Practice Of Relationship Marketing


Relationship marketing may not be equally effective in all market situations. It is extremely effective with customers who have longer time horizons and high switching costs. Strategically, the level of investment (time and money) on building customer relationship should be matched with the number of customers and size of profit from the transaction.

A firm selling mass merchandised consumer items of low to medium profit margin, the firm may adopt accountable marketing. A firm selling a product with high profit margin to a medium number of customers may adopt proactive marketing. If a product gives medium profit margin and its size of customer is small, the firm may again adopt proactive marketing. Partnership marketing, the most advanced form of relationship marketing is feasible only when a firm is selling a product with high profit margin to a small number of customers.