Customer Relationship Management in the Airline Industry

  List of Figures  

  Figure number Name of Figure Page  

  Figure 1 Six Markets’ model.  3

  Figure 2 The Disconfirmation Paradigm.  4

  Figure 3 Technical framework of E-CRM process.  10

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customer retention. Among other elements, relationship marketing is characterised by its long -term perspective, high customer commitment and contact, contracts on a time basis, and orientation on product benefits. On the other hand, transactional marketing stands for a short-term perspective, l imited customer commitment, moderate customer contact, contracts on a volume bases, and orientation on product features (Christopher et al., 1994).

To understand the nature of the relationship, it is worthwhile to mention the Morgan and Hunt relationship marketing model (1994) which divides relational exchanges between supplier partnerships, lateral partnerships, buyer partnerships, and internal partnerships. Another model of interest is developed by Ford (1980). He uses a model which distinguishes between the ‘overall relationship’ and the ‘individual relationship’. The overall relationship contains the delivery, price negotiations, and social meetings, which represent the individual episodes. Lastly, the IMP group developed the interactive approach to examine buyer-seller relationships in which the relationship takes place between two parties. The model explains that either the buyer or the seller will take the initiative to look for a partner.

After investigating the term relationship marketing and its na ture, it is necessary to define what exactly is meant by ‘the customer’ and ‘other publics’ in order to examine how their levels of satisfaction might be improved? According to Applebaum (1980), one has to differentiate between a customer and a consumer. A customer is a “purchaser of a product or a service”, whereas a consumer is a “user of a product or service”. Often the customer is influenced by the needs of the consumer. ‘Other publics’ is any group, with some common characteristics with which an organisation needs to communicate, including the media, governmental bodies, financial institutions, pressure groups etc. These groups, including the customers, are summarised by Payne (in Cranfield School of Management, 2004) with the help of the ‘six-market model’ or ‘relationship marketing multiple markets model’. He states that relationship marketing recognises a diversity of key ‘markets’. These are shown by the following figure:

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Figure 1: ‘Six Markets’ model (Payne in Cranfield School of Management, 2004).

The internal markets are the individuals and groups in the organisation. The referral markets include sources of professional advice such as lawyers. Influence markets include organisations and individuals , which can influence the marketing environment of the company. Recruitment markets include relationships with existing and potential employees. Supplier markets refers to the network of organisations that provide materials, products and services. Finally, customer markets represent all individuals and organisations which purchase the company’s product (Payne, 2004). This model represents an overview about the company’s relationships, including its customers and other publics, which can be influenced by relationship marketing to increase their level of satisfaction.

But what is the nature of satisfaction, and its basic theories? And how is it connected to relationship marketing? Kristensen et al. (1999) stateS that customer satisfaction is the key to increase “the v alue of customer assets and create better business performance”. Customer satisfaction is an important indicator of successful relationship management (Dwyer et al., 1987; Ganesan, 1994). Expectations, performance and disconfirmation are the most essential determinants of customer satisfaction (Anderson, 1973; Olivier, 1980). However, the most central idea in the

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