Transaction/Relationship/Database/Partnership Marketing – Flashcards
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Transaction Based Marketing
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Buyer and seller exchanges characterized by limited communications and no ongoing relationship between the parties
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Relationship Marketing
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development, growth, and maintenance of long term cost effective relationships with indivdual customers, suppliers, employees, and other partners for mutual benefit
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Shift away from production oriented marketing:
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emphasis on individual sales and transactions, limited communication, no ongoing relationship, limited to some markets, such as residential and realestate
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shift toward relationship marketing
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views customers as equial partners in transactions, encourages long term reltaionships, repeat purchases, and multiple brand purchases from the firm, leads to increased sales and low marketing costs
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forms of buyer and seller interactions from conflict to integration
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customer relationship management - integration relationship marketing - cooperation transaction based marketing - conflict
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Relationship Marketing
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focuses on long term reather than short term, emphasizes retaining customers over making a sale, ranks customer service a s high priority, encourages frequency customer contact, fosters customer commitment with the firm, bases customer interactions on cooperation and trust
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Elements of Relationship Marketing
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Firms build long term relationships in 4 ways: Gather info about their customers Analyze the data and use it to modify the marketing mix monitor interatctions with customers use customers preferences and knowledge
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Internal marketing customer types
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external customers: people or organizationsthat buy or use a firm's goods or services Internal customers: employees or departments within the organization whose success depends on the work of other employees or departments
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Three Levels of relationship marketing
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financial, social, structural Degree of customization: low, medium,medium/high Potential for sustained competitive advantage: low, moderate, high
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First Level: Focus on price
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if they're more focused on price, they're less concerned on who they get the product from;most superficial level, least likey to lead long term relationships; marketers rely on pricing to motivate customers; competitors can easily duplicate pricing benefits
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Second level: social interactions
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if theres a huge customer service issue, usually you won't go back to them; want positive social interactions, customer service and communication are key factors;
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Third Level: Independent Partnership
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relationship transformed into structural changes that ensure partnership and interdependence between buyer and seller; cloud based approach tech help agents can anser customer questions via chat, telephone, web or social media
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Three Steps to Measure Customer Satisfaction
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Ongoing Measurement, customer feedback, undersatnding customer needs
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Understanding customer needs
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to build long term relationships firms must understand what customers need, want, and expect; must measure customer satisfaction; marketers need to keep in touch witht he needs of current and potential customers
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Obtaining customer feedback and ensuring satisfaction
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sources ofinfo include: toll free numbers or online feedback; some firms hire mystery shoppers posing as customers to evaluate service; complaints help firms overcome problems and demonstrate commitment to service; some firms conduct surveys to measure satisfaction
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Building Buyer-Seller Relationships
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Consumers form relationships to: reduce choices, simplify info gathering and the entire buying process, reduce the risk of dissatisfaction; perceived positive value received in a long term buyer-seller relationships is the key benefit for customers; customers may switch loyalties if they percieve better benefits from a competitor
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How Marketers keep customers
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retaining customers is more profitable than losing them, customer churn: customer turnover (expensive for the company); firms generate more profits with each additional year of a relationship Frequency marketing: frequent buyer or user marketing programs that reward customers Affinity marketing: solicits resposes from individuals who share common interests and activities
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Database Marketing
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use of software to analyze data about customers Helps firms to: identify their most profitable customers, calcualate the lifetime value of each customer's business, build relationships and encourage genuince brand loyalty, improve customer retnetion and referral rates, reduce marketing and promotion costs, boos sales volume per customer or targeted customer group, expand loyalty programs
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Database marketing possible sources of data:
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credit card applications, software registration, product warrenties, point of sale register scanners, customer opinion surveys, websites, telecom companies database
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Database Marketing
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interactive television: tv service package that includes a return path for viewers to interact with programs or commercials by clicking their remote controls Application Service Providers: outside companies that specialize in providing both the computers and the application support for managing info systems of business clients
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Customers as advocates
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grassroots marketing: connecting directly with existing and potential customers through nonmainstream channels viral marketing: satisfied customers spread the word about products to other consumers Buzz marketing: gathers volunteers to try products and then relies ont hem to talk bout their experiences
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Customer Relationship Management
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combination of strategies and tools that drive customer relationship programs; leverages tech to manage custoemr relationships; integrates all stakeholders into a company's product design and 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 premisis
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Problems with CRM
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requires companywide commitment and knowledge to use the crm system; failure to effectively reorganize firm's people and processes to take advantage of benefits a CRM system offers.
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Retrieving Lost Customers
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reason's customers leave: boredom (you don't change your product much), move to a new location, no longer have a need for a product, prefer competing products, customer win back: process of rejuvenating lost relationships with customers
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Customer retention in the auto industry
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Hyundai: 60%, highest; Ford, Honda, BMW, Kia, Toyata, Checy, Mercedes, Lexus (in order from highest to lowest) between 50-60%; Caddilac: 50%, lowest
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Retrieving Lost Customers
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Rules for service providers: To anticipate where problems will arise and figure out how to prevent them, to accept that mistakes will occur in even the best systems and have a high quality recovery effort in place that emplyees are empowered to enact
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Business to Business Marketing
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organizational sales and purchases of goods and services to support production of other products
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Buyer seller relationships in business to business markets
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advantages of buyer and seller relationships: lower prices, quicker deliveries, improved quality and reliability, customized product features, favorable financing terms
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Partnership
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affiliation of two or more companies that help each other achieve common goals; protect or improve position in existing markets; gain access to new domestic or international markets; quickly enter new markets
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Choosing Business Markets
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partner firm must add value to the relationship; partner firms often complement each other; firms must share similar values and goals
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Types of partnerships
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Buyer: firm purchases goods and services from one or more providers Seller: long term exchanges of goods and services in return for cash or other consideration internal: relationship involving customers within an organization lateral partnerships: strategic relationship that extends to external entities but involves no direct buyer-seller interactions
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Cobranding and Comarketing
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cobranding: cooperative arrangement in which two or more businesses team up to closely link their names to a single product comarketing: cooperative arrangement in which two 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; demonstrates depth of commitment to customers; ability to collaborate on mutually beneficial solutions to problems; improvements in efficiency and effectiveness for both partners
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Business to Business Databases
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Indespensible, essential in building B2B relationships
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Electronic Data Exchanges and Web Services
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Electronic Data Interchanges (EDI): Computer to computer exchanges of invoices, orders, and other business documents. Quick response merchandising: a just in time strategy that reduces the time merchandise is held in inventory Web services: platform independent info exchange systems that use the internet to allow interaction between the firms
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Vendor Managed Inventory
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inventory management system in which the seller determines how much of a product is needed; collaborative planning, forcasting, and replenishment (CPFaR): modified VMI approach
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Managing the Supply chain
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supply chain: sequence of suppliers that contribute to the creation and delivery of a product. effective management offers several advantages: increased innovation, decreased costs, improved conflict resolution within the chain, improved communication and involvement among members of the chain
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Business to Business alliances
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strategic alliances: partnership formed to create competitive advantage (improve supply chain relationships and enhance flexibility); can be a new operation in which alliance partners have an ownership stake; may be less formal
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Evaluating Customer Relationship Programs
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lifetime value of a customer: revenues and intangible benefits a customer brings to the seller over an average lifetime; may influence th types of customers a firm tries to reach.
