CHAPTER ONE

INTRODUCTION

1.1       Background to the Study 

The survival, success and continuity of service organizations depend on effective relationship marketing. The effectiveness of relationship marketing in service organizations determine to a great extent the performance of the organization as well as the satisfaction customers can derived from services rendered by the organization (Kotler, 2006).

Relationship marketing (RM) is meriting an increasing amount of attention in marketing research, and has already become a key enterprise marketing activity in recent decades. The term ‘relationship marketing’ was coined more than twenty years ago and since then it has been receiving considerable attention from both researchers and practitioners (Yang and Wu, 2007; Sharker, 2009). Mulki and Stock (2003) discuss several environmental factors that have facilitate the rise for this concept such as the trends for firms to be service and information-oriented, be niche-oriented, global in nature and of course, to adopt information technologies.

The concept of "relationship marketing" is at the very heart of the study of marketing management and work organization. The issue of relationship marketing is a current topical issue in marketing management that is presently attracting the concern and attention of marketing organization and company's services (Achumba, 2002).

For any organization to survive the on slough of competition, it must define clearly its relationship marketing which is a strategy adopted to create a cordial relationship between the marketing company and its customers. This will ensure the achievement of the company objectives and set goals that will invariable yield positive results (Weitz and Sandy, 1995).

In spite of its importance, not everyone appreciates its in-depth meaning, perhaps, the reason for this is because it is difficult to define and apply in organizations. Relationship marketing therefore, is concerned with the creating and maintaining mutually beneficial exchanges and relationship between the marketing organization and the target markets to achieve organizational objectives (Berry, 1995)). This can only be possible by providing quality services, ensuring the availability and provision of after sales services.

The role of Relationship Marketing in Competitive Marketing Strategy includes: guide moments of truth, improve profitability, build partnering, address 'Customer Better', buy in of customer attention, protect emotional well-being, understand consumer psyche, build trust with customer (Morgan and Shelby, 1994). Relationship marketing serves as a moderator for the sustenance of positional advantages and influences the impact of competitive and market conditions on the formulation of the marketing mix. In service industries, there is always some form of direct (social) contact between the customer and the service firm. This direct (social) contact or 'service encounter' is so important a part of service delivery that it is frequently called 'the moment of truth' (Johns, 1999).

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