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Chapter 1: Relationship Marketing Basic Concept (Importance of customers…
Chapter 1: Relationship Marketing Basic Concept
Definition of RM
Marketing activities that are developing and managing long term relationship with customers. Focused in attracting, maintaining and enhancing customers relationship.
Importance of RM
Long term relationship
Establish, Maintain, Enhance and when necessary terminate relationship with customer and other business partner (stakeholder)
For mutual benefits
RM Strategies provide greater CA for business
Principle of RM
Maximizing the lifetime value of customers
Deliver high value in term of profits, long term relationship and increase purchase
Develop relationship with multiple market
Focus all kind of stakeholders to achieve long term success
RM is cross-functional
All the departments are responsible not only marketing department
Benefits of RM
Dual focus
Acquiring and retaining customers
Increase customers retention and loyalty
Higher customer profitability
Lower cost of maintaining old customers and reduce cost of sale
Quality RM is a new CA for firm
Long term survival in the global market
Value delivery sequence
The sequence (Step) to deliver the value of the customers
The value deliveries system must be effective and efficient
It must integrate all function in the organization
Importance of customers retention
Acquisition costs of new customers are high
Loyal customers tend to buy more
Less cost to serve regular customers
Regular customers are willing to pay premium price
Satisfied customers bring new customers to the firm
Difficult for new competitors to enter the new market
Difficult for competitors to gain market share
Drivers of RM
RM benefits to firm
Strong relationship with customers and others stakeholder will allow the firm to sustain in the market
Strong relationship will create loyal customers
RM benefits the customers
Less effort in making decision to purchase product
less time and effort to communicate problems or product needs
customer can cut down the cost of learning new procedure
Weaker brand loyalty among customers
Consumers are not brand loyal
satisfaction does not lead to loyalty
consumer are price sensitive
good relationship will make them stay with the firm
New development and technology
new technology help companies to build individuals relationship with their customers
company can mass-customize products,tailor services and personalize communications with customers
Intense competition
intense competition in the industry (suppliers are around the world)
RM create CA to the firm
Matured markets
limited expansion of market / saturated market ( firm must maintain current customers for profits)
Element of RM
Quality
Quality organisation must produce quality products and services will create satisfied customer and stakeholder.
Quality offering
The perception of the degree to which the product or services meet the customer expectation
Quality is about meeting the need and expectation of customer
Benefit
Reduce cost
Increase productivity and efficiency of the firm
Gain loyalty and customer satisfaction
Provide competitive advantage to the firm
Increase profitability of the firm
Marketing
The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational goal.
The marketing framework
The marketing mix (internal factor)
The element that make up the marketing program. (4 p's)
Market forces (external factors)
Economy, social, political, technology,competition, customer, cultures, environmental factors etc
the opportunities and threats of this factor may effect the marketing strategies and opperations
could effect the existing marketing program and create opportunities
The matching process
the process of matching the market mix and the forces (external forces) in developing strategies for the companies
the matching between market forces and the marketing mix results in marketing strategy and program
example of market forces
Customer
The industry's behviour
Competitors
Government and regulatory
Customer service
it is the responsibility of all department
must align internal process with external customer requirement
service process must be flexible
Benefit
Increased customer satisfaction
Stronger customer loyalty
Creates competitive advantage
Improve market position
Create staff pride and satisfaction