Impact of Relationship Marketing on Customer Retention (A case study of Makkays)

Abstract

This research reports depicts the implementation of one of latest marketing concepts; Relationship Marketing (RM). The study organization chosen is Pakistan based company Makkays which deals with electronic devices of several international brands, with its head office in Capital. Impact of RM can be measured mainly in two ways, either to measure underlying concepts of trust and commitment on strength of relationship or implementation tools of RM on customer retention along with customer satisfaction. Researcher has chosen second approach in which a holistic view of implementation of RM in form of Six market model; Customer market, supplier market, Internal market, Referral market, Influence market and recruitment market is followed. Main focus of researcher was to find out impact of most important “customer market” on customer satisfaction and retention, other supportive markets were not studied as deeply (each market domain does not fall under premises of marketing). Primarily RM strategies applied by company are not scrutinized (as any strategy can be applied provided that its aligned with basic concept of RM) instead relationship between end results of RM strategies; customer satisfaction (which is defined in terms of relationships) and customer retention (measured in terms of frequent repurchase) was measured. Results show that customer satisfaction and customer retention do not co exist so there is no relationship between RM and customer retention, though majority of customers are retained by company but they are not satisfied in terms of relationships. To find out what is wrong with RM strategies applied, interview was conducted and it was found that Makkays has following issues.