Relationship Marketing and the 4 P’s

Over the years, organizations have switched their perspectives in how they do business with their customers. They have gone from the traditional approach of transactional marketing to customer relationship marketing (Smith, 2013).

So what is customer relationship marketing exactly? defines the term as “marketing activities that are aimed at developing and managing trusting and long-term relationships with larger customers.”

Since there has been a change in the way that organizations are approaching their customers with more emphasis on social media, there has also been a change in the way that the 4 P’s of marketing are being used:

Product: “More products are customized to the customers’ preferences” (Kolter, 2013). An example would be the Nike shoe. Customers can log in to their NikePlus account and track their workouts, see what exercise activities friends are doing, and even customize their perfect running shoe. It is not only color that they are able to customize, but also the fabric, type of insole, and tread for the bottom. Organizations are able to offer more to the customer, without spending too much more on the development costs of the product.

Price: “The organization will set a price based on the relationship with the customer and the bundle of features and services ordered by the customer” (Kolter, 2013). Cell phone companies are an excellent example of this. If you ask most people, they will tell you that they are not very satisfied with their current cellular service provider and the cell phone companies know this. So when a customer calls to cancel their contract or they aren’t going to renew their contract, the cell phone company will take a look at how long the customer has been with the company and how profitable that customer is. Then the company will offer ‘exclusive’ pricing to entice the customer to stay.

Placement: Thanks to the internet and social media, communicating directly with customers has become much easier and more efficient than ever before (Smith, 2013). Because relationship marketing favors marketing directly to the customer, the need for a middleman to deliver the product is removed and costs are reduced (Kolter, 2013). Also with the development of online shopping, customers are able to shop from the convenience of their home, and the product is delivered right to their front door.

Promotion: Relationship marketing “favours more individual communication and dialogue with customers” (Kolter, 2013). Organizations can select certain customers from their database based on demographic and psychographic information that has been collected and specifically target that customer segment. They can then communicate with the customers through email, Twitter, Facebook, or wherever the organization’s customers are, directly. This direct contact also reduces advertising costs such as television commercials, and newspaper and magazine advertisement costs where the messages may not even be reaching the intended market segment.



BusinessDictionary. 2013. What is relationship marketing? definition and meaning. [online] Available at: [Accessed: 17 Sep 2013].

Kolter, P. 2013. Relationship marketing: Kotler on marketing – MaRS Discovery District. [online] Available at: [Accessed: 17 Sep 2013].

Smith, M. 2013. 12 Relationship Marketing Best Practices. [online] Available at: [Accessed: 17 Sep 2013].

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