(Solved) MK4003: Relationship Marketing in a Global Context




MK4003: Relationship Marketing in a Global Context

(Solution) Part A: A literature review on relationship marketing

1.0 Introduction

According to Kotler (2012), due to increased volatility and competition in the global market, firms are increasingly seeking to establish long term relationships with their customers. This has made relationship marketing a common form of marketing in the modern day arena. This report makes reference to Apple to analyse the literature on relationship marketing. Apple is an American multinational corporation that deals with the designing development and selling of consumer electronics (Reuters, 2016). The first part of this report defines and explains the concept of relationship marketing. The second part of this report explains the elements and theories of relationship marketing vis a vis Apple Inc. the last part of the report reviews literature on the role of relationship marketing in the global context.

2.0 Concept and definition of relationship marketing

Various authors have attempted to define the term relationship marketing using wide ranges of components, variables and concepts. First, Hollensen (2015) and Gummesson (2014) conceptualised relationship marketing as a strategic process whose goal is to develop, establish, maintain and strengthen various networks of relationships with all stakeholders for the purpose of gaining strong social and economic standards as well as achievement of common objectives. This definition is the one that will be used as the framework of this paper.

3.0 Analysis of elements of relationship marketing

Drawing from the literary review, relationship marketing is made up of wide ranges of variables elements and concepts. These concepts/elements include trust, commitment, loyalty and expectations.  Below is the analysis of these elements;

3.1 Trust

Drawing from the definition by given Hollensen (2015) it is clear that relationship marketing is an effort that involves various stakeholders, including the consumer, a marketer and so forth. It is on this basis that trust becomes important as for the relationship to prevail, it is imperative that all parties involved to be convinced that the other party will meet their end of the bargain (Jones et al., 2013). According to Hashim and Tan (2015), for this state of mind to exist, trust should be established. Trust is understood as the perception of credibility, goodwill and integrity in a relationship between two or more parties (Miquel-Romero et al., 2014). For Apple Inc, trust between the company and its customers is deemed as the most important elements in relationship building. As such, the company uses quality assurance techniques to establish trust between it and its customers. In this case, Apple ensures that goods and services reaching the customers meet and sometimes exceed their expectations (Apple, 2017). In a nut shell, trust is central characteristic of a relationship and is highly regarded as a key determinant of variables of conflict management and cooperation between parties (Gummerus et al., 2017). Furthermore, Gummerus et al. (2017) emphasize that within the context of relationship marketing, trust is a cornerstone of strategic partnership as well as a key component in the establishment and management of network relationships in a firm.

3.2 Commitment

Moller (2013) defines commitment as the underlying need and desire to maintain a valuable relationship between various stakeholders. Within the context of relationship literature, commitment is regarded as a crucial and quite important element for any firm interested in maintaining valuable and good relationship with its customers for a long term. In other words, commitment is perceived as a key to achieving outcome of great value in an exchange partner relationship. It results to value creation for all parties involved allowing for the strengthening and encouragement of all parties to maintain the relationship for a long term (Kotler, 2012). As shown in figure 1 below, when a relationship is build on commitment, it is more likely for the parties to adopt cooperative behaviours which in return enable them to fulfil their cognitive needs thus increasing loyalty and enhancing relationship strength (Kotler, 2012).

Figure 1: Commitment

Source: Kotler (2012)

In regard to Apple, the company has showed commitment to providing their customers with high quality products i.e. iPods, iPhone and other products (Apple, 2017). This has been reciprocated by a high degree of commitment by the consumers who are quite loyal to the brand.

3.3 Loyalty

According to Lings et al. (2016), the concept of loyalty is of great importance within the realm of relationship marketing. First, the conceptual definition of loyalty is the deliberate move by a firm to push its customers into buying a brand. Jones et al. (2015) however define loyalty as the behavioural as well as attitudinal disposition of a customers to prefer a given brand over the others. In this regard, consumers are said to loyal if they exhibit high level of commitment to the brand. According to Martínez and del Bosque (2013), although loyalty is manifested mostly on the consumers as an end result of past experiences, firms ought to put efforts to increase the level of loyalty in their customers. To this end, most firms including Apple Inc have adopted a number of ways to increasing their customers loyalty including showing value for money (Samaha et al., 2014), convenience and product safety among others.

3.4 Expectations

According to Schultz et al. (2017), the expectations element in a relationship marketing refers to the underlying beliefs and perceptions held by consumers about the performance of particular product. Wei et al. (2013) argue that it is important for marketers to anticipate as well as manage the expectations of their customers. To do this, firms/marketers are required to set performance expectations of their product and ensure that all efforts are put toward the achievement of those expectations. According to Catoiu and Tichindelean (2012), customers tend to build their expectations through previous experiences, interaction with the products, knowledge of the firm and familiarity with the competitors as well as social classes. It is also important for marketers to realise that customers can build expectations from individual aspects such as beliefs, values and attitudes. In the case of Apple Inc, the most outstanding approach used by Apple Inc to build its customer expectation is through the classification of its customers based on social classes. Apple’s products are premium priced which means that only those people with higher income can buy their products. By doing this, Apple is able to create a quality perception in their customers mind and thus creating valuable expectations for its customers which it meets by providing high quality products (Reuters, 2017).

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