Relationship Marketing

Knowledge Center


Build continuing relationships between the organization and its customers. Explanation of Relationship Marketing of Theodore Levitt. ('83)



What is Relationship Marketing? Description

Relationship Marketing is an approach which emphasizes the continuing relationships that should exist between the organization and its customers. It emphasizes the importance of customer service and quality and of developing a series of transactions with consumers. The terminology was first described by Theodore Levitt in 1983.

Origin of the Relationship Marketing Approach. History

Already in 1980, B. Schneider wrote: What is surprising is that researchers and businessmen have concentrated far more on how to attract customers to products and services than on retaining customers. In 1983 Levitt wrote: In a great and increasing proportion of transactions, the relationship actually intensifies subsequent to the sale. This becomes a central factor in the buyer's choice of the seller the next time.

Relationship Marketing is strongly linked to Business Process Reengineering. According to this reengineering theory, organizations should be structured according to complete tasks and processes. Rather than functions.

Usage of Relationship Marketing. Applications

Relationship marketing and traditional transactional marketing are not mutually exclusive and they are not necessarily in conflict with each other. Relationship Marketing may be more suitable in the following circumstances or situations:

  • High value products or services.
  • Industrial products.
  • Products are not generic commodities.
  • Switching costs are high.
  • Customers prefer a continuous relation.
  • There is customer involvement in the production phase. See: Co-Creation.

Steps in the Relationship Marketing Process

  1. Chart the service delivery system. Set standards for each part of the system, especially the 'encounter points'.
  2. Identify critical service issues.
  3. Set service standards for all aspects of service delivery.
  4. Develop customer communication systems.
  5. Train employees on building and maintaining a good relationship with clients.
  6. Monitor service standards, reward staff for exceeding service levels, correct sub-standard service levels.
  7. Ensure that each employee fully understands the importance of quality and relationships in the marketing philosophy.

Strengths of Relationship Marketing. Benefits

  • Focus on providing value to customers.
  • Emphasis on customer retention.
  • The method is an integrated approach to marketing, service and quality. Therefore it provides a better basis for achieving Competitive Advantage.
  • Studies in several industries show that the costs to keep an existing customer are just a fraction of the costs to acquire a new customer. So often it makes economic sense to pay more attention to existing customers.
  • Long-term customers may initiate free word of mouth promotions and referrals.
  • Long-term customers are less likely to switch to competitors. This makes it more difficult for competitors to enter the market.
  • Happier customers may lead to happier employees.

Limitations of the Relationship Marketing model. Disadvantages

Relationship Marketing is less appropriate in the following circumstances:

  • Relatively low value products or services.
  • Consumer products.
  • Generic commodities.
  • Switching costs are low.
  • Clients prefer a single transaction to relationships.
  • No / low customer involvement in production.

Book: Theodore Levitt - The Marketing Imagination -

Relationship Marketing Forum
  What's Behind Relationship Marketing and CRM...
The basic principle of relationship marketing and ...
  Internal (Relationship) Marketing
As you may know, internal marketing was fir...
  What are 'Business Relationships'?
What differences do customers perceive between per...
  What is International Relationship Marketing (IRM)?
International Relationship Marketing means relatio...
  Relationship Marketing in Banking
Relationship marketing is extensively practiced in...
  Relationship Marketing as Part of your Strategy and Tactics
A practical approach is the "Group Merchant/Dis...
  Relationship Marketing Strategies in Retail
What type of relationship marketing strategies are...
  Relationship Management and The Creative Industries
Does anyone know of Relationship Marketing works b...
  The ART of Relationship Marketing
When the marketers have used science to develop a ...
  Is Relationship Marketing a New Paradigm
Is relationship marketing an addendum to the tradi...
  Relationship Marketing and Customer Loyalty
One of the important objectives of relationship ma...
  Relationship Marketing Should be a Systematic Approach
Implementing a customer relationship program or as...
  Relationship Marketing Critics
‘Relationship marketing is attacked by consumer gr...
  Relationship Marketing Levels
What are the levels of relationship marketing?...
  Selling is transforming a LEAD into a DEAL
Sale is all about identifying the LEAD and convert...
  Increasing sales by relationship marketing
How does one increase sales in a Biometric company...
  It`s all about Relations
Relationships marketing is about relations, how yo...
  Relationship Marketing and Perception
A very important element to remember when building...
  What is Relationship Marketing? Definition
Relationship marketing is a form of marketing that...
  Relationship Marketing Focus
One of the major points Relationship Marketing mus...

Relationship Marketing Special Interest Group

Special Interest Group

Relationship Marketing Education & Events

Find Trainings, Seminars and Events

Best Practices - Relationship Marketing Premium
  Relationship Management in Chinese Culture: Guanxi (关系)
The Chinese are acclaimed to be the masters of bui...

Expert Tips - Relationship Marketing Premium

Pitfalls of Traditional Relationship Marketing

About 50 percent of leading brands' buyers change ...
Usage (application): Relationship Marketing Implementation / Improvement

The Old versus the New View on Relationship Marketing

Here is a point by point comparison:
Usage (application): Relationship Marketing Implementation

Six Causes of Relationship Marketing problems

Researchers Deb Rapacz and Martin Reilly identifie...
Usage (application): Relationship Marketing Implementation

Factors for Corporate Credibility

Strong bonds and relationships between organizatio...
Usage (application): Establishing Trust

Customer Relationship TYPES

Next time you're using the term "CRM", remember th...
Usage (application): CRM, Relation Marketing, Branding

Branding In Relationship Marketing

In an article, Deb Rapacz and Martin Reilly invite...
Usage (application): Linking the Brand

Definitions of Relationship Marketing

Since its first description by Levitt, Relationshi...
Usage (application): Teaching Relationship Marketing

Customer Retention

In the game between Defensive Marketing and Offens...
Usage (application): Relationship Marketing

Use of Permission Marketing

Permission Marketing, the practice of marketing...
Usage (application): Building Customer Loyalty

Resources - Relationship Marketing Premium

Factors Influencing the Effectiveness of Relationship Marketing

Relationship marketing (RM) has emerged as one of ...
Usage (application): Effective Relationship Marketing

A Service-Oriented View on Marketing

Presentation about a service-dominant logic mindse...
Usage (application): Service-Dominant Logic, Perspectives on Marketing

The Effect of Relatinal Constructs on Relationship Performance

Peter C. Verhoef, Philip Hans Franses and Janny C....
Usage (application): Relationship Marketing

Introduction Into Permission Marketing (PM)

Presentation that introduces the concept of Permis...
Usage (application): Direct Marketing, Email Marketing, Internet Marketing, Search Marketing

The Importance of Noncustomers

Even the biggest enterprises (other than a governm...
Usage (application): Market Research, Customer Strategy, Innovation Strategy, Customer Survey Pitfalls

Interview with Theodore Levitt on Global Marketing

Theodore Levitt explains and ponders on global mar...
Usage (application): Understanding Global Marketing

News about Relationship Levitt


News about Relationship Marketing Concept


Videos about Relationship Levitt


Videos about Relationship Marketing Concept


Presentations about Relationship Levitt


Presentations about Relationship Marketing Concept


Books about Relationship Levitt


Books about Relationship Marketing Concept


More about Relationship Levitt


More about Relationship Marketing Concept


Compare with Relationship Marketing: Customer Relationship Management  |  Marketing Mix  |  Extended Marketing Mix  |  SERVQUAL  |  Benchmarking  |  Customer Satisfaction Model  |  Total Quality Management  |  Quality Function Deployment

Return to Management Hub: Marketing  |  Supply Chain & Quality

More Management Methods, Models and Theory

Special Interest Group Leader

You here

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2018 12manage - The Executive Fast Track. V14.1 - Last updated: 22-9-2018. All names ™ of their owners.