Download Relationship Marketing

Core strategy
three
PART
Chapter 8: Relationship marketing
Chapter 9: Segmentation and positioning
Chapter 10: Competitive strategy
Principles of Marketing
FIFTH EUROPEAN EDITION
Kotler, Armstrong,
Wong, Saunders
Video Case: Acme Whistles (1)
• How does a manufacturer of relatively low-tech
products, such as whistles, compete effectively
against numerous low-cost, copycat
competitors?
Principles of Marketing 5e, © Pearson Education 2008
8-2
Video Case: Acme Whistles (1)
Principles of Marketing 5e, © Pearson Education 2008
8-3
Video Case: Acme Whistles (2)
• How might the marketing mix vary for products
developed for consumer and industrial
customers?
• How can the Internet help a small
business reach global markets?
Principles of Marketing 5e, © Pearson Education 2008
8-4
Video Case: Acme Whistles (2)
Principles of Marketing 5e, © Pearson Education 2008
8-5
CHAPTER
eight
Relationship marketing
Principles of Marketing
FIFTH EUROPEAN EDITION
Kotler, Armstrong,
Wong, Saunders
Previewing concepts (1)
• Define customer value and discuss its
importance in creating and measuring
customer satisfaction
• Discuss the concepts of value chains and
value delivery systems and explain how
companies go about producing and delivering
customer value
Principles of Marketing 5e, © Pearson Education 2008
8-7
Previewing concepts (2)
• Define quality and explain the role
of total quality marketing in building
profitable customer relationships
• Explain the importance of retaining current
customers as well as attracting new ones
• Understand the role and operation of
customer relationship management
Principles of Marketing 5e, © Pearson Education 2008
8-8
Prelude case: The most important
part of a car is the distributor
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Satisfying customer needs
A customer-centred company is
one that focuses on customer
developments in designing its
marketing strategies and on delivering
superior value to its target customers.
Principles of Marketing 5e, © Pearson Education 2008
8-10
Figure 8.1
Customer delivered value
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Upon what does
customer satisfaction depend?
Customer satisfaction depends upon
the product’s performance relative to a
buyer’s expectations.
Principles of Marketing 5e, © Pearson Education 2008
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How do buyers form expectations?
• Past buying experiences
• Opinions of friends and associates
• Marketer and competitor information and
promises
Principles of Marketing 5e, © Pearson Education 2008
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The role of customer delight
Customer delight
creates an emotional
affinity for a product
or service beyond
just a rational
preference and this
creates high
customer loyalty
Principles of Marketing 5e, © Pearson Education 2008
8-14
Methods of tracking
customer satisfaction
•
•
•
•
Complaint and suggestion systems
Customer satisfaction surveys
Ghost shopping
Lost customer analysis
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The value chain
• The value chain is the main tool for
identifying ways to create more customer
value
• It breaks a firm into nine value-creating activities
to understand the behaviour of costs in the
specific business and potential sources of
competitive differentiation
Principles of Marketing 5e, © Pearson Education 2008
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Figure 8.2 Generic value chain
Principles of Marketing 5e, © Pearson Education 2008
8-17
Core business processes
•
•
•
•
Product development process
Inventory management process
Order-to-payment process
Customer service process
Principles of Marketing 5e, © Pearson Education 2008
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What is the
customer value delivery system?
A customer value delivery system is
a system made up of the value chains
of the company and its suppliers,
distributors, and ultimately customers,
who work together to deliver value to
customers.
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Figure 8.3 Relative quality boosts
rate of return
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What is
total quality management?
Total quality management refers to
programmes designed to constantly
improve the quality of products,
services and marketing processes.
Principles of Marketing 5e, © Pearson Education 2008
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Figure 8.4 The European Foundation for
Quality Management’s model of
business excellence
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How can we make
customers more profitable?
• Maximise customer lifetime value
• Improve customer retention
– By reducing customer defections by only
5%, companies can improve profits by
anywhere from 25-100%
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What is relationship marketing?
Relationship marketing involves
creating, maintaining and enhancing
strong relationships with customers
and other stakeholders.
Principles of Marketing 5e, © Pearson Education 2008
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Relationship levels
Basic
Reactive
Accountable
Proactive
Partnership
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Figure 8.5 Relationship levels as
a function of profit margin
and number of customers
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Customer value-building
approaches
Financial benefits
Social benefits
Structural ties
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Steps in establishing a
relationship-marketing programme
• Identify the key customers meriting
relationship management
• Assign a skilled relationship manager to
each key customer
• Develop a clear job description for relationship
managers
• Have each relationship manager develop
annual and long-range customer relationship
plans
• Appoint an overall manager to supervise the
relationship managers
Principles of Marketing 5e, © Pearson Education 2008
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Selective
relationship management
• Relating with more
carefully selected
customers
• Relating for the long
term
• Relating directly
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What is customer relationship
management?
Customer relationship management
involves managing detailed information
about individual customers and
carefully manage customer touch
points.
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Touch points
• Customer purchases •
• Sales force contacts
• Service and support •
calls
•
• Website visits
• Satisfaction surveys
Credit/payment
interactions
Market research
studies
Other contacts between
customer and company
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Ping’s CRM initiative
Ping relies on
a data warehouse
with customerspecific data about
every golf club it has
manufactured for the
past 15 years
Principles of Marketing 5e, © Pearson Education 2008
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Figure 8.6 Comparing customer
relationship revenues with
relationship costs
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Figure 8.7
The 8 Cs competitive domain
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Discussing the concepts (1)
• Describe a situation in which you
became a ‘lost customer’. Did you drop
the purchase because of poor product
quality or both? What should the firm do to
‘recapture’ lost customers?
• How might total quality be managed for the
following products?
–
–
–
–
–
Packaged foods
Restaurant meal
Public utility
Family holiday
University education
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Discussing the concepts (2)
• Recall a purchase experience in
which the sales assistant or some
other representative of an organisation
went beyond the normal effort to produce
the utmost in service quality. What impact
did the noticeable effort have on the
purchase outcome?
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Discussing the concepts (3)
• How does the meaning of service
quality differ between items bought
online, through a call center or at a
traditional retail store?
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