Creative Marketing Review | Relationship Marketing


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Creative Marketing Review | Relationship Marketing

  1. 1. Relationship Marketing What is relationship marketing, and why does it matter? MS6105 Week 2 2012-13
  2. 2. What is marketing?  Facilitating an exchange between two parties (customer and organisation)  Both a business activity and a philosophy  Various approaches  Sales support  Communications  Operational  Strategic Customer Organisation
  3. 3. The target marketing process Define market Segment market Target a segment Position Price Product Place Promotion People Physical evidence Process
  4. 4. Marketing Motorcycles  See case study.
  5. 5. Criticisms of the TM approach  Theoretical and practical limitations  Too simplistic yet unrealistic  Studies on the profitability of retention  Reichheld & Sasser 1990, Evans & Laskin 1994  Changes in customer culture  Increasing sophistication and promiscuity  Changes in technology  Increasing information storage and processing power
  6. 6. The continuing search for competitive advantage  The anatomy of the product  Change in emphasis from physical to emotional USP Augmented product Actual product Core product
  7. 7. What is relationship marketing? “…to identify and establish, maintain and enhance and, when necessary, terminate relationships with customers and other stakeholders, at a profit so that the objectives of all parties are met; this is done by mutual exchange and the fulfilment of promises.” (Gronroos 1994) “Thinking in terms of having customers, not merely acquiring customers” (Berry 1983)
  8. 8. Strategic and tactical requirements of RM  Define organisation as a service organisation  Focus on long term retention rather than acquisition  Approach marketing from a process management perspective (Gronroos 1996)  Seek direct contact with customers  Develop a database on individual customers  Develop collaborative networks of suppliers/intermediaries Strategic implications Tactical implications
  9. 9. The requirements of a relationship Attraction Satisfaction Trust Commitment Loyalty Target marketing Customer care, service quality & internal marketing Total Quality Management
  10. 10. Three components of RM  Customer service (service quality/marketing)  Internal marketing  Total Quality Management Christopher Payne & Ballantyne 1991
  11. 11. The six markets model of RM (Employee) Recruitment markets Supplier markets Internal markets Referral markets Influence markets Customer markets Christopher, Payne & Ballantyne (1991) Gummesson (1999) Suggests 30Rs!!
  12. 12. JJ Motorbikes  Develop a marketing strategy for JJ Motorbikes using RM principles  Identify the offer being made to customers  Highlight other key relationships  Explain what needs to be done to effectively service these relationships (resources, communication channels etc).
  13. 13. The RM plan  Strategic and tactical planning  Marketing strategy  Components of the plan  Emergent Vs. intended strategy Where are we now? Strategic audit Where do we want to be Objectives How might we get there? Strategy and tactics How will we make sure we arrive? Monitoring and control
  14. 14. RM shifts the focus The emergent view of strategy (e.g. Mintzberg, Quinn) Also strategy as `fit’ (e.g Porter) or `Stretch’ (e.g. Grant, Barney, Hamel & Prahalad). Learn from experience Monitor results Reflect knowledge in future actions Take action Consistent patterns of behaviour (i.e. strategy) emerges over time
  15. 15. The relationship portfolio  The relationship ladder (Christopher et al 1998)  The relationship life cycle Prospective Developing Established Declining Time Turnover Little & Marandi 2003
  16. 16. Managing the relationship portfolio High High Low Low Relationship strength Relationshippotential Invest for growth Select for development or ignore Maintain Ignore
  17. 17. The RM-TM continuum RM TM High customer anxiety High degree of contact Customized product Importance of confidence, social and special benefits Customers in favour of relationships Low customer anxiety High contact unnecessary Standard product Customers not seeking relationships Little & Marandi 2003
  18. 18. It’s all about process  Perhaps the biggest implication of the RM approach  Shifts emphasis from products and brands to the systems that maintain and develop repeat custom  This is more about what goes inside the organisation than about customers `out there’ in the environment.