RelationshipMarketing

V l ti d t t i l t ti Valuecreationandstrategyimplementation
A d Agenda
Th Ch i F i M k i TheChangingFocusinMarketing
TraditionalversusRelationshipMarketing
Approach
TransactionalversusRelationshipMarketing p g
RelationshipMarketing:principleand
orientation orientation
TheroleofRMtocompetitivemarketing
strategy strategy
h d b h f i d i Asamerchantyoudbetterhaveafriendin
everytown
AnancientMiddleEasternproverb
Th Ch i F f M k ti TheChangingFocusofMarketing
Customer
relationship
Competitiveposition
focus
relationship
focus
Service
d i t
Sales
MarketingMix
focus
k
dominant
e
x
i
t
y
Production
focus
focus
Market
dominant
C
o
m
p
l
e
Product
focus
Product
Dominant Dominant
Pre1800s 1920s 1950s 1970s 1980s 1990s 2000+
Time
Source:Christopheretal(1991)
T di i l M k i A h TraditionalMarketingApproach
Marketing Mix (4Ps)Approach MarketingMix(4Ps)Approach
Product
Price Price
Place
P ti Promotion
ProblemswithTraditionalMarketing
Approach Approach
Itassumesallsegmentsofcustomersare
similarandmaybetreatedinastandardized
way
Itassumesconsumersarepassiveabsorbersof
marketinginformation
Itassumesshorttermandoftenoneoff
transactionsbasedaroundtheexchangeof
goodsformoney
Source:Christopheretal(1991)
D fi iti f R l ti hi M k ti DefinitionofRelationshipMarketing
Perspective Definition Perspective Definition
Berry(1993)froma
serviceperspective
RelationshipMarketingisattracting, maintainingandmulti
serviceorganizationsenhancingcustomerrelationship
J k (1985) f M k ti t t d t d t l ti Jackson(1985) froman
industrialmarketing
perspective
Marketingconcentratedtowards strong,lasting
relationshipwithindividualaccounts
Berry and Parasuramen Attracting developing and retaining customer BerryandParasuramen
(1992)fromaservice
perspective
Attracting, developingandretainingcustomer
relationships
Gronos (1995) froma To identifyandestablish,maintainandenhance ( )
networkperspective
y ,
relationshipwithcustomersandotherstakeholders,at
profitsothattheobjectivesofthepartnersinterestare
met,andthisachievedbyamutualexchangeandfulfillment
of promises ofpromises
Source:Christopheretal(1991
General Model of Relationship GeneralModelofRelationship
Marketing
Focusesonarelationshipratherthantransactional
approachtomarketing
d d h f Understandstheeconomicsofcustomerretention
Highlightsthecriticalroleofinternalmarketingin
achievingexternalmarketingsuccess g g
Extendstomorediversemarket
Recognizesthequality,customerservicesand
k ti d t b l l i t t d marketingneedtobecloselyintegrated
Ensuresthatmarketingisconsideredacrossfunctional
context
The Transactional to Relationship TheTransactionaltoRelationship
Marketing
Emphasisonall
k t d i d
RELATIONSHIP
marketdomainsand
customerretention
RELATIONSHIP
MARKETING
Emphasison
customeracquisition
TRANSACTIONAL
MARKETING q
Functionalitybased
Marketing
Crossfunctionality
basedMarketing
Source:Christopher,
RelationshipMarketing,2002
Transactional Marketing Relationship Marketing TransactionalMarketing RelationshipMarketing
Focusinvolume
h d f
Focusonprofitable retention
h l Emphasizes productfeatures
Shorttimescale
Littleemphasisoncustomer
Emphasizescustomervalue
Longertermtimescalers
Highcustomerservice p
services
Moderatecustomercontact
Primary concern with product
g
emphasis
Highcustomercontact
Concern with relationship Primaryconcernwithproduct
quality
Concernwithrelationship
quality
PrinciplesofRelationshipMarketing
Maximizing Customer Lifetime Value (CLV) is a MaximizingCustomerLifetimeValue(CLV)isa
fundamentalgoalofRelationshipMarketing
The future flow of net profit discounted back to the Thefutureflowofnetprofitdiscountedbacktothe
present
Focusingmarketingactiononmultiplemarkets g g p
SixMarketsModel
It must be crossfunctional Itmustbecross functional
Marketingistooimportanttobelefttothe
marketingdepartment(DavidPackard)
Th R l i hi M k i TheRelationshipMarketing
Orientation
Quality
RELATIONSHIP
MARKETING
Customer
Service
Marketing
Source:Christopheretal(1991)
BenefitsRMtothefirms
Towinanewcustomerismoreexpensivethanto p
itistotoretainanexistingcustomer
Establishedcustomerstendtobuymore(shareof
wallet) wallet)
Satisfiedcustomersaremorelikelytoreferothers
(reduce cost of acquisition) (reducecostofacquisition)
Loyalcustomerscanbelesspricesensitiveand
maybelesslikelytodefectduetopriceincreases
Retainingcustomersmakesmarketentrydifficult
forcompetitors
TheRoleofRMtoCompetitive
Marketing Strategy MarketingStrategy
Valueasthecentralroletodevelopand
implement relationship marketing strategy implementrelationshipmarketingstrategy
Stakeholdersinteractionprocess
K l ti iti Keyvalueactivities
h l f l TheRoleofCustomerValue
Customer Perceive Value (CPV) CustomerPerceiveValue(CPV)
Isthedifferencebetweentheprospective
customersevaluationofallbenefitsandallthe
costsofanofferingandtheperceivedalternatives.
Customerstendtobevaluemaximizers
ComponentofCustomerValue
P d Product
Attributes
Service
Attributes
Perceivedbenefit
Perceived sacrifice
Expected
Customer
Value
Transaction
cost
Lif C l
Perceivedsacrifice Value
LifeCycle
Cost
Risk
Source:CustomerValueToolkit,1
st
Edition,byE.
Naumann andR.Kordupleski,1995
TheValueProcess
ValueDetermination
ValueCreation
ValueDelivery
ValueAssessment
Relationship Value Management
Customer
retention
Employee
recruitment
RelationshipValueManagement
Framework
Value
determination
THE
Customer
satisfaction
Employee
satisfaction
Customers:
Customermarkets
R f l M k
Employees:
InternalMarket
Recruitment
Value
assessment
Value
creation
THE
VALUE
PROCESS
Customer
Employee
retention
ReferralMarket
markets
Valuedelivery
attraction
retention
Stakeholder
retention
Stakeholder
engagement
Externalstakeholders:
Shareholders
Otherinfluencemarkets
Suppliersandalliancemarkets
Stakeholder
satisfaction
Source:Christopher,
RelationshipMarketing,2002
ChoiceofRelationshipStrategy
Three generic strategies identifies by Treacy and ThreegenericstrategiesidentifiesbyTreacy and
Wierseman:
Operational excellence Operationalexcellence
Providingcustomerswithreliableproductsorservicesat
competitivepricesandminimalinconvenience
Productleadership
Providingproductsthatcontinuallyredefinethestateofart
Customer intimacy Customerintimacy
Sellingthecustomeratotalsolutionnotjustaproductor
service
R f References
Chistopher,Martin,AdrianPayneandDavidballantyne (2002).Relationship
Marketing,creatingstakeholdervalueButterwor.thHeinemann.
Harwood,Tracy,T.GarryandABroderick(2008).RelationshipMarketing:
Perpectives,DimensionsandContext,McGrawHill.
N E A d R K d l ki (1995) C t V l T lkit 1
st
diti S th Naumann,E.AndR.Kordupleski (1995).CustomerValueToolkit,1
st
edition.South
WesternCollege\publishing.
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