Relationship Marketing Approaches in Services Marketing

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| 2012 | | Relationship Marketing Approaches in Services Marketing |

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Over the last years the focus of marketing has changed from transactional to relationship marketing because companies realized that is cheaper to keep old customers rather than attracting new ones. Also this shift has occurred because of the intense rivalry that can be noticed in every industry. Besides its main goal of retaining customers and encouraging repeats, relationship marketing also creates value through relationships between buyers and sellers as well inside the organisation, or external with competitors, suppliers and distributors. A develop definition of relationship marketing by Christian Grönroos in 1989 would be: The purpose
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Improving customer satisfaction and longevity, providing a competitive edge and reducing marketing expenses are just relationship marketing strategies that have a great impact on a company. By adopting this marketing pattern, there are created benefits, not only for the service firm but also for its loyal customers, such as lower marketing expenditures, stability, new barriers for new competitors and reduced uncertainty. A big advantage for the relationship marketing approach is that it lowers the operating costs. Having loyal customers means that the company gets to know its buyers more and more with each transaction. Being based on a relationship approach, a company requires less information about the customer because with each encounter with him, the firm adds new information to the customer database. Strategically, a company based on the relationship marketing, has long term customers increasing their profits. Having more advantages for the customers than a traditional transactional marketing based company, a relationship marketing approach confers the company the possibility of charging more for their services without affecting the number of customers. A good example is the medical industry where a known individual might be willing to pay more for a doctor they know rather than choosing a cheaper competitor. In the services market a company may even charge more their premium customers for
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