Competitive strategy and value creation in relationship marketing

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[...] (Kothandaraman & Wilson, 2000) The idea that relationship strategy should be viewed as a whole business model is supported by Porters (1985) Value Chain theory which recognized the importance of viewing all business processes as a sequence of events that create and add value. (Porter, M. 1985) Porter submits that organizations with strong interrelationships developed between business units (functions) can contribute to the firms' competitive advantage through a horizontal and cross functional corporate strategy. “Without horizontal strategy, business units may well act in ways that reduce rather than enhance their ability to exploit interrelationships.” (Porter Pg 366) The Relationship Chain The ‘Relationship Chain', which builds upon Michael Porters framework, suggests how added-value can be enhanced, with less cost, through process re-engineering. [...]

[...] (Why relationship marketing should continue after the shop has shut.) A logical next step would be to suggest a framework of possible withdrawal strategies. Key References Brennan, R et al. Contemporary Strategic Marketing (2003) Palgrave Macmillan. Hampshire Bund-Jackson, Barbara. Build Customer Relationships That Last. (November/December 1985) Harvard Business Review. 120-128 Full article re-published by: Payne, A et al. Relationship Marketing for Competitive Advantage: Winning and Keeping Customers. (1995) Butterworth- Heinemann Ltd. Oxford. Cassar, Sandro. In search of the common good: Understanding customers' feelings through CRM and building better customer-employee relationships. [...]

[...] Matters such as the organizations position on the relational spectrum; the ability of the organizations business units to work co-operatively; the positive relationship orientation of functional managers and the selection of appropriate relationship partners are factors that must be examined. It is clear that the advantages of relationship marketing should be weighed against concern for engaging in relationships only when it is expected that relationship marketing is consistent with the organizations overall marketing strategy. In short, relationship marketing should be practiced only when it offers, or contributes to an organizations strategy for achieving a sustainable competitive advantage. [...]

[...] 1985) Relationship Strategy Case Study A car hire company decides to adopt a relationship strategy in an attempt to better meet customer requirements. During the first stage of the new strategy the company undertakes research to fully establish their customer's needs. As a result they decide to offer a new service to customers, free route planning, which they believe will foster stronger relationships and in turn build loyalty, facilitating mutual exchange. However, the car hire company finds that although customers are taking advantage of their new service a number then make their next purchase from a competitor. [...]

[...] In the early days of the discipline, Berry (1983) defined relationship marketing as; “Relationship marketing is attracting, maintaining and . enhancing customer relationships .Cementing the relationship, transforming indifferent customers into loyal ones - this is marketing too.” (Brennan, R et al. 2003) O'Malley et al (1997) builds on this definition further; “Relationship marketing involves the identification, specification, initiation, maintenance and (where appropriate)dissolution of long term relationships with key customers and other parties, through mutual exchange, fulfillment of promises, and adherence to relationship norms in order to satisfy the objectives and enhance the experience of the parties concerned.” (Brennan, R et al. [...]