Relationship Marketing

Abstract:

This academic paper describes and analyses the term 'Relationship Marketing' and 'Quality of Service' delivered to the customers in a hotel business. The New Year's Event was organized by the Pavithra Hotel to attract new customers and retain them by providing them with the best quality service. The theory relationship marketing and quality of service are analyzed with the event and specifically how the hotel has built on its relationship marketing and provided good quality of service to its customers. Some recommendations are provided as to how the hotel can improve on its marketing issues and the advantages and disadvantages of implementing these recommendations with in the industry.

Introduction:

According to Peppers and Rogers (2004) customers have relationships with service providers, and these relationships can be simple and straight forward, or complex and emotional (Ball, Coelho & Vilares. 2004). This journal article explores the term 'relationship marketing' and 'quality of the service' products. The main aim in choosing these two topics were because this particular branch of the hotel was not doing very well when newly opened but after the New Year's event organized by the hotel which was mainly to attract more customers to build on the relationship with customers and retain customers by providing the best quality service to the customers. This, in turn would enhance the productivity of the hotel. The paper also describes the event of New Year's Event and is related to relationship marketing and the quality of the service offered to the customers. Recommendations are provided at the end to improve these service products to suit the current industry and enhance the performance in terms of relationship marketing and quality offered. The article is developed by referring some of the scholarly journal articles and also the real life event which took place.

Background -New Year's Event (Pavithra Hotel, Bangalore):

Hotel Pavithra is a North and South Indian food family restaurant located in Bangalore with several branches spread across Bangalore catering to all classes of people. Initially, when this restaurant was opened, there was hardly any customers coming to the hotel and the quality of the service was not up to the standard. This made the management to think about a strategy to build on its customers thus, they decided to organize the New Year's Event which gave them a means to attract customers. The main objective to organize this event was to attract more customers and retain them and also sell their service through word of mouth advertising. The event was organized with an orchestra program where few local celebrities were invited to attract more customers. Few entertainment programs were arranged to entertain the customers and buffet dinner was served as well. The program started at seven in the evening and went on till midnight. The stewards were very well-mannered, tolerant and very pleasant while serving the customers which impressed the customers. The quality and variety of food served was another major factor for customers to get a positive impression about the hotel. The restaurant was renovated before the event to make it more appealing to the customers. Finally, feedback was taken from every customer who attended the event and their mailing address as well in order to build on the relationship and also invite these customers back if any future events occurred.

The event created positive word of mouth communication from the customers about the hotel, quality of service, quality of food, and its physical features which were considered very appealing. This event was a means for the hotel management to build on their relationship marketing and customer retention. The profitability of the hotel increased after this event both monetarily and in terms of increased customers.

Relationship Marketing:

The term ' Relationship Marketing as defined by Evert Gummesson cited in ( Lovelock et al.2005,p.387) as Marketing which is totally involved about relationships, networks, and relations, and being familiar that marketing is rooted in the complete management of the networks of the selling companies, the market, and the society. It is usually in long term perspective which is beneficial for both customers and company (Lovelock et al. 2005, p.387).

According to Gwinner, Gremler and Bitner (1997) cited in Lovelock et al.2005 relationships create value for individual consumers through such factors as inspiring greater confidence, offering social benefits and providing special treatment. The findings of several studies on services marketing have suggested that in order to acquire and maintain a competitive edge, service organisation should develop long term relationship with their customers (Gronroos .1991, Gronroos. 1994, Berry. 1995).

Firms have accepted that customer's retention is even more profitable than the customer's attraction. It is in the interest of firms to adopt relationship marketing principles and designing strategies to develop close and long lasting relationship with the most profitable customers (Sheth & Parvatiyar.1995, Richards. 1998). Since relationship marketing includes all the activities directed towards the establishment, development and maintenance of the exchange of relationships (Morgan & Hunt.1994), the activities of relational strategy should consists of the next objectives attraction (creating relationships), loyalty (developing relationships) and interaction (maintaining relationships). Barton (1999) stresses that the relationship between customers and a company develops in stages. Relationship marketing is closely linked to services marketing because of the boundary which occurs quite often between the consumers and the service provider. As the services are high both in experience and accepted qualities customers usually rely on the word of mouth rather than advertising as a basis for service provider selection. They also consider price, people, and physical features to judge quality, and remain loyal to service providers that constantly satisfy their needs (Hennig-Thurau et al. 2002).

According to Peterson (1995), a significant amount of research has developed on a firm's benefits of relationship marketing activities. Particularly relational marketing activities are shown to enhance revenues of loyal consumers (Reichheld.1996), raise the probability of further good and service purchases (Clark and Payne.1994) and influence consumer's tendency to initiate positive word-of-mouth communication among peer groups (Zeithaml et al. 1996). Although research has advanced regarding

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