Essay
Business level 3 unit 11 p1
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Describe the development of relationship marketing.
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In terms of the reasons behind the development of relationship marketing. Businesses need tofocus on relationship marketing in order to keep their customers. There is a short term and long
term period of keeping customers and long term benefits the business and its less costly , however
short term cost more. Businesses will need to understand the needs of their customers in order to
retain customers and they will need to adjust with the needs by changing their products and
services. Relationship marketing relates to businesses treating their customers in a certain way in
order for them to come and shop with them again and to build a relationship with the customer’s
long term. Businesses also need to focus on the customers coming back and not just about making
a quick sale because this may stop the customer from shopping with them and it decreases their
profit. Relationship marketing is also about meeting customer’s needs and understanding what they
want such as introducing products they want, which will allow the business to be a first choice of the
customer. Building long term relationships with customer’s increases profit as they will be coming
often. Also knowing the customer’s needs more than competitors builds loyalty and profit.
Attracting new customers is costly, which is why it is important for businesses to build a bond with
their long term customers. When attracting new customers it is costly because of advertising.
However with long term customers the business already knows their needs and has satisfied them
and the customer is going to keep shopping with them which is why they do not need to spend a lot
such as on advertising and trying to attract them. Having a long term relationship brings in more
sales, loyalty, high reputation and recommendations. Replacing old customers with new ones will
decrease sales instead businesses should try and build long term with both old and new which will
benefit them. New customers will need to be attracted in some way for them to shop with the
business which will be costly for example the business will need to offer them something for them to
shop such as free delivery or discount of their items. Which means paying attention to old
customers is less costly whereas attracting new customers cost more. Keeping long term customers
will increase profit as less is spent on them. Long terms of rewarded with loyalty card where they
get points to get discount of their items which is less costly for the business because these
customers will spend more so they can get more points which increases business profit.
In term customisation this is when customers will make changes to a product to suit them which is
what Nike offers whereas personalisation is what the business will do to modify or create a product
to suit a customer. Technology made it possible for customisation and personalisation as the
technology is now possible to do so and customers can state what type of product they want more
simply via website or email. A customer being able to customise their own product and make it
unique will make them spend more as this increases the business profit and it is also interactive.
Retaining a customer a customer will increase profit rather than just treating them well for a quick
sale; rewarding a customer and giving them discounts will keep them coming, rather than just
treating them well without rewarding them.When customers are loyal they will buy more products
and will not have the intention of shopping with a competitor. Also sending promotions to long term
customers via email shows that the business wants the customers to come back and they are
customer centered. Also getting the customers to do surveys shows the business care and want to
satisfy the customers need .
A business having a good relationship marketing website will allow them to make more sales
because when they have an interactive website where customers can customize their products its
makes it exciting for the customer. The website having personalisation and customisation allows
customers to create and design their own products makes it more interesting and allows them to be
unique which is why they will pay more. The website should be simple enough for the customers to
find what they want and purchase it which means the business will need to invest in their website to
make it good and it shows they care about their customers and want to impress them. There are
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