RELATIONSHIP MARKETING

MARKETING
Marketing

is every where.formally or informally,people and organization engage in a vast number of activities that could be called marketing. Marketing profoundly affects our day-today lives.

RELATIONSHIP MARKETING
The

decade of the 90s saw the rebirth of relationship marketing. Once again the issue of trust between customer and marketer was emphasized. The relationship marketing approach amphasix on both the hard and the soft aspect of marketing process.

What is Relationship Marketing?

"Relationship

marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges."

The Firms Potential Marketing Relationships

Supplier Partnerships
Goods Suppliers Services Suppliers

Lateral Partnerships
Competitors

Business Units

Employees

Focal Firm

Nonprofit Organizations

Functional Departments

Government

Internal Partnerships

Intermediate Customers

Ultimate Customers

Buyer Partnerships

Commitment & Trust vs. Satisfaction

Satisfaction

is very unstable Satisfaction is a poor predictor of outcomes Commitment & Trust are very stable Commitment & Trust are good predictors of outcomes

Outcomes of Commitment & Trust

Retention Positive Word of Mouth Cooperation Ease of Complaining Willingness to Complain

Uncertainty Functional Conflict Share of Wallet New Product Adoption

How do we generate Commitment & Trust?

Economic

Content Resource Content Social Content

Understanding How Customer Relationships Develop

Relationships Economic Content

Attitudinal Outcomes

Relationships Resource Content

Relationship Attitudes

Relationships Social Content

Behavioral Outcomes

Building Relationships
First, lets look at the fundamental drivers of relationships, the economic, resource, and social contents.
Relationship Attitudes

Relationships Economic Content

Attitudinal Outcomes

Relationships Resource Content

Relationships Social Content

Behavioral Outcomes

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Economic Content

The purely economic costs and benefits of participating in the relationships Examples:
Service fees Interest rates Costs saved due to superior management of customers wealth

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Resource Content

Benefits gained that match/complement the needs or resources held by the partner.
Examples:
Professional competence Comprehensive financial services Business development assistance Convenience (time as a resource) Tangibles Brand equity
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Social Content

Psychic benefits gained due to feelings of compatibility -- similar values, goals, etc. -- that result in a feeling of comfort. Examples:
Relationships with employees Fit of firms mission and actions with customers values High quality communication programs

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Building Relationships
Next, lets look at the ultimate outcomes of relationships, which impact firms business performance.
Relationship Attitudes

Relationships Economic Content

Attitudinal Outcomes

Relationships Resource Content

Relationships Social Content

Behavioral Outcomes

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Attitudinal Outcomes

Customer beliefs that result from relationship dynamics, these attitudes can go on to impact behaviors and the development of even stronger attitudes. Examples:
Uncertainty Brand ambivalence Brand equity Brand personality
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Behavioral Outcomes

Partner behaviors and intended behaviors that directly or indirectly impact the firms performance.

Examples:
Retention Positive word of mouth Complaining Willingness to try new/other services

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Building Relationships
Relationships Economic Content

Whats missing? Intermediary, relationship attitudes. These attitudes are built from the particular content of the relationship and go on to impact critical outcomes!

Attitudinal Outcomes

Relationships Resource Content

Relationship Attitudes

Relationships Social Content

Behavioral Outcomes

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The Moneyball Phenomenon

What factors make for a successful baseball player? Traditional Wisdom: - 60 yard dash time - RBIs - Batting average Sabermetrics indicates: - Slugging average (total bases/at bats) - On-base percentage
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Multiple Constituencies Approach

Premise:

Individuals develop commitment to an organization through the commitments that develop first to individuals or groups of individuals. Organizations do the same thing, as a collection of individuals.

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Research Opportunities
How

are high levels of trust achieved quickly? How do economic, resource, and social content vary in importance over the relationship life cycle? Implications for outsourcing?

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ADVANTAGE

Places focus on users and relationships rather than products and services In relationship marketing every employee has a marketing role Because RM is the way the whole library deals with its user community. The relationship marketing goes beyond traditional marketing which uses the 4Ps (pricing, product, promotion and place
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DISADVANTAGE
No

real life examples The role of people in the RM mix is largely unaddressed Doesnt draw the distinction between hard knowledge (data) and soft knowledge that a firm may hold

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THANK YOU
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