Key concepts of relationship marketing

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Relationship marketing

'Consistent application of up to date knowledge of individual customers to product and service design which is communicated interactively in order to develop a continuous and long term relationship which is mutually beneficial' (Cram, 1994],

Mass marketing

One-to-many communication between a company and potential customers, with limited tailoring of the message,

Customer-centric marketing

The approach to Internet marketing function is based on customer behaviour within the target audience and then seeks to fulfil the needs and wants of each individual customer,

Sense and respond communications

Delivering timely, relevant communications to customers as part of a contact strategy based on assessment of their position in the customer lifecycle and monitoring specific interactions with a company's web site, e-mails and staff,

Relationship marketing is best understood within the context of the historical development of marketing. The Industrial Revolution, the large-scale production of more widely distributed, standardised products changed the nature of marketing. Whereas marketing had previously been largely by word of mouth and based on personal relationships, it became an impersonal mass-marketing monologue. During the twentieth century, differentiation of products and services became more important, and this highlighted the need for feedback from customers about the type of product features required. Sharma and Sheth (2004) have stressed the importance of this trend from mass marketing to what is now widely known as 'one-to-one' or 'customer-centric marketing' (although many would regard the latter as a tautology since the modern marketing concept places the customer at the heart of marketing activity). These authors give the example of the Dell model where each PC is manufactured and distributed 'on demand' according to the need for a specific customer. This is an example of what they refer to as 'reverse marketing' with the change in emphasis on marketing execution from product supply to customer need. Another aspect of this transformation is that online, web marketers can track the past behaviours of customers in order to customise communications to encourage future purchases. This approach, which is another aspect of reverse marketing and also a key concept with e-CRM, can be characterised as 'sense and respond communications'. The classic example of this is the personalisation facilities provided by Amazon where personal recommendations are provided.

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