1. Relationship Marketing Management
Stage One:
Making the case for RM
Stage Two:
Identifying critical RM success factors
Stage Four:
Adapting to context specific
conditions
Planning RM
Implementing
Monitoring
Ethics
Stage Three:
developing RM practices

2. Criticisms of Traditional Marketing
CHAPTER ONE
Criticisms of Traditional Marketing
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

3. CHAPTER 1 – Criticisms of Traditional Marketing
Learning objectives
Analyse the main assumptions of the marketing mix framework
Critically evaluate the relevance of the marketing mix framework in today’s markets
Discuss the importance of customer orientation
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

4. The development of the marketing mix framework
CHAPTER 1 – Criticisms of Traditional Marketing
The development of the marketing mix framework
Borden’s twelve ‘ingredients’:
product planning, pricing, branding, channels of distribution, personnel selling, advertising, promotions, packaging, display, servicing, physical handling, fact-finding & analysis.
McCarthy’s 4P’s (1960)
product, price, promotion, place
Kotler (1984)
4Ps, political power, public opinion-formation
Advantages of the mix framework
simple & easy to understood, alternative to the production & sales concepts, stressing the needs of identifying & satisfying customers wants
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

5. Marketing Mix

6. Marketing Mix Message

7. Criticisms of the Mix Framework
CHAPTER 1 – Criticisms of Traditional Marketing
Criticisms of the Mix Framework
Theoretical limitations
Gronroos (1997) said it is neither a theory nor a model but rather a tool; in practical, it emphasis contents & structure but not the processes (ie: like a tool box); its value depends on how its is used.
Practical limitations
business environment was characterised via mass markets, highly competitive distribution system & commercial mass media, it’s supplier oriented.
Fosters ‘departmental marketing’
Baker (2000) argued that marketing mix approaches treat marketing as an functional activity in its own right, increase potential conflicts between departments (ie: finance dept, production dept, HR dept)
Short-term focus – chasing for short-term profits based on transaction volume
Assumes customers are passive
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

8. The Marketing Mix – development
Because marketing mix variables cannot possibly include every relevant element
applicable in every situation, many academics have tried to add further Ps to the list.

9. The importance of customer retention
CHAPTER 1 – Criticisms of Traditional Marketing
The importance of customer retention
Links between customer retention and profitability
Reichheld & Sasser (1990)
Evans and Laskin (1994)
They observed that customer retention increase profits, reduced costs & lower expenditure on marketing (advertising-promotion) more than to recruit new ones.
Barnes 1994
It is easier to persuade existing customers who know and trust the company to buy more. Better opportunity for cross-selling. Promotion of company’s product by word of mouth.
Note: one must be cautious about the its applicability to all industries, to all companies & at all times.
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

10. Changes in the marketing environment
CHAPTER 1 – Criticisms of Traditional Marketing
Changes in the marketing environment
Globalisation of markets – the convergence of demand across the world & attempts by companies to offer the same, or very similar, products across national boundaries. The move is encouraged by WTO, IMF & World Bank, eliminating trade barriers & opening doors to foreign companies.
Increasing brand promiscuity among customers – customers satisfaction is not enough, they seek better price, new experience & variety. Suppliers have to think of different ways of keeping customers loyal in order to survive & prosper. The realisation that satisfaction does not lead to loyalty.
Increasing expectations and waning loyalty -unless a company is in a monopoly situation, it has to constantly strive to exceed customer expectation in order to be successful.
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

11. Changes in the marketing environment
CHAPTER 1 – Criticisms of Traditional Marketing
Changes in the marketing environment
New developments in technology (Increases in information storage and processing power) - Recent development in technology has made it possible for the biggest companies to build individual relationship with their customer, ie: Banks
Fragmentation of the media – media are segmenting audiences more narrowly, making more difficult to reach a wide audience through the same medium. (ie: internet, TV, radio stations, magazines)
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

12. The continuing search for competitive advantage
CHAPTER 1 – Criticisms of Traditional Marketing
The continuing search for competitive advantage
The anatomy of the product:
Core product – basic need fulfilled
Actual product – styling, packaging, brand image, quality & price benefits
Augmented product – sales support, guarantees & after sales care.
Change in emphasis from physical to emotional USP
The Unique Selling Proposition (also Unique Selling Point) is the marketing concept that was first proposed as a theory to explain a pattern among successful advertising campaigns of the early 1940s. It states that such campaigns made unique propositions to the customer and that this convinced them to switch brand (Wikipedia, 2007).
Augmented product
Actual product
Core product
Relationship Marketing Management Ed Little and Ebi Marandi Thomson Learning©

13. The continuing search for competitive advantage
It should stressed that whilst RM is a vehicle for augmenting the total offer, it should not be seen as something that can be ‘bolted on’ to existing offerings.
Successful delivery of RM benefits requires fundamental changes in the way the organisation approaches marketing management.
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14. CASE
Generally, you now understand the importance of long term relationship between your organization and the customer. Your group is working as professional service representatives for Pfizer, one of the biggest pharmaceutical companies in the world. You manage the brand Viagra and your goal is to maintain/build strong relationships with your clients. In specific and practical ways, how are going to do this? What specific programs would you create? PRESENT IN PPT PRESENTATION.