49688246 relationship marketing

7/27/2019 49688246 Relationship Marketing

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CONTEMPORARY ISSUES OF MARKETING

(SEMINAR)

REPORT ON RELATIONSHIP

MARKETING

SUBMITTED BY Nitish Bhardwaj

RQ1809A33

10803225

BBA (HONS) 6th Semester

SUBMITTED TO

Lr. Kuljit Minhas

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TABLE OF CONTENT

SR.

NO.

Topic Content Pag

e no.

1 Introduction Definition, need & facts 4

2 Objectives of Relationship Marketingand Issues

Objectives,Procedure,Impact &Applications,Approaches

6

3 Best practices of relationshipmanagement

Dell,Nescafe,Wal-Mart,MarutiSuzuki,Volkswagen,AIRTEL

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4 CONCLUSION MERITS AND CONCLUSION 19

5 BIBILIOGRAPHY URLs 20

RELATIONSHIP MARKETING

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INTRODUCTION

What actually is the relationship marketing?

According to the greatest marketing guru of the modern times, Mr. Philip Kotler, The aim of

Relationship Marketing is for building mutually satisfying long-term relations with key-partieslike the customers, suppliers, distributors in order to earn and retain their business. Therefore

we can come to the notion that Relationship as well as mutual bonding for the benefit of both the

parties is known as the Relationship marketing which can be built between the Manufacturer(Company) and Customers, between the Manufacturer (Company) and Suppliers & distributors

as well. As the marketing world has emerged over the years, every business now-a-days are

adopting new strategies to interact with its customers. But the way the companies interact with

their customers varies from company to company as per the situation.

In general definition we can define Relationship Marketing as a form of marketing which

moreover emphasizes on customer retention and satisfaction, rather than a dominant focus onsales transactions.

Thus as a practice, Relationship Marketing differs from other forms of marketing in that it

recognizes the long term value of customer relationships and extends communication beyond

traditional advertising and sales promotional messages.

Need of Relationship Marketing

Today, its all about more. More consumer control, more channels, more media and more money

spent online.

Businesses in many industries may lose up to 50% of their customers over a five year period.

Studies have shown its 6 to 7 times more expensive to acquire a new customer than it is toretain a current customer.

As little as a 5% increase in customer retention can increase profits by 25 to 95%.

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Some facts regarding Relationship Marketing

1 Now-a-days Customers are not loyal any more: Customers are getting a wide array of

choices to choose their options and make evaluative purchases. Direct purchases are in lessdemand now-a-days and the internet marketing is taking their places. In the business

markets also, face-to-face transactions are getting replaced by emails and online ordering.

2. The Companies actually want to interact the customers doesnt want: Consumers needs

to be turned into Customers. This reality needs to be understood by the companies as fast

as possible because the customers really dont want the relationships; they will go to thosecompanies who will give them more value. In that case, its about the companies who need

to go near the customers and seek relationships with them in order to earn their interests

from heart and from their pockets.

3 Representing the brand in front of the customers: To control the information flow to and

from the company and to provide the name infront of the customers in such a way that, it always

will remain in their minds.

4 Customers are now-a-days expecting to be thanked after their sales: The modern

customers are becoming more and more demanding in nature and they dont mind in spendingbig amount while purchasing anything. But in return they also expect to be thanked by the

company after the first sale itself which is very critical in nature. Therefore the companies need

to thank their customers after the first sales and also after every sales to make them feel that they

are the Special Ones.

5 Companies dont control the selling process, but the customer does: Now-a-days the

customers dont bother about the price but they want the best benefit for their money, be it

functional or emotional.

6 Dont make overcomplicated program, but try to build them innovatively : This meansDont do different things but try to do things differently. Simply dont make complicated

promotional and other programs which will bounce over the heads of the customers, rather if

possible make them with innovativeness and advertise them on a regular basis so that thecustomers will notice them and believe me, they might just go after it!

7 Experiment continuously: Dont hesitate to experiment with new tricks of acquiring and

maintaining the customers in a profitable way. Because of the volatile nature of customersin this fast changing world, there is need to develop and test new tricks and strategies on a

regular basis to earn more share of the profit pie.

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OBJECTIVE & ISSUES OF THE STUDY : THE RELATIONSHIP

MARKETING

With competitors just a mouse click away, marketers need to create strong relationships

with their customers in order to build loyalty and keep them coming back. With bettercustomer insight, both online and offline, marketers can develop relationship marketingprograms that are relevant to their visitors needs.

The goal of relationship marketing is to increase customer loyalty. At the core of this

strategy is the concept of establishing a learning relationship with each customer.

Every interaction companies have with a customer is an opportunity to learn about theirindividual motivations.

Gaining deep insight into visitor behavior at every stage of the visitor lifecycle isessential to successful relationship marketing.Customer behavior should be represented

by a comprehensive analysis of all customer data, allowing deep insights into customerpreferences and motivations.

Moving beyond transactions lets you monitor individual behavior accurately across anytime period and learn about customer preferences and motivations. Instead of reacting to

transactional data (which is a mirror to the past) you can proactively meet the needs of

the customers through relevant online and offline marketing programs and a personalizedonline experience.

PROCESS : RELATIONSHIP MARKETING

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HOW TO DEVELOP STRONG RELATIONSHIP WITH CUSTOMERS?

1: Understanding the Visitors Behind the Visits

Every interaction is an opportunity to understand more about the customers. Because customerdata is captured through a variety of channels, marketers often have a fragmented view of theirvisitors. Its essential to develop a comprehensive cross-channel view of customer behavior to

have a complete understanding of their interests and preferences. It is must recognize individual

customers at every contact point to learn about individual customer needs and motivations.

2: Segmenting Customers by Behavior: Segmenting the customer behavior through variouschannels and ways-

Grouping the customers by their needs.

Discover how visitors impact the sales cycle.

Identify visitors that are most likely to purchase.

Create and customize the segments by assigning levels of visitor interest, or visitorattractiveness .

Compare segments and look for ways to increase the value of underperforming segments or

look to expand the most valuable segments.

3 Creating Specific Content to meet the Customers Needs through sending personalized email

to customers who have opted into communications & using the data gathered to customize

marketing message to individual customers, and use insight gained to take action to improve the

effectiveness and cost-efficiency of marketing efforts.

4: Measuring the Success: To measure the results of relationship marketing campaigns and

continually optimize the results of the programs. By measuring and learning from the customers

at every interaction, companies can continually provide a better experience every time thecustomer returns, which creates a lasting competitive advantage.

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Approaches of Relationship Marketing

1 Satisfaction

Relationship marketing relies upon the communication and acquisition of consumer requirements

solely from existing customers in a mutually beneficial exchange.With particular relevance tocustomer satisfaction the relative price and quality of goods and services produced or sold

through a company alongside customer service generally determine the amount of sales relative

to that of competing companies.

2 Retention

A key principle of relationship marketing is the retention of customers through varying means

and practices to ensure repeated trade from preexisting customers by satisfying requirements

above those of competing companies through a mutually beneficial relationship . This techniqueis now used as a means of counterbalancing new customers and opportunities with current and

existing customers as a means of maximizing profit.

Relationship marketers speak of the "relationship ladder of customer loyalty". It groups types of

customers according to their level of loyalty. The ladder's first rung consists of "prospects", thatis, people that have not purchased yet but are likely to in the future. This is followed by the

successive rungs of "customer", "client", "supporter", "advocate", and "partner". The relationship

marketer's objective is to "help" customers get as high up the ladder as possible. This usually

involves providing more personalized service and providing service quality that exceedsexpectations at each step.

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The Results of Relationship Marketing

Build Brand Engagement

By using every transaction with a customer as an opportunity to gain insight, can create customer

lock-in by delivering the right experience and modifying the experience based on yourcustomers needs and motivations.

Rewarding loyal customers. Identifying high-value visitors that forwarded a new product offerto a friend and send a special discount offer as a thank you.

Reengage inactive customers. Identifying loyalty program members that have not been to the

site recently. Send them a text message with a bonus points offer.

Increase Customer Loyalty

Once companies establish a learning relationship with your customers, companies become theirpartner. Thus able to meet and exceed customer expectations by anticipating their needs. The

more complex customers needs become, the more they will appreciate the relationship

companies could establish with themand the less likely they will be to go elsewhere.

Improve customer service. Identify high value customers who used online support system andindicated their issue was unresolved. Launch proactive customer service calls to help resolve the

problem.

Increase up-sell and cross-sell opportunities. Tie offline information such as purchase historyand demographic data to online behavior to tailor up-sell and cross-sell promotions to include

product or services a customer is most likely to buy.

APPLICATION OF RELATIONSHIP MARKETINGRelationship marketing may be more suitable in the following circumstances or situations

(Product):

1. High value products and services

2. Industrial products

3. For those products in which switching cost is high because of high competition

4. Customers preferring a continuous relationship

5. There is involvement of customers in the production stage.

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BEST PRACTICES OF RELATIONSHIP MARKETING

CUSTOMER MARKET

Michael Dell emphasizes the significant status of customers to the companys business by statingFinding ways to get close to your customers is critical to your success. In an Interview he

called this strategy virtual integration with customers. He affirms that DELL Computer Corp.

detaches the partnership function from the marketing department, making everybody in the

company responsible for fostering the relationship to its customers.DELL organizes its business around three main customer segments: large corporate customers

also called relationship customers, home and small businesses (transaction customers) and thepublic sector. Interestingly DELL uses relationship marketing terminology to characterize these

segments.

Hence the company approaches each segment differently and customized to the specific needs.The worlds largest computer manufacturer mainly utilizes two communication channels, the

Internet and call centers.

DELL assigns sales and telephone service representatives to individual relationship customers,

whereas each sales representative is dedicated to only one customer. In 1999 30 DELLemployees worked to maintain Boeings 140.000 PCs.

Premier Dell.com is the procurement portal for large customers. The websites are customized

allowing all registered customers to communicate faster with DELL, to place orders online and

to request technical support 24 hours a day.

The so called Platinum Councils are another means of maintaining a close customer

relationship. DELL organizes semi-annual meetings for their biggest customers invitingexecutives and technicians to discuss latest developments in technology and giving them the

chance to exchange views and experiences.

All above listed examples draw a good picture of the way DELL intents to build and maintain a

good relationship with their customers. It also becomes clear, that the company regards some

customers more relationship worthy than others, by analyzing customer value and segmenting.The largest customers even constitute a segment-of-one. Consequently relationship-building

measures concentrate on these groups. This philosophy becomes obvious as DELL names its

biggest customers relationship customers in opposing transaction customers.

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Nescafe, the UKs best-selling coffee brand, has appointed Eleven as its agency of record for

below-the-line work as it gears up for a major relationship marketing push.

Eleven, Carlson Marketing Groups ideas generation agency, will support Nescafe Original andNescafe Gold Blend, the UKs top two coffee brands, as well as Nescafes premium and

specialty coffee brands, with direct and digital marketing, sales promotions, road shows and

samplings.

While the Nestle-owned brand refused to give further details of its future strategy, theappointment comes as it gears up for a loyalty push.

In April, Nescafe launched an interactive web site to build loyalty and target its communicationsbetter. The online venture is being used to build a database of customer information, and future

strategy is expected to focus on e-mailing consumers information and offers.

Nestle also launched its first brand loyalty promotion to run across the whole range of Nescafe

coffee in March.

Other Relationship marketing efforts

In 2006, NESCAFE launched the new coffee machine system "Dolce Gusto" ("sweet taste"in Italian). The system allows consumers to make various styles of coffees themselves

(Cappuccino, Latte Macchiato, Espresso, Lungo, etc.). Additionally, hot chocolate and colddrinks can be prepared with the machine. The machines are now sold in more than 15 countries

worldwide.

Other marketing activity included Experiential Marketing/Relationship Marketing, which led

Nescaf to become the headline sponsor ofGood Food show 2008 at Birmingham NEC as part

of their campaign to drive awareness of the increased Nescaf collection. 95% of consumers at

this popular event rated the Nescaf Collection stand the best at the show. Nescaf usedadvanced 3D technology to engage their consumers, led by iD Experiential.

In the UK in August 2009, Nescaf unveiled a 43m ad campaign for Nescaf, focusing on the

purity of its coffee and featuring the strapline "Coffee at its brightest".

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http://en.wikipedia.org/wiki/Italian_Languagehttp://en.wikipedia.org/wiki/Relationship_Marketinghttp://en.wikipedia.org/wiki/Good_Foodhttp://en.wikipedia.org/wiki/Birmingham_NEChttp://en.wikipedia.org/wiki/3D_computer_graphicshttp://en.wikipedia.org/wiki/Italian_Languagehttp://en.wikipedia.org/wiki/Relationship_Marketinghttp://en.wikipedia.org/wiki/Good_Foodhttp://en.wikipedia.org/wiki/Birmingham_NEChttp://en.wikipedia.org/wiki/3D_computer_graphics


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Maruti created a land-mark in CRM by launching a website for the customers in the year 1998

by launching their websites.

Maruti is investing a lot of money and effort in building customer loyalty programmes.

Maruti Auto Card - Auto Card brings the customer all the advantages of an internationalcredit card in addition to bringing the customer an opportunity of buying.

Maruti has aided customers by providing them the facility to bring their vehicle to a 'Maruti TrueValue' outlet and exchange it for a new car, by paying the difference. They are offered loyalty

discounts in return. This helps them retain the customer.

Maruti Call Center Maruti has proper customer complain handling cell under the CRM dept.

The CIC will help MUL rapidly build an information pool of over 3 million Maruti owners as

well as that of its prospective.

The MOS ensures: Round-the-clock services in most of the cities -

A computerized call-monitoring system dispatches a mobile MOS van to the customer at theearliest.All MOS vans are manged by qualified Maruti Authorised Dealers / MASS technicians

who are trained by Maruti in problem diagnosis .The customer are charged only Rs 100.

N2N: Marutis N2N Fleet Management Solutions for companies, takes care of the A-Z of

automobile problems.Services include end-to-end backups/solutions across the vehicleslife: Leasing, Maintenance,Convenience services and Remarketing.

Market Research Department- Their Market Research department remains on its toes to study the

changing consumer behaviour and market needs. Maruti enjoys 70%repeat buyers which furtherbolsters their claim of being customer friendly.

Availability of easy finance-Maruti has also made the customer experience hassle free andhelped building customer satisfaction by developing different revenue streams in

the form of Maruti Insurance and Maruti Finanace.

Other advantage:which help in Maruti CRM

A Buying Experience Like No Other Maruti Suzuki has a sales network of 307 state-of -the-artshowrooms across 189 cities, with a workforce of over 6000 trained sales personnel to guide

MUL customers in finding the right car.

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Volkswagen Relationship Marketing: A New Age of Marketing Cars Online

Tribal DDB launches the brand new site for Volkswagen.co.uk, providing customers with the

most life-like experience of sitting in and walking round a new car without having to leave the

comfort of their own homes.

The launch of this site is the fruition of 18 months work by a dedicated full-time team of 50, and

is one of the biggest website projects currently being worked on in London.

Teams across creative, design, account management, technical and Flex have built this site from

scratch in response to demand from consumers and the increasing importance of the internet in

relation to how people now reach key buying decisions when searching for a car.

Tom Roberts, the Volkswagen site Account Director at Tribal, comments: Buying a new car can

be a confusing process. Using clean white space and featuring the most progressive carconfigurator currently available online, we built this site to be the most simple yet most

comprehensive, intuitive and engaging experience in this market.

The highly sophisticated car configurator features 3D models of the Volkswagen range (whichthe Tribal team spent a total of six months creating). Additionally, every option that visually

changes the appearance of each model has been included. As such, visitors can see first hand

how changing and including additional options will enhance the car of their choice.

In the near future, visitors to the site will also be able to book test drives, in real time,by directly

accessing retailers booking systems. They will be able to see which models are available at aspecific time and retailer, and reserve a time slot on line.

Volkswagens Relationship Marketing Manager, Marianne Nicholas, explains: Our researchshows that people looking for a new car now do the majority of their research on the internet,

with visits to showrooms more than halved, down from five to two on average.

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Relationship Marketing services by Airtel

Retention plans

Loyalty Plans

100% bill accuracy guarantee.(Key driver)

Offer of the day.

World on finger tips

FEEDBACK

Ensuring Feed Back from all in Airtel World.

Ensuring Feedback on all calls from 121.

Feedback survey done every week.

Feedback from vendors.

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CONCLUSION & SUGGESTION

Finally we can suggest that what the new-age marketer requires is the foresight and they

shouldnt get caught by the marketing myopia and look beyond their usual ways to think out of

the box and innovate new tricks to cater the customers in a more profitable way which will makethe bond between the customers and the company stronger.

As customer perceptions continue to shift toward a more commoditized view of the world,traditional marketing methods are quickly becoming obsolete. The market advantage is shifting

from companies with the ability to reach large numbers of customers through mass media to

those that have high levels of insight into individual customers behaviors and preferences.Businesses that move beyond individual transactions and engage in learning relationships with

customers are seeing a lasting competitive advantage. Marketing Warehouse dramatically

simplifies this process, providing real-time visitor insight businesses need to build customer

loyalty and succeed in the new world of marketing.

The strengths that relationship marketing have on other marketing modes

1 Relationship marketing focuses on providing value to the customers.

2 It emphasis on customer retention3 The method is an integrated approach to marketing,service and quality.Therefore it

provides a better basis for achieving competitive advantage.

4 Long term customers may initiate free word of mouth promotions and referrals.5 Long term customers are less likely to switch to competitors.This makes it more difficult

for competitors to enter the market.

6 Happier customers may lead to happier employees.

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BIBILIOGRAPHY

http://en.wikipedia.org/wiki/Relationship_marketing

http://www.12manage.com/methods_levitt_relationship_marketing.html

http://www.webtrends.com/upload/wp_relationshipmarketing.pdf

http://www.jagsheth.net/docs/Evolution%20of%20Relationship%20Marketing.pdf

http://print.rit.edu/pubs/02_04_sorce.pdf

http://www.leavingfingerprints.com/FHDortmund/archive/Dell%20%20best%20practice%20for

%20Relationship-Marketing.pdf?clsid=9a7fb2c3fadfe2eb6e62671771c26c31

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http://en.wikipedia.org/wiki/Relationship_marketinghttp://www.12manage.com/methods_levitt_relationship_marketing.htmlhttp://www.webtrends.com/upload/wp_relationshipmarketing.pdfhttp://www.jagsheth.net/docs/Evolution%20of%20Relationship%20Marketing.pdfhttp://print.rit.edu/pubs/02_04_sorce.pdfhttp://www.leavingfingerprints.com/FHDortmund/archive/Dell%20%20best%20practice%20for%20Relationship-Marketing.pdf?clsid=9a7fb2c3fadfe2eb6e62671771c26c31http://www.leavingfingerprints.com/FHDortmund/archive/Dell%20%20best%20practice%20for%20Relationship-Marketing.pdf?clsid=9a7fb2c3fadfe2eb6e62671771c26c31http://en.wikipedia.org/wiki/Relationship_marketinghttp://www.12manage.com/methods_levitt_relationship_marketing.htmlhttp://www.webtrends.com/upload/wp_relationshipmarketing.pdfhttp://www.jagsheth.net/docs/Evolution%20of%20Relationship%20Marketing.pdfhttp://print.rit.edu/pubs/02_04_sorce.pdfhttp://www.leavingfingerprints.com/FHDortmund/archive/Dell%20%20best%20practice%20for%20Relationship-Marketing.pdf?clsid=9a7fb2c3fadfe2eb6e62671771c26c31http://www.leavingfingerprints.com/FHDortmund/archive/Dell%20%20best%20practice%20for%20Relationship-Marketing.pdf?clsid=9a7fb2c3fadfe2eb6e62671771c26c31

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