Ch. 11: Relationship Marketing & Customer Relationship Management (CRM) – Flashcards
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transaction-based marketing
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buyer & seller exchanges characterized by limited communication and little or no ongoing relationship btw the parties
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relationship marketing
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development, growth, & maintenance of long-term, cost-effective relationships w/ individual customers, suppliers, employees, & other partners for mutual benefit - views customers as equal partners in transactions - encourages long-term relationships, repeat purchases, & multiple brand purchases from the firm - emphasizes retaining customers over making a sale - ranks customer service as a high priority - fosters customer commitment w/ the firm - bases customer interactions on cooperation & trust
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***4 ways that firms build long-term relationships
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***1. Gather info about their customers 2. Analyze the data & use it to modify the marketing mix 3. Monitor interactions w/ customers 4. Use customers' preferences & knowledge
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external customers
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people or organizations that buy or use a firm's goods or services
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internal customers
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employees or departments within the organization whose success depends on the work of other employees or departments
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3 levels of relationship marketing
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1. focus on price (financial) 2. social interactions (social) 3. interdependent partnership (structural)
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1st level of relationship marketing: focus on price
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- most superficial level, least likely to lead to long-term relationships - marketers rely on pricing to motivate customers - competitors can easily duplicate pricing benefits
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2nd level of relationship marketing: social interactions
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- customer service & communication are key factors - ex: a wine shop holding a wine-tasting reception
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3rd level of relationship marketing: interdependent partnerships
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- relationship transformed into structural changes that ensure partnership & interdependence btw buyer & seller
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customer churn
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customer turnover
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frequency marketing
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frequent-buyer or frequent-user marketing programs that reward customers
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affinity marketing
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solicits responses from individuals who share common interests & activities
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customer relationship management (CRM)
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- combination of strategies & tools that drive customer relationship programs - leverages technology to manage customer relationships - integrates all stakeholders into a company's product design & development
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benefits of CRM
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- software systems can make sense of huge amounts of data - simplifies complex business processes - CRM can be used at 2 different levels: on-demand & on-premises
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problems with CRM
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- requires companywide commitment & knowledge to use the CRM system - failure to effectively reorganize firm's people & processes to take advantage of benefits a CRM system offers
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customer win-back
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process of rejuvenating lost relationships with customers
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business-to-business marketing
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organizational sales & purchases of goods & services to support production of other products
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partnership
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affiliation of 2 or more companies that help each other achieve common goals
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types of partnerships
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1. buyer partnership 2. seller partnership 3. internal partnership 4. lateral partnership
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buyer partnership
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firm purchases goods & services from one or more providers
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seller partnership
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long-term exchanges of goods & services in return for cash or other consideration
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internal partnership
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relationship involving customers within an organization
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lateral partnership
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strategic relationship that extends to external entities but involves no direct buyer-seller interactions
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cobranding
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cooperative arrangement in which 2 or more businesses team up to closely link their names on a single product
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comarketing
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cooperative arrangement in which 2 businesses jointly market each other's products
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national account selling
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promotional effort in which a dedicated sales team is assigned to a firm's major customers
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supply chain
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sequence of suppliers that contribute to the creation & delivery of a product
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strategic alliance
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partnership formed to create a competitive advantage - improve supply chain relationships & enhance operating flexibility
