Marketing 11

The Shift From Transaction Based Marketing to Relationship Marketing
-since industrial era, focus has been on production-based orientation
-many organizations sense then have done relationship-based orientation
• the change from production to relationship made a change from conflict to cooperation
relationship marketing
• focus on long-term
• emphasis on retaining customer
• ranks customer service as high priority
• encourages frequent customer contact
• fosters customer commitment with firm
• bases customer transactions on cooperation and trust
• commits all employees to provide high-quality products
what elements are needed to achieve a longterm relationship in Relationship Marketing
• Gather information about their customer
• Analyze data and modify marketing mix to customize for customer
• Monitor interactions w/ customers through relationship marketing
• Orient every part of organization w/ knowledge of customer using CRM (customer relationship management) software
three levels of Relationship Marketing
• Level 1: Focus on Price
o Short term
• Level 2: Social Interactions
o Customer service and communication are key
o social relationship
• Level 3: Interdependent Partnership
o Buyer and seller are true business partners
3 major steps to involved in enhancing customer satisfaction
• understanding customer needs
o carefully identify the characteristics of product that customers want/like
o pay attention to new elements that might affect satisfaction
o satisfaction is measured by what the customers expect and what they actually get
• obtaining customer feedback
o look at reactive feed back (blogs and discussion boards)
o customers complaints present a firm w/ an opportunity
• ensuring satisfaction
Why is it important to Build Buyer-Seller Relationships
-consumers build relationship partly to reduce choices
• perceived positive value of product
-also important to understand why customers end relationships
How Marketers Keep Customers
-important to keep up with customer churn (customer turnover)
-longer relationship give higher chance of profit
-some use frequency marketing
• frequent buyer or user marketing programs that reward customers
-some also use affinity marketing
• effort sponsored by an organization that solicits responses from individuals who share common interest and activities
Data Marketing
-the use of software technology to analyze data about customers and their transactions
• form basis of advertising or promotions to certain target market
• effective for building relationships
-databases can help companies in many ways
• find most profitable customers
• calculate lifetime value of customers’ business
• builds relationship
• improving retention and referral
• reduce costs
• boosts sales volume
• expanding loyalty program
technology helps find information
• interactive television
• application service providers (ASP)
Customers as Advocates
-grassroots marketing- connecting with potential and existing customers through nonmainstream channels
• relies on nonconventional, nontraditional
• small budget, lots of legwork, long-term relationship
-viral marketing- lets satisfied customers get the word of the product out
-buzz marketing- gathers volunteers to try product then relies on the to get the word out
• usually use “influencers” to do this
Customer Relationship Management
-strategies and technologies that empowers relationship programs, reorienting the entire organization to a concentrated focus on satisfying customers
• made possible through technological advances
• represents a shift in thinking
Benefits of CRM
• makes since of mast amounts of data
• simplify complex business processes
• can be used
o on demand (via internet)
o on premises (company’s computer system)
Problem w/ CRM
• Must be planned and implemented correctly or its an expensive mistake
• Must understand customers
Retrieving Customers
-customer win-back is very important in CRM
• resparking lost relationship w/ customers
-most of the time relationships can be rejuvenated
• sometime this is impossible
Buyer-seller Relationship in Business-to-Business Markets
-business-to-business marketing- buying of good and services by organization to fund that companies operations
-provides benefits for both companies
Choosing Business Partners
• Locate firm that can provide value
4 key types of partnerships
• buyer partnerships-purchase goods from multiple firms
o suppliers must meet buyers needs
• seller partnerships- long-term exchange of cash and products
• internal partnerships- relationships involving customers in the organization
o foundation of organization, help meet needs of external customers
• lateral partnerships-strategic alliances with other companies
o involves no direct buyer-seller interaction
Cobranding and Comarketing
-cobranding- join to strong brand names to sell a product
-comarketing- two or more organizations join to sell their products in an allied marketing campaign
Improving Buyer-Seller Relationships in Business-to-Business Markets
National Account Selling
Electronic Data Interchange and Web Services
National Account Selling
-dedicated sales team is assigned to a firms major customer
• used mostly when large investments are at stake
• more efficient and show dedication to customer
Electronic Data Interchange and Web Services
– electronic data interchange(EDIs)- computer-to-computer exchanges of business documents
• reduces cost, increase efficiency
• many use EDIs are used as a core quick response merchandising tool
o just-in-time strategy that reduces the time a retailer has to hold merchandise in inventory
o cost saving
-web services- information exchange systems via the internet to allow interaction between firms
• simpler
vendor-managed inventory
– seller determines how much of a product is needed
-some companies have modified VMI to collaborative planning, forecasting and replenishment
• planning and forecasting approach that is collaborated between both firms
benefits of supplier managing Supply Chain
-supply chain- sequence of supplier that contribute to the creation of a product
-results in…
• increased innovation
• reduced cost
• improve conflict resolution
• improve communication and involvement
Business-to-Business Alliances
-strategic alliances- partnerships in which 2 or more companies combine resources to create a competitive advantage
• long term
• structured in 2 ways
o new business unit in which both own part of
o less formal (such as joint research team)
• more flexible, easy to change markets
Evaluating Customer Relationship Programs
-lifetime value of customer
• tangible and intangible benefits that a customer bring minus the cost of retaining a customer over an average lifetime
• one of the most important measures in relationship marketing
• long term customers more valuable
• -feedbacks, surveys, replies, etc. are a way to evaluate customer relationship programs also