Global Journal of Management and Business Studies. ISSN 2248-9878 Volume 3, Number 8 (2013), pp. 843-848 © Research India Publications http://www.ripublication.com/gjmbs.htm

Global ’ Impact of Relationship on Customer Loyalty: An Analytical Study

V.K. Aggarwal1 and Simple Arora2

1HOD, Commerce Department, University of Delhi, Shyam LAL College, Delhi, India 2Asst. Professor of Commerce, University of Delhi, Shyam LAL College, Delhi, India

Abstract

In today’s changing landscape and contour of global marketing with wide range of social media tools available at our disposal the modern age marketers are shifting their focus from transactional marketing to relationship marketing. It is the expectations of the global customers and modern marketers’ instant reaction to them that lays the foundation of developing and nurturing long term cordial relationships with customers. With all spotlight on building everlasting associations, retention and loyalty, the appropriately named notion of “relationship marketing” is planned and drafted around strong global relations with customers by making them available tailored information as per their aspirations, needs and interests. Its essence being, selling by winning customers instead of selling by yelling. Given the fact that satisfied customers are more committed and less likely to switch, they also tend to be less price conscious and do not mind paying more if they feel they are taken care off. Around this background, the main objective of this paper is to examine the relation between relationship marketing (RM) and customer loyalty with regard to few global brands. An attempt has been made to investigate the impact of relationship on enhanced customer loyalty by studying the cases of famous five global smart phone brands. The analytical method was followed to gather the data from various secondary sources like annual reports articles, news papers, journals, magazines and websites to get an insight into the connection between relationship marketing practiced by two major Smartphone global brands and their customer loyalty. The study contributes to the global RM literature and service

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marketing literature by providing evidences of the impact of RM activates on customer loyalty and relationship perception.

Keywords: Global marketing, Relationship Marketing (RM), Customer loyalty, Marketing Strategies, Service Marketing.

1. Introduction Today’s global marketing environment facilitating easy access to relative information, better online shopping experience and quick information sharing on range of social media sites has made the job of marketers more challenging as it has now become difficult to build image and earn customer loyalty. Here comes to rescue is the concept of Relationship Marketing (RM) aiming towards building and nurturing long term closer relations with customers to cope with modern day challenges and obtain global competitive advantage. (Wel and Bojei J., 2009). According to Ndubisi (2004) this is the reason why most of the companies are concentrating on building strong lifetime customer relationship to survive among competing global brands. It’s been noted with regard RM that it is more beneficial for a business to hold on to present customers to increase and sustain customer loyalty, than to earn new customers. Evanschitzky H. Wangenheim F. V. (2006) as it will be mutually beneficial for both the companies as well as customers (Rapp and Collins, 1990) . This relationship with customers forms the basis of strategic marketing planning by global brands and attempts to measure the impact of it on customer loyalty. In light of this paradigm shift the companies have began working towards appropriately understanding and predicting their customers’ buying behaviors by offering personalized shopping experiences through various social media sites like Facebook, Twitter and online selling sites like Jabong, Snap Deal, Myantraa etc. It a best way to create and sustain customer loyalty towards global brands as it offers better handling of customers’ queries and quick dissemination of required information. However, managing global information dissemination suited to local needs has its own challenges for constructing and intensifying customer loyalty towards global brands. From this gap we deduce the purpose of the present study where we attempted to investigate the impact of relationship marketing strategy on customer loyalty of two global brands of smartphone. The paper is mainly divided into five sections, section 1 i.e. the present section gives insights of global brands, relationship marketing, customer loyalty, section 2 gives brief review of present literature, section 3 gives data and methodology, followed by analysis and interpretations of results contained in section 4. Section 5 gives summary conclusions and interpretations of the results. References form the part of last section.

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2. Literature Review The changing landscape of global marketing is making global marketers shift their focus from transaction based marketing which aim at aggressive selling to more interactive relation strengthening marketing aiming to build and nurture lasting close associations with customers. (Abbasi and Torkemani, 2010). Different academicians have explained the notion of relationship marketing in different ways. If Gummesson (1994) defined it as the strategy having relationships, interactions and association as elementary issues then Berry (1983) viewed it as a strategy of attracting, sustaining and improving customer relationships. But it was Gronroos (1994), who gave the most comprehensive definition of relationship marketing as the aim of relationship marketing is to create, preserve and improve relations with customers and other partners by mutual exchange and fulfillment of promise. The main objective of relationship marketing is to promote customer loyalty, which according to Oliver (1999) is the strong commitment to re-buy products in spite of availability of wide product distractions in the market. Few characteristics of RM like treat each customer as individual person, direct all activities to present customers, implement strategies in interactive manner and strengthen customer associations were suggested by Blomqvist (1993). Loyalty is defined as lasting commitment to friends, family and country. However according to Ranjbaryan & Barari (2009) it is believed that this concept primarily got into the marketing literature by stressing on brand loyalty. The long term loyal customers are more profitable than other customers is the basic assumption of marketing to which Palmer, Roger and Lindgreen, Adam and VahammeJoelle (2005) recommended that it can be achieved by a series of steps which start with customer’s perceived value which produce customer satisfaction that, in turn, leads to strengthening of the relationships intending to last longer and eventually become more profitable. According to Morgan & Hunt (1994) it is less costly to retain an existing customer than to get hold of a new one. In marketing literature, behavioral data is usually used to appraise the customer loyalty because its collection is easier and less costly to obtain though it fall short in making a distinction among real and fake loyalty Wetsch L. R. (2005). For loyalty it is said that it is a condition where customers prefer to stick to the brand in spite of ever changing market conditions. If customers’ loyalty to the brand is the core of a brand’s equity then the assessment of the connection that a customer has to a brand is called brand loyalty. It signifies the likelihood of a customer to shift to some other brand when the present brand makes few changes in products’ price or features. As the customer loyalty increases the susceptibility of the customers to competitors action diminishes. According to Aaker, David A (1991), it is the only indicator of brand equity which is associated with future profits in view of the fact that brand loyalty straightforwardly transforms into prospective sales. In views of Levy, Michael ve Weitz, Barton A. (2001) some of the ways by which marketers try to build loyalty are: Appropriate Positioning, Database retailing, efficient customer service, selling unique merchandise. Even though a rapport building type of marketing approach is long-standing by nature, Transaction marketing is more short term goal oriented primarily because the endeavor of transaction marketing is to earn customers

846 V.K. Aggarwal & Simple Arora while of relationship marketing is to maintain, retain and sustain customers (Gronroos , 1995). On the basis of extensive literature review we have deduced the purpose of our study. The main objective of this paper is to examine the relation between relationship marketing (RM) and customer loyalty with regard to few global brands. An attempt has been made to investigate the impact of relationship marketing strategy on enhanced customer loyalty by studying the cases of two famous global brands.

3. Data and Methodology The methodology used in this study is analytical descriptive research where deep examination is done on the subject based on secondary data. This not only deals with analysis but review of literature is done deeply on the subject to draw some conclusions and implications for some global brands. For achieving the purpose of the study, along with investigating success stories and case studies on the subject, the systematic reviews are embedded in the analysis to add robustness in the research paper and draw some realistic lessons for relationship marketing concept and its impact on customer loyalty. The in depth analysis of information obtained from various sources like reports, news paper articles, information brochures websites, journals blogs etc was carried out with regard to two global brands in smart phone category namely Samsung and Apple. In Order to comprehend the significance of relationship marketing strategy upon customer loyalty, a detailed comparative analysis of both these global brands was carried.

4. Analysis and Interpretation This section gives the deep analysis on diverse facets of relationship marketing and customer loyalty. After gaining an insight it the notion of relationship marketing it was found that it entails a detailed understanding of the ways to be adopted to serve diverse customers with the aim to build long lasting relationships. The analysis of our study revealed that in the category of smart phones among five global brands it is the Apple I Phone which occupies the First position. It is the top global brand having most loyal customers. Also as stated by Interbrand, Brand ranking agency in its report that when it comes to its offerings and the status of its brand “Apple continues to whet appetites for more” According to a recent report of a group it was found that 60% of apple owners expressed their desire to buy another apple product because of their wonderful positive experience with Apple’s in store technical support. Our study reveal that Apple’s relationship marketing strategy offering unparalleled level of delight to its customer is clear indicator that RM has a positive impact on building customer loyalty. Apple’s policy of consistently delivering a customer experience that not only meets but exceeds the expectation of customers has allowed it to set itself apart from its tech competitors. Apple has managed time and again to occupy the top slot for customer satisfaction in consumer satisfaction index and has also secured highest customer

Global Brands’ Impact of Relationship Marketing on Customer Loyalty 847 satisfaction scores in Consumer Report Questionnaires. Another global brand Samsung is not far behind its competitor with having ‘‘creating customers for life” as one of its code of conduct. Samsung’s strategy of prompt handling of customer demands through quality accountability of quality has helped it in securing lifelong loyal customer. As per the results of a recent survey it was found that Samsung’s swift and accurate after services were appreciated by 80% customers among all other smartphone brands. Samsungs USP is its commitment to give customers what they want i.e. choice to pick from wide variety of phones at different prices with diverse operating systems. The major findings of our study were 1) Despite Apple being the number one smartphone vendor,86% of people who purchased a cell phone in 2013 did not buy an Apple I phone 2) though the popularity of smartphone is increasing(according to IDC, sales rose 44%) still 60% bought a normal phone. 3) customers value the experience they get more than the product features.4) though both global brands Apple and Samsung differ in their RM approach, they both were able to secure long term loyal customers.

5. Conclusion and Recommendations On the basis of our study we conclude that there is a significant impact of relationship marketing strategy of global brands on their customer loyalty as each satisfied customer refers to hundred new customers. It’s not the product alone but the whole experience which a customer gets from the brand that induce him to become a loyal customer. To build and sustain strong lasting connections with customers, the companies basically have to approach it and apply fundamental human relationship principles to it. The Five simple ways to sustain lasting relations with customers are-1) Spend one-on- one quality time with customers to feel their experience and understand their expectations to assess the brands’ strengths and weakness. 2) Delight customers with a surprise or something novel like an out of the box campaign or rewarding loyal customers event to make the bond even stronger.3) First Listen and then communicate to prove your true commitment and concern to your customers.4) Re kindle your old relations with product innovation and viable creativity that maintains new, significant and sympathetic relations 5) Never take your loyal customers for granted but instead further harness and reward the connections to enhance those bonds of unconditional love.

Reference

[1] Aaker, David A.. Managing Brand Equity, 1 st Edition. New York:The Free Press [2] Abbasi, M.R. and Turkamani, M. (2010).Theoretical Models of Customer Relationship 1991, p. 39.

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[3] Berry, L.L. (1983), “Relationship marketing”, in Berry, L.L., Shostack, G.L. and Upah, G.D. (Eds), Emerging Perspectives of Services Marketing, American Marketing Association, Chicago, IL. [4] Blomqvist, R., Dahl, J. and Haeger, T. (1993), Relationsmarknadsforing: Strategi och metod for servicekonkurren (Relationship Marketing: Strategy and Methods for Service Competition), IHM Forlag, Goteborg. [5] Evanschitzky H. Wangenheim F. V. (2006) ‘Customer Value Based Entry Decision in International Markets: The Concept of International Added Customer Equity’ Journal of Relationship Marketing Vol.5 (1) p. 79-91. [6] Gro¨nroos, C. (1994), “From to relationship marketing: towards a paradigm shift in marketing”, Management Decision, Vol. 32 No. 2, pp. 4-20. [7] Grönroos, Christian, Relationship Marketing: The Strategy Continuum, Journal of the Academy of Marketing Sciene, Vol. 23, (Fall 1995), No.4 p.252-254. [8] Gummesson, E. (1994a). Marketing relationship marketing operational. International Journal of Service Industry Management, 5(5), 5-20. Management, Journal of Commerce Reviews, No. 41, pp.34-19. [9] Levy, Michael ve Weitz, Barton A.. Retailing Management. 4. Edition. New York:McGraw-Hill,2001, p.175. [10] Morgan, R.M. and Hunt, S.D. (1994), “The commitment-trust theory of relationship marketing”, Journal of Marketing, Vol. 58 No. 3, pp. 20-38. [11] Ndubisi, N.O. (2003a), “Markets-marketers symbiosis under globalization: the aftermath of poor customer value”, Academy of Marketing Studies, Vol. 8 No. 1, pp. 45-52. [12] Oliver, R.L. (1999), “Whence consumer loyalty?”, Journal of Marketing, Vol. 63, pp. 33-44. [13] Palmer, Roger and Lindgreen, Adam and VahammeJoelle (2005) « relationship marketing: schools of thought and future research direction» journal of marketing intelligence & planning, Vol. 23, No.3, emerald, pp. 313- 330. [14] Pisharodi R. M. Angur M.G. and Shainesh G. (2003) ‘Relationship Strategy, Effectiveness, and Responsiveness in Service Marketing’, Journal of Relationship Marketing Vol.2 (1/2) p.3-22. [15] Ranjbarian,b;berari,m.(2009). Relationship marketing approach to improve customer satisfaction, Journal of Executive Management, No. 2 (repeated 36). [16] Wel C.A.B. and Bojei J. (2009) ‘Determining Relationship Marketing Instruments’, JUP Journal of Aug 2009 Vol. 8 Issue 3/4 p.25-41. [17] Wetsch L. R. (2005) ‘Trust, Satisfaction and Loyalty in Customer Relationship Management: An Application of Justice Theory’, Journal of Relationship Marketing Vol.4 No. 3/4 p. 29-41.