• Philip Kotler

    Philip Kotler received his Master's Degree at the University of Chicago and his PhD at MIT, both in economics. He did post doctoral work in mathematics at Harvard University and in behavioral science at the University of Chicago.

  • Gary Armstrong

    In 2008, the Institute on Comparative Political and Economic Systems added an International Track to its oldest program. The idea was to broaden the program to include foreign policy and a more global perspective.

  • Kevin Lane Keller

    Two articles in Top 20 papers that most affected practice of marketing science in past 25 years, INFORMS Society for Marketing Science, March 2007; Sheth Foundation/Journal of Marketing Award, 2003; Harold H. Maynard Award, Journal of Marketing, 1993; Dissertation Awards, 1986: American Marketing Association, American Psychological Association Division 23, Association for Consumer Research, Marketing Science Institute.

  • Steven J.Skinner

    Steven J. Skinner is the Rosenthal Professor and Director of the School of Management in the College of Business and Economics at the University of Kentucky, where he has taught undergraduate and graduate courses in marketing for 16 years. He was previously on the faculty at Illinois State University, and was formerly a research administrator for State Farm Insurance Companies. He has also consulted with a variety of large and small organizations.

  • Naresh K Malhotra

    Dr. Naresh K. Malhotra is Senior Fellow, Georgia Tech CIBER and Regents' Professor Emeritus, Scheller College of Business, Georgia Institute of Technology, USA. He is listed in Marquis Who’s Who in America continuously since 51st Edition 1997, and in Who’s Who in the World since 2000.In 2010, he was selected as a Marketing Lege nd and his refereed journal articles were published in nine volumes by Sage with tributes by other leading scholars in the field.He was selected to receive the Hind Rattan Award in 2012.

  • David W.Cravens

    David W.Cravens is Emeritus Professor of Marketing in teh M.J.Neeley School of Business at Taxas Christian University.He previously held the Eunice and James L.West Chair of American Enterprise Studies and was Professor of Marketing.

19 February, 2016

This final section of the chapter discusses situations in which the firm might actually consider ending the relationship and how that might occur,in the next chapter we discuss situations in which the customer might decide to terminate the relationship and switch providers.


The Customer Is Not Always Right:

The assumption that all customers are good customers is very compatible with the belief that "the customer is always right",an almost sacrosanct tenet of business.Yet any service worker can tell you that this statement is not always true,and in some cases it may be preferable for the firm and the customer to not continue their relationship.

The Wrong Segment:

A company cannot target its services to all customers,some segments will be more appropriate than others.It would not be beneficial to either the company or the customer for a company to establish a relationship with a customer whose needs the company cannot meet.
For Example: A school offering a lock step,daytime MBA program would not encourage full time working people to apply for its program nor would a law firm specializing in government issues establish a relationship with individuals seeking advice on trusts and estates.

Not Profitable in the Long Term:

In the absence of ethical or legal mandates,organizations will prefer not to have long term relationships with unprofitable customers.Some segments of customers will not be profitable for the company even if their needs can be met by the services offered.

Example: This situation are when there are not enough customers in the segment to make it profitable to serve,when the segment cannot afford to pay the cost of the service,or when the projected revenue flows from the segment would not cover the costs incurred to originate and maintain their business.

Difficult Customers:

Managers have repeated the phrase "the customer is always right" so often that you would expect it to be accepted by every employee in every service organization.So why isn't it? Perhaps because it simply is not true.The customer is not always right.No matter how frequently it is said,repeating that mantra does not make it become reality,and service employees know it. 

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08 January, 2016

Switching barriers tend to serve as constraints that keep customers in relationships with firms because they however firms can engage in activities that encourage customers to remain in the relationship because they creating relationship bonds.
Leonard Berry & A.Parasuraman have developed a framework for understanding the types of retention strategies that focus on developing bonds with customers.

Level :1 Financial Bonds:

The customer is tied to the firm primarily through financial incentives lower prices for greater volume purchases or lower prices for customers who have been with the firm a long time.
Many travelers belong to several frequent flyer programs and do not hesitate to trade off among them.Although price and other financial incentives are important to customers,they are generally not difficult for competitions to imitate because the primary element of the marketing mix being manipulated is price.

# Volume and frequency reward

# Stable pricing

# Bundling and cross selling

Level :2 Social Bonds:

The firm through more than financial incentives.Although price is still assumed to be important,strategies seek to build long term relationships through social and interpersonal as well as financial bonds.Customers are viewed as clients not nameless faces,and become individuals whose needs and wants the firm seeks to understand.

# Continuous relationship

# Personal relationship

# Social bonds among customer

Level :3 Customization Bonds:

Level 3 strategies involves more than social ties and financial incentives,although there are common elements of level 1 and 2 strategies encompassed within a customization strategy and vice versa.Two commonly used terms fit within the customization bonds approach mass customization and customer intimacy.

# Anticipation

# Mass customization 

# Customer intimacy

Level: 4 Structural Bonds:

Level 4 strategies are the most difficult to imitate,they involve structural as well as financial,social and customization bonds between the customer and the firm.Structural bonds are created by proving services to the client that are frequently designed right into the service delivery system for that client .

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13 November, 2015

Relationship value of a customer is a concept or calculation that looks at customers from the point of view of their lifetime revenue and profitability contributions to a company.This type of calculation is needed when companies start thinking of building long-term relationships with their customers.

Factors That Influence Relationship Value:

The Lifetime or relationship value of a customer is influenced by the length of an average "Lifetime" the average revenues generated per relevant time period over the lifetime,sales of additional products and services over time,referrals generated by the customer over time,and costs associated with serving the customer.

Estimating Customer Lifetime Value:

If companies knew how much it really costs to lose a customer,they would be able to accurately evaluate investments designed to retain customers.One way of documenting the dollar value of loyal customers is to estimate the increased value or profits that accrue for each additional customer who remains loyal to the company rather than defecting to the competition.

Linking Customer Relationship Value to Firm Value:

The emphasis on estimating the relationship value of customers has increased substantially in the past decade.Part of this emphasis has resulted from an increased appreciation of the economic benefits that firms accrue with the retention of loyal customers.

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06 November, 2015

Both parties in the customer firm relationship can benefit from customer retention.This is,it is not only in the best interest of the organization to build and maintain a loyal customer base,but customers themselves also benefit from long term associations.


Benefits for Customers:

Assuming they have a choice,customers will remain loyal to a firm when they receive greater value relative to what they expect from competing firms.Value represents a trade off for the consumer between the components.

Confidence Benefits:

Confidence benefits comprise feeling of trust or confidence in the provider along with a sense of reduced anxiety and comfort in knowing what to expect.One customer described his confidence that resulted from having developed a relationship with a service provider.

Social Benefits:

Over time,customers develop a sense of familiarity and even a social relationship with their service providers.These make it less likely that they will switch,even if they learn about a competitor that might have better quality or a lower price.This customer's description of her stylist in a quote from the research just cited illustrates the concept of social benefits.

Special Treatment Benefits:

Special treatment includes getting the benefit of the doubt,being given a special deal or price,or getting preferential treatment as exemplified by the following quotes from the research.

Benefits for Firms:

The benefits to organization of maintaining and developing a loyal customer base are numerous.In addition to the economic benefits that a firm receives from cultivating close relationships with its customers,a variety of customer behavior benefits and human resource management benefits are also often received.

Economic Benefits:

Research reveals that over the long run,relationship-oriented service firms achieve higher overall returns on their investments than do transaction oriented firms.These bottom line benefits come from a variety of sources,including increased revenues over time from the customer,reduced marketing and administrative costs,and the ability to maintain margins without reducing prices.

Customer Behavior Benefits:

The contribution that loyal customers make to a service business can go well beyond their direct financial impact on the firm.The first and maybe the most easily recognized,customer behavior benefit that a firm receives from long term customers is the free advertising provided through world of mouth communication.

Human Resource Management Benefits:

Loyal customers may also provide a firm with human resource management benefits.First,loyal customers may,because of their experience with and knowledge of the provider,be able to contribute to the co-production of the service by assisting in service delivery.often the more experienced customers can make the service employees job easier.

30 October, 2015

Scholars have suggested that marketing exchange relationships between providers and customers often have the potential to evolve from strangers to acquaintances to friends to partners.

1.Customers as Strangers:

Strangers are those customers who have not yet had any transactions with a firm and may not even be aware of the firm.At the industry level,strangers may be conceptualized as customers who have not yet entered the market,at the firm level,they may include customers of competitors.clearly the firm has no relationship with the customer at this point.Consequently,the firm's primary goal with these potential customers is to initiate communication with them in order to attract them and acquire their business.

2.Customers as Acquaintances:

Once customer awareness and trial are achieved,familiarity is established and the customer and the customer and the firm become acquaintances,creating the basis for an exchange relationship.A primary goal for the firm at this stage of the relationship is satisfying the customer.In the acquaintance stage,firms are generally concerned about providing a value proposition to customers comparable with that of competitors.For a customer,an acquaintanceship is effective as long as the customer is relatively satisfied and what is being received in the exchange is perceived as fair value.

3.Customers as Friends:

As a customer continues to make purchases from a firm and to receive value in the exchange relationship,the firm begins to acquire specific knowledge of the customer,s needs,allowing it to create an offering that directly addresses the customer's situation.The provision of a unique offering,and thus differential value,transforms the relationship from acquaintance to friendship.A primary goal for firms goal for firms at the friendship stage of the relationship is customer retention.

4.Customers as Partners:

As a customer continues to interact with a firm,the level of trust often deepens and the customer may receive more customized product offerings and interactions.The trust developed in the friendship stage is a necessary but not sufficient condition for a customer firm partnership to develop.That is the creation of trust leads to the creation of commitment and that is the condition necessary for customers to extend the time perspective of a relationship.

28 August, 2015

Relationship marketing essentially represents a paradigm shift within marketing away from an acquistitions focus towards a retention focus.Relationship marketing is a philosophy of doing business,a strategic orientation,which focuses on keeping and improving relationships with current customers rather than on acquiring new customers.This philosophy assumes that many consumers and business customer prefer to have an ongoing relationship with one organization than to switch continually among providers in their search for value.Building on this assumption and another that suggests it is usually much cheaper to keep a current customer than to attract a new one,successful marketers are working on effective strategies for retaining customers.

"Relationship marketing is the process of creating,maintaining and enhancing strong value,laden,relationship with customer and other stockholders."-->Philip Kotler.

"The term relationship marketing is an organization effort to develop a long term cost effective like with individual customers for mutual benefit."-->Kevin&Herley.

Strong Value.

Finally we can say,Relationship marketing is the process of creating,maintaining and enhancing strong value,laden,relationship with customer and other stockholders.
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26 June, 2015

The research uses the critical incident technique to get customers and employees to provide verbatim stories about satisfying and dissatisfying service encounters they have experienced.Each of the themes is discussed here and sample stories of both satisfying and dissatisfying incidents for each theme are given in-

1.Recovery-Employee response to service delivery system failures:

The first theme includes all incidents in which there has been a failure of the service delivery system and an employee is required to respond in some way to consumer complaints and disappointments.The failure may be,for example,a hotel room that is not available,an airplane flight that is delayed six hours,an incorrect item sent from a mail order company,or a critical error on an internal document.The content or form of the employee,s response is what causes the customer to remember the event either favorably or unfavorably.

2.Abaptability-Employee response to customer needs and requests:

A second theme underlying satisfaction in service encounters is how adaptable the service delivery system is when the customer has special needs or requests that place demands on the process.In these cases,customers judge service encounter quality in terms of the flexibility of the employees and the system.

3.spontaneity-Unprompted and unsolicited employee actions:

Even when there is no system failure and no special request or need,customers can still remember service encounter as being very satisfying or very dissatisfying.Employee spontaneity in delivering memorably good or poor service is the third theme.Satisfying incidents in this group represent very pleasant surprises for the customer.

4.Coping-Employee response to problem customers:

The incidents categorized in this group came to light when employees were asked to describe service encounter incidents in which customers were either very satisfied or dissatisfied.In addition to describing incidents of the types outlined under the first three themes,employees described many incidents in which customers were the cause of their own dissatisfaction.

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