1. Definition and importance of Relationship Marketing
2. Evolution of Relationship Marketing
3. Fundamental Principles of Relationship Marketing
4. Expanded Marketing Mix
5. Drivers of Relationship Marketing
6. Elements of Relationship Marketing: Quality, Customer Service and Marketing
CUSTOMER SATISFACTION 69
CUSTOMER SATISFACTION 69
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16
CHAPTER I THE FUNCTIONS OF MARKETING
) (
To remain competitive, hospitality organizations must keep up w
ith the ever-changing market. Courtesy of The Melting Pot.
)THE MARKETING MIX
Marketing managers have used the term marketing mix for a long time. The concept of the marketing mix has gained universal acceptance. It is important for hospitality marketing students to understand this concept, both conceptually and strategically. This section outlines the major components of the traditional marketing mix, and the next section covers the hospitality marketing mix that was offered as an alternative for the industry. We will explain the similarities and differences between the two approaches. A successful hospitality organization is one that focuses on the needs and wants of the consumers and markets the product-service mix of the operation. Management of this type of operation involves integrating the components of the marketing mix into a marketing program that will appeal to potential consumers and meet the goals and objectives of the firm. The following sections will introduce the components of the marketing mix, which will be discussed in more detail in Chapters 7 to 14.
The Traditional Marketing Mix
The marketing mix, many believe, consists of four elements, often called the four P's of marketing:
THE MARKETING MIX 17
PRICE. The price component refers to the value placed by a firm on its products and services. Some of the decisions involve pricing the product line, discounting strategies, and positioning against competitors.
PRODUCT. This component refers to the unique combination of goods and services offered by a firm to consumers. The product includes both the tangible and intangible elements of the service offering. Product decisions involve product attributes such as quality, the breadth and mix of the product line (i.e., the number and type of products and services offered by a firm), and services such as warranties and guarantees.
PLACE. The place component refers to the manner in which the products and services are being delivered to consumers. This component is sometimes referred to as distribution, and it involves decisions related to the location of facilities and the use of intermediaries. In addition, the marketing of services includes the decision regarding customer involvement in the production process.
PROMOTION. This component refers to the methods used to communicate with consumer markets. The promotion mix includes advertising, personal selling, sales promotions (e.g., coupons, rebates, and contests), and publicity. These are the vehicles that can be used to communicate the firm's intended messages to consumers. The decisions for promotion involve the amount to be spent on each component of the promotion mix, the strategies for each of the components, and the overall message to be sent.
Price
Price refers to the value placed by a firm on its product.
Distribution Management, Need for Marketing Channels,Decision involved in setting up the channels, Management Strategies, Introduction to logistics Management, Retailing, wholesaling, Multi Channel Marketing.
Dr. V. Ramadevi, Department of Management.ramakarthik
This PPT contains the basic marketing concepts, marketing mix elements, customer value and satisfaction, value chain, strategic marketing planning process, marketing research, marketing environment, CRM.
This ppt would be useful for the management students.
This is Part one Of Principles of Marketing Management:
Fundamentals of Marketing
Marketing Mix
Customer Value
Product Life Cycle
Segmentation
Targeting
Positioning
Branding
Personal Selling & Salesmanship
DAGMAR
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• Uncover the power of a foundational marketing system that dynamically communicates with prospects and customers on autopilot.
• Harness neuroscience and Tribal Alignment to transform your communication strategies, turning potential clients into fans and those fans into loyal customers.
• Discover the art of automated segmentation, pinpointing your most lucrative customers and identifying the optimal moments for successful conversions.
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3. Definition and Importance Of RM
Evolution of RM
Fundamental Principles of RM
Expanded Marketing Mix
Drivers of RM
Elements of RM : Quality, Customer Service
and Marketing
4. The ongoing process of identifying and creating new
value with individual customers and then sharing the
benefits over a lifetime of association.
Gordon (1982)
Identify and established, maintain and enhance and
when necessary also to terminate relationships with
customers and other stockbrokers, at a profit, so that
the objectives of all parties involved are met, and that
this is done by mutual exchange and fulfillment of
promises.
Gronroos (1997)
5. The shift from traditional to relationship focus in
running the business.
Increase customer retention and loyalty.
Higher customer profitability through lower cost of
recruiting customers and reduce costs of sales.
Linking together customer service, quality and
marketing.
8. YEARS MARKETING
1950’s Consumer marketing
1960’s Industrial marketing
1970’s Non profit and societal
marketing
1980’s Services marketing
1990’s Relationship marketing
9. YEARS MARKETING
1950’s Consumer marketing
1960’s Industrial marketing
1970’s Non profit and societal
marketing
1980’s Services marketing
1990’s Relationship marketing
10. In 1950’s the marketing interest was focused primarily on
consumer marketing. During this time manufacturers
realize the importance of including customer in their
marketing programs.
In 1960’s the focus shifted towards industrial markets.
The shift became dominant as manufacturers acknowledge
the importance of establishing relationship with their
customers
In 1970’s non-profit or societal marketing became the
center of attention as marketers moved from solely making
profits toward social responsibility.
In 1980’s attention was directed to the service sector.
This sector became important as a result of the need to
provide complementary services to the consumer and
industrial sectors.
In 1990’s the area of interest is towards relationship
marketing. This move came about due to the need to
acquire, maintain and retain customers.
11. ERA SELECTED MARKET
DRIVERS OR
ENABLES
STRATEGIC RESPONSE OR
FOCUS
1960’S •Consistent expansion
of most consumer and
business to business
markets
•Diversification and balance of
product portfolio
1970’s •Slowing market growth •Companies focus on their
core business
1980’s •Expansion of upscale
market segment
•Growth of global
competition
•Product innovation to
address upscale
•Market development
Early
1990’s
•Contraction of many
upscale markets
•Simplification of product,
services and process.
Late
1990’s
•Renewed expansion of
upscale market
•Focus on relationship
marketing
15. 1. A Pure Tangible
Goods
2. A Tangible
Goods With
Accompanying
Services
3. A Major Service
With
Accompanying
Minor Goods And
Services
4. A Pure Service
1980’s Services Sector
16. 1. A Pure Tangible
Goods
2. A Tangible
Goods With
Accompanying
Services
3. A Major Service
With
Accompanying
Minor Goods And
Services
4. A Pure Service
1980’s Services Sector
17. Micro level
It is a recognition that the nature of
interrelations with customer is
changing.
Macro level
The recognition that marketing impacts
on a wide range of areas.
19. CHARACTERISTIC TRANSACTIONAL
MARKETING
RELATIONSHIP
MARKETING
Focus On single sale Customer retention
Orientation Product features Product benefits
Time scale Short time scale Long time scale
Customer service Little High
Customer commitment Limited High
Customer contact Moderate High
Quality Concern of production Concern of all
20. Extending the ‘lifetime value’ of customers through strategies
that focus on retaining targeted customers.
Recognition that companies need to forge relationships with
a number of market domains or stakeholders if they are to
achieve long term success in the final marketplace.
Marketing has moved from being the sole responsibility of the
marketing department to a market facing company and cross-
functional.
21. Principles of RM:
Maximizing the life time value of a customer
Customer Life Time Value (LTV): The future flow of revenues/or net profit expected of every
customer for defined time period.
In practice, increasing the LTV means to set 3 aims:
To increase the period when the clients buy from the company (to increase the customer life
cycle
To increase the amounts spent for every purchase;
To decrease the time between two purchases ;
Extended life cycle of customers:
increases the profit from increased purchases (cross selling);
increases profit from reduces operating costs;
Increases profit from refferals;
Forge relationship with various market domain or stakeholders, instead of just the customer.
(i.e. The Six Market Model)
Move responsibility to pan-company and cross section rather than marketing department only.
This is a call to bring marketing out of its functional silo and distribute some functions and
tasks to other departments. All employees must be involved in and devoted to the activities for
establishing long-term relations with customers.
22. Users
Individuals that use product or service
Influencers
Persons who influence the buying decision
Deciders
Have power to decide on product requirement on
suppliers
Approvers
Person who must authorize the proposed actions of
deciders or buyers
Buyers
Persons with formal authority for selecting suppliers and
arranging the terms of purchase
Gatekeepers
Persons who have the power to prevent sellers or
information from reaching members of the buying
centre
24. Process which provides time
and place utilities for the
customers which involves:
1. Pre-transaction
2. Transaction
3. Post- transaction
25. Total order entry, all communication with
customers, all shipping, all freight, all invoicing
and total control of repair of products.
Timely and accurate delivery of products ordered.
To ensure long-term relationship of mutual
advantage.
Understanding what the customer buys and
adding value.
27. As a guidance to other in the techniques
involved during the process.
To get the quality planning cycle and the
communications right.
To remain competitive in business and
sustain in market.
To improve productivity and efficiency and to
maximize resources by reducing wastes.
To maintain profitability and to retain or expand
market share.
31. THE EXPANDED MARKETING MIX
Customer Service
- A customer oriented corporate philosophy that
integrates and manages all the elements of the
customer interface to meet or exceed expectations
of customer service quality (Bennet, 1995)
- A major factor in the development of customer
loyalty in RM. (Berman, 1996)
32. The categories of products:
A pure tangible product (shampoo, detergent
without any accompanying services).
A tangible product with accompanying services
(buying an automobile you will get free service for
the 1st 1000km).
A major service with accompanying minor goods and
services (savings account accompanied by an
automated teller card for withdrawals).
A pure service (haircut).
33. THE EXPANDED MARKETING MIX
Processes
- Involve procedures, task schedules, activities and
routines by which a product or service is delivered to
the customer.
- Processes are the ways in which firms create value
for their customers
- Close cooperation between marketing and operation
staff in process management.
34. THE EXPANDED MARKETING MIX
People
- Involve employees in an organization.
- Key element in an organization’s success and some
companies include them in their overall marketing
strategy.
- If employees are more connected with the market,
the organizations themselves need to become
customer-centric.
35. The important forces acting on the marketing mix
include:
◦ The customer – buying behaviour in terms of their
motivation to purchase, buying habits, environment, size
of market and buying power.
◦ The industry’s behaviour – the behaviour of retailer
and wholesaler and other members of the logistics chain
in terms of their motivations, structure, practice and
attitudes.
◦ Competitors – their position and behaviour as
influenced by industry structure and the nature of
competition.
◦ Government and regulatory – controls over
marketing which relate to both marketing activities and
competitive practices.
Refer diagram - page 20
38. Market
To direct marketing activities to the existing markets.
Customer markets at the centre
Focus on the relationship marketing, customer value,
satisfaction and loyalty, leading to improved profitability
in the longer term.
Seeking new customers
Ensure ongoing marketing activity directed at existing
customers.
40. A suspect is someone who comes
across your companies’ promotion.
They are a potential suspect for your
company.
Anyone who reads or hears an ad, looks
at a brochure or encounters some other
type of promotion is a suspect.
Suspects include everyone who might
possibly buy your product or service.
We “suspect” they might buy; we do not
know enough yet to be sure.
Suspect
41. Someone who pays attention to your
promotion.
If the person is interested in your promotion
they become a potential prospect.
A prospect is someone who has a need for
your product or service and has the ability to
buy.
Although a prospect has not yet purchased
from you, he or she may have heard about
you, read about you, or had someone
recommend you to him or her.
Prospect
42. A customer is someone who purchases either your
product or service.
First-Time Customer. First-time customers are those
who have purchased from you one time. They are
customers of yours but are almost certainly still customers
of your competitor as well.
Repeat Customer. They have purchased from you two
or more times. They may have bought the same product
twice or bought two different products or services on two
or more occasions. They will buy from you but will also
continue to give their business to competitors. In
professional services you may be one of a number of
firms on their panel.
Customer
43. A customer who buys a second time which is
who come back to you.
A loyal customer or client buys from you rather
than anyone else. You have a strong, ongoing
relationship that makes him or her resistant to
the pull of the competition.
For professional services firms this is where
you begin to make the transition from being a
supplier to trusted advisor. You are ‘top of mind’
and the first firm that a client calls when they
need help.
Client (Loyal Customer)
44. A customer who gives unpaid
advertising for the products or
services of a business.
Promotes your business on your
behalf. They are so happy about
your product/service that they tell
others.
Like a client, an advocate buys
everything you have to sell and
purchases regularly.
Advocate
46. The best form of marketing is to get your
customers to do the marketing for you.
Consist 2 main categories
Customer
Best marketing done by an organization’s existing
customers - positive word of mouth (WOM) and delivery of
outstanding services quality.
Non-customer
Recommend an organization to prospective customers,
including intermediaries, connectors, third party markets
and various agencies.
47. Emphasizes a long term very close
relationship and a win-win situation.
Suppliers/vendors - providers of
physical resources to the business.
48. Market to access wider range of specialist skills.
Represents potential employees’ who possess
the necessary skills and attributes needed to
match the profile that the company wishes to
portray to its customers
Refers to third parties - colleges, universities,
recruitment agencies or other employers
49. Includes :-
finance markets
regulatory markets
governments markets
Apply the term ‘influencer’ to a range of third
parties who exercise influence over the
organization and its potential customers
50. Internal Market refer to any person working
within an organization.
The marketing activity needs to be done internally
within a firm.
Key aspects involved:
Employees must understand that they have both a
customer as well as a supplier whose needs and
wants must be addressed.
All the staff also works together in a manner that is
attuned to the company’s mission, strategy and
goals.
To ensure all members of the staff provide the best
representation of the company and successfully
handle all telephone, mail, electronic, and personal
interactions with the customer.
51. RM and traditional transactional marketing are
not mutually exclusive and they are not
necessarily in conflict with each other.
RM may be more suitable in the following
circumstances or situations:
◦ High value products or services
◦ Industrial products
◦ Products are not generic commodities
◦ Switching cost are high (e.g telco contract)
◦ Customers prefer a continuous relation
◦ There is customer involvement in the
production phase.
52. Relationship marketing implies a consideration of not just better
relationships with customer markets but also the development
and enhancement of relationships with supplier, employee,
referral, ‘influencer’ and internal markets.
Thus the key concept of relationship marketing involves both a
consideration of the six market areas and the creation
of bond with each market through the delivery of value
satisfaction as represented by the quality of the ongoing
relationship as well as the quality of products and services
being produced. It is this notion of total quality, the sense of
providing customer perceived value, that creates an opportunity
to turn transaction based marketing into relationship-based
marketing.
Editor's Notes
Marketing cannot be accomplished in isolation. Even though the marketing function resides with marketers, the concept of marketing must permeate the entire organization.