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ches to redefine the marketing concept. As such, relationship marketing (RM) has received increasing attention, (Kotler and Armstrong, 1996; Palmer, 1996; Grönroos, 1994a; Gilbert, 1996; Gummesson, 1994; Bennett, 1996). The traditional “marketing mix” and its 4Ps, which has dominated the marketing paradigm for decades is challenged by the RM writers as a production-oriented definition of marketing instead of a market-oriented, or customer-oriented approach (Grönroos, 1994b). This approach is an attempt to replace earlier notions of transaction marketing. In transaction marketing the focus is very short term and since there is not much more than the core product or, in some cases, the image of the firm, or its brand, which would keep the customer attached to the seller, customers are difficult to retain. This leads to the price becoming the determining factor as competition rises (Grönroos, 1994a).
On the other hand, relationship marketing embraces a function which has a longer term focus where its main philosophy is to build long-term relationships with customers. By maintaining a customer base and applying relationship marketing functions, the firm would create more value for its customers than the core product could provide alone. Within such circumstances, customers would tend to be less sensitive to a competitor’s price attraction, which would generate more profit for the company. Grönroos (1994a) suggests that the emergence of RM represents a paradigm shift in marketing, away from a restricting focus on the clinical functions of the management of the marketing mix toward an emphasis on the development and management of diverse forms of customer relationships.

References and further reading
Adler, N (1991), International Dimensions of Organizational Behaviour, PWS-Kent, Boston, MA, .
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Ambler, T (1995), "Reflections in China: re-orienting images of marketing", Marketing Management, Vol. 4 No.1, pp.23-30.
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Bennett, R. (1996), "Relationship formation and governance in consumer markets: analysis versus the behaviourist approach", Journal of Marketing Management, Vol. 12 pp.417-36.
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Buttery, E., Leung, T. (1998), "The difference between Chinese and Western negotiations", European Journal of Marketing, Vol. 32 No.3/4, pp.374-89.

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Buttle, F. (1996), Relationship Marketing: Theory and Practice, Paul Chapman, London, .
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Chen, M. (1995), Asian Management Systems: Japanese and Korean Styles of Business, Routledge, London, .
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Davies, H., Leung, T, Luk, S., Wong, Y.H (1995), "The benefits of guanxi: the value of relationships in developing the Chinese market", Journal of Industrial Marketing Management, Vol. 12 pp.207-14.

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Gilbert, D.C (1996), "Relationship marketing and airline loyalty schemes", Tourism Management, Vol. 17 No.8, pp.575-82.

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Grönroos, C. (1994a), "From marketing mix to relationship marketing: towards a paradigm shift in marketing", Management Decision, Vol. 32 No.2, pp.4-20.

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Grönroos, C (1994b), "Quo vadis, marketing? Toward a relationship marketing paradigm", Journal of Marketing Management, Vol. 10 pp.347-60.
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