a literature reviews: The relationship makreting development in uk supermarket industry

RELATIONSHIP MARKETING DEVELOPMENT IN UK SUPERMARKET INDUSTRY

2006 Relationship Marketing Development in UK Supermarket Industry

Introduction

Since its creation , the science of marketing has been growing along with the growth of the society . As the society becomes more and more educated , marketing has become a more serious and complicated issue

The marketing society has also evolved along with the modern environment . Today , in the era of communication and connections marketers can no longer afford to perform the traditional aggressive marketing concept , where they can release themselves from the responsibility of

unsatisfied consumers by finding a new one . Society is now interconnected , which means , a bad image will echo through the entire community

Within this , we will discuss the practice of defensive marketing concept , or better known as the relationship marketing concept , and how they are practiced in a modern market . We will also incorporate the use of advance technology in discussion of relationship marketing strategy As an object of study , we will use the UK supermarket industry to describe how the relationship marketing concept is applied in a real marketing strategy Relationship Marketing

The concept grew from as far back as the 1960 's . When people start to realize that customer retention is more valuable than constantly attracting new consumer . The concept actually originated from the B2B markets , characterized by long term contract and frequent deals Afterwards the concept developed rather rapidly due to the fact that relationship marketing can be applied wherever there is an ongoing and periodic desire for products or services

The once famous `offensive marketing strategy ' turned to `defensive marketing strategy , where marketers attempt to reduce or manage the dissatisfaction of customers and increase customer 's purchase frequency According to Gordon (1999 , the term relationship marketing is about creating new and mutual value between supplier and individual customer The cost of retaining customers is only about 10 of he cost of acquiring a new customer

There are several reasons why the customer retention efforts could increase profitability significantly . First , the cost of acquiring new customers usually peaked at the beginning of a relationship , so the longer the relationship , the lower the customers tend to be less likely to switch and usually less cost sensitive . This can result a rather stable unit sales volume Furthermore , long term customers tend to produce free word-of-mouth promotions for the products . Third , good relationship with long-term customers also resulted positive attitude from employees because it made the job more satisfying

The relationship marketing is characterized with the following considerations

Customer valuation , which means the company , must be able to decide which consumers are potential for deeper and better relationship with the company . Customers must be divided by their financial and strategic value , in to define where to invest the deeper relationship (Gordon , 1999

Customer retention measurement . The relationship marketing management consist of calculating a company 's `customer retention rate . This is simply the percentage of customers at the beginning of the year that is still loyal by the end...