Study of Relationship Marketing and Its Impact on Consumer Behavior Term Paper

Excerpt from Term Paper :

Relationship Marketing and Its Impact on Consumer Behavior

Research Questions & Sub-questions

Research Design & Methodology

Organization of Study

Secondary Research

This report explores Customer Relationship management. In [articular the investigation seeks to understand the impact of relationship Marketing and Its Impact on Consumer Behavior. This issue has proven problematic for businesses because many do not have the ability to form effective relationships with customers. This deficiency costs companies customers and profits. The report sought to present effective ways to better customer relations at the business level. More specifically, the investigation saught to determine how businesses can determine what their customers really need and how will meeting these needs affect the customers' behavior? A review of the literature suggest the customers are effected by the attitudes of employees that they come into contact with. The attitude of a saleclerk can often have an impact on a customers decision to do business with a certain company. In addition, there are a host of other things that impact customer relations.such as the quality of the product, the price and the company's ability to meet the needs of the customer. In addition, the report focuses on the development of a Customer Relationship Management model. The report asserts that customer Relationship Management (CRM) is a field of management that concerns itself with the interaction between customers and businesses. Customer relationship management is an essential component in any successful firm. The report also discusses an adaptive approach to the implementation of a Customer relationship management system. The report concludes that it would be advantageous of businesses to develop a plan that incorporates a CRM model using an adaptive approach.

Chapter One


Context of the Problem

Relationship Marketing and Its Impact on Consumer Behavior is qn issue that has existed for many years, and it appears as though it will remain with the business world for some time to come. This problem stems from the inability of many businesses to relate to their customers, and therefore many customers choose not to return to a business. Therefore, businesses must develop tactics that will encourage customers to return to the business. Because the problem extends to so many businesses and walks of life it is, contextually, quite large.

Early on, there were fewer merchants, and people that needed goods and services bought from those merchants because there were not any other alternatives. Currently, there are literally hundreds of choices for some items, and customers can make better decisions about where they want to purchase a product, based on various factors such as price, treatment, etc. This is beneficial for customers, but it has proven problematic for businesses, as many of them can not relate to current or future customers.

Because of the number of businesses today and the increasing consumer demand for so many products, the context of the problem is important, and vast. Customers are able to choose from such a wide array of products and services that fewer of them are interested in developing any kind of relationship with the businesses. Still others are left feeling as though the business has no interest in developing a relationship with them. In either case, it harms the businesses, and new schemas must be developed to change it if businesses want to keep customers coming back.

Statement of the Problem

The problem, specifically, is that businesses are not developing good relationships with their customers. They have been ineffective in ensuring that customers are happy and that those same customers will return to shop with them. Naturally, this is a great concern for the businesses, because it is often harder to get new customers than to keep the ones that they have. It is also more expensive in most cases.

For large chain stores, retaining customers is not as significant, because there are always more customers coming in to replace those that choose not to return. However, for smaller, or more select businesses, losing a customer to a competitor can mean losing a great deal of money. Businesses do not want this, but in the past businesses have done a poor job at determining what a customer needs in order to get him or her to continue patronizing a particular store.

Customers who feel appreciated are more likely to return to a particular store, and when they are treated poorly or indifferently, they are less likely to return. This is a simple unpleasant fact, and applies to almost everyone. However, what customers think and feel has quite often been overlooked by many businesses, and it is only recently that many of these same businesses are starting to look for new ways of understanding what customers want and need. The way that customers are treated by a business, and the relationship that the business has with the customers appears to affect the customer's behavior, and this can be very significant for a business that needs to keep its customers coming back.

Despite the fact that many businesses are aware that customer retention and customer decisions can be affected by the relationship between the customer and the business, few businesses actually devote much time to understanding what their customers need. Naturally, this will not work for all customers, as there will always be some who shop at a particular store only when it has a good sale, or buys a particular brand on someone else's recommendation, etc. However, most customers can be retained if businesses develop an understanding of what customers need when they enter the business and then making sure that they get it. This is not just true for the product or service, but for the treatment that they receive as well, as this is very important to many people.

Understanding customer needs seems to be a huge part of the problem. Because most customers enter a shop, get what they need, and leave, it is difficult to get them to talk about what else they might want. Asking people to take surveys or answer questions while they are trying to purchase products and then return to their daily lives, is often difficult and many people refuse. This makes the issue more problematic because getting the answers that businesses need requires talking to these customers and finding out what a particular business is doing right or wrong so that changes can be made. Until enough customers are surveyed so that a well-rounded picture of what they need can be developed, businesses will continue to struggle with the problem of how to keep the customers. In addition, they have the added responsibility of continuing to build relationships with new customers so that their base of shoppers will increase, thus increasing their profits and what they are able to do for the customers that they have.

Research Question and Sub-questions

It is important, at this point, to look at the question that will be asked in the study. Without a clear research question, there is no real way to determine what a study is for or to ensure that anything gets accomplished as the study is completed. For purposes of this study, there will be one main research question and some sub-questions that will also need to be answered.

The research question for this study is:

How can businesses determine what their customers really need and how will meeting these needs affect the customers' behavior?

There are also sub-questions that will be answered, as the research question itself could lend itself to many different interpretations and opinions. The sub-questions that will be looked at in this study are as follows:

What is the best way for businesses to determine what their customers really want from them?

How can these wants be turned into policies that will keep everyone, both employees and customers, happy?

What will the business receive in return for meeting the needs of the customers who have expressed their opinions on the issue?

How will meeting the needs of the customers change the behavior that those customers have toward a particular business?

These are not the only questions that could be determined by this study. However, they are the main issues that should be investigated. Realizing that customer behavior will be changed because of the actions of a business is only common sense, but determining what changes a business should make and why, is still met with difficulty in the minds of many individuals.

By looking at the research question and sub-questions, and by attempting to answer them as realistically as possible based on the literature review, one can get a better understanding of just how difficult it is for a business to get the answers it needs when it comes to what to do to retain customers. One can also develop a more thorough understanding of how customers react to the changes and how developing a relationship with a customer will lead to a change in customer behavior.

Significance of the Study

This study has a strong significance for many. Not only are businesses affected by what customers…

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