1. What is relationship marketing and how does it benefit service organisations such as this?There are four gaps in the customer gap model. These four gaps guide firms to close the customer gap, which is the difference between customer expectations and perceptions. For example, a customer visiting an expensive gym will expect a high level of service quality compared to an economical gym, such as eliminating wait time for each machine, and increasing number of facilities. Understanding customer's expectation of the service and perceived service is crucial in closing all gaps.
The principle of relationship marketing is to establish, attract, maintain, and enhance relationships with customers, so that the objectives of both seller and buyers involved are met. This is achieved through a mutual exchange and fulfilment of promises (Lovelock, Patterson & Walker, 2001; Berry 1983). Zeithaml (2006) describes relationship marketing as a "bucket theory of marketing". This "bucket" reflects marketing activities such as advertising and promotional programs of the gym, and will remain full if these programs are effective.
However, the "bucket theory" has holes. Whilst the gym is running well and delivers on its promise, the holes are small and few customers leak. On the other hand, when the gym's operation is weak and fails to deliver on its promise (unsatisfied customers), the holes become bigger and customers leak faster than what is being poured.
This bucket theory illustrates the concept of how relationship marketing can plug the holes in the bucket. By pouring "customers" into the bucket you begin to establish and attract customers to the business, and to avoid customers from leaking, customer relationship plugs these "holes" by maintaining and enhancing relationships with customers.
Relationship marketing is one out of the three key factors (Zeithaml, 2006), that assist in closing the difference between customer expectations and...