Showing posts with label Relationship Marketing. Show all posts
Showing posts with label Relationship Marketing. Show all posts

Emerging Trends in Marketing in a Competitive Market

The new trends in marketing as follows:

1. Globalization


Globalization is an emerging trend in marketing. It refers to free flow of ideas, goods and services all over the world. Effect of globalization is increasing in marketing. Increasing globalization is crating both opportunities and challenges for marketers. It is also creating international competition.

2. Changing technology


Changing technology is also an emerging trend in marketing. Development in information and communication technology, electronics, new materials and nano-technology development advances are opening many new opportunities for marketing.

3. Direct marketing


Direct marketing is also increasing. Direct mail, catalogue, telephone, television etc. are used in direct marketing. Now-a-days Internet and websites are also using and e-commerce is getting popular. Business-to-business purchasing is growing fast on the Internet.

4. Service marketing


The role of service products to satisfy needs, wants and demand of customers.

5. Outsourcing


An emerging trend in marketing is outsourcing. It is the process by which marketers purchase inputs such as capital, human resources, technology, machines, raw materials, technical know-how, skills, services from other organizations throughout the world. Outside suppliers are playing greater role in supply of goods and services.

6. Relationship marketing


Relationship marketing is also the emerging trend in marketing. It is concerned with building long-term mutually satisfying relationship with customers. Marketers focus on managing their customers as well as their products and series. They also focus on quality, value, customer satisfaction, customer loyalty and partnership with customers.

7. Quality marketing


Quality marketing is concerned with customer satisfaction. In order to deliver customer satisfaction, marketers have to offer ‘quality’ in their goods and services. Now-a-days total quality management (TQM) is getting popular.

8. Growth of global brands


Global companies, with very large size and scale of activities, have now been growing. These companies are able to establish their brands in global markets. Global brands in electronics, foods, clothing, autos, intellectual property etc. are becoming popular all over the world. Due to the practices of licensing and franchising strategies global brands are increasing.

9. Global life style


Advances in global communication, television networks, transportation, technology, cross cultural exchange, flow of tourists across the globe etc. are promoting global life styles. Global life style is providing added opportunities for marketers.


High-tech industries: Now-a-days high-tech industries also growing. Mechanization, automation, computerization, robotics, information technology, biotechnology, nano-technology, new materials and artificial intelligence are getting popular. Marketers can achieve gain economies of scale by using high-tech.

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Holistic Marketing Concept: an approach to recognize and reconcile the scope and complexities of marketing activities

Holistic marketing concept is an approach to marketing that attempts to recognize and reconcile the scope and complexities of marketing activities. These activities are concerned to the relationship marketing, integrated marketing, internal marketing, social responsibility marketing and performance marketing. Marketers can create, maintain and renew customer value through holistic marketing concept.

The holistic marketing concept is the new and emerging concept which emphasizes the development, design, and implementation of marketing programs, process and activities. This concept recognizes that “everything matters” with marketing. It also recognizes that a broad, integrated perspective is necessary to get success in marketing.

According to Philip Kotler and Kavin Lane Keller –“The holistic marketing concept is based on the development, design and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies.”


Components of Holistic Marketing


1. Relationship Marketing

It is a key component of holistic marketing. Marketers need to establish long-term relationship with customers. Relationship marketing is an act of building of long term mutually satisfying relationship with the different kinds of customers to earn and retain their long-term loyalty because they are good partners in creating value. Relationship marketing’s focus is not immediate sales; rather it is directed at building a large group of satisfied and loyal customers. Customer retention and winning back lost customer are the key strategy in relationship marketing. This marketing uses sustained long-term efforts in delivering value to the customers and profit to the firm.

2. Integrated Marketing

Integrated marketing is coordination of all of a company’s marketing activities in establishing marketing strategies such as packaging, media promotion, point of purchase materials, after sales services etc. It is the process of mixing and matching marketing activities to maximize their individual and collective actions. Marketing organizations must integrate their systems for demand management, resource management and network management.

3. Internal Marketing

Internal marketing is the process of bringing out support for a company and its activities among its employees, in order to encourage them to promote its goals. It describes the task of hiring, training and motivating able employees who want to serve customers well. It also refers to investment in human resources to train and motivate employees to better serve the customers.

4. Social Responsibility Marketing

Social responsibility marketing is a management orientation that holds that the key task of the organization is to determine the needs and wants of target markets and to adopt the organization for delivering the desired satisfactions more effectively and efficiently than its competitors in a way that preserves or enhances the consumers’ and society’s well being. It implies the orientation of the organization’s social responsibility to face the major environmental and demographic challenges.

5. Performance Marketing

It focuses on the value of marketing efforts. Performance marketing is practiced to ensure financial accountability in profitability term. Holistic marketing concept uses performance marketing to ensure profitability from marketing efforts and activities.

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Relationship Marketing and Customer Development Process

Relationship Marketing


Marketers need to establish long-term relationship with customers. Relationship marketing is an act of building of long term mutually satisfying relationship with the different kinds of customers to earn and retain their long-term loyally because they are good partners in creating value. Relationship marketing’s focus in not on immediate sales; rather it is directed at building a large group of satisfied and loyal customers. Customer retention and winning back lost customer are the key strategy in relationship marketing. This marketing uses sustained long-term efforts in delivering value to the customers and profit to the firm.

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Now we can say that relationship marketing is a long-term partnership between marketers and customers in which both parties collaborate on identifying needs and developing as well as up-dating marketing mixed to satisfy needs. Besides these, in a competitive market, it is not enough to build relationship only with customers; it is
equally important to establish relationship with the vendors, intermediaries, and other influence groups.

Importance of Relationship Marketing

The major importance of relationship marketing can be listed as flows:
  • It maintains log term relationship with key customers.
  • It leads to develop loyalty and satisfaction, which in turn increases transactions with the same customers, again and again.
  • It supports for long-run business.
  • It focuses on customer retention. It can stop customers switching to another brand.
  • It results in positive image projection and enhanced brand equity on account of high degree of customer relation, loyalty and customer satisfaction.


Levels of Investment in Customer Relationship Building


A company needs to invest its time and money in building customer loyalty. How much should it invest in building loyalty so that costs do not exceed the gains? We need to distinguish different levels of investment in customer relationship building.

As following figure shows, the likely level of relationship marketing depends on the number of customers and the profit margin level.


Levels of Investment in Customer Relationship Building

  1. Basic marketing: The salesperson simply sells the product.
  2. Reactive marketing: The salesperson sells the product and encourages the customer to call if he or she has questions, comments or complaints.
  3. Accountable marketing: The salesperson phones the customer to check whether the product is meeting expectations. The salesperson also asks the customer for any product or service improvement suggestions and any specific disappointments.
  4. Proactive marketing: The salesperson contacts the customer from time to time with suggestions about improved product uses or new products.
  5. Partnership marketing: The company works continuously with its large customers to help improve their performance.

Most companies practice only basic marketing when their markets contain many customers and their unit profit margins are small. At the other extreme, in markets with few customers and high profit margins, most sellers will move toward partnership marketing. The best relationship marketing going on today is driven by technology. Companies are using e-mail, web sites, call centers, databases, and database software to foster continuous contract between company and customer.

Customer Development Process


The relationship marketing involves a long-term process of building satisfied and loyal customers. The process is explained below:
  1. Suspects: Most firms start from the pool of suspects. Suspects constitute of everyone who has the possibility of everyone who has the possibility of building the firm’s product or service.
  2. Prospects: From the pool of suspects the firm identifies customer groups who are mot likely to buy the product or service.
  3. First time users: They are those who buy a product for the first time. Then, the firm makes its maximum efforts to convert the first time customers into the repeat customers.
  4. Repeat customers: They are the first time customers who repeatedly buy the product or service. This group has the potential to be become loyal customers if the firm tries to build relationship in absence of the firm’s effort to build the relationship, the repeat customers may switch to competing firm’s product or service. They also move to the ex-customer pool.
  5. Clients: They are the loyal and satisfied customers who normally buy the firm’s product or service for a longer period of time. Firms need to work closely with clients so that they maintain long-term loyalty.
  6. Members: They are those clients who join membership programme to take advantage of benefits.
  7. Advocates: They are those clients who enthusiastically recommend the firm and its products and services to other prospects.
  8. Partners: The advocates may convert into partners, who work actively with the firm for mutual benefits.

There may be the possibilities, at each stage of customer development process, that some of the customers may become ex-customers, if they are dissatisfied. So, firm should try to satisfy the customers and to create strong customer loyalty.

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How can companies attract customers and retain them?

How can companies attract customers and retain them?

Traditionally, the focus of marketing has been on building new markets and attracts new customers. But it is not enough to be skillful in attracting new customers; the firm must keep them and increase their business. Now, firms are found giving more weight to attract customers and retain them. The key to customer retention is customer satisfaction. A highly satisfied customer stays loyal for long periods; buys more when the company introduces new product; talks favorably about the product and the firm; pays less attention to competitor’s advertisement and brands; is less sensitive to competitors price and other offers; provides ideas to the firm to improve the product; and the cost of servicing a loyal customer is lower than the cost of servicing a new.

Firms seeking to expand their market have to attract customers and retain them. For this, they have to spend considerable time and resources. They must develop several advertisements and places them in various indoor, outdoor, direct and display media that will reach new prospects. Advertising is the cheapest, fastest, and reliable medium to attract the new customers as well as current customers.

Besides these, customer retention can be done by the following methods:

1. Erecting High Switching Barriers


In order to make customer retained, the firm can erect high switching barriers. Switching may involve high capital costs, high search costs, and loss of attractive discounts for current customers. It could sometimes be wise to phone recent buyers and get information to what degree they are satisfied with the products and services.

2. Developing Relationship Marketing


Relationship marketing is best tool to retain the customers. Therefore, the firm needs to develop relationship marketing remembering customers between calls, building a personal reputation, improving customer relations, maintaining after sales services, providing solutions to their problems, etc. The firm takes steps to know and serve its customers better.

3. Customer’s Expectation


For the retention of the customer, it is also very necessary to set the customer’s expectation in prior state. The setting of customer’s expectation help to minimize the uncertainty level of offering your services to your clients. The expectation of the customers should be made developed as positive and delivering the services in the particular time. But sometimes, it may also lead to negative, if the delivery the services is not done in the particular time. Due to such negative expectations, the client/ customers may also cancel their order from the business.

4. Being the Expert


Now a days, the small business organization needs to be more dependent upon the services. So, being the expert in the particular services you are delivering surely help to retain the customers towards your services. The business organization should be trusted advisor for building customer loyalty and reduce customer churn.

5. Conduct Customer Surveys


In order to know the reactions of the customers towards the delivered services, it is also very necessary to conduct customer surveys. By conducting the surveys, the business organization can triggered out the weakness of the services and can turn into strength. The feedback of the customers also play great role because the information provided by the customers are very valuable for the services delivered in relation to the customers’ expectations.

6. Online Relationship


In the age of advanced communication technology, business can build online relationship with their clients very easily and building an online relationship is also taken as the way of retaining customers towards your services. Nowadays, there are a lot of social media networking sites that can connect millions of customers within your computer screen. It will be also better to create a social profile in some popular social networking sites like Facebook, LinkedIn, Twitter, Pinterest and many others. Majority of the people are engaged in these media.

7. Post-support Services


Selling huge quantity for a time is not the entire goal of your business. But selling for a long period of time and retain customers for long period of time is a most. For that, business companies should provide post-support services or post-sales services to the clients. By providing such services, customers become more loyal towards your services and continue to use your services.

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Relationship Marketing: Meaning, Levels and Approaches of Relationship Marketing

Meaning of Relationship Marketing


Long-term partnership between marketing expert and customers is called marketing relationship. It maintains satisfactory relationship with customers to earn long term goodwill and maintain it. Creating maintaining and increasing good and strong relationship with customers and stakeholders is relationship marketing.
Relationship marketing includes increasing strong relation with customers, keeping contact and enhancing it. Relationship marketing gives emphasis on establishing valuable relationship and creating delivery network with them rather than personal dealings. Relationship marketing is long term oriented. 


The main objective of relationship marketing is to continue long term delivery to the customers and measure their satisfaction. All the departments of a company should work as a group with marketing to provide services to the customers. Relationship should be maintained with economic, social, technical and legal sectors. It helps to increase the reputation of the company and its products or services. In relationship marketing, marketers and customers work together to identify customers' wants and needs and meet those by updating them in marketing mix.

According to Philip Kotler and Gary Armstrong, "Relationship marketing is the process of creating, maintaining and enhancing strong, valued-laden relationship with customers and stakeholders."

For the last some years, the companies have realized the importance of relationship marketing and are practicing it. Nowadays there are many customers, they are living and spreading all over the world. They want such suppliers who can provide goods at any place, any time and can solve problems and bring improvement in quality of the products living nearby them. Relationship marketing fulfills these wants of the customers.

Levels of Relationship Marketing


Different levels are created while buying goods by the customers. They are: basic level, reactive level, accountable level, proactive level and partnership level.

Levels of Relationship Marketing

1. Basic level


At this level, the seller sells products to the customers. But do not establish relationship with them anyway. They only sell products to them.

2. Reactive level


At this level, the seller of the company sells goods to the customers and encourages them to ask if they have any problems and questions. At this level, the sellers become ready to solve problems of the customers after selling goods.

3. Accountable level


At this level, the seller phones the customers a short time after the sale of check whether the product is meeting the customers' expectations. They solicit for suggestions if any improvement is necessary.

4. Proactive level


At this level, the seller and other employees phone the customers from time to time with suggestions about improved product use. They find out whether the customers are satisfied with the improved products or not. If they are not fully satisfied, they will ask for suggestions and advices.

5. Partnership level


At this level, the company works regularly with the customers to find out methods for delivery of products. At this level, the company takes the customers as partners.

Approaches of Relationship Marketing


Financial benefits, social benefits and structural ties are the approaches of relationship marketing. They are made clearer by the following figures:- 

Approaches of Relationship Marketing

1. Financial benefits


The first approach is to provide financial benefits to the customers to strengthen relationship with them. For example, an airline may give special discount to its regular customers by scheduling regular flights. Hotels may provide special discount to their regular customers. Similarly other business organizations may provide discount or prize to their regular customers. Some organizations provide several facilities to their regular customers by giving them membership of their club. Strong and deep relationship can be established with the customers by giving such financial benefit.

2. Social benefits


The second approach of relationship marketing is social benefits. Relationship with customers can be strengthened by providing social benefits to them. Business company develops personal relationship with the customers for the same purpose by this approach. It confers them social respect and recognition. The company identifies wants and necessities of personal customers, and makes marketing mix accordingly. Besides financial benefits, the social benefit strategy strengthens relationship with customers as well.

3. Structural ties


The other important approach of relationship marketing is structural ties. Its main objective is to involve customers in organizational structure. In order to develop effective relationship with customers, special equipment or marketers supply with special equipment or computer linkage that help them manage their order, payroll and inventory. Electronic Data Interchange (EDI) should be developed. The medicine wholesaler, McKesson Corporation had invested millions of dollars to develop EDI to systematize inventories, orders and shelf space of small pharmacies. That means, a company should even spend much capital to establish strong relations with customers, maintain it and involve them in the structural tie.
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