Relationship Marketing, Internal Marketing, and Service Quality Management: A Case of Al Hilal Bank – Page 1

In today’s world, organizations are in dire demand for marketers with the ability to combine marketing techniques with analytic and strategic communication campaigns. The aim of this is to capture and harness vast amounts of data in the quest of acquiring diverse information reflecting on different stakeholders of the organization. The solution to this growing challenge in the field of marketing involves the application of strategic relationship marketing. To understand better on relationship marketing, this paper will relates to the operations of an organization in Asia, specifically the United Arab Emirates. Al Hilal Bank, also known as the Al Hilal Islamic Bank, is a government owned bank in the United Arab Emirates. The bank operates in the vast banking and finance industrial sector. In essence, its financial services are broad and incorporate the primary Islamic banking. It also delivers services based on the Islamic asset management. More so, it plays the role of an investment bank by both the Islamic investment banking and investment advisory services. The bank includes a range of monetary services and products strategically designed to meet all financial needs of all those who subscribe to its services. The fact that it is Islamic means that the design of their products lies on the principles of Shari’a, which include giving choice, flexibility and utmost banking convenience. Al Hilal Bank has been operational since June 2008 and until now operates through a network of 21 branches located across strategic areas across the United Arab Emirates in additional to three other branches in the major cities of Kazakhstan. The targets of this financial institution include individuals, small and big firms, and huge organizations such as the Gulf Cooperation Council (GCC).

Relationship Marketing

As aforementioned, relationship marketing operates under a design set to develop strong and steadfast connections with all the stakeholders of an organization by providing them with clear and worthy information, which directly suits their interests and needs through the facilitation of open communication channels. The concept of relationship marketing operates under an approach to increase word-of-mouth promotional activities, repeat business and heightened willingness for various stakeholders to provide information to the organization necessary for its growth (Grönroos& Ravald 1996, p. 20). This concept of relationship marketing differs from its predecessor, transactional marketing, in the sense that transactional marketing operates on an approach that focuses on sale volume increment. In practice, most organizations apply both marketing approaches in their day-to-day activities. However, it is important to understand that the basic difference between the two marketing approaches gives one an upper hand. In retail banking for instance, relationship marketing is more appropriate to transactional marketing since it emphasizes more on creating substantial relationships at a personal level, compared to transactional marketing chief goal of just increasing the product sales and revenues.

Relationship Marketing in Organizations

Each organization in today’s world that incorporates a competitive marketing strategy within its structure also uses a relationship marketing scheme to enhance its business performance and productivity. The reason for incorporating relationship marketing in the mainstream marketing strategy, as implemented by the Al Hilal Bank, is because of its ability to identify, establish, maintain, enhance, modify and terminate the relationships between an organization and all is key stakeholders (Kanagal, 2012, p. 2). During its operations, either in service delivery or product provision, an organization such as Al Hilal Bank aims at creating value for all its stakeholders other than customers through a series of relational interactions with them either in the past or in the future.

Al Hilal Bank operates in the vast banking and finance industry. Just like other organizations in other industries, the financial organizations in the banking industry also seek the benefits of relationship marketing. The intensity of both local and global competition has influenced Al Hilal Bank to indulge in relationship marketing. The local retail bank competition specifically comes from big financial institutions such as the Abu Dhabi Commercial Bank, the Abu Dhabi Islamic Bank, the Emirates National Bank of Dubai, and the First Gulf Bank (Relbanks.com, 2013). The environment within which retail banks operate is wide and diverse. Therefore, it is only through relationship marketing that the Al Hilal Bank is able to acquire proper trust, bond, marketing communication, shared value, reciprocity, and empathy within its operations concerning all its relevant stakeholders. The bank relates with several organizations in different projects as a means of relationship marketing. This strategy plays well in enhancing its stakeholder loyalty (Kumar & Shah, 2004, p. 319). For instance, Al Hilal Bank has made a clear indication that is supports the Earth Hour and Abu Dhabi Vision 2030 (Ammari, 2013). More so, it is an official partner and supporter of the President’s Cup for five consecutive years, under the United Arab Emirates Football Association (Fassed, 2013). In a bid to enhance its relationship with close organizations from different industries, bank also organizes an Auto Festivalevery year that brings it together with all major auto manufacturers and dealers in and out of the United Arab Emirates, all in the quest of strategic relationship marketing (Ajou, 2013).

The Six Markets Model

The Six Market Model main aim is reviewing an organization’s stakeholders. The six markets model illustrates the fact that all stakeholders relatively play a very influential role in various environmental aspects of any organization. As illustrated in Figure 1, the Al Hilal Bank follows in the steps of other retail banks such as the Emirates National Bank of Dubai and the First Gulf Bank by using the six markets model incorporated on various organization operational fields including internal markets, supplier markets, recruitment markets, referral markets, influence markets, and customer markets.

Figure 1: The Six Markets Model

Figure 1

Source: (Harrison & Wicks, 2010)
This theoretical model dates back to 1991 when it first surfaced from the efforts of Christopher, Payne and Ballantyne. Specifically, the customer markets include the intermediaries. In the case of the Al Hilal Bank, relationship marketing efforts are at times channelled through various intermediaries such as brokers and bank representatives who promote the banks strategic plans to potential stakeholders across the United Arab Emirates and Kazakhstan, its key operational regions. The referral markets include the customers, who recommend the organization’s services to other people. With reference to this bank, a good example to illustrate referral markets is the GCC Equity Fund. Since its inception in April 2010, this equity fund has generated a 17.64 percent return for all major Al Hilal Bank stakeholders, with 11.8 percent being from the start of the year 2013 (Emirates News Agency, 2013). The supplier markets include alliance partners while the internal markets include internal staff in various departments. The influencer markets include the various shareholders, business press and the government. However, since the Al Hilal Bank is government owned, it is not subject to huge influence as far as state administration is concerned. The only influence is from the Central Bank of United Arab Emirates and a few monetary policy implementation agencies in its home country.

Network-Based Relationship Marketing

The root traditions of relationship marketing and business networks emphasize on two fundamentals of the relationship marketing concept. There is the market-based and the network-based relationship marketing (Baker & Saren, 2010, p. 318). The network-based evaluates and examines complex relationships presuming a business environment characterized by a network-like system. In light of this, the use of the network-based relationship marketing model by the Al Hilal Bank acts as a platform for the developing of less abstract yet complex views of current research focused on relationship marketing and business networks (Cunningham, Turnbull, & Ford, 1996, p. 47). The network-based relationship marketing incorporates all the external and internal relationship networks open for the organization to use (Baron, Conway, & Warnaby, 2010, p. 19). In light of this, Al Hilal Bank is actively involved in network-based relationship marketing. It has a well-established national network of branches and many other smaller service delivery units. The effectiveness of its services and its market retention of loyal stakeholders relies so much on how well it manages all the players who help in consolidating its entire operation network both in the United Arab Emirates and the Kazakhstan.

Influences and Challenges of the Above Relationship Tools

The above tools have played a great role in enhancing the development of the relationship between the management of the Al Hilal Bank and all its relevant stakeholders. Essentially, the six markets model helps to highlight all the areas necessary for this bank to pay attention to with reference to accomplishing its relationship marketing objectives. Coupled with the network-based marketing, these strategic tools assist all retail banks to establish a steadfast customer loyalty as well as relate well with various agencies, competitors as well as employees.

However, proper implementation of the above tools also faces challenges at times. Specifically, a considerable number of the management in the Al Hilal Bank still thinks that transaction marketing is better than relationship marketing since it prioritizes sales and revenue generation. Thus, the greatest challenge facing the above tools in developing relationship marketing emanates from the failure to fully adapt the relationship marketing strategy (Gronroos, 1999, p. 329).

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