Relationship marketing

Table of contents

Abstract         i

1. Introduction         1

2. The Evolution of Relationship Marketing         1

2.1 A paradigm shift         1

2.2 Defining Relationship management         2

3. Levels of the Relationship         3

4. Prerequisites for the Relationship         5

4.1 Commitment Trust Theory         5

4.2 The value concept         6

5. The Benefits of Relationship Marketing         7

5.1 Organisational benefits         7

5.2 Customer Benefits         7

6. Managerial Implications         9

7. Conclusion         9

List of references         11

List of tables.................................................................

Table 1................................................................................. 4

Table 2..................................................................................8

1. Introduction

Relationship Marketing (RM) has played a significant role in shifting the focus of marketing during the past two decades. The purpose of this paper is to uncover the underlying theory behind RM and discuss its evolution as a new marketing paradigm. More importantly, the scope of this paper will be limited to the benefits received by the customer and the organisation resulting from a successful relationship. A review of RM literature is presented, followed by a discussion on the implications associated with RM.

2. The Evolution of Relationship Marketing

2.1 A paradigm shift

Marketing literature consistently attributes the coining of the term "Relationship Marketing" to Leonard Berry. Berry's concept of RM came of age in 1983 when he proposed that the servicing of existing customers was just as important to an organisations success as attracting new ones (Berry, 1983). Prior to Berry's (1983) paper popular literature in regards to marketing almost exclusively covered the attraction of new customers to an organisation. A shift away from this paradigm was becoming increasingly obvious by the mid 1970s and was reflected in Richard Bagozzi's (1975) paper, which began to look at the importance of exchange relationships. Bagozzi (1975, p.32) noted that contemporary marketing literature dealt exclusively with restricted or "gives to and receives from" exchanges where the retailer attempts to...