Magazine article Journal of Services Research

Towards Relational Exchange in Services Marketing:insights from Hospitality Industry

Magazine article Journal of Services Research

Towards Relational Exchange in Services Marketing:insights from Hospitality Industry

Article excerpt

INTRODUCTION

Modern marketers are rediscovering the ancient mantras for success in corporate world and blending them with contemporary marketing practices. It is believed that long term survival and competitive advantage can only be attained by establishing an emotional bond with the customers. A shift is clearly taking place from marketing to anonymous masses of customers to developing and managing relationships with more or less well -known or at least some -identified customers (Gronroos, 1994). Service organizations are shifting their focus from "transactional exchange" to "relational exchange" for developing mutually satisfying relationship with customers. Extended relationships are reported to have a significant impact on transaction cost and profitability, and customer lifetime value. Serving the customers, in true sense, is the need of the hour as the customer was, is and will remain the central focus of all organizational activities.

Services, owing to intangibility, simultaneity in production and consumption, and customer interaction during the service operationalization, are perceived to be high in risk and make the customers more involved in purchase situations. Regular interaction with customers is imperative for knowing and understanding their expectations and customizing the service solution with a personal touch. Organizations that continue to make the customers feel happy, the way they like it, are able to get them for lifetime. With the growing realization about the benefits of being a "relationship oriented organization", marketing strategies are designed to incorporate technical and behavioural features of service solution, essential to create a satisfying, pleasurable and memorable customer experience. Getting customers to love the organization is the mission of most customer focused organizations in the world.

Relationships are fundamental for living together in the society. They refer to a state of mind in which a person is favorably disposed of and attached to other person, object or organization. They build the bond among people or organizations for long-term co-existence. No organization can survive without having harmonious relationships with its stakeholders, in the market. Customers provide the life-blood to the organization in terms of revenue and profits. They also serve as the basis for competitive advantage. Managing relationships with customers is imperative for all types and size of service organizations. A sound base of happy and satisfied customers allows the organization to move on the path of growth, enhance profitability, fight out competition and carve a niche in the market place.

The need for relational exchanges in contrast to transactional exchanges has been strongly emphasized in the literature on customer relationship management (CRM). Bennett (1996) described that CRM seeks to establish long term, committed, trusting and cooperative relationship with customers, characterized by openness, genuine concern for the delivery of high quality services, responsiveness to customer suggestions, fair dealings and willingness to sacrifice short term advantage for long term gains. Schneider and Bowen (1999) advocated that service business can retain customers and achieve profitability by building reciprocal relationships founded on safeguarding and affirming customer security, fairness and self esteem. It requires that companies view customers as people first and consumers second. Trust, commitment, ethical practices, fulfillment of promises, mutual exchange, emotional bonding, personalization and customer orientation have been reported to be the key elements in the relationship building process (Levitt,1986; Gronroos, 1994; Morgan,1994; Gummesson,1994; Bejou et al,1998 ). An effective CRM program requires an integration of these elements with all the operations performed in the service organizations. Successful implementation of such programs require a strategic approach, which encompasses developing customer centric processes, selecting and implementing technology solutions, employee empowerment, customer information and knowledge generation capabilities to differentiate them, and the ability to learn from the best practices (Shainesh and Mohan, 2001). …

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