Relationship Marketing

a. How different is relationship from traditional marketing? (10marks)

Relationship marketing, according to Gronroos (1994) is to identify, establish and enhance and when necessary, terminate relationships with customers and other stakeholders, at a profit so that the objectives of all parties involved are met and this is done by mutual exchange and fulfillment of promises. On the other hand, Traditional marketing according to the Chartered Institute of Marketing (CIM) is “the management process of identifying, anticipating and satisfying customer requirements profitably.” From the two definitions we can derive that the two strategies seek to achieve the same thing but through different channels.

According to Philip Kotler, “Transaction marketing is part of a larger idea called relationship marketing. Relationship marketing aims to build long-term mutually satisfying relations with key parties - customers, suppliers, distributors—in order to earn and retain their long-term preference and business. Effective marketers accomplish this by promising and delivering high-quality products and services at fair prices to the other parties over time. Relationship marketing builds strong economic, technical, and social ties among the parties. It cuts down on transaction costs and time. In the most successful cases, trans- actions move from being negotiated each time to being a matter of routine. The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, university scientists, and others) with whom it has built mutually profitable business relationships. Increasingly, competition is not between companies but rather between marketing networks, with the profits going to the company that has the better network.”

I. Relationship marketing places a special emphasis on maintaining healthy and...