Relationship Marketing In Retail - 1 3a4q6l

RELATIONSHIP MARKETING IN RETAILING

What is Relationship Marketing? 

It refers to all marketing activities directed towards establishing, developing and maintaining successful relational exchanges.

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Relationship marketing is attracting, maintaining and, in multi-service organizations, enhancing customer relationships.

What is Relationship Marketing? Relationship marketing concerns attracting, developing, and retaining customer relationships. Relationship Marketing is making a bond with the customer and retaining the customer through it.

What is Relationship Marketing? Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges.

The Firm’s Potential Marketing Relationships Supplier Partnerships Goods Suppliers

Services Suppliers

Business Units

Competitors

Focal Firm

Employees

Nonprofit Organizations

Functional Departments

Internal Partnerships

Lateral Partnerships

Government

Intermediate Customers

Ultimate Customers

Buyer Partnerships

Understanding How Customer Relationships Develop

Relationship s’ Economic Content

Relationship s’ Resource Content

Relationship s’ Social Content

Attitudinal Outcomes

Relationship Attitudes

Behavioral Outcomes

Building Relationships

Relationship s’ Economic Content

Relationship s’ Resource Content

Relationship s’ Social Content

First, let’s look at the fundamental drivers of relationships, the economic, resource, and social contents.

Attitudinal Outcomes

Relationship Attitudes

Behavioral Outcomes

Economic Content 

The purely economic costs and benefits of participating in the relationships

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Examples:   

Service fees Interest rates Costs saved due to superior management

Resource Content 

Benefits gained that match/complement the needs or resources held by the partner.

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Examples:      

Professional competence Comprehensive financial services Business development assistance Convenience (time as a resource) Tangibles Brand equity

Social Content 

Psychic benefits gained due to feelings of compatibility -similar values, goals, etc. -- that result in a feeling of comfort.

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Examples:   

Relationships with employees Fit of firm’s mission and actions with customers’ values High quality communication programs

Building Relationships

Relationship s’ Economic Content

Relationship s’ Resource Content

Relationship s’ Social Content

Next, let’s look at the ultimate outcomes of relationships, which impact firm’s business performance.

Attitudinal Outcomes

Relationship Attitudes

Behavioral Outcomes

Attitudinal Outcomes 

Customer beliefs that result from relationship dynamics, these attitudes can go on to impact behaviors and the development of even stronger attitudes.

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Examples:  

Brand equity Brand personality

Behavioral Outcomes 

Partner behaviors and intended behaviors that directly or indirectly impact the firm’s performance.

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Examples:    

Retention Positive word of mouth Complaining Willingness to try new/other services

Building Relationships Relationship s’ Economic Content

Relationship s’ Resource Content

Relationship s’ Social Content

What’s missing? Intermediary, relationship attitudes. These attitudes are built from the particular content of the relationship and go on to impact critical outcomes!

Attitudinal Outcomes

Relationship Attitudes

Behavioral Outcomes

Indicators of effective relationship marketing in retailing  High level of trust  High level of commitment  Long time horizon (length of relation)  Open communication channels  Retailer having the customer interest at heart  A commitment to quality  An attempt by the retailer to favorably lock-in or retain the customer

Evaluation of relationship Marketing Relationship marketing in retailing has emerged out of two major considerations:  At macro level, the recognition that marketing influences a wide range of areas including customers ,employees, supply, internal, referral, and ‘influencer’ markets such as the government and financial markets;  At the micro level, the recognition that the nature of interrelations with customers is changing. The emphasis is on moving from a transaction focus to a relationship focus.

Difference between Transactional & Relationship Marketing Transactional Marketing Focus on single sale orientation Orientation on product features benefits Short time scale Little emphasis on customer customer service Limited customer commitment commitment Moderate customer

Relationship Marketing Focus on customer Orientation on product Long time scale High emphasis on service High customer High customer

Relationship marketing strategies in retailing Relationship marketing strategies could be combination of one or all the following benefits: Personalization Special Treatment Benefits Communication Benefits Rewards

Personalization  Personal exchanges between buyers and sellers important in influencing the quality of relationship.

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 The term personalization describes the social content of the interaction between service employees and their customers.  Other indicators of personalization efforts are employees attempts to get to know a customer as a person, their efforts to engage in friendly conversation, and their exhibition of personal warmth.  Personalization leads to a positive impact in of increasing trust in the seller/store, customer satisfaction with the relationship, and repeat purchase.

Special Treatment Benefit  Consumer focus & selectivity, i.e., all consumers don’t need to be served in the same way, is a key aspect of relationship marketing.  The retailers can distinguish between at least two identifiable customer segments:  Loyal customers  Non-Loyal customers

Communication Benefits  Communication is often considered as a necessary condition for the existence of relationship.  Efforts to stay “stay in touch” with the customers have been identified as a key determinants of relationship enhancement in retailer-customer relationship. The intents levels of buyers-seller communication: 1.Increase the probability of discovering behaviors that generate rewards 2.Enhance the prediction of behaviors of the other party and clarifies each others roles. 3.Leads to easier discovering of similarities between parties 4.Encourages feelings of trust, special status and closeness. Generally communication strategies as part of relationship marketing efforts refer to directed communication to the customers as against mass media communication, which doesn’t afford

Rewards  Providing customers with tangible rewards in often referred to as “level one relationship marketing”.  Psychologists have long been interested in the role of rewards in behavioral learning and modification  Frequent flyer programs, customer loyalty bonuses, free gifts, personalized discount coupons, another point for benefit “clubs” are examples of relationship efforts.  It is important to that rewarding efforts generally don’t lead to sustained competitive advantages given the reality that price is the most easily imitated element of the marketing mix.  Rewards should be designed to promote long term behavior and discourage short term deal seeking behavior.

Relationship marketing in the organized vs. unorganized retail sector Organized: 1.Standardized Services 2.Well trained Sails staffs 3.Courteous & High Quality Ambience 4.Wide Range of merchandise stocks

Unorganized: 1.Limited reach 2.Location convenience 3.Customized services 4.Procuring merchandise & delivering