Relationship Marketing

Relationship marketing has the aim to building mutually satisfying long term
relationship with key parties in order to earn and retain their business.

Relationship marketing builds strong economic, technical and social ties among
the parties
-KOTLER

Relationship marketing is based on interaction within networks of relationships

Relationship marketing seen as relationship networks and interactions
-EVERT GUMMESSON

RM Vs Transactional Marketing

Relationship marketing uses methods to develop long term relationship with

customer in order to retain and develop a healthy relationship with their customer
Transactional marketing is focusing all of its marketing efforts on attracting
customer for one off sale

Customer Relationship Marketing

CRM is the values and strategies of relationship marketing with particular emphasis
on customer relationship turned into practical application

Customer Lifetime Value

Losing an existing customer means losing the entire revenue stream that customer
represents not just that single encounter or sale

Customer loyalty and satisfaction

Highly satisfied customer are ;

Less price sensitive

More likely to talk favorably about product
More likely to refer products to others
Remain loyal for long

5 levels of Relationship Marketing

Basic Marketing The salesperson sells to the final customers. This is also known
as direct sales.

Reactive Marketing The sales person sells the product and encourages the
customer to call for any comments or enquiries.

Accountable Marketing The sales person calls the customers to ensure whether
the product is working as per satisfaction and if there is any problem in the product.
Furthermore he also asks the customer for any suggestions / feedback to improve the
service / product. Thus he is taking responsibility for the sale.

Proactive marketing The company works continuously with its large customers to
help improve performance. This is especially seen in financial companies wherein the
movement in the financial market induces the company to make changes regularly.
However at the same time, these financial companies have to take care of their
customers as well. Thus they take regular feedback from their large customers
thereby developing their products accordingly.

Partnership Marketing The company works continuously with its large customers
to improve its performance.

10 Critical players in RM
1. Supplier
2. Distributors

3. End users
4. Employees
5. Financial firms
6. Government
7. Media
8. Allies
9. Competitors
10. General public

Relationship Marketing and the 4Ps

Product

More products are customized to the customers preferences.

New products are developed and designed cooperatively with suppliers and
distributors.

Price

The company will set a price based on the relationship with the customer and the

bundle of features and services ordered by the customer.

In business-to-business marketing, there is more negotiation because products are
often designed for each customer.

Distribution (Place)

RM favours more direct marketing to the customer, thus reducing the role of

middlemen.
RM favours offering alternatives to customers to choose the way they want to order,
pay for, receive, install, and even repair the product.

Communication (Promotion)

RM favours more individual communication and dialogue with customers.

RM favours more integrated marketing communications to deliver the same promise

and image to the customer.

RM sets up extranets with large customers to facilitate information exchange,
joint planning, ordering, and payments.

Properties of Relationship Marketing

Collaboration
Commitment, Dependency

Trust, risk and uncertainty

Power
Longevity
Frequency, regularity and intensity
Closeness and remoteness
Formality, informality and openness
Routinization
Content
Personal and social properties

Why RM is important ?

It costs five times as much to attract a new customer as it does to keep a current

one satisfied
It is claimed that a 5% improvement in customer retention can cause an increase in

profitability b/w 25% and 85% depending on the industry

Likewise it is easier to deliver additional products and services to an existing
customer than to a first time buyer

Conclusion
sRelationship Marketing is the practice of building long-term satisfying relations with
key partiescustomers, suppliers, distributorsin order to retain their long-term
preference and business.

References:
https://en.wikipedia.org/wiki/Relationship Marketing
www.business dictionary.com/definition/relationship marketing
www. Marketing.schools org..types. marketing/relationship marketing

Prepared by:
Olivia M. Sonajo

GCI Marketing Management

Submitted to:
Sergie Domingo U. Adlawan, Ph. D. Cand.