Relationship Marketing

Relationship marketing in our book is defined as "a strategy that focuses on keeping and improving relationships with current customers."

This term is introduced in Chapter One of our book, as it refers to Customer Satisfaction. It assumes that many consumers and business customers would rather have an on-going relationship with one company than to continuously switching between companies. I found that All-State Insurance is a prime example of a company that thrives on relationship marketing. They have developed a plan in which states that if you go a year without getting into a car accident then they will give you $100 for that year and the ones that follows.

Unconventional to other companies, this plan seemed to be directly relating to Relationship Marketing because it is a way of rewarding their customers if they have been accident free for an entire year. By providing a reward system of some sorts to their customers, they are more likely to keep said customers.

Should a company rely heavily on relationship marketing, or should the company focus more on other aspects?

In Response to Joe Maturo

Do you like variety and options when buying something?

I most definitely like when there is a variety or options when buying products. Of course it depends on what I am buying. For instance: if I were shopping for a new pair of soccer cleats I would go to a store that was specialized in making such product. Although I could find soccer cleats in various places, like that of Target or Walmart, I would not go there. This is because I would be looking for quality in the product, one that will last for a relatively long time. Companies like Target or Walmart specialize in providing consumers with anything they need all in one store; not worried so much on the quality of the product. In certain situations Target and Walmart stores are good to go to when you need something, however in other cases I would have to choose a company that was more specialized in certain products.

In Response to Jade Brulotte

If I believed that the good or service met my needs and expectations then yes, I would be willing to pay the extra amount. However, it also depends on what the product is and whether or not the extra money is actually worth it. Companies such as Apple provide high-end products at a relatively high price. However with their products you know that your money will be well spent, and that with the product you gain technical help with technicians who are trained to make sure your product will work properly. In cases like this, I know that my money won't go to waste.

You also have to weigh in whether the product is worth it in the long run. People are not willing to buy a product if it won't last overall. Will the product hold up over time? The L.L Bean company understood this need of their consumers and provide life-time guarantee on all of their products. With this the consumer has the knowledge that no matter what they purchase, it will last for forever. Deciding whether or not to purchase a good at a higher price depends on the benefits one will experience and the quality of that good or service.

Do you think that consumers are more likely to purchase a good or service at a higher price due to the advertising of that product?