Organizing for relationship marketing


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Organizing for relationship marketing

  1. 1. Organizing for Relationship Marketing Akash C.Mathapati Akash C.Mathapati
  2. 2.  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
  3. 3.  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
  4. 4.  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
  5. 5. 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
  6. 6.  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
  7. 7.  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
  8. 8.  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
  9. 9.  Collaboration  Relationships fizzle without continuous reinvestment to create new value  Collaboration is the key to building this new value Akash C.Mathapati