Emerging Trends in Marketing
According to Blythe (2005) the later part of the 1990’s and now into the 21st century has seen marketing “undergoing some radical changes”. The traditional method of marketing whereby thinking is concentrated on the single transaction is no longer applicable. Jobber (2010, p.3.) notes how “successful companies rely on customers returning to repurchase; the goal of marketing is long-term satisfaction”. This has lead to a trend in what is known as relationship marketing. Though building good relationships with your customers has been around since ancient times, the recent emergence of relationship marketing has occurred when “businesses saw the potential of implementing relationship marketing strategies through [the use of] I.T. (Payne and Frow 2013). It was not so much a “discovery, but a rediscovery”. However it should be noted that this relationship marketing extends beyond just that of the customer, but also relationships built with all relevant stakeholders as seen in the fig. above. Gronroos (2004) cited in (Baron et al. 2010) states that:
If marketing is to be successful, other suppliers, partners, distributors, financing institutions, the customer’s customers, and sometimes even political decision makers may have to be included in the management of the relationship in the network of relationships.
However the core ideas are consistent despite the stakeholder and that is that the relationship must be a “mutually rewarding connection between the parties so that they expect to obtain benefits of it” and that “the parties have a commitment to the relationship over time and are, therefore, willing to make adaption’s to their own behaviour to maintain its continuity” (Jobber 2010 p.162). In the coffee industry this has lead to the implementation of different schemes such as loyalty cards. About the launch of the Costa Coffee loyalty card scheme Kevin Hydes, head of marketing UK at Costa Coffee, cited in Thomas (2010) said that “In a competitive market, it is vital that we show our coffee-lovers just how much we value their custom”. By attempting to build this relationship with the customer, Costa Coffee is seeking to differentiate themselves from their competitors in a market where Bainbridge (2009) states “there is little differentiation among leading brands”. Morgan and Hunt (1994) draw on the commitment-trust theory to state that both commitment and trust help firms to “resist attractive short term alternatives in favour of the expected long term benefits”. By creating a loyalty scheme coffee shops, such as Costa Coffee, are helping to develop this long term commitment and trust between the customer and their firm. This will hopefully create a relationship which turns “new customers into regular purchasers…to strong supporters…to active, vocal advocates of the company” (Christopher et al. 1991, cited in Baron et al. 2010, p.11). As part of Costa Coffee’s relationship marketing strategy “Cardholders…receive tactical communications throughout the year, in support of Costa's overall positioning” (Thomas 2010) and this reinforces their message that they are “consistently proud in reassuring us that we are making the best choice when we sip their coffee” (Ashmore 2013). Whilst traditional marketing uses the simple 4p’s framework, Payne and Frow (2013) suggest that this oversimplifies the situation too much and that when it comes to relationship marketing a match is needed between the external market and the internal capabilities of the firm. One such limitation on a firm is its capability to manage its relationship management operations whether technologically or financially. Keynote (2013) states that across the globe since 2008/9 there has been a “transition to hosted CRM products, which are often cheaper in the short term than in-house CRM systems”. This acts as a solution to this potential problem, but of course brings with it its own challenges.