Relationship marketing has emerged from the 1980s as a key concept in marketing literature and widely adopted by organizations in the contemporary business world. Relationship marketing shifts attention from short-term transaction and immediate profits toward a process of creating customer value through long-term relationships with customers.
The modern relationship marketing can be understood if it is contrasted with the traditional transactional marketing. In transactional marketing, the focus is on sales and sales are achieved through the effective implementation of marketing mix. Sales are perceived to be the result of immediate actions such as aggressive selling, sales promotion, or advertising.
Relationship marketing's focus is not on immediate sales; rather it is directed at building a large group of satisfied and loyal customers. Customer retention and winning back lost customers are the key strategy in relationship marketing. Relationship marketing uses sustained long-term efforts in delivering value to the customers and profit to the firm.
In a competitive market, it is not enough to build relationship only with customers; it is equally important to establish relationships with the vendors, intermediaries, and other influence groups. Relationship marketing is adopted by smart marketers who try to build up a long-term trusting, win-win relationship with valued customers, distributors, dealers, suppliers, and other stakeholders.
This approach is directed at building strong economic, technical and social relationship with the parties concerned over a period of time. The objective of relationship marketing is to build a valuable company asset popularly known as marketing network. today, the real competition is not between companies; rather it is between marketing networks.
