Introduction According to American marketing association,” relationship marketing is marketing with the conscious aim to develop and manage long term relationship with customers, distributors or other parties in the marketing environment”.
Comparison of buyer and sellerwhen sale is first madeSeller BuyerObjective achieved Judgment postponed; applies test of timeSelling stops Shopping continuesFocus goes elsewhere Focus on purchase; wants affirmation that expectations have been metTension released Tension increasedRelationship reduced Commitment made
Contrasting transactional andrelationship marketingTransactional marketing Relationship marketingDo the deal and disappear Negotiate a win-win sale situationPush price Promote valueShort term thinking and acting Long term thinking and actingBuild the business on deals On relationshipGetting new customers Keeping old customers and clientsNo structure for ongoing business Structure created to support relationshipSelling focused Relationship focusedShort term empathy Long term empathyIncentive for doing deal Incentive for long term relationshipFoundation of sale telling and selling Foundation of revenue trustRace for a sale result Swift, strong and safe enduring in results through relationship building
Transactional marketing Relationship marketingProduct- service focused People expectation and perception focusedReward incentives for doing deal Rewards for maintaining relationshipThe deal is end. The sale just the beginningAfter sale service poor-seen as cost After sale service seen as investment
Application of relationshipmarketing The three types of customers identified are:(I) The lost-for-good customers(II) The always-a-share customer(III) The intermediate type
THE LOST FOR GOOD CUSTOMER The lost for good customer makes a series of purchases over time, faces high costs in switching to a new supplier, and views the commitment to a particular supplier as relatively permanent. The buyer adopts this position because switching cost is very high. For example airlines are unlikely to change lightly the type of aircraft which they purchase.
The always a share customer At the other end of the customer behavior spectrum, lies the always a share customer who purchases regularly, has loyalty to a particular supplier, and can switch easily from one vendor to another.
The intermediate type Most of the customer belong to this category. Wide range of factors like: the characteristics of the product, category , the customers pattern of product usage and the actions of the customer and the supplier affect the relationship. Such relationship are more applicable for organisational buyers than consumer products, where regular buying is a norm.