Relationship Marketing and Customer Loyalty-Samples for Students

Question: Discuss about the Relationship Marketing and Customer Loyalty. Do Customer Satisfaction and Customer Trust Really Serve as Intervening Variables? Answer: The purpose of the paper is to reflect the study of the article related to the Relationship Marketing. Relationship marketing is a approach that is intended to raise the customer loyalty, contact and long-term engagement. It is intended in such a way to develop sturdy connections with the clients by offering them the data directly that suits to the requirements and interest by promoting the open communication system (Zhang, Watson IV, Palmatier Dant, 2016). The article that has been selected reflects the description related to the relationship marketing and customer loyalty in retail banks. The study shows that the customer trust and loyalty get affected due to the customer-relationship-centered marketing tactics. This is the fact that the customer trust and loyalty is the most important element of the retail banking and these retail banks make use of the relationship marketing to form the good customer loyalty that leads to the growth of the business. The article shows the significance of the marketing client retention, loyalty, market economies and the client relationship financial prudence for the banking sector after the globalization. This issue affects the company and the conditions of the banks forced them to bring the changes in their way of doing the marketing and they shift from managing the big pool to specific clients. This helps in creating the strong relationship with the customers (Mulyaningsih and Daly, 2011). The journal article related to the relationship marketing shows the importance of the relationship marketing for Indonesia banking sector to strive gaining a competitive benefit to enhance the quality of services and improvement in the system. The bank of Indonesia has the largest asset base with the domestic economy due to which they need to be focused towards the customer expectations related to the services. As per the report of the client loyalty in retail banking the customers of Indonesian banking consumers are second top switchers due to its relationship with the banks (Bain, 2013). This shows that their loyalty varies according to the services offered by the company. Report of banking competition recommends to the banks in Indonesia to change the way they attract their customers in the year 2013. Along with this, with the emergence of the competition in the industry banks have considered the association as the support of their business activities and marketing (MarkPlus Insight, 2013). Relationship marketing creates the impact on the profitability of the banks. Moreover, the concept of relationship marketing and customer loyalty is described in the article as both the terms are interconnected to each other and also plays a vital role for the companies who want to survive in the competitive world. Therefore, the banks make use of the marketing strategies to retain the customers who can provide them a high amount of profit. In the banking sector, the key responsibility of the managers is to generate and improve the client loyalty if they are willing to maintain customer loyalty with profit. The article reflects the hypothesize association among the relationship marketing and the client loyalty such as Hypothesis 1- Relationship Marketing and Customer Satisfaction, Hypothesis 2- Relationship Marketing and Customer Trust, Hypothesis 3- Customer Satisfaction, Customer Trust and Customer Loyalty, Hypothesis 4- Customer satisfaction influences customer loyalty and Hypothesis 5- Customer trust affects customer loyalty. Hypothesis 1- The author presented this opinion that there are three keystones of relationship marketing include planning and regulatory of client satisfaction, management of customer value and maintaining and building stable relationships. The satisfaction of the customer is totally dependent on the value that is expected by the customer and value that is offered to the customer (Bagherzad, Chavosh and Hosseinikhah, 2011). Due to this, the bank makes use of the related programs that helps the company in enhancing the flow of statistics among the service provider and clients as this is the only way to make the relationship strong. Hypothesis 2- In the banking sector trust of the company is well-defined as the consumer confidence in the reliability and quality of services presented by the company. To form the effective and strong relationship there is need of trust. The article shows that the banks make use of the relationship marketing but in that also the customer need to trust on the words of the managers. Hypothesis 3- Customer satisfaction is essential to retain the customer and to make that customer a loyal customer. Along with this, the customers who trust banks will not likely to switch to competitors. Relationship management is an effective way, through which the company will be able to form customer satisfaction, trust, and loyalty (Rizan, Warokka and Listyawati, 2014). Hypothesis 4- According to the study of the author given in the article, a maximum number of customers of banks has faith in their financial institution which is essential for getting the worth for money. This shows that when the customer gets satisfied then they trust the company which shows their loyalty towards the company. Hypothesis 5- All the hypothesis aspects are interrelated to each other which shows that it is essential for banks to make use of the relationship marketing strategies because this is the way through which they can attain the maximum profit for their company. (Research Model of Relationship Marketing and Customer Loyalty) The article also describes the methodology and the Research model for the relationship management and client loyalty. The three dimensions are adapted to measure the marketing relationship tactics which are preferential treatment, tangible rewards, and interpersonal communication. Along with this, to measure the customer loyalty there is the use of the four dimensions which include product quality, service quality, price and situational factors (Yen, Liu and Chao, 2009). Moreover, the article also reflects the different dimensions that are used to analyze the customer trust and satisfaction. All these measures are essential to be conducted by the bank for the further changes in the relationship marketing. The article shows the use of the SEM (Structural Equation Model) for the examining the hypotheses. Considering the examining hypotheses there is a discussion of research results and discussions as this is the effective way through which the banks can easily understand the relational marketing tactics that might affect the customer trust and satisfaction. The result shows that the bank is able to increase the customer trust. Through, this customer trust the bank will be able to face a strong competition. The article reflects the argument on banks profitability, growth and market share. Along with this, to increase a strategic advantage and live in todays increasingly competitive environment the banks should bring new innovation in relational marketing strategies to get belief from its customers (Rizan, Warokka and Listyawati, 2014). Overall, the article inspects the relationship of relational marketing strategies along with the consumer loyalty in retail banks. Nowadays, it is vital for the banks to make use of the effective and appropriate technology to analyze the customer data and to communicate them effective details. Along with this, the implementation of the smart system will help the banks in generating marketplace news on the client monetary performance and the new ventures that help the banks in generating the new solutions which result in profit for the banks. The articles also reflect the recommendation for the retail banks as the banks should root the customer relationship which is the only way to generate the competitive advantage in this competitive market. There are many banks who work systematically with the help of which they are able to convert customers into advocates. The growth strategies of these banks are the customer loyalty. The banks should build the employee engagement in the workplace which makes the positive changes in the environment of the bank and this will also improve the communication channel for the customers which enhance customer satisfaction. The bank needs to motivate their employees towards the employee engagement and to bring improvement in their performance (Ndubisi, Chan and Gibson, 2007). The article reflects that the retail banks should always take the feedback from the customers and should make the changes in the service according to their feedback. Moreover, positive customer feedback for the bank will inspire the bank and motivate them to introduce new services to their customers References Bagherzad, A, Chavosh, A. Hosseinikhah, S. (2011). The Influence of Relationship Marketing Tactics on Customers Loyalty in B2C Relationship The Role of Communication and Personalization. European Journal of Economics, Finance and Administrative Sciences, 5(31), 49-56. Bain Co. Inc. (2013). Customer Loyalty in Retail Banking: Global Edition. Boston: Bain Co. Inc. MarkPlus Insight. (2013). Banking Competition in 2013: In the time of Regulatory Transition. Jakarta: MarkPlus Consulting. Mulyaningsih, T. Daly, A. (2011). Competitive Conditions in Banking Industry: An Empirical Analysis of the Consolidation, Competition and Concentration in the Indonesia Banking Industry between 2001 and 2009. Bulletin of Monetary Economics and Banking, 14(2), 141-176. Ndubisi, NO., Chan, KW. Gibson, CN. (2007). Supplier-Customer Relationship Management and Customer Loyalty: The Banking Industry Perspective. Journal of Enterprise Information Management, 20(2):222-236 Rizan, M., Warokka, A. Listyawati, D. (2014). Relationship Marketing and Customer Loyalty: Do Customer Satisfaction and Customer Trust Really Serve as Intervening Variables? ", Journal of Marketing Research and Case Studies, 2014(2014), Article ID 724178, 12. Yen, TF., Liu, HJ., Chao, LT. (2009). Managing Relationship Efforts to Influence Staff Relationships in Services. Journal of Marketing Research, 45 (6), 741- 756. Zhang, J. Z., Watson IV, G. F., Palmatier, R. W., Dant, R. P. (2016). Dynamic relationship marketing.Journal of Marketing,80(5), 53-75.