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Relationship Marketing, its goals, and benefits of long term relationship for firm and customers.
Customer profitability segments as the strategy for relationship marketing.
Relationship development strategies: Core service, switching barriers, and relationship bonds.
It represents a paradigm shift within marketing away from an acquisitions focus toward a retention/relationship focus. It focuses on keeping and improving relationship with current customers rather than an acquiring new customers
Wednesday, May 02, 2012 S.M. Monirul Islam, DBA, NUB 3
Customers as Strangers
Product Offering Source of Competitive Advantages Buying Activity Focus of selling Activities Relationship Time Horizon Attractive relative to competitive offering or alternative purchase Attractiveness
Buyer may have had no previous interactions with or knowledge of the firm
Customers as Acquaintance
Product Offering Source of Competitive Advantages Buying Activity Focus of selling Activities Relationship Time Horizon Parity product as a form of industry standard Satisfaction
Satisfaction facilitates and reinforces buying activity and reduces need to search for market Familiarity and general knowledge of customers
Generally short because the buyer can often switch firms without much effort of cists
Customers as Friends
Product Offering Source of Competitive Advantages Buying Activity Focus of selling Activities Relationship Time Horizon Differentiated product adapted to specific market segments Satisfaction+trust
Trust inn firm is needed to continue the buying activity without perfect information Specific knowledge of customers connection to segment need abd situation facilities selling Generally longer than acquaintance relationships
Customers as Partners
Product Offering Source of Competitive Advantages Buying Activity Focus of selling Activities Relationship Time Horizon Customized product and dedicated resources adapted to an individual customers or organizations Satisfaction+ trust+ commitment
Commitment in the form of information sharing and idiosyncratic investments is needed to achieve customized product Specific knowledge of customers need and situation and idiosyncratic facilitates selling. Generally long because it takes time to build and replace interconnected activities and to develop a detail knowledge.
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Platinum Tier
It describes the companys most profitable customers, typically those who are heavy users of the products are not overly price sensitive are willing to invest in and try new offering and the committed customers of the firm
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Gold Tier
Where profitability levels are not as high, perhaps because the customers want price discounts that limit margins or are not as loyal. That may be heavy users who minimizes risks by working with multiple vendors rather than just local company
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Iron Tier
The iron tier contains essential customers who provide the volume needed to utilize the firms capacity, but their spending levels, loyalty & profitability are not substantial enough for special
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Lead Tier
It consists of Customers who are costing the company money. They demand more attention than they are due given their spending & profitability & are sometimes problem customers-complaining about the firm to others & tying up the firms resources.
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What segments costs us in time effort & money yet does not provide the return we want? What segment is difficult to do business with?
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Customer Benefits
Firm Benefits
Switching Barriers
Wednesday, May 02, 2012 S.M. Monirul Islam, DBA, NUB 19
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2. Switching Barriers
Customer
Inertia
Here discussed why dissatisfied customers stay with provider. Because.. People dont like to change their habit. To retain customer firm consider increasing the perceived effort is needed to change companies.
Customer
cost
Cost involve in changing to and purchasing from a different firm. It may be real/perceive, monetary /non-monetary.
Wednesday, May 02, 2012 S.M. Monirul Islam, DBA, NUB 21
3.Relationship Bond
Level 1 Financial Bonds Level 2 Social Bonds
Level 3
Customization Bonds
Level 4
Structural Bonds
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3.Relationship Bond..
Financial
Bond
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3.Relationship Bond
Social
Bond
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3.Relationship Bond..
Customization
Bond
Anticipation/Innovation
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3.Relationship Bond..
Structural
Bond
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