Organizing for Relationship Marketing Akash C.Mathapati Akash C.Mathapati
Relationships can extend the duration & value of connections Companies can go with the flow & build the capabilities needed to enhance relationships or Co’s can go against the flow & seek to lock down every current & valuable connection by increasing exit barriers This way they can profit from their past investments E.g., U.S Utilities Companies Akash C.Mathapati
A RM company must be structured differently from one organized according to traditional marketing principles RM seeks to create new value for customers and then to share the value so created between producer & customer RM recognizes the key role individual customers play, not only as purchasers, but in defining the value they want RM requires that a company, as a consequence of its business strategy & customer focus, design & align its business processes in support of the value individuals want Akash C.Mathapati
RM is a continuously cooperative effort between buyer & seller RM recognizes the value of customers over their purchasing lifetimes, rather than as individual customers or organizations that must be resold on each purchasing occasion RM seeks to build a chain of relationships within the organization to create the value customers want & between the organization & its main stakeholders, including suppliers, distribution channel intermediaries Akash C.Mathapati
Implication of RM for the Organization Technology enables RM. Its design must be integrated with that of organizational design RM suggests that the company can focus on the ultimate market segment & serve customers as individuals Companies can give customers, the value each wants by using technology appropriately E.g., using internet for on-line ordering Akash C.Mathapati
RM means competing on scope, often through partnering. This changes processes, with profound implications for organizational design To serve the customer the way they wish, companies have to do things they not done before Companies needs to expand the scope of their products/ services, for providing customer more than just what the companies make Work with co’s with stronger or more-relevant customer relationships to distribute their own products/ services Firms need to reorient their relationship focus, from serving customers to seeing other firms as their primary customers or as their collaborative partners Akash C.Mathapati
Customers choice affect organizational design Company competing on scope typically also partners with a narrow range of customers Firms will focus on customers appropriate to their strategies and reject others that no longer fit Customer Mix Co’s need to reconsider their customer mix, describing with which customers they should do business, with which they should not, & what to do about those in between Akash C.Mathapati
Access In RM era, competition will be primarily for the customer access Those companies that have access will be able to benefit from an increase in scope E.g., Printing co Bonding RM can be benefited from increased bonding All suppliers need to know where they stand with their customers Akash C.Mathapati
Collaboration Relationships fizzle without continuous reinvestment to create new value Collaboration is the key to building this new value Akash C.Mathapati
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