Download Chap003

Relationship
Selling
Mark W. Johnston
Greg W. Marshall
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Value Creation in
Buyer-Seller
Relationships
Chapter 3
3-3
Learning Objectives
• Understand the concept of perceived
value and its importance in relationship
selling
• Explain the relationship of the roles of
selling and marketing within a firm
• Explain why customer loyalty is so critical
to business success
3-4
Learning Objectives
• Recognize and discuss the value chain
• Identify and give examples for each
category of communicating value in the
sales message
• Understand how to manage customer
expectations
3-5
Exhibit 3.1
Factors Affecting Marketing
Communications Mix
3-6
Value is Related to Customer Benefits
• Utility – the want-satisfying power of a
good or service
• Types of Utility
• Form
• Place
• Time
• Ownership
3-7
Increasing Value to the
Customer
• Raise benefits
• Reduce costs
• Raise benefits and reduce costs
• Raise benefits by more than the increase
in costs
• Lower benefits by less than the reduction
in costs
3-8
Exhibit 3.2
Generic Value Chain
3-9
Lifetime Value of a Customer
• Lifetime value of a customer – present
value of the stream of future profits
expected over a customer’s lifetime of
purchases
• Firing a customer – encouraging a
customer to find alternative sources from
which to purchase
3-10
Communicating Value in the
Sales Message
• Product quality
• Channel deliverables (supply chain)
• Integrated marketing communications
(IMC)
• Synergy between sales and marketing
3-11
Communicating Value in the
Sales Message
• Execution of marketing mix programs
• Quality of the buyer-seller relationship
(trust)
• Service quality
• Salesperson professionalism
3-12
Communicating Value in the
Sales Message
• Brand equity
• Corporate image/reputation
• Application of technology
• Price
3-13
Product Quality
•
•
•
•
•
•
•
•
Performance
Features
Reliability
Conformance
Durability
Serviceability
Aesthetics
Perceived quality
3-14
Channel Deliverables
(Supply Chain)
• Excellent supply chain management
systems can add tremendous value to
customers
• Supply chain – encompasses every
element in the channel of distribution
• FedEx and Wal-Mart are examples of
companies with exemplary supply chain
management systems
3-15
Integrated Marketing
Communications
• Solid IMC allows salespeople to solidify
their client relationships by referring to a
well-known, consistent corporate
message
• Clients expect and deserve consistency in
the way a firm’s value-added message is
put forth
3-16
IMC Communicating the Message
Firm’s internal
value chain
Message
Message
Employees and
other internal
stakeholders
Customers and
other external
stakeholders
3-17
Synergy Between Sales and
Marketing
• Seamless organizational processes
focused on managing customer
relationships strengthen the value
proposition
• When sales and marketing are not
synergistic, the customer is marginalized
3-18
Execution of Marketing Mix
Programs
• Product
• Place - for distribution, or getting the
product into the hands of the customer
• Price
• Promotion - marketing communications
3-19
Quality of the Buyer-Seller
Relationship
• Trust - a belief by one party that the other
party will fulfill its obligations
• Trust is essential to successful relationship
selling
• Trust signifies that a salesperson has the
customer’s long-term interests at heart
3-20
Service Quality
•
Services differ from goods in that they
exhibit these unique properties:
•
•
•
•
•
Intangibility
Inseparability
Variability
Perishability
These properties create opportunities to add
value to the firm’s overall product offerings
3-21
Dimensions of Service Quality
• Reliability
• Responsiveness
• Assurance
• Empathy
• Tangibles
3-22
Brand Equity
• Brand equity – the value inherent in a
brand name in and of itself
• How might applying the concept of brand
equity influence how you “brand
yourself” in customer relationships?
3-23
Corporate Image/Reputation
• A strong, positive corporate image
• Provides a leg up on the competition
• Brings confidence to clients
• Can overcome other issues in making a
sale
3-24
Application of Technology
• Technology can add substantial value to
customer relationships
• Example: Pharmaceutical companies like
Pfizer and Merck have developed
sophisticated software for specific clients
• Strategic Partnerships – formalized
relationships where companies share
assets for mutual advantage
3-25
Price
• Value – amount by which benefits to a
customer exceed cost of doing business
with a seller (including a product’s price)
• Low price may be a marketing strategy
3-26
Managing Customer
Expectations
• Customer expectations management –
underpromise and overdeliver to create
customer delight
• Customer delight – exceeding customer
expectations to a surprising degree; a
powerful way to gain customer loyalty
3-27
Role Play
http://www.mhhe.com/business/marketing/videos/RS/03_RP_value_creation.mp4
3-28
3-29