Question

Discuss with examples how Relationship Marketing allows suppliers to influence customers in value creation.

(Please explain what is relationship marketing and what is value creation)

Answer 1

Relationship marketing is one of the aspects of customer relationship management which focusses on the loyalty of customer and long term engagement rather than short term obectives of individual sales or customer acquisition. The objective of relationship marketing includes creation of strong and emotional customer connections with the brand which leads to business, free word of mouth promotion and referrals by them.

Acquisition of new customers is one of the most challenging and costly aspects of marketing. Relationship marketing helps in retention of customers for a long period of time that increases brand loyalty. This is better than one time or infrequent purchases by customers.

Relationship marketing helps the marketer to stay in close contact with the customer, which in turn helps to understand the ways customers use the products and services of the brand and also help them assess the unmet needs of the customers. This way new products can be created and offered which can further strengthen the relationship of brand and customer.

Relationship marketing increases the customer lifetime value by creating brand loyal customers who purchase frequently. These customers are more likely to become brand advocates which results in reduction in the advertising and marketing spends by the organization. The organizations also become customer focussed due to relationship marketing.