Chapter 9 – Relationship marketing
– The mass marketing approach is now less effective and less profitable. More and more markets are mature and oversupplied. New customers are more and more difficult to find.
– Keeping existing customers may have a positive profitability impact in situations where it is difficult and or expensive to find new customers to replace the profitable ones who have been lost
– Value is created by the firm and embedded in their products which are then distributed to customers = Value in Exchange
– Therefore less (or no) attention to existing customers
– Value is created throughout the relationship by the customers, in interaction with the service provider
– Value emerges when customers use products/services = Value in Use
– In transaction marketing situations customers, are exposed to a number of competing products and they are supposed to make independent choices from among the available options.
– In relationship marketing where interactions and cooperation exist at some level, the customer and the supplier are not totally isolated from each other. There is an interdependence between the two parties.
2. Customer is forced to buy from the firm because they have no other option
3. Customer and company do not genuinely interact
– A prospect becomes a customer when they purchase a product or service.
– Clients are those who come back to the business and make ongoing purchases
– Supporter means that you like the companys things but you are not really active in helping them marketing
– Advocate/fan, customers who are really loyal and tell others about the firm.
Power Symmetry/asymmetry = Power in a relationship is only rarely symmetrical, meaning that each party has the same amount of power. To use one’s position to the extreme is detrimental (schädlich) to sustaining a relationship; a certain amount of goodwill and helpfulness is demanded from all parties.
Commitment, dependency and importance = If a relationship is important, we are dependent on it and we must then commit ourselves to making it work.
True, risk and uncertainty = Often we only know partially what we are buying – we do it on trust. This ignorance creates uncertainty and therefore also a risk.
Frequency, regularity and intensity
Adaptation = In long term relationships the parties must adapt to one another. For example for Online banking you need a pc, and internet subscription.
Attraction = in the marriage metaphor of long term relationships, attraction between the parties is a dominant factor. For Firms it means that business and partners should convey an image through their brands.
Closeness and remoteness
Formality, informality and transparency
Content = economic exchange (knowledge and information, or money and goods)
Personal and social properties = These are age, gender, profession, education, ethnicity, personality type, geographical and social mobility, as well as person traits such as lust for power, or an ability to create trust and confidence.