long Range Planning, 20(4), 1020. Gummesson, E. (2002) Total Relationship Marketing. Rethinking Marketing Management: From 4Ps to 30Rs, Butterworth Heinemann, Oxford. Kotler, P. (1967) Marketing Management: Analysis, planning, implementation and control, Prentice Hall, New Jersey. Morgan, R. and Hunt, S. (1994) The CommitmentTrust Theory of Relationship Marketing, Journal of Marketing, 58 (Oct.), 2038. Sheffield Theatres: http://sheffieldtheatres.co.uk , accessed 22/04/12