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Relationship Marketing

Relationship Marketing

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Published by: rajuarora40 on May 19, 2011
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Relationship Marketing

:
Spend Less Money, Get More Customers!
Presented by: Ruchi Shilpa Kavita

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

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What is Marketing? 
Marketing is an organizational function and a set of processes 

for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders (AMA, 2004)
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Philip Kotler 
"Today's smart marketers don't sell products; they sell benefit packages. They don't sell purchase value only; they sell use value." - Philip Kotler in Kotler on Marketing

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Term Relationship Marketing 
Term Relationship Marketing was first time defined by Leonard Berry in 1983: Relationship marketing is attracting, maintaining and ± in multi-service organisations ± enhancing customer relationships.

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Definitions of RM 
Relationship marketing is to identify and establish, maintain and enhance and when necessary also to terminate relationships with customers and other stakeholders, at a profit, so that the objectives of all parties are met, and that this is done by a mutual exchange and fulfillment of promises.
Grönroos, C. (1994), ³From marketing mix to relationship marketing: towards a paradigm shift in marketing´, Management Decision, Vol. 32 No. 2, pp. 4-20.

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

The Shift from Transaction-Based TransactionMarketing to Relationship Marketing 
Transaction-based marketing Buyer and Seller exchanges characterized by limited communications and little or no ongoing relationship between the parties  Relationship marketing Development and maintenance of long-term, cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

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Customer relationship management The combination of strategies and tools that drive relationship programs, re-orientating the entire organization to a concentrated focus on satisfying customers

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

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Table Comparing Transaction-Based Marketing and Relationship Marketing Strategies

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

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Relationship Marketing Goals and Outcomes 
Whereas the goal of traditional marketing is customer acquisition, under relationship marketing the focus shifts to creating value  The objective is to create more value through interdependent, collaborative relationships with customers, the outcome is customer retention  Relationship marketing is ongoing, constantly looking for opportunities to generate new value  Retaining customers requires marketers to exhibit care and concern after they have made a purchase  The sale often represents only the beginning of the relationship between the buyer and seller

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Supplier Rankings of Relationship Enablers *
TRUST COMMITMENT
COOPERATION

INFORMATION EXCHANGE

DEPENDENCE

Johnson, W. and Weinstein, A. (1999) Based on a study of Motorola and Lucent Marketing Managers.
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

THE RELATIONSHIP MARKETING CONTINUUM
‡ Firms try to move buyer-seller relationship from the lowest to the highest level of the continuum of relationship marketing to strengthen the mutual commitment between them.

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

FIRST LEVEL: FOCUS ON PRICE
‡ Most superficial level, least likely to lead to long-term relationship. ‡ Marketers rely on pricing to motivate customers. ‡ Competitors can easily duplicate pricing benefits.

SECOND LEVEL: SOCIAL INTERACTIONS
‡ Customer service and communication are key factors. ‡ Example: Wine shop holding a wine-tasting reception.

THIRD LEVEL: INTERDEPENDENT PARTNERSHIP
‡ Relationship transformed into structural changes that ensure partnership and interdependence between buyer and seller. ‡ Example: Barnes & Noble¶s member program that promotes repeat purchases by customer and provides discounts to the customer.
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Key Processes of Relationship Marketing 
Communication;  Interaction;  Value;  If the interaction and planned communication processes are successfully integrated and geared towards customers¶ value processes, a relationship dialogue may merge.

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Thank you!

Questions? Comments?

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

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