Relationship Marketing - ppt download
Relationship marketing was first defined as a form of marketing developed from direct response From a social anthropological perspective, relationship marketing theory and practice can be interpreted as commodity According to Liam Alvey, relationship marketing can be applied when there are competitive product. According to Liam Alvey, relationship marketing can be applied when there are theory of business" in which new customers gained in older direct marketing. With the growth of the internet and mobile platforms, relationship marketing has perspective we can interpret relationship marketing theories and practices as According to Liam Alvey, relationship marketing can be applied when there are.
Other techniques include the analysis of customers' complaints and competitive benchmarking see competitor analysis. Develop and implement a corrective plan — This could involve actions to improve employee practices, using benchmarking to determine best corrective practices, visible endorsement of top management, adjustments to the company's reward and recognition systems, and the use of "recovery teams" to eliminate the causes of defections.
A technique to calculate the value to a firm of a sustained customer relationship has been developed. This calculation is typically called customer lifetime value. Retention strategies may also include building barriers to customer switching. This can be done by product bundling combining several products or services into one "package" and offering them at a single pricecross-selling selling related products to current customerscross promotions giving discounts or other promotional incentives to purchasers of related productsloyalty programs giving incentives for frequent purchasesincreasing switching costs adding termination costs, such as mortgage termination feesand integrating computer systems of multiple organizations primarily in industrial marketing.
Many relationship marketers use a team-based approach. The rationale is that the more points of contact between the organization and customer, the stronger will be the bond, and the more secure the relationship.
Application[ edit ] Relationship marketing and traditional or transactional marketing are not mutually exclusive and there is no need for a conflict between them. In practice, a relationship-oriented marketer still has choices, depending on the situation.
Most firms blend the two approaches to match their portfolio of products and services. Social bond refers to the relationship established through the collective blood relationship between people. Relationship marketing is to establish and strengthen these two kinds of bonds, especially the structural bond, so as to strengthen the relationship with clients and lock them in.
- Relationship marketing
- Relationship Marketing https://store.theartofservice.com/the-relationship-marketing-toolkit.html.
Morgan and Hunt made a distinction between economic and social exchange on the basis of exchange theory and concluded that the basic guarantee of social exchange was the spirit of the contract of trust and commitment. The traditional marketing concept of one-time transaction begins to transfer to the concept of relationship marketing. This is the transition from economic exchange theory to social exchange theory.
The theoretical core of enterprise relationship marketing in this period is the cooperative relationship based on commitment. They define the concept of relationship marketing from the perspective of exchange theory, and emphasize that relationship marketing is an activity related to the progress, maintenance and development of all marketing activities.
Shows that trust and commitment is a trading enterprise and the basis of marketing activities to establish a long term good relations, also is the factors affecting the basis of cooperation for both sides, moreover the relationship effect of other factors include: Coptics and Wolf believe that relational marketing is the marketing of databases.
They think, the enterprise want to be able to continue to improve the effect of relationships with customers, when access to the data and information to improve the effect of relationship with the customer's cost is low, enterprises will pay the cost to improve relations with customers, at present, due to tell the development of communication technology and Internet technology, makes the information costs have dropped substantially, so the argument that relationship marketing is for database marketing is increasingly valued, this view emphasizes the relationship marketing is through the Internet technology database data lock with the customers, to establish and maintain good relationship with customers.
Liker and Klamath introduced the relationship between enterprises and suppliers into the scope of relational marketing, believing that in the marketing process, manufacturers make suppliers assume corresponding responsibilities, and enable them to give play to their technological and resource advantages in the production process, which can improve the marketing innovation ability of manufacturers.
Lukas and Bryan a. Ferrell believe that the implementation of customer-oriented marketing concept can greatly promote the innovation ability of marketing, and at the same time encourage enterprises to break through the traditional relationship model between enterprises and customers and propose new product Suggestions with technical feasibility. Lethe through the observation of the benchmarking customer research, to confirm the relationship between enterprises and customers to enterprise's product innovation capacity there is a positive correlation, the enterprise can in the development and in the process of benchmarking customer good relationship, to identify those more market potential for development of new products, it can save a lot of for the enterprise cost of new product development and market acceptance of this kind of product is high.
In addition, he also proposed that all the relationships established with relevant parties to enterprise marketing activities are centered on the establishment of good customer relations, that is, the core relationship of relationship marketing is the relationship with customers. Guinness believes that relationship marketing is essentially a consciousness that regards the marketing process as the interaction between enterprises and various aspects of relationships and networks.
According to his research, relationship is the relationship between two or more subjects, network is a larger set of relationships, and interactive interaction between people in the relationship or network process. It is claimed that many of the relationship marketing attributes like collaboration, loyalty and trust determine what "internal customers" say and do.
According to this theory, every employee, team, or department in the company is simultaneously a supplier and a customer of services and products. An employee obtains a service at a point in the value chain and then provides a service to another employee further along the value chain. If internal marketing is effective, every employee will both provide and receive exceptional service from and to other employees.
It also helps employees understand the significance of their roles and how their roles relate to others'. If implemented well, it can also encourage every employee to see the process in terms of the customer's perception of value added, and the organization's strategic mission.
Further it is claimed that an effective internal marketing program is a prerequisite for effective external marketing efforts. Referral marketing is developing and implementing a marketing plan to stimulate referrals. Although it may take months before you see the effect of referral marketing, this is often the most effective part of an overall marketing plan and the best use of resources[ citation needed ].
Marketing to suppliers is aimed at ensuring a long-term conflict-free relationship in which all parties understand each other's needs and exceed each other's expectations. In contrast, relationship marketing is cross-functional marketing.
It is organized around processes that involve all aspects of the organization. In fact, some commentators prefer to call relationship marketing "relationship management" in recognition of the fact that it involves much more than that which is normally included in marketing. Because of its broad scope, relationship marketing can be effective in many contexts. As well as being relevant to 'for profit' businesses, research indicates that relationship marketing can be useful for organizations in the voluntary sector  and also in the public sector.
Approaches Satisfaction Relationship marketing relies upon the communication and acquisition of consumer requirements solely from existing customers in a mutually beneficial exchange usually involving permission for contact by the customer through an " opt-in " system.
Although groups targeted through relationship marketing may be large, accuracy of communication and overall relevancy to the customer remains higher than that of direct marketing, but has less potential for generating new leads than direct marketing and is limited to Viral marketing for the acquisition of further customers. Retention A principle of relationship marketing is the retention of customers through varying means to ensure repeated trade from preexisting customers by satisfying requirements above those of competing companies through a mutually beneficial relationship   This technique is counterbalancing new customers and opportunities with current and existing customers as a means of maximizing profit and counteracting the "leaky bucket theory of business" in which new customers gained in older direct marketing oriented businesses were at the expense of or coincided with the loss of older customers.
Research by John Fleming and Jim Asplund indicates that engaged customers generate 1. According to Buchanan and Gilles,  the increased profitability associated with customer retention efforts occurs because of several factors that occur once a relationship has been established with a customer. The cost of acquisition occurs only at the beginning of a relationship, so the longer the relationship, the lower the amortized cost.
Account maintenance costs decline as a percentage of total costs or as a percentage of revenue. Long-term customers tend to be less inclined to switch, and also tend to be less price sensitive.
This can result in stable unit sales volume and increases in dollar-sales volume. Long-term customers may initiate free word of mouth promotions and referrals. Long-term customers are more likely to purchase ancillary products and high margin supplemental products. Customers that stay with you tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share.
Regular customers tend to be less expensive to service because they are familiar with the process, require less "education", and are consistent in their order placement. Increased customer retention and loyalty makes the employees' jobs easier and more satisfying. In turn, happy employees feed back into better customer satisfaction in a virtuous circle. Relationship marketers speak of the "relationship ladder of customer loyalty ".
It groups types of customers according to their level of loyalty. The ladder's first rung consists of "prospects", that is, people that have not purchased yet but are likely to in the future. This is followed by the successive rungs of "customer", "client", "supporter", "advocate", and "partner".
The relationship marketer's objective is to "help" customers get as high up the ladder as possible. This usually involves providing more personalized service and providing service quality that exceeds expectations at each step. Customer retention efforts involve considerations such as the following: Customer valuation — Gordon describes how to value customers and categorize them according to their financial and strategic value so that companies can decide where to invest for deeper relationships and which relationships need to be served differently or even terminated.
Customer retention measurement — Dawkins and Reichheld calculated a company's "customer retention rate". This is simply the percentage of customers at the beginning of the year that are still customers by the end of the year. This ratio can be used to make comparisons between products, between market segments, and over time.
Price can act as a substitute for product quality, effective promotions, from the marketers point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay.
In economic terms, it is a price that shifts most of the economic surplus to the producer. A good pricing strategy would be the one which could balance between the floor and the price ceiling. Marketers develop an overall pricing strategy that is consistent with the organisations mission and this pricing strategy typically becomes part of the companys overall long -term strategic plan.
The strategy is designed to provide guidance to price-setters and ensures that the pricing strategy is consistent with other elements of the marketing plan. In some cases, prices might be set to de-market, revenue-oriented pricing, - where the marketer seeks to maximise the profits or simply to cover costs and break even. For example, dynamic pricing also known as yield management is a form of revenue oriented pricing, customer-oriented pricing, where the objective is to maximise the number of customers, encourage cross-selling opportunities or to recognise different levels in the customers ability to pay.
Value-based pricing, occurs where the company uses prices to market value or associates price with the desired value position in the mind of the buyer. The aim of value-based pricing is to reinforce the overall positioning strategy e. Socially-oriented pricing, Where the objective is to encourage or discourage specific social attitudes, E.
When decision-makers have determined the broad approach to pricing, they turn their attention to pricing tactics, tactical pricing decisions are shorter term prices, designed to accomplish specific short-term goals. The tactical approach to pricing may vary from time to time, accordingly, a number of different pricing tactics may be employed in the course of a single planning period or across a single year 3. Retail — Retail markets and shops have a very ancient history, dating back to antiquity.
Retailing involves the process of selling goods or services to customers through multiple channels of distribution to earn a profit. Retailers satisfy demand is identified through a supply chain, Once the strategic retail plan is in place, retailers devise the retail mix which includes product, price, place, promotion, personnel and presentation. In the digital age, a number of retailers are seeking to reach broader markets by selling through multiple channels.
Digital technologies are changing the way that consumers pay for goods. Retailing support services may include the provision of credit, delivery services. Shopping generally refers to the act of buying products, sometimes this is done to obtain final goods, including necessities such as food and clothing, sometimes it takes place as a recreational activity.
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Recreational shopping often involves window shopping and browsing, it not always result in a purchase. Retail shops occur in a range of types and in many different contexts - from strip shopping centres in residential streets through to large.
Shopping streets may restrict traffic to pedestrians only, forms of non-shop retailing include online retailing and mail order. Retail comes from the Old French word tailler, which means to cut off, clip, pare and it was first recorded as a noun with the meaning of a sale in small quantities in Like in French, the retail in both Dutch and German also refers to the sale of small quantities of items.
Also see History of merchants, History of the market place, open air, public markets were known in ancient Babylonia and Assyria. These markets typically occupied a place in the towns centre, surrounding the market, skilled artisans, such as metal-workers and leather workers, occupied premises in alley ways that led to the open market-place. These artisans may have sold wares directly from their premises, in ancient Greece markets operated within the agora, and in ancient Rome the forum.
In antiquity, exchange involved direct selling, merchants or peddlers, the Phoenicians, noted for their seafaring skills, plied their ships across the Mediterranean, becoming a major trading power by 9th century BCE. The Phoenicians imported and exported wood, textiles, glass and produce such as wine, oil, dried fruit, the Phoenicians extensive trade networks necessitated considerable book-keeping and correspondence. In around BCE, the Phoenicians developed an alphabet which was much easier to learn that the complex scripts used in ancient Egypt 4.
Brand management — In marketing, brand management is the analysis and planning on how that brand is perceived in the market. Developing a good relationship with the market is essential for brand management. Tangible elements of management include the product itself, look, price. The intangible elements are the experience that the consumer has had with the brand, a brand manager would oversee all of these things.
In andKapferer and Keller respectively defined it as a fulfillment in customer expectations, brand management is a function of marketing that uses special techniques in order to increase the perceived value of a product. Brand management is the process of identifying the core value of a particular brand, in modern terms, brand could be corporate, product, service, or person.
Brand management build brand credibility and credible brands only can build brand loyalty, bounce back from circumstantial crisis, the origin of branding can be traced to ancient times, when specialists often put individual trademarks on hand-crafted goods.
The branding of animals in Egypt in BC to avoid theft may be considered the earliest form of branding. As somewhat more than half of older than years old are in Japan. In the West, Staffelter Hof dates to or earlier, byEnglish bakers were required by law to put a specific symbol on each product they sold.
Branding became more used in the 19th century, through the industrial revolution. Brand value, moreover, is not simply a feeling of consumer appeal. Companies will rigorously defend their brand name, including prosecution of trademark infringement, occasionally trademarks may differ across countries.
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Among the most highly visible and recognizable brands is the red Coca-Cola can, despite numerous blind tests indicating that Cokes flavor is not preferred, Coca-Cola continues to enjoy a dominant share of the cola market. Brand management science is replete with stories, including the Chevrolet Nova or it doesnt go in Spanish.
Modern brand management also intersects with legal issues such as genericization of trademark, the Xerox Company continues to fight heavily in media whenever a reporter or other writer uses xerox as simply a synonym for photocopy 5. Advertising — Advertising is an audio or visual form of marketing communication that employs an openly sponsored, nonpersonal message to promote or sell a product, service or idea.
Sponsors of advertising are often businesses who wish to promote their products or services, Advertising is differentiated from public relations in that an advertiser usually pays for and has control over the message.
It is differentiated from personal selling in that the message is nonpersonal, the actual presentation of the message in a medium is referred to as an advertisement or ad.
Commercial ads often seek to generate increased consumption of their products or services through branding, on the other hand, ads that intend to elicit an immediate sale are known as direct response advertising. Non-commercial advertisers who spend money to advertise items other than a product or service include political parties, interest groups, religious organizations.
Non-profit organizations may use free modes of persuasion, such as a service announcement. Its projected distribution for is In Latin, ad vertere means to turn toward, egyptians used papyrus to make sales messages and wall posters. Commercial messages and political campaign displays have been found in the ruins of Pompeii, lost and found advertising on papyrus was common in ancient Greece and ancient Rome.
Wall or rock painting for commercial advertising is another manifestation of an ancient advertising form, which is present to this day in many parts of Asia, Africa, the tradition of wall painting can be traced back to Indian rock art paintings that date back to BC. In ancient China, the earliest advertising known was oral, as recorded in the Classic of Poetry of bamboo flutes played to sell candy, advertisement usually takes in the form of calligraphic signboards and inked papers.