Transcript of RELANTIONSHIP MARKETING As A TOOL
- 1. EXAMINATION OF A NEW PARADIGM RELATIONSHIP MARKETING
AMARNATH.K
- 2. JOURNAL: ADVERTISING EXPRESS
- 3. OLD IS GETTING CHANGED..!! OLD IS NOT MORE GOLD Marketing
for many years has been based on the management of demand, for
example, by advertising and promotion, and the management of price
to stimulate demand, or by developing new and different products
appealing to different segments of the market at different price
points. THIS INTERACTION BETWEEN SUPPLY AND DEMAND IS NO-LONGER
ADEQUATE.
- 4. THIS HUNT FOR NEW CUSTOMERS IS DIFFICULT! WHY BECAUSE? Of
the changing pattern of the demand in keeping with the rise in the
service based industries and a fall in the consumers and industrial
sectors. THE WORLD IS GETTING SMALLER AND SMALLER AND PEOPLE HAVE
SO MANY ALTERNATIVES TO CHOOSE FROM IN THIS NEW COMPETITIVE
ENVIORNMENT. So services theses days play an important role in the
whole process of product offering.
- 5. THE REASONS FOR THESES DEVELOPMENTS ARE:
- The decline of traditional mass marketing techiques,as
customers become more discriminating and demanding;
- The saturation of markets as they mature;
- The increasing focus on price, as differentiation
decreases.
- The appearance of technological development that provides new
solutions and products ,and
- The changing nature of markets, particularly the increase in
competition and development of fragmented ,regional, and global
markets and companies.
- 6. So because of theses
- Marketing is experiencing a shift from Transaction Orientation
to Relationship-Orientation
- It says instead of one sale at a time view of marketing,
emphasis should be laid on the relationship between the
organization and its markets.
SO THERE EMERGES THE NEED FOR RELATIONSHIP MARKETING.
- 7. WHAT IS RELATIONSHIP MARKETING?
- It was first coined by BERRY (1983) as a deviant form of
traditional marketing.
- Relationship marketing is defined as the process of attracting,
maintaining and ,in multi-service organizations, enhancing customer
relationships (BERRY,1983).
- VAVRA(1992) defines it as a customer retention program in which
a variety of after marketing tactics are used for customer bonding
or staying in touch after the sale is made.
- So Relationship marketing is to be the ongoing process of
engaging in-cooperative and collaborative activities and programs
with immediate and end user customers to create or enhance mutual
economic value at reduced cost.
- The underlying dimensions for theses definitions are: the
PURPOSE(OR OBJECTIVE);PARTIES(OR CUSTOMER PARTNERS); and PROGRAMS
(OR DEVELOPING RELATIONS).
- 8.
- Some factors that led to the rapid development of relationship
marketing are:-
- SOPHISTICATED TECNOLOGY like computers and telecommunications
that allow the producers to interact with the customers.
- TOTAL QUALITY MOVEMENT DRIVE among the companies has led to the
enhancement of relationship marketing.
WHAT IS THE DIFFERENCE BETWEEN TRADITIONAL AND RELATIONSHIP
MARKETING? Instead of saying it has differences its better we say,
the CONTINUUM IN THE MARKETING STRATEGY, because of theses
competition and other factors
- 9. THE MARKETING STRATEGY CONTINUUM-SOME IMPLICATIONS Consumer
packaged Goods Consumer durables industrial Goods Services The
product continuum Internal marktg of substantial strategic
importance to success Internal marktg of no or limited importance
to success The role of Internal marketing Interface of substantial
strategic importance Interface of no or limited strategic
importance Interdependency between marketing, operations and
personnel Real-time customer feedback system Adhoc customer
satisfaction surveys Customer Information system Managing the
customer base(Direct approach) Monitoring market share(Indirect
approach) Measurement of customer satisfaction Quality of
interactions(Functional quality dimension )grows in importance and
may become dominant. Quality of output( technical quality dimension
is dominant) Dominating quality dimension Less sensitive Customers
tends to be more sensitive to price Price Elasticity Interactive
marketing Supported by marketing mix activities) Marketing Mix
Dominating Marketing Function Long term focus Short term focus Time
perspective Relationship Marketing Transaction Marketing The
Strategy continuum
- 10. Key Elements in Relationship Marketing
- To identify and build a database of the current and potential
customers ,which incorporates the information regarding the
demographic ,lifestyle and purchase behavior of the customers.
- To deliver the right messages to the right target customers at
the right time through proper communication channels.
- To keep track of each and every relationship and monitoring the
cost of acquiring the consumers and their lifetime value.
- The emphasis on the interaction between suppliers and customers
is shifting from a transaction to a relationship focus.
- 11.
- The relationship marketing focuses on maximizing the lifetime
value of desirable customers and customer segments.
- Quality ,customer service and marketing are closely related
,but most of the time they are managed separately. The relationship
marketing makes these elements coherent.
- Delivering differentiated messages to theses people through
established and new media channels based on the consumers
characteristics and preferences.
- 12. PURPOSE OF RELATIONSHIP MARKETING
- CUSTOMER RETENTION IS THE ONLY PURPOSE
- Relationship marketing attempts to involve and integrate
customers ,suppliers and other infrastructural partners into a
firms developmental and marketing activities .Such involvement
results in close interactive relationships with suppliers,
customers or other value chain partners of the firm.
- Thus RM reflects interdependence rather than independence of
choice among the parties and emphasizes cooperation rather than
competition and consequent conflict among the marketing
actors.
- So development of relationship marketing points a significant
shift in the axioms of marketing competition :
- COMPETITION AND CONFLICT TO MUTUAL COOPERATION.
- CHOICE INDEPENDENCE TO MUTUAL INTERDEPENDENCE.
- 13. TRANSACTIONAL MARKETING RELATIONSHIP MARKETING INDEPENDENCE
AND CHOICE MUTUAL INTERDEPENDENCE COMPETITION AND CONFLICT MUTUAL
COOPERATION AXIOMS OF TRANSACTIONAL AND RELATIONSHIP MARKETING
- 14. SIX MARKET FRAMEWORK OF RELATIONSHIP MARKETING
- Markets are also important as it reflects the competitive
aspects of relationships.
- Thus it says that in order to build and sustain customer value
it is important to recognize that relationships must be built with
a number of constituencies.
- The framework thus ,represents the groups of components that
are critical to building and maintaining relationships.
- 15. CUSTOMER MARKETS RECRUITMENT MARKETS SUPPLIER &
ALLIANCE MARKETS INFLUENCE MARKETS REFERRAL MARKETS INTERNAL
MARKETS
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- The essence of this framework is that although customer markets
are at the center of the figure it is not the only market of
importance in terms of relationship marketing; the other markets
are as influential as customer markets depending on the situation
and context.
- Many organizations market to trade customers (Intermediaries,
distributors or retailers) and consumers (end purchasers ,user and
consumer), but their relative power within the supply chain is
likely to determine which relationships are in focus and which are
not.
- Referrals are characterized by their credibility towards the
environment of the relationships or as endorsers of one of the
parties involved .Referrals can be decisive as they posses a high
credibility factor. They arent gained from publishing their point
of view.
- 17.
- Each and every employee of an organization is responsible for
creating and distributing value to the customers. According to
BERRY (1984),employees are an organizations first customers.
- Recruiting right employees for the right post in an
organization is a very important factor in the overall performance
of the organization. Recruitment has slowly become a marketing
related task. The potential employee will search for internal
qualitative factors that go far beyond its products and
services.
- Influence Markets are the markets that may or may not influence
a relationship ;however they share the potential to influence
relationships regardless of whether they are internal or
external.
- In the marketing system ,suppliers should be included as
relationship partners. In SCM(supply chain management), the whole
marketing system is considered the unit of analysis. This is in
synchronization with the six market framework.
- 18. RELATIONSHIP MARKETING PROGRAMS
- By observations of the corporate practices ,there are three
types of relationship marketing programs
- They take different forms depending upon whether they are meant
for end-customer, distributor customers ,or business to-business
customers.
- Marketers use a combination of one or more types of theses to
build closer and mutually beneficial relationships with their
customers.
- 19. VARIOUS TYPES OF RELATIONSHIP MARKETING PROGRAMS PREVALENT
AMONG DIFFERENT TYPES OF CUSTOMERS Institutional Buyers (B2B)
Distributors/Resellers Individual customers Joint marketing and
co-development Co-operative marketing Co-branding Co-marketing/
Partnering Key account management and co-development Customer
business development Data warehousing and data mining Individual
marketing Special supply arrangements E.g.-JIT,MRP Continuous
Replenishment Loyalty programs Continuity marketing CUSTOMER TYPES
PROGRAM TYPES
- 20. FOR INSTANCE TELECOMMUNICATION SECTOR..
- 21. CHALLENGES FOR RELATIONSHIP MARKETING
- Once the strategy of RM is established, implementing RM
requires application of a range of skills and resources from the
initial database and product to fulfillment capabilities and
feedback mechanisms.
- Some of the challenges faced by RM marketers are:
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- Gaining access to the appropriate systems and executional
capabilities.
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- Developing the right organizational structure.
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- Budgeting for lifetime customer value.
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- Managing an integrated communication program.
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- Building alliances between manufacturers and retailers.
- 22. CONCULSION
- To conclude,relationship marketing emerged as a result of shift
from customer acquisition to customer interactions.
- RM provides advertisers with a richer set of tools for building
brand image and awareness and spending promotional money more
effectively. Advertisers who fail to master the techniques of RM
will find themselves outplayed by the smarter competitors .
- The important question to be answered now is to decide whether
to deploy RM or not and to determine how and when to do so.
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