Introduction to Relationship marketing

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Relationship Marketing

Akash C.Mathapati

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Remember Me ??

I'm the fellow who goes into a restaurant, sits down and patiently waits while the waitresses do everything but take my order. I'm the fellow who goes into a department store and stands quietly while the sales clerks finish their little chitchat. I'm the man who drives into a gasoline station and never blows his horn, but waits patiently while the attendant finishes reading his comic book.

"Yes, you might say, I'm a good guy. But do you know who else I am? I am the fellow who never comes back, and it amuses me to see you spending thousands of dollars every year to get me back into your store, when I was there in the first place, and all you had to do to keep me was to give me a little service; show me a little courtesy."

Source: From a Better Business Bureau bulletin submitted by An Arkansas Reader to Dear Abby

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RM Definition Attracting, maintaining and enhancing

customer relationship - Berry 1983 Relationship marketing: the process of

creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders

- Gummersson 1994

Activities directed towards establishing developing and maintaining successful relational exchanges

- Morgan and Hunt 1994

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It will reap greater rewards from long-lasting relationships with customers

Thailand says, It is going from excessive mass marketing to Relationship Marketing

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Transactional Vs Relationship Marketing

Transactional Marketing Relationship Marketing

Do the deal and disappear Negotiate a win-win sale situation and stay around, being a

resource for better result

Push price Promote value

Short-term thinking and acting Long-term thinking and acting

Building the business on deals Building the business on relationships

Getting new customers Keeping all customers and clients

No structure for on-going

business

Structure created to support business relationship; special

club and memberships for frequent users/buyers

Selling focused Relationship focused for results

Race for a sale result Swift, strong, safe and enduring in results through relationship building

After-sales support and service poor — seen as cost

After-sale support and service’ seen as an investment in the relationship

Product-service focused People expectations and perception focused

Rewards-incentive for’ doing deals’

Rewards incentives for maintaining and growing relationship and revenue

The deal is the end. Pursuit of deals.

The sale just the beginning. Pursuit of long-term relationship and result.

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Relationship Marketing Programs Literatures suggest 3 types of pgms

Continuity Marketing Programs One to One Marketing Partnering Programs

These different forms depends on whether they are meant for end customers, distributor customers or B-2-B customers

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Continuity Marketing Programs Majority of Co’s have developed this program Aims at retaining customers and increasing

loyalty Consumer in Mass Markets

Membership & loyalty card programs Distributor Customers

Continuous replenishment B-2-B

Preferred Customer Programs Single and Dual Sourcing Programs

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Source: www.mycokerewards.com

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Source:http://www.staplespreferred.ca

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One to One Marketing One to One or individual marketing is

grounded on account-based marketing Once this concept prevalent only in B2B Mass Market (dissemination of individualized

info) Online info & database of customers Info used to develop frequency, interactive and

after marketing programs to develop relation on high yielding customers

Distributors Customers Individual marketing pgms take the form of

customer business development

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conti.. B-2-B

Individual marketing has been in place for quite some time

Key Account Management (KAM)

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Partnering Programs This pgm involves partnering relationships

between customers & marketers to serve end-user needs

Mass Market Co-branding Affinity Partnering

Distributors Customers – Partnering pgms through Logistics partnering Cooperative marketing

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Amazon.com “IM Logistics will exclusively fulfill Amazon.com's desktop, notebook and related accessory sales, handling all the logistical pick, pack and ship functions on behalf of the e-tailer.”

Source: http://www.crn.com/news/channel-programs/18815408/ingram-micro-amazon-com-announce-exclusive-logistics-partnership.htm;jsessionid=pDR4TQ1lAxj2uuyVeqspAw**.ecappj01

Source: http://www.ingrammicro.com

Affinity Program:

A marketing effort sponsored by an organization that solicits responses from individuals who share common interests and activities

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B-2-B Partnering pgms involve co-development and co-

marketing activity