HAPTER

11 Emerging Concepts in Marketing

Course Coverage:
ks,
A. Relationship marketing
Customer
development in relationship marketing
13, Strategies for relationship marketing
B. E-commerce
Connectivity through E-commerce
Features of E-commerce
n. Impact of E-commerce on marketing
Limitations of E-commercee
ne C. Strateegic Alliances
Reasons for forming strategic alliances
Forms of strategic alliances
Scope of strategic alliances
Requirements of successful strategic alliances
 Chapter 11: Emerging Concepts in Marketing Gurukul CA
A. Relationship Marketing
Relationship marketing is a marketing strategy designed to create a healthy relationship with the
customers which lead to customer loyalty, interaction and long-term engagement. The marketer
develops the loyal customers by providing better products, taking care of customer needs and listening
to customers' complaints and needs. The customers are so impressed with the service from the
marketers that they not only are loyal towards the products, they become strategic partners in the

marketing process by advocating about the brand to other

customers.

Relationship marketing is a long term partnership between the marketer and customers where both
the parties take care of each other; collaborate with each other in identifying and satisfying needs and

developing new marketing mix strategies

Customer development in Relationship marketing

Relationship marketing is a long term strategy. Marketers use step by step process to build a strong
relationship with the customers. The relationship marketing development involves following steps:

This step figures out prospective customers from the pool

of customers in
1. Prospects
the market. The prospective customers are those with the need, ability to
pay and willingness to pay for the product.

2. First time They are the first time buyers of the product. They are the curious customers
customers who are willing to take the risk with the new product.

The first time customers who get satisfied with the product purchase the
3. Repeat
customers product repeatedly. They are the satisfied customers and have potential to
be regular customers.

4. Clients The marketers recognize the regular customers who are using the product
repeatedly and start to treat them specially. These customers are the clients
who purchase and use the product continuously. They are loyal to the brand
and product.

5. Members The clients who join the membership programs to enjoy different benefits
provided by the marketers are the members. They do so when they feel that
the product will give them the ultimate satisfaction they need and want to
enjoy benefits from the marketer.

6. Advocates They are the members who are so satisfied with the product that they
recommend the product to their peer groups. They enthusiastically
recommend the product and even advocate in favor of the product brand
and the organization.

7. Partners They are the advocates who work together with the organization for
mutual benefits. The marketers provide special benefits to the advocates
for their efforts towards the product. Partners are the ultimate customers
every marketers wish for. The marketing campaign is targeted towards
converting the prospective customers to partner customers.

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oter11:
Emerging Concepts of Marketing
Gurukul CA
Strategies for relationship marketing
The strategies for relationsthip marketing are as follows:

1. Quality MarketersS must assure of best

price. Quality gives satisfactionquality
assurance
to their
product and services at fair
and satisfaction lead to
develops the consumer marketer relatiqnship. loyalty. Loyalty
2. Economic Consumers seek for positive value from
the product. Value is the
benefits difference between the price
(Financial
paid for the
Consumers prefer additional economic product
and satisfaction
gained.
benefits if they can find any.
benefits) Relationship with the customers can be maintained if the marketers can
provide additional economic benefits to the customers. The benefits can
be provided
through frequency marketing programs where customers get
extra benefit of discount
upon purchasing frequently and through club
membership programs where the customers are provided with privilege
club membership. This membership enables the
customers to get extra
discounts, privilege and benefits. yaue = SatsbehongoineelPre paid
3. Social benefits Another strategy for relationship marketing is to provide social benefits
to the customers. The marketer provides special status to their regular
N customers which provide social recognition to the customers. Similarly the
marketers organize social meet where the customers can enjoy different
refreshment dedicated to them.

4. Technical Organizations provide different benefits to their customer through

benefits technology. This attracts the customers as they get special privileged
A services that make their life easy. Technological services such as online
customer service, internet based services, privileged services are provided
to the customers. Amazon prime subscribers can enjoy quick delivery to
their ordered product along with other benefits.

B. E-commerce
The development of computers and internet facility has changed the market interface system. The
take place in physical geographical place can now be
traditional trade and commerce that used to
This system of conducting business, trade, transactions and
executed virtually in the world of internet.
commerce is E-commerce.
business which includes buying, selling and making
E-commerce is the process of conducting
the internet communication, Any business that
is conducted using e-mail, online
payments using
E-commerce, This is new system that has emerged with the rapid
to as
services and internet is referred
communication technology.
development n internet and

Connectivity through E-commerce

and the consumers to connect with each other easily. It not onlv
E-commerce enables the marketers
their poterntial customers, the customers can also get connected
enables the marketers to connect with
holders. The connectivity can be explained through followine
with the marketers and other stake
models:
Chapter 11: Emerging Concepts in Marketing
ukul .
1. Connecting with Intenet allows the manktes ad he u t s u g"1 t el i d
customers their desired parties easily. Multiple ertn statis
using E-commerce, 'The conetoma t i t i a (1121) 1sinen us
connection where Iwo buninesses ean ome1 witli e the I, ult
theirorganizational goali, (1M) usinesh to u d o e 0 tinl vd
the business can conmect with thelr enustomes pvil thein p l u .
and services, (C2C)customerto eustomer ( 0 e t i o I wlre twyt t
can connect with each other to execute tlieir desieed deal, ( 11) tste
to business connection wlere tlhe customet Ca eouert witlh I s i n st
get their desired products and servieen.
This connection helps to build a strong Dond alnong th buyeil lers
which can last for a long time eeating branul loyalty.

2. Connecting with The internet connection allows te marketen lo (0et

stakeholders
willi thei
stakeholders. It is a useful tool in ntegiated marketinp as allthe stals Can
connect to a central "Think tank" that allow 1hem to nderntandd what
is going in the organization and what contributionn
they can mak, "h
internet allows the marketers to connect with their supplien, middleen
and facilitators instantly and conduct their businen dealn
(anily witlh ln
hassle and paper works. Internet allows connectig with strateyir alliais
and make plans and strategles easily and effectively.
3. Connecting The development of internet has made global connection very easy. With
globally internet, businesses around the globe can connect and deal instantly. 'This
has allowed the businesses to
go global with minimal investment and
expenses

Features.of E-commerce
E-commerce has following features:
1. E-commerce enables individualized communication with
individual customers. 'This allows them
tocustomize their marketing mix according to individual
customer need.
2. E-commerce facilitates the
organizations to have a data center that is
theworld. This also allows storing huge amount of data enabling the accessible from any place in
much needed information in decision marketers to record and retain
making.
3. E-commerce provides E-mail and other
electronically transmittable information and
communication platform which enable them to
transfer data, information and
E-commerce facilitates the businesses to sell their documents.
This allows them to reach distant markets. This also products in virtual markets via online
selling
facilitates them to
consumers and cater their individual needs. individually connect with the
E-commerce facilitates to build relationship with the
consumers more
relationship marketing strategies more effectively and efficiently. conveniently and promote

Impact ofE-commerce on marketing

The positive impacts of E-commerce in marketing are as follows:
1.
E-commerce allows the marketers to directly connect with the consumers and execute direct
marketing strategles. This not only eliminates the middlemen, it also allows the
understand their customers deeply. marketers to
2. E-commerce has allowed the organlzatlons to deal vla virtual stores,lhey do not
physical stores as customers can purchase from virtual stores more need to invest n

3. se of convenlently.
E-commerce has decreased the cost of
middlemen can be eliminated with the use of . operatlon.lhe commission to agents and profit to
comnerce. Also the cost of
staffs can also be cut off. operatlon for stores ad
4. Since the business organizations can directly connect wltlh the
custoners individually, they
cater the customers with customized marketing mix for can
every unlque individual.y
 of Marketing
pter
11: Emerging Concepts
of Gurukul CA
W ed and E-commerce, promotion can be targeted towards the actual
the use
5.0
personalized promotion tools can be used
tinctive strategic alliances can be developed to cater
6. Effecti
through E-commerce. target market
effecti marketing mix ix strategies to global standards in marketing. They can create
pursue their common
and resources to better utilize their resources, goal. They can share their
technology
OIer E-commerce has few limitations. They are as follows:
F-commerce lacks privacy and security. Hackers can hack into
Dersonal data and information and miss use them. our system to get access to our

F-commerce is having more concern over

ethical
interest
use of information, privacy and individual

C. Strategic Alliances
Strategic alliances is the tie-up between and among two or more
terms and conditions to
mutually use their resources and
organizations where they agree upon
and interest. The businesses can tie technologies to achieve their common
goal
up to develop products and manufacture, conduct
and agree to join hands to achieve joint projects
mutually benefiting common goals.
Strategic alliances involve:
1. An
agreed agreement in a form of legally signed contract to mutually use their resources to achieve
mutual common goal.
2. The involvement ratio need not be
equal. The ownership is as per the share equity.
3 They jointly share the technology through technology transfer.

Reasons for forming strategicalliances

Strategic alliances are formed for following reasons:
1.
Strategic alliances are formed to better utilize the resources by joining them with other resources
to execute
bigger projects.
2.
Reduce the operational cost by sharing the expenses and adding up value to the product by creating
better products.
3. It allows co-specialization as the organizations share their technologies and ideas.
4. Allows the organizations to explore new markets with their joint resources and divided risk.
Organization can tie up with local companies to enter new markets where they can enjoy the market
networks,distributions channels and customer support services.
5. Strategic alliances can learn from each other.
6. Strategic alliances mitigate the risk through risk sharing and better performance through share
ideas and resources.

Forms of strategic alliances

The different forms of strategic alliances are as follows:

1. On the basis of ownership

a. lointventures where an independentorganlzatlon 1s setup under joint ownership. The ownershin
can be in terms of share-holding or agreement for profit sharing.

eortia are the alliance where muliple organizations jointly invest their resources
for
or a
particular project. They ereate a resource necessary for the product.
Chapter 11: Emerging Concepts in Marketing Gurukul CA
2. On the basis of contract
a. Licensing is the form of alliance where a business allows another business to
manufacture
patented product in return of certain fee.
b. Franchising isa contractwhere a brand allows using the brand in return of royalty. The franchiser
provides technical support and seeks for quality standards.
C.
Subcontracting is the alliance where a contractor sub contracts a part of project or job with
another contractor.

3. Market based strategic alliances

a. Networks where businesses tie up to build their chain to
mutually benefit.
b. Opportunistic alliances where businesses tie up for a particular project to grab the opportunity.

Scopeof strategic alliances

The scopes of strategic alliances are as follows:
a. Buyer seller alliance where
buyer and seller tie up to create better business. This allows them to
reduce the lead time for delivery, understand each other's
requirements, manage inventory etc.
b. Alliance to increase buying power where businesses
join hands to purchase larger bulks and enjoys
economies of scale.
c. Alliance to build barriers to entry where businesses work
together to create a barrier for new
organization to enter the market and avoids additional competition.
d. Alliance to gain entry where businesses join hands to enter new markets.
e. Alliance to share work where businesses co-produce with the clients and
works with the clients.
Requirements forsuccessful strategic alliance
Strategic alliance requires following elements for and effective and productive alliance:
1. The alliance members must have trust with each other and
loyalty for each other.
2. The alliance must have top management support at all levels to avoid
conflicts and frictions among
allies.
3 The alliances must be clear with the performance expectations from others.
The alliances must be clear with their
organizational arrangements with clear
responsibilities.
cut duties and
5. The alliances must be compatible with each other at operational levels with strong interpersondi
relationships.
6. The alliances should be ready for evolution and change as the alliances are formed to
among the organizations. bring evolution
 apter 11: Emerging Concepts of
Marketing Gurukul CA
CA
STUDY MATERIAL SUBJECTIVE QUESTIONS
1. What is relationship
ire
marketing? Describe customer development process in relationship marketing
2. Describe strategies for relationship
marketing.
er 3. What is e-commerce? Describe its features.
. Discuss the impact of e-commerce on
marketing.
th 5 What is strategic alliance? State reasons for forming strategic alliances.
6. Explain various forms of strategic alliances.
7. Describe the factors that contribute to success of
strategic alliances.
y. EXAMINATION SUBJECTIVE QUESTIONS
8. What is relationship marketing? How be retained with the customers?
can relationship Explain.
(June 2009, 2+3=5 marks)
9. Write a note on usefulness of relationship marketing. (June 2012, 5 marks)
to
Briefly explain the following: (5*2=10)
S a. E-commerce (June 2009)
b. B2B vs. B2C buying behavior (December, 2009)
w
C. Relationship marketing (December, 2009
d. E-marketing (June 2010)
e. E-commerce (December, 2010)
f. Telemarketing. (June 2011)
g. E-commerce (December, 2011)
h. E-marketing (December, 2012)
i. E-commerce (June 2013)
.Relationship marketing (June 2013)
k. E-commerce (June 2014)
1. Relationship marketing (December, 2015)
m. Meaning of E-marketing (December, 2017)
n. E-commerce (June 2018)
O. E-marketing (December 2018)
p. E-marketing (December 2019)