RELATIONSHIP MARKETING

Prof. Musadiq A. Sahaf The Business School

University of Kashmir
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April 07,2009

Learning Goals
• Understand the concept and significance of Relationship Marketing; • Differentiate between transactional and relationship marketing; and • Examine the process of Relationship Marketing.

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Relationship Marketing: Conceptual Text
Relationship Marketing is the attraction, maintaining and enhancing customer relationship

Relationship marketing is an interactive process where a firm works continuously with the customers to develop a long-term relationship for mutual benefit.

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Features of Relationship Marketing
• Focus on series of independent transaction; • Continuing and reciprocal interaction; • Lasting satisfying relationship between a marketer and his customers; • Collaborative exchange; • Cooperative spirit; • Circular communication; • Emphasis on high customer service; and • Focus on customer retention
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Transaction versus Relationship Marketing

Partners Advocates Supporters Clients

Relationship Marketing

Conceptual

Gap
Customers Prospects

Transaction Marketing

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Transaction View versus Relationship View
Transaction Marketing
• • • • • • Focus on single sale. Aims to catch the customer. Little emphasis on customer service. Mass market broadcast. Assess potential of market segment on the basis of market share. Interaction between a marketer and his customers for limited time i.e. transaction duration. Limited customer commitment. Business is defined by its products. • • • • • •

Relationship Marketing
Focus on series of independent transactions. Aims to keep the customers. High emphasis on customer service. Dialogue and tailored communication. Assess potential of market segment on the basis of lifetime value. Interaction between a marketer and his customers for a longer period i.e. lifetime. High customer commitment. Business is defined by its customer relationships.
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• •

THE RELATIONSHIP MARKETING CONTINUUM

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The Levels of Relationship Marketing

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The Levels of Relationship Marketing
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. THIRD LEVEL: INTERDEPENDENT PARTNERSHIP • Relationship transformed into structural changes that ensure partnership and interdependence between buyer and seller.

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Loyal Customer Pyramid

Partners

Advocates Supporters Clients

Customers
Prospects

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Process of Relationship Development

(1)
Awareness

(2) Exploration

(3) Expansion

(4) Commitment

(5)
Dissolution

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Relationship Marketing Process
Selection of key customers Study of Expectations

Relationship Marketing

Cooperation & Feedback

Formulation & Implementation of Strategies

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