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CHAPTER 2
Relationship Marketing: Where Professional Selling Fits
CHAPTER OUTLINE
I.
WHAT IS MARKETING?
A.
B.
C.
To be Successful, Businesspeople Must do Two Things:
1.
Determine people's needs and wants.
2.
Produce goods and services that satisfy them.
Two Major Functions of Business:
1.
Production of goods or creation of services.
2.
Marketing of goods and services.
Marketing – the process of planning and executing the conception, pricing,
promotion, and distribution of goods, services, and ideas to create exchanges that
satisfy individual and organizational objectives.
Involves diverse set of activities:
D.
1.
Development
2.
Pricing
3.
Promotion
4.
Distribution
Marketing is Not Limited to Business.
1.
E.
Anytime you try to persuade someone to do something.
Exchange and Transactions.
1.
Exchange – obtaining desired products through transactions.
2.
Transaction – a trade of value.
3.
Relationships – formed through exchanges and transactions.
II.
CUSTOMER ORIENTATION'S EVOLUTION.
A.
Transformation to Customer-Oriented Attitude
1.
The production concept.
a.
Pre-great depression, 1930's.
b.
"If you build a better mouse trap, the world will beat a path to
your door."
2.
The selling concept.
a.
Early 1940's and past WWII.
b.
Products produced without regard for customer needs.
c.
Began advertising and personal selling.
(1)
3.
Emphasized product knowledge.
The marketing concept.
a.
Beginning in the 1950's.
b.
Three fundamental beliefs:
c.
(1)
Customer oriented planning and operations.
(2)
Company's goal should be profitable sales volume.
(3)
Organizationally coordinated marketing.
Marketing concept – customer's want-satisfaction economic and
social justification for existence.
d.
III.
Difference between selling and marketing concepts.
(1)
Selling – emphasis on product.
(2)
Marketing – emphasis on customer's wants.
MARKETING'S IMPORTANCE IN THE FIRM.
A.
Product Must Be Marketed to Consumers Before Its Full Value Is Realized.
B.
Marketing People Have Four Objectives To Accomplish.
1.
Maximize sales of existing products in existing markets.
2.
Develop and sell new products.
3.
Develop new markets for existing or new products.
4.
Provide the quality of service necessary for customers to be satisfied
with their transaction.
IV.
C.
Marketing Generates Sales.
D.
Marketing Provides Quality Customer Service.
ESSENTIALS OF A FIRM'S MARKETING EFFORT
A.
To Determine The Needs Of Their Customers.
B.
To Create And Maintain An Effective Marketing Mix That Satisfies Customer
Needs.
C.
Marketing Mix Elements.
1.
Product.
2.
Price.
3.
Distribution or place.
4.
Promotion.
D. Product: It's More Than You Think.
1.
Value-added – benefits received that are not included in the purchase
price of the individual good or service.
2.
Consumer products.
3.
Industrial products.
E.
Price: It's Important to Success – value or worth of a product.
F.
Distribution – The Channel Structure Used to Transfer Products from an
Organization to its Customers.
1.
2.
G.
Customers fall into three groups.
a.
Households.
b.
Firms.
c.
Governments.
Resellers.
a.
Wholesalers.
b.
Retailers.
Promotion – Increases Company Sales by Communicating Product Information
to Potential Customers.
1.
V.
Four parts of promotion effort.
a.
Personal selling.
b.
Advertising.
c.
Publicity.
d.
Sales promotion.
H.
Goal of Marketing Mix – Provide Right Product, Price, Time, Promotion.
I.
Coordination is Important.
RELATIONSHIP MARKETING
A.
Emphasis on Creating Customers for Tomorrow.
B.
Relationship marketing – creation of customer loyalty. Organizations use
combinations of products, prices, distribution, promotions, and service to achieve
this goal. Based on the idea that important customers need continuous attention.
VI.
RELATIONSHIP MARKETING AND THE SALESFORCE
A.
Four Basic Questions Used as Guidelines in Defining the Role of the Salesforce:
1.
How much selling effort is necessary to gain and hold customers?
2.
Is the sales force the best marketing tool?
3.
What type of sales activities will be necessary?
4.
Can the firm gain strength relative to its competition with its sales force?
B.
Personal Selling Builds Relationships
1.
C.
VII.
Two main functions of personal selling:
a.
Generate revenue.
b.
Provide services to satisfy customers.
2.
Flexible in operation.
3.
Focused on prospective customers.
4.
Results in actual sale.
Salespeople Implement Relationship Marketing
LEVELS OF CUSTOMER RELATIONSHIP MARKETING
A.
Three General Levels:
1.
Transaction selling – customer sold and not contacted again.
2.
Relationship selling – contact customer after purchase to determine
satisfaction and future needs.
3.
VIII.
Partnering – seller works to continually improve customer's business.
PARTNERING WITH CUSTOMERS
A.
Criteria Encouraging Buyer and Seller to Share Information.
1.
Individual Excellence – both partners add value, and their motives are
positive rather than negative.
2.
Importance – both partners want the relationship to work
because it helps them meet long-term strategic objectives.
3.
Interdependence – the partners need each other to reach
their goal.
4.
Investment – the partners devote financial and other
resources to the relationship.
5.
Information – the partners communicate openly about goals, technical
data, problems, and changing situations.
6.
Integration – the partners develop shared ways of opening: they teach
each other and learn from each other.
7.
Institutionalization – the relationship has formal status with clear
responsibilities.
8.
IX.
Integrity – both partners are trustworthy and honorable.
THE NEW CONSULTATIVE SELLING
A.
Consultative Selling vs. Traditional Selling
1.
Consultative Selling – process of helping the customer achieve strategic
short-- and long-term goals through the use of the seller's good and /or
service.
2.
Traditional Selling – process of strictly gaining and maintaining sales
with a customer. There is very minimal involvement between the
customer and the salesperson.
B.
Three Roles of Consultative Selling
1.
Team leader – coordinates information, resources, activities needed to
support customers before, during, and after the sale.
2.
Business consultant – gives advice and service.
3.
Long-term ally – acts as helper in meeting customer's needs.
a.
Customer-Seller Relationship Gap
(1)
Buyer - sellers post-sale levels of concern
for each
other.
(a)
Buyer's usually high.
(b)
Seller's often decrease.
X.
E-SELLING: TECHNOLOGY AND INFORMATION BUILDS RELATIONSHIPS
XI.
WHAT'S A SALESPERSON WORTH?
A.
XII.
It Depends on Cost of the Salesperson and Profits on the Products Sold.
THE KEY TO SUCCESS
A.
Excellent Performance.
1.
Knowing and satisfying target customers.
a.
Identified by marketing.
b.
Satisfied by salespeople.